Business and the Economy

Tristram Hunt Excerpts

Monday 14th May 2012 Commons Chamber

[Vince Cable]

That suggestion sounds eminently sensible. I do not know the extent to which it is required to be incorporated in the law, but it seems eminently sensible to pursue it in guidance.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Further to the point made by my hon. Friend the Member for Huddersfield (Mr Sheerman), can the Secretary of State explain why there is no higher education Bill in the Queen’s Speech? If we are interested in innovation, skills and training, and future competitiveness, why on earth is there no such Bill?

[Vince Cable]

There were many candidates for the Queen’s Speech—a lot of productive legislation. The reforms in higher education are being pursued successfully. Many of the alarms sounded about the university reforms have not been realised. We can pursue questions about higher education in Business, Innovation and Skills questions next week. This is not about the higher education Bill.

--- Later in debate ---

[Tristram Hunt]

When it comes to industrial policy, is my hon. Friend as worried as I am by the lack of a strategy for intensive energy users in the Government’s plan? There is nothing in the Queen’s Speech, or in the Budget, to protect our steel and ceramics industries, which are vital to a low-carbon future.

[Mr Umunna]

My hon. Friend is right. I know that his constituency contains some of those industries.

The Government refuse to heed the call of businesses to get our economy going, and they refuse to adopt the active industrial strategy that we need. Instead, we have a Chancellor who is seeking to play the same old Tory tunes and watering down employee rights as a substitute for a proper growth strategy, along with a Business Secretary who is at best seemingly powerless to stop the Treasury juggernaut, and at worst going along with its nonsense on employee rights. We do not yet know what form the changes to employment law contained in the enterprise and regulatory reform Bill will take. All that we have been told to date by the Business Secretary’s Department is that the Bill will

“Overhaul the employment tribunal system, and transform the dispute resolution landscape.”

The Business Secretary alluded to that earlier. However, reforming the employment tribunal rules of procedure is one thing; making it easier for companies to hire and fire their workers, as the Government have spun it in the media, is quite another.

In March, the Business Secretary told the House that we already had the most flexible labour market in Europe, a claim that he repeated today. He also said that ours was the second most flexible labour market in the OECD. However, in an opinion piece which appeared in The Telegraph on 7 May and which was referred to by the hon. Member for Stone (Mr Cash), there was the Business Secretary parroting his Tory masters’ line.

“Britain is no longer a lone voice in the push”

for an even more “flexible labour market”, he told us. He then proceeded to round on the working time directive, which he condemned for being “'wasteful”. What has happened in the interim? Why the change of tone? I think that the Business Secretary has been got at.

Let us consider what the working time directive does through the working time regulations that give it effect in UK law. It ensures that workers have at least 11 hours’ rest in any 24-hour period. It ensures that workers have one day off in any seven days. It guarantees four weeks’ paid leave a year, and the right to a rest break of at least 20 minutes during a working day of six hours or more. I know that Ministers do not think we are all working hard enough, but I did not envisage that they would seek to tamper with those basic rights to a modicum of time off and a rest.

--- Later in debate ---

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

It is a pleasure to follow the hon. Member for Skipton and Ripon (Julian Smith), although I do not think that Opposition Members believe that the fundamental problem facing the British economy is an inflexible labour market. We believe the problem to be the double-dip recession that has been delivered by this Government.

In the year of her diamond jubilee, I believe that Her Majesty wanted to deliver a Queen’s Speech that focused on jobs and growth. This one, combined with the Budget that preceded it, manifestly fails to deliver that, however. The Government are failing all the tests that they have set themselves, from paying down the deficit to promoting economic growth and tackling youth unemployment. We needed a plan to stimulate demand and activity in our economy, but we have failed to receive one.

As some of my hon. Friends have said, there were multiple omissions from the Queen’s Speech. Here, I should declare an interest, as set out in the Register of Members’ Financial Interests, relating to my employment in a university. It was profoundly disappointing that there was no higher education Bill in the Queen’s Speech. Higher education is a highly successful industry that is vital to our future competitiveness. Instead, we are seeing exactly the wrong way to make Government policy. They began by introducing a system of fees that had absolutely no rationale behind it and made our fees structure among the most expensive in the world. They also slashed public expenditure on our universities, which only Romania is doing elsewhere in the European area.

There has been a lack of investment in our higher education structure, and a lack of strategy. The Secretary of State suggested that these were all scare stories, but since the Government introduced the new fees structure we have seen a collapse in demand for humanities and modern language courses. The areas in which the UK has a global competitive advantage are being undermined by Government policy. We need a strategy for higher education, for innovation, for spin-outs, for intellectual property, and for the kind of university-industry collaboration that we all want to see. We have none of that in the Queen’s Speech.

Instead, we have the enterprise and regulatory reform Bill, which contains some decent measures. We would like to see faster progress on the green investment bank, and further strengthening of shareholder power, but it was disappointing not to have more on the mutual and co-operative sector. It is interesting to note that, since 2008, co-operatives have increased their turnover by more than 21%. These are successful models in a new system of political economy that we should be thinking about today, but the Queen’s Speech fails to deliver that. In particular, it would have been nice to have a system that allowed entrepreneurs to sell their companies to employees, in order to embed that system of co-operatives and mutuals in our political economy.

We also need to do more on banking reform. Many hon. Members have pointed out that the access to funds is still appalling. Industrialists in the ceramic industry and elsewhere in my constituency continually complain about the poor access to funds. Last week, we were honoured to host Lord Digby Jones and Lord Green in Stoke-on-Trent. We talked about UK Trade & Investment, and the failure of our industries to break into new markets. We need to focus on UKTI, but we also need to look at procurement. The Government are not thinking smartly enough about their own procurement strategy, and about how it can drive industry and manufacturing.

The truth is that, for the past 10 years, the British economy has been unbalanced. There has been an overdependence on financial services and on the south-east. Our tax base was too narrow and, when the crisis came, it hit our public finances. We all need to own up to that. We need to work out how to shift that balance in order to rebalance the economy. That could involve capital allowances for manufacturing so that it can invest in energy-efficient technology, and moves to promote combined heat and power technology and to promote gas storage. All those elements would form an industrial strategy, but such a strategy is signally lacking in this Government.

Late last year, we heard plans for the energy intensive sector. We heard talk of £250 million to allow the sector to become more competitive, but that simply has not been followed up. Instead, we still have terrible regional disparities in economic growth, which are augmented by problems with lending. The truth is that the regional growth fund is not delivering the growth that we need. We in Stoke-on-Trent are grateful for those investments that have been made, but the money is not flowing through. We have seen the figures from the west midlands, which show an absence of money pouring in.

Finally, I want to make a small constituency plea to the Chief Secretary to the Treasury. A company called Body Temple in Stoke-on-Trent sells nutritional drinks. The Government are “simplifying” VAT on such products, but I do not think that they have thought that through. They do not understand that £3 billion market, and the role that the UK can play in it. I urge the Minister to think carefully about the consultation process on that measure, essentially on business competitiveness grounds.