Steel Industry

Debate between Vince Cable and Angela Smith

Wednesday 14th January 2015 Commons Chamber

[Vince Cable]

I pay tribute to all the members of the community who fought for the steel works and secured the reopening by my hon. Friend the Member for Redcar and others.

Of course, this is an industry with a great many problems, which I will review in a moment, and the metal sector generally has been under great pressure. I was just trying to make the simple point that the rather self-righteous tone from the Opposition is perhaps not reflected in the historical record, so I would urge a slightly more balanced approach.

[Angela Smith]

On the subject of the Secretary of State’s record, what representations did he make to the Chancellor when the latter proposed to introduce the carbon floor price?

[Vince Cable]

My Department has been engaged in active discussions with the Treasury about the implications of the carbon price floor and other environmental measures. I was going to make the point that the principle of trying to change incentives through the tax system to discourage carbon-intensive production was inspired by the Leader of the Opposition when he held this role in government, and we have maintained that green principle in taxation. Of course, that has costs for energy users, and we have sought to deal with that through a compensation mechanism, which so far has made commitments of £3 billion. I shall explain in a moment the progress we have made on implementing that.

AstraZeneca (Pfizer Bid)

Debate between Vince Cable and Angela Smith

Tuesday 6th May 2014 Commons Chamber

[Vince Cable]

I was slightly puzzled as to why the Leader of the Opposition made it a party political point that there would be a Select Committee inquiry. As I understand it, Select Committees are the property of the House. I am very happy to engage with either or both of the Committees. Indeed, we have already had extensive discussions with the Business, Innovation and Skills Committee about the legacies of Kraft-Cadbury and the takeover legislation. Those matters were thoroughly inquired into.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Does the Secretary of State agree that the way in which the Government have approached the takeover—appointing two civil servants to negotiate directly with Pfizer—is unprecedented?

[Vince Cable]

That is a bizarre criticism. We have talked to Pfizer and AstraZeneca on a neutral basis. Those conversations have been conducted by Ministers. The Prime Minister, the Deputy Prime Minister, the Chancellor, the Minister for Universities and Science and I have all been involved. Of course the Government have civil servants to carry out their instructions. I am baffled as to why the hon. Lady regards that as a problem.

Amendment of the Law

Debate between Vince Cable and Angela Smith

Thursday 22nd March 2012 Commons Chamber

[Vince Cable]

The shift from a system based on tax credits to one based on tax allowances obviously benefits the middle and low-income population as a whole. The impact on particular groups depends on a variety of things, including the minimum wage, which we have just uprated, and the complex interaction of tax and tax credits.

However, let me turn to the point about pensioner income. I find it quite extraordinary to hear the shadow Chancellor expressing such alarm about the impact of the Budget on pensioners. I do not know whether he has looked at the scorecard, but it is clear. In 2012-13, the effect of the increase in the basic state pension and the pension credit minimum income guarantee will be to transfer £1.75 billion to pensioners. The impact of the changes on age-related allowances is £360 million—one fifth of the additional funding going to pensioners as a consequence of this Budget. When we look at the pensioner population, we of course see big differences. There are 5 million pensioners who do not pay tax, many of whom are poor, and who are not, of course, affected by the changes at all. There is a small group of people—frankly, my contemporaries—who have high retirement incomes and considerable asset wealth, and it is right in principle that they should pay a bit more. There is a group in between, as the shadow Chancellor rightly said, of people who are not wealthy and do not have particularly high incomes, but who could be affected to a limited extent, as a result of inflation eroding the value of the allowances—inflation is currently estimated at 2.5%. Those people will benefit enormously from the increase in the basic pension.

Let us just remind ourselves what is happening. We have an increase of £5.30 in the basic state pension for a single person. On top of the increase last year, we are talking about a £10 increase in the basic state pension, as a result of the protections that this Government have introduced. For many years, the pension steadily fell behind earnings as a result of de-linking, and, despite numerous promises, the previous Government did absolutely nothing about the problem. More and more pensioners were sucked into means-testing. This Government have corrected that problem. We have a triple lock system and, as a result of that, and of this Budget, the vast majority of pensioners on low and middle incomes will be considerably better off than they were before.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

What does the Secretary of State have to say to the Institute for Fiscal Studies, which has today described the Budget as a “hotch-potch of reforms” that are risky because they might be “less fiscally neutral” than the Chancellor is claiming?

[Vince Cable]

I am sorry; I do not follow the logic of the question. The Budget is of course fiscally neutral. I have just quoted figures, which the Office for Budget Responsibility has validated, which show that pensioners as a whole will gain five times as much from the increase in the pension and from pension tax credits as from the change in allowances.

Oral Answers to Questions

Debate between Vince Cable and Angela Smith

Thursday 15th March 2012 Commons Chamber

[Angela Smith (Penistone and Stocksbridge) (Lab)]

14. Whether his Department plans to develop an industrial strategy; and if he will make a statement. [R]

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

Yes, I am developing an industrial policy, and I will continue to work closely with my ministerial colleagues on that important work. In speeches on 27 February and 6 March, I set out what that policy should be and where our future industrial capabilities should lie.

[Angela Smith]

In his leaked letter last week, the Secretary of State said:

“Where we know big investment decisions are going to be made…we need to put in place a strategy actively to plan how we will strengthen the supply chain”.

Does he therefore agree that a good start would be to work towards ensuring that the new Ministry of Defence tankers are built in Britain, not in Korea, and that our new nuclear reactors are made in Sheffield, not in France?

[Vince Cable]

A great deal of progress is being made in developing British supply chains that were whittled away to a disastrous extent with the decline of manufacturing under the last Government. If the hon. Lady looks at what is happening in the car and aerospace industries, for example, she will find that a lot of supply chains are coming back to the UK. As for her last point, on the nuclear industry, I think she is aware that the company that she represents is a regional growth fund recipient.

Executive Pay

Debate between Vince Cable and Angela Smith

Monday 23rd January 2012 Commons Chamber

[Vince Cable]

I was not aware of the shadow Chancellor’s wisdom on that particular subject, but his party leader has spoken constructively and I hope that that will lead to agreement between our parties on how we can proceed.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Does the Secretary of State still believe that all bankers paid more than the Prime Minister should publish details of their remuneration, as he believed when he was in opposition?

[Vince Cable]

I am surprised that Labour Members keep reminding us about bankers’ pay. Bankers’ bonuses in 2008-09, when the Labour party was still in government, were something of the order of £13 billion. They have now come down to about a quarter of that.

Oral Answers to Questions

Debate between Vince Cable and Angela Smith

Thursday 31st March 2011 Commons Chamber

[Vince Cable]

I am very flattered by the suggestion, if a little surprised, but I am already fully employed with my existing duties. In my recent conversation with my counterpart at DECC, we agreed that considerable progress had been made with Ofgem’s recent report on opening up competition and benefiting consumers, both industrial and personal.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Energy-intensive industries in my constituency, of which there are many, are worried about the cumulative impact of regulations relating to a carbon floor price on their competitiveness. Is the Secretary of State having discussions with the Treasury and DECC to ensure that our industries do not lose out to foreign competition?

[Vince Cable]

I am doing just that. On Monday I was in Port Talbot to talk with Tata Steel about that exact question. It is absolutely right that the Government press ahead with our ambition to decarbonise the economy, but the system of tax and regulation is complex and we must structure it in a way that supports our energy-intensive industries.

Amendment of the Law

Debate between Vince Cable and Angela Smith

Thursday 24th March 2011 Commons Chamber

[Vince Cable]

The claim to be the greenest Government ever has been vindicated in significant part by some of the key announcements in the Budget—of, for instance, the establishment of the carbon floor price, which is the first effective carbon tax system in the world, and the green investment bank, to which the hon. Lady referred. It has been made clear for the first time that it will be a proper bank—a borrowing bank—although, as a public sector institution, it will have to reflect the position of the public finances.

[Angela Smith]

The carbon floor price, which the Secretary of State has just mentioned, could threaten the international competitiveness of key intensive energy users such as the steel, glass, paper and ceramics industries. How will the right hon. Gentleman ensure that growth does not suffer as a result of the policy?

[Vince Cable]

The hon. Lady makes a valid point. I have already spoken to representatives of the steel industry about precisely that issue.

The Budget referred to the climate change agreements and to more extensive relief. Energy-intensive industries are an issue, but any Government who are serious about carbon reduction will have to deal with such industries in a balanced way.

Department for Business, Innovation and Skills (Performance)

Debate between Vince Cable and Angela Smith

Wednesday 2nd February 2011 Commons Chamber

[Vince Cable]

I will take one intervention, and then move on.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Steel manufacturers’ confidence would increase if the Secretary of State could demonstrate that he was prepared to invest in steel, which he failed to do in the case of Sheffield Forgemasters, and if he came clean on whether his party supports the new generation of nuclear power stations that would create so much work for those manufacturers.

Local Growth White Paper

Debate between Vince Cable and Angela Smith

Thursday 28th October 2010 Commons Chamber

[Vince Cable]

Yes, it is designed to do exactly that. I can confirm that Cornwall and Isles of Scilly is one of the LEPs that is going ahead in the first wave.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Given that the £80 million loan to Sheffield Forgemasters was all about providing strategic investment to the advanced manufacturing sector to promote private sector growth, may I take it from the Secretary of State’s statement about focused intervention that his early disastrous decision to cancel the loan will be reversed, or will he continue to dig his heels in in the hope that the issue will go away? I can assure him that it will not.

[Vince Cable]

We have discussed this extensively in the House and in the Select Committee, and we have explained that the situation we were confronted with was that that project was not affordable. If new projects come up from there or elsewhere, they can be considered by the regional growth fund on their merits.

Capital Gains Tax (Rates)

Debate between Vince Cable and Angela Smith

Wednesday 23rd June 2010 Commons Chamber

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

This is the first opportunity that I have had to debate with the shadow Chancellor from this side of the Dispatch Box. May I start by paying tribute to him? I have always said publicly, and am happy to continue to do so, that in many respects he was one of the people who emerged from the wreckage of the previous Government with an enhanced reputation. He did so for two reasons. First, he inherited an enormous banking crisis that was in part the result of the naivety and negligence of the treatment of banking before he became Chancellor. He dealt with it decisively in the autumn of 2008, through liquidity and part nationalisation, and I reassert that he deserves credit for that. Secondly, he has at his core a strong element of honesty and integrity, which occasionally involves him blurting out the truth. There was the famous occasion when he came back from a holiday in the Hebrides and uttered the blasphemous four-letter word “cuts” for the first time, much to the annoyance of his next-door neighbour in Downing street.

The question to which the Government have wanted an answer is this: why were we left £50 billion of cut commitments without any explanation of what they were going to be? On 12 June, the shadow Chancellor gave us an insight into what had been going on. He said:

“I wanted to show more examples of what we could cut, and more examples of what we could switch. But there was a more limited appetite for that than you might think.”

It was not just the appetite of his then next-door neighbour, who is now being blamed for everything, that was limited. I think that there was a limited appetite here and there, and as a result we have been left with the responsibility of spelling out what those painful cuts are.

There is another comment which is not a direct quote of the shadow Chancellor, and he might not even have said it, but let me give it to the House, as I think it reflects quite well on him. He is said to have made an insightful observation on the nature of sovereign debt crises. Apparently, he told the Cabinet, “The ice seems solid the moment before it cracks.” That captures beautifully the dilemma that the Government now face with a sovereign debt crisis in the background. I wish to return to that issue, but first I will briefly answer the technical points that he threw in at the end of his speech.

As I understand it, the French-German proposal is a balance sheet levy similar to what is happening here. The proposals relating to regional rebalancing, which are an important part of the Government’s proposals, have two elements: £5,000 relief from employer national insurance contributions for new companies with up to 10 employees outside the east, the south-east and London, and a fund that will be distributed on the basis of bids received for good projects, especially those with a high-technology and environmental component. The details on that will emerge in due course.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Why, if the Government are so keen on rebalancing the economy regionally, did they turn down the loan to Sheffield Forgemasters?

[Vince Cable]

The hon. Lady knows the reason; it has been explained several times. A lot of questions had to be asked about the affordability, value for money and risk of that project. What was a very highly geared project promised extraordinary rates of return to the private promoter. We looked carefully at all the evidence, and the project clearly had positive aspects, but we decided that in the circumstances of a Government with highly constrained public finances, we could not support it.

[Angela Smith]

Will the right hon. Gentleman give way?

[Vince Cable]

I have answered the question; I do not want to pursue it.

Were the private promoters able to take the project forward, we would be delighted, because as a commercial project it has many attractions. However, the Government could not commit large amounts of money to such a project.

The shadow Chancellor made a series of challenges, which I will take systematically. He asked why we, and I personally, have endorsed austerity policies and especially quick cuts; he asked about the issues around fairness and value added tax, with which I will deal; and he asked about the important economic question of how we get growth emerging from a period of austerity, and I will try to answer that. First, however, let me explain why I changed my mind—for I did change my mind—about the necessity for early action on the budget deficit. Let me describe the sequence of events, because I think that it is quite important.

As the shadow Chancellor knows, because he was still Chancellor then, when the election took place there was, in the background, a major sovereign debt crisis in Europe. The day after the election, when there was a hung Parliament, the then Prime Minister suggested to me, I think for reasons for courtesy, that I talk to some senior officials in the Government and the governor of the central bank about the existing situation, in order to obtain their assessments of what was going on. I did so. The leader of my party talked to the governor, and I have talked to him since.

The advice that I received, uncompromising and unequivocal, was that the incoming Government, whoever they were—we did not know who they would be at the time—would have to act immediately and decisively on the budget deficit, because there was a serious threat to this country. I took that advice, but was left with a nagging question. The former Chancellor was presumably receiving the same advice. What would he have done? Was he proposing to disregard it? The line of policy that he is developing now suggests that he would have liked to disregard it, but was he going to do so, or was he going to be responsible, accept the advice and act on it? Because he is a responsible and serious man, I think he would have accepted it.

We now know, because the figures are becoming clear, that in the current financial year, when, as the shadow Chancellor said, the economy was fragile, he was introducing a fiscal tightening of £23 billion. The new Government have introduced a tightening of £6 billion. The last Government did not announce that fiscal tightening—it emerged in the small print from the Institute for Fiscal Studies—but the shadow Chancellor did it, and he clearly did it with good reason. The problem was that it was never clear what the Government were doing, it was done in a very chaotic way, and some Ministers—including Lord Mandelson, my predecessor—plainly wanted to support the Chancellor and to act in the public interest, and got on with those cuts. When I entered the Department, people such as further education lecturers and scientists were being made redundant as a result of the measures that had already been initiated by the Government in response to the crisis that they knew existed.