Oral Answers to Questions

Vince Cable Excerpts

Thursday 27th October 2011 Commons Chamber

[Graham Evans (Weaver Vale) (Con)]

15. What steps he is taking to support manufacturing.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

As part of rebalancing the British economy, we are taking steps to support manufacturing in the UK by encouraging high levels of business, innovation, investment, exports and technical skills. I set out our strategy for achieving that in a talk to Policy Exchange yesterday.

[Mr Jones]

From recent discussions with several representatives of our largest manufacturing companies, it is apparent that they are now looking actively to bring more UK supply manufacture back to our country, but they seem to question whether some of our small and medium-sized enterprises have sufficient capacity or investment to meet the growth in demand in this area. What can the Government do to help facilitate the right conditions to help some of our SMEs meet this increasing demand?

[Vince Cable]

The hon. Gentleman is right to say that there is a supply chain issue. We are hearing good news from the automobile and aerospace sectors, with the large primes, such as Tata, Rolls-Royce and Airbus, making large investments. However, we also need to attract back the supply chains, which is already happening, particularly in the car industry. We have bodies that co-operate with industry in both those sectors: the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk) chairs one of them and I chair the other. We are therefore working actively with industry to attract the supply chains back to the UK.

[Nigel Mills]

Will the Secretary of State join me in congratulating the work of the high-value manufacturing technology and innovation centre, which has had a display in Parliament for the past two days, and especially a business in my constituency, Advanced Composites, on the work that it does as part of that? Does he agree with the strategy and aims that it has set out, especially on having a strategy for how we can get manufacturing back to being 20% of gross domestic product by 2020?

[Vince Cable]

Yes, we are fighting a historical trend, because, under the previous Government, and certainly over the past decade, manufacturing contracted as a share of the economy more rapidly than in any other western country and we lost a third of the work force. We have to retrieve that, and one of the main ways of doing so is through promoting innovation. The first innovation centre, as my colleague rightly points out, is the manufacturing technology innovation centre, which has seven campuses. Composites is one of those core technologies being developed, which I very much welcome.

[Graham Evans]

Does my right hon. Friend agree that if we are effectively to support manufacturing, we need to ensure that our future work force have the necessary skills? Will he join me in welcoming the approval of Sandymoor free school in my constituency, which is receiving support from the nearby Daresbury science and innovation campus and which will help to achieve this goal?

[Vince Cable]

Skills are obviously critical, and no doubt my hon. Friend the Minister for Further Education, Skills and Lifelong Learning will say more about the big increase in the number of apprenticeships shortly. I am sure that the school in my hon. Friend’s constituency will contribute to this at an early stage of development. Apprentices are a real success story and we are certainly going to build on it.

[Mr Dennis Skinner (Bolsover) (Lab)]

One way to increase manufacturing growth would undoubtedly be for the Business Secretary to turn his attention to Markham Vale. I cadged about £32 million off the then Chancellor of the Exchequer in the Labour Government to flatten the pit tips and build a vast industrial estate straight off junction 29A on the M1, and what has happened? There have been grey, miserable clouds hanging over Markham Vale ever since this tin-pot Government came to power. Why don’t you pull your finger out? We were spending money while the sun was shining; there is none being spent now.

[Vince Cable]

I would certainly be happy to visit Markham Vale at some point and talk those things through with the hon. Gentleman. His area has a local enterprise partnership and has had an opportunity to put in a bid for an enterprise zone or the regional growth fund. I do not know what it has done, but I am certainly happy to talk to him.

I know that the hon. Gentleman is a long-standing Member and I am sure that he has followed the changes in attitudes towards manufacturing in this House under different Governments. He will be interested in the leader of the Labour party’s new distinction between “predators” and “producers”. What is troubling a lot of us on the Government Benches is why a party of dinosaurs is so opposed to predators. Perhaps the hon. Gentleman can explain.

[Mr David Hanson (Delyn) (Lab)]

Companies in my constituency that manufacture construction products, quarry materials for concrete or build materials for the construction industry have very much welcomed the plan announced by my right hon. Friend the Member for Morley and Outwood (Ed Balls) to bring forward infrastructure projects in order to increase employment and build manufacturing capacity in the United Kingdom. Given falling growth and rising unemployment, would it not be prudent for the Business Secretary to support that plan?

[Vince Cable]

Infrastructure is certainly a key to recovery, and it is absolutely right to put it on a sustainable basis. The Chief Secretary announced a programme for urgent modest-scale infrastructure projects a few weeks ago, and other infrastructure projects will be announced in the regional growth fund imminently.

[Mr Iain Wright (Hartlepool) (Lab)]

In answer to questions to his Department in June, the Secretary of State said:

“There is rapid growth now beginning to take place in manufacturing and exports.”—[Official Report, 9 June 2011; Vol. 529, c. 276.]

Given that figures from the Office for National Statistics confirm that manufacturing output fell last quarter and given that yesterday’s CBI industrial trends survey showed sentiment from manufacturers deteriorating, order books emptying and export prospects sharply declining for a second successive quarter, will the Minister update his assessment of four months ago? Does he think that any aspect of Government policy needs to change to ensure that manufacturing drives forward economic recovery and growth?

[Vince Cable]

The hon. Gentleman is right to say that business conditions are difficult, but over the last two years manufacturing has increased significantly faster than the rest of the economy, as have exports. That is the direction that we need to pursue. Given that manufacturing is predominately an export-based industry, he will understand that the difficulties facing our major export markets in the European Union are creating problems for manufacturers and manufacturing confidence, but we will hit our way through them.

[Ian Swales (Redcar) (LD)]

I thank the Secretary of State for visiting SABIC Petrochemicals in my constituency to hear about the cost issues for energy-intensive manufacturing industries. When can those industries expect an announcement about a mitigation package?

[Vince Cable]

I think they expect an announcement very soon. The visit was extremely constructive, and my colleague and others have rightly emphasised to us that energy-intensive industries are a key part of manufacturing recovery. It would be totally counter-productive economically and environmentally if they were driven overseas. We are determined that that should not happen, and a package of measures will be announced soon.

[Phil Wilson (Sedgefield) (Lab)]

3. What recent assessment he has made of the level of science funding over the comprehensive spending review period.

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[Alun Cairns (Vale of Glamorgan) (Con)]

13. What steps he is taking to promote British exports.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

My Department is supporting British exports through UK Trade & Investment. Its strategy, which was launched in May 2011, sets out plans to provide practical support to exporters over the next five years. I have undertaken a number of visits overseas to promote British business to countries including China, India, Brazil, Japan, South Korea, Turkey and Romania, and next week I shall be in south-east Asia promoting British trade.

[Pauline Latham]

Britain is increasingly becoming a centre of excellence for high-tech, high-value manufacturing exports. In Derbyshire, we have some great high-tech exporters ranging from Rolls-Royce, which my right hon. Friend knows all about, to Pektron, an innovative, family-owned electronics manufacturer. What more can my right hon. Friend do to showcase those exceptional firms and remind people up and down the country and internationally that high-tech British goods are in demand everywhere, and that that needs to continue?

[Vince Cable]

Yes, there are many successful British exporters. Over the past year, exports have grown on a year-to-year basis by about 9%. Where we have fallen down historically is that British small and medium-sized companies have not been as involved in exporting as the larger enterprises such as Rolls-Royce. One of the main commitments in the UKTI strategy is to concentrate help and resources on those companies, which would undoubtedly help the specialist company in my hon. Friend’s constituency.

[Alun Cairns]

It is good to note that exports have risen to their highest level since records began, and I note the Government’s plans to double our exports to Brazil by 2015. Following the Foreign Affairs Select Committee report, what specific action is my right hon. Friend taking to help British exporters to overcome the language issues and bureaucratic barriers that might stand in the way of achieving that?

[Vince Cable]

I went to Brazil precisely to answer that question. My hon. Friend is quite right to say that we are starting from a weak position. As a result of neglect in the past, Britain’s share of imports into Brazil is far lower than those of Germany, France and Italy, for example, and we must remedy that. We are putting in a major effort in Brazil, through UKTI, to capture some of the opportunities, particularly those that are arising from the expansion of the oil and gas industries there.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Secretary of State has mentioned some exotic locations, but he did not mention the fact that he came to Huddersfield two weeks ago. Did he learn from that visit that export manufacturing is at the heart of getting the biggest bang for our buck, and that manufacturing for export counts for more in regard to the balance of trade? He talks about innovation and universities, but we do not want just seven—we want 133 innovation units.

[Vince Cable]

As a Yorkshireman myself, I would hesitate to call Huddersfield an overseas market, but it is certainly an outstanding centre of excellence. I enjoyed my visit there. We visited David Brown, one of the recipients of regional growth fund money and a very successful manufacturing exporter. I would also commend going further up the valley to Todmorden, where there is a brilliant British casting and forging company working flat out in our major export markets.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

UKTI has no presence in Wales, so what discussions has the right hon. Gentleman had with the Welsh Government to ensure that UKTI is doing its best to promote Welsh exports?

[Vince Cable]

Of course the Welsh Government, as a devolved Government, have more responsibilities of their own in this field, but Wales is part of the UK and I will do my best to work with my Welsh Government colleagues to promote exports. I have already talked to the Secretary of State about getting more Welsh businesses represented on UKTI missions and on projects of that kind.

[Ian Lavery (Wansbeck) (Lab)]

5. What recent assessment he has made of the effectiveness of the regional growth fund.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

In April we announced that 50 bids had been successful as part of round 1 of the regional growth fund, receiving a conditional allocation of £450 million, which will deliver 27,000 new or safeguarded jobs and close to 100,000 jobs in supply chains. More than half these projects have already started, and successful bidders will receive funding as due diligence is completed. Announcements on the second larger round are imminent.

[Ian Lavery]

There have been conflicting reports about the Department’s performance on the regional growth fund and what has been settled as a result of it. Will the right hon. Gentleman tell us how many applications have come from Northumberland, how many of them have been successful and how many have received any form of payment to date?

[Vince Cable]

I cannot tell him off the cuff how many companies in Northumberland have received regional growth fund money. I know that the north-east was the most substantial recipient in the first round. I believe that several—in fact, the majority—of those projects are proceeding, and they will create jobs in Northumberland.

[Mr Richard Bacon (South Norfolk) (Con)]

We in South Norfolk were very pleased to see the Secretary of State visiting Group Lotus, one of the country’s highest technology companies, which he described as “the best of British”. Does he agree that the regional growth fund would be seen as even more effective if Lotus’s high-quality bid were successful?

[Vince Cable]

I think my colleague is disarmingly tempting me to commit some indiscretion here. I have been to Lotus, but we did not discuss the regional growth fund bid. It is an outstanding company, and I am certainly aware that it has put in a bid.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Well, why do we not put the bunting out? Six months after 45 regional growth fund bids were submitted, only three have got the money, so there are only 42 to go. Perhaps the Secretary of State could tell us how many people in BIS it takes to change a light bulb. However, on 17 October, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) assured The Times that due diligence on the bids had taken an average of six weeks. These bids have all been waiting six months. Will the Secretary of State tell us when the bidders will get their promised money, as all these continued growth prospects have been put at risk because his Department has been asleep at the wheel?

[Vince Cable]

I definitely think we should put the bunting out for the regional growth fund. As I explained in my first answer to this question, more than half of all these projects are now under way. Factories have been built; jobs have been created—that is what it is about. As was made clear at the outset and as Lord Heseltine made clear a few days ago, the release of funding is a later stage in the process when due diligence has been completed. Are the Labour Front-Bench team seriously arguing that we should dispense with controls over the spending of public money in the private sector? I know they did that in government, but we are not going to do it.

[Stuart Andrew (Pudsey) (Con)]

6. What steps his Department is taking to promote manufacturing skills.

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[Jake Berry (Rossendale and Darwen) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

My Department has a key role in supporting the rebalancing of the economy and business to deliver growth while increasing skills and learning.

[Jake Berry]

I thank my right hon. Friend for that answer. I congratulate Ministers on the fantastic apprenticeship numbers that were announced today. With that and the rebalancing of our economy in mind, and given that in Rossendale and Darwen we have a manufacturing economy, can the Secretary of State tell the House how we are going to make it easier for employers in my constituency to take on new apprentices?

[Vince Cable]

The hon. Gentleman is right to acknowledge the big increase in apprenticeships, and it is not simply quantity; it is also about quality. Some of the rapid growth that is taking place is in advanced apprenticeships, including in manufacturing, and we welcome that, but we do not accept that the status quo is adequate. We want to strip away some of the bureaucratic barriers that hinder companies, particularly small companies, and my colleagues are working on that.

[Mr Chuka Umunna (Streatham) (Lab)]

A few years ago, the Business Secretary was described by the Deputy Prime Minister as an “economic prophet”. So in January, when the Secretary of State told the House that

“…economic growth is now strong. It will become stronger as a result of the work that the Government are doing in stabilising finances”—[Official Report, 13 January 2011; Vol. 521, c. 429.]

we listened with interest. Given the performance of the economy since January, does the Business Secretary believe he has lived up to his billing?

[Vince Cable]

May I first warmly congratulate the hon. Gentleman on his rapid and considerable promotion? I will not tempt fate by hoping that he makes a success of it, but I none the less wish him well. Of course, one advantage that he has in coming into Parliament only very recently is that he is not personally responsible for some of the disasters that occurred under his predecessors. One of our problems is sorting out some of those disasters, not least of which are the massive deficit that we inherited, a broken banking system, large amounts of personal debt and a flat housing market. All those factors explain why it is now very difficult to launch into rapid growth, but we are putting in place the rebalancing of the economy and the financial discipline to make that feasible.

[Mr Umunna]

I thank the Business Secretary for his kind words, but I wonder when he will take responsibility. In his first speech as Business Secretary, he described his Department as the “Department for economic growth”. The truth is that, under his leadership, it has been the Department for no growth. The economy has stagnated, unemployment has soared and confidence has nose-dived—and that is all before the effects of the eurozone crisis have been felt. Things would be very different if he changed his policy and adopted a proper plan for growth to get demand back again. In January, he thought his policies were working and it turns out he was wrong. He has described himself as a Keynesian, but Keynes famously said:

“When the facts change, I change my mind.”

Why will the Business Secretary not do the same?

[Vince Cable]

Well, Keynes famously wrote in his well-publicised note to Franklin Roosevelt that probably the most useful thing that the Government could do in a depression was keep down long-term interest rates, and that is what this Government have done as a result of their fiscal prudence.

The hon. Gentleman says that we do not have the policies in place; we have two things in place. We have policies for financial stability, which we did not have when we inherited the economy; and on the other hand we have policies in place to rebalance the economy, to reinvent manufacturing, which was allowed to decline catastrophically under the previous Government, and to promote exports and business investment—things that were shamefully neglected when his colleagues were in government.

[Jane Ellison (Battersea) (Con)]

T2. The Mayor of London has had great success in growing the number of apprenticeships from the low base inherited from his Labour predecessor by requiring apprentices to be taken on as a condition of bids for public projects. Will the Minister look at whether that success could be built on and extended to national Government?

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[Mark Hendrick (Preston) (Lab/Co-op)]

T7. The Secretary of State will be aware that Remploy businesses were set up across this country after the second world war to give work to disabled people returning from the war. Those businesses have gone on for decades and given great work to disabled people. Why are the Government going to axe the programme?

[Vince Cable]

Certainly we should be doing all we can to support disabled workers. My understanding is that those decisions lie with the Department for Work and Pensions, but I would be happy to engage or help if there is a problem.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

UK Trade & Investment has just completed a trade mission to Iraq for the Erbil international trade fair, of which I was privileged to be a part. We had 86 businesses, companies and educationalists at the British pavilion at the trade fair, whereas three years ago we had only one. Will the Secretary of State join me in congratulating the UKTI team and our consul-general on their great work during the mission?

[Vince Cable]

Yes. UKTI does an excellent job. Like all other parts of the Government, it is having to do more with less, but it does so through refocusing and strategy. I have not yet been to that country, but I look forward to doing so.

[Diana Johnson (Kingston upon Hull North) (Lab)]

T8. Does the Minister of State really think that sending a letter to Members whose constituents are affected by the potential redundancies at BAE Systems stating that those people could move to other parts of the country to get jobs shows any understanding of the regional economy and the need for skilled manufacturing jobs, particularly in the Humber area?

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[Mr William Bain (Glasgow North East) (Lab)]

The Bank of England’s own data released last week indicate that lending by banks to small businesses fell by £2.5 billion in the three months to August. Was not the Secretary of State right to admit at last that the economy is in a far weaker state under this Government than it ever was in the last year under Labour?

[Vince Cable]

That certainly is not the case, but the hon. Gentleman has a perfectly valid point in relation to bank lending. That is absolutely the case, and, as a result of the agreement that we have reached with the banks, they have—certainly in the first two quarters—achieved the gross lending objectives that we set them, but there is a lot more to do. Surveys show that a shortage of credit is a serious problem, and we have to continue to work with the banks and, where necessary, to require them to make credit available to the economy.

[Greg Mulholland (Leeds North West) (LD)]

Since December 2008, 3,218 tied pubs have closed and 425 free houses have opened, yet the British Beer and Pub Association, which speaks for pub companies, continues to mislead Ministers and MPs by stating that the opposite is actually the case. Do Ministers agree that this discredits the BBPA and also shows that the Government must stick to their commitment to act on the issue?

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[Duncan Hames (Chippenham) (LD)]

Next month should at last see meaningfully democratic elections in Egypt, but a new democratic Egypt faces a future hamstrung by debts from the Mubarak era. Will my right hon. Friend ask his officials to conduct an audit of the £100 million owed by Egypt to the Export Credits Guarantee Department?

[Vince Cable]

As my hon. Friend knows, there is a mechanism for dealing with official debt, through the Paris Club, but I will certainly undertake to speak to my colleague, the Secretary of State for International Development, to ask what concessional assistance we are giving to Egypt. The matter does not directly bear on my Department, but I accept that there is a link with the promotion of trade.

[Grahame M. Morris (Easington) (Lab)]

Does the Business Secretary believe that tax evasion and tax avoidance is having a negative impact on economic growth?

[Vince Cable]

Absolutely. I am resolute, and I hope that my colleagues on the Opposition Benches will work with me in combating both.

[Dr Julian Huppert (Cambridge) (LD)]

The Department for Business, Innovation and Skills is considering the creation of a public data corporation. Does the Minister accept that making public data openly available can facilitate innovation in more ways than can be easily anticipated, benefiting the economy and the country? Will he meet me and other campaigners to discuss the details of that further?

[Chris Bryant (Rhondda) (Lab)]

One of the Labour Government’s great successes was the introduction of the artist’s resale right. Since then, the art market has quadrupled, and hard-pressed artists have received £13 million. The derogation in awarding the artist’s resale right to the estate of dead artists lapses at the end of the year. Will the Secretary of State confirm that from January next year it will apply to the estate of deceased artists?

[Vince Cable]

No, I cannot confirm that, but I will speak to my colleague at the Department for Culture, Media and Sport about the impact on the art market, and how we propose to proceed with that in the European Union.

[Mr Marcus Jones (Nuneaton) (Con)]

The success of apprenticeships is undoubtedly vital to future prosperity in areas such as the west midlands. Will my hon. Friend update the House on the progress of the apprenticeship programme in the west midlands region?