Budget Resolutions and Economic Situation

Tom Blenkinsop Excerpts

Thursday 21st March 2013 Commons Chamber

[Vince Cable]

The hon. Gentleman has obviously found another version of plan B that I did not discover in my search, but I am sure he is right.

Let us consider what has caused this slow-down, which the shadow Chancellor blames on Government policy. The OBR was clear and explicit and stated that the downward revision in our forecast for 2012 is largely accounted for by a reduction in the contribution of net trade. We are operating in a difficult international context—particularly in the eurozone, which accounts for half our exports—and that largely explains the slow-down that has occurred, and the consequential impact on Government debt and borrowing.

We are giving overriding priority to developing British trade in those markets that have been neglected for many years. Over the past two years, led by the Prime Minister, I and other Ministers have gone back time and again to people in the big emerging economies to promote exports and inward investment. That is why our exports to Brazil and India have increased by more than half, and by approximately 100% to China and 130% to Russia. That diversification of our export base is fundamental to getting us out of this crisis. That is what we are doing, and we are succeeding.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I welcome the Secretary of State’s comments, but they appear pretty poor words for companies such as Alcan in Northumberland that is going to shut —the Budget did not come soon enough to provide tax breaks for energy-intensive industries. Furthermore, the steel industry in England and Scotland has been losing out to foreign, imported steel in bridge contracts, as my hon. Friend the Member for Scunthorpe (Nic Dakin) mentioned today in business questions.

[Vince Cable]

That is a serious point and I am sympathetic to it. My colleagues and I have spent a lot of time talking to the EEF, the CBI and other employers groups about the higher costs of energy and how we compensate for it. A compensation package has been through consultation and is being implemented—the cash will be disbursed soon—for the higher cost of the carbon price floor and the EU emissions trading scheme. I fully understand the hon. Gentleman’s concern—he is absolutely right—and we are addressing it.

[Tom Blenkinsop]

Further to that point, places such as Wilton, which has the largest chemical industry in the country—

[Helen Goodman]

It is the largest in Europe.

[Tom Blenkinsop]

As my hon. Friend reminds me, it is the largest in Europe. Wilton has lost out on the carbon capture and storage programme, which would have added 20 or 30 years’ longevity to the capital on site. The north-east is pushing more than any other region in providing exports for the country, and yet the Secretary of State is not providing the financial support for the infrastructure that was provided by the Labour Government.

[Vince Cable]

A CCS competition is taking place. As the Chancellor pointed out in his Budget, there is a recognition of the problems of energy-intensive industries in the north-east, Scunthorpe and south Wales. They will be given an extra year of support as a result of yesterday’s announcement.