Cable quizzed: Topical Questions

• [Jun 09] Jack Dromey (Birmingham, Erdington, Labour): If he will make a statement on his departmental responsibilities.

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

Jack Dromey (Birmingham, Erdington, Labour): The Government are forcing Advantage West Midlands to engage in a fire sale of £108 million-worth of assets. They are blocking councils from gaining those assets and barring local enterprise partnerships from retaining them, yet they have seen fit to gift Boris Johnson with London Development Agency assets. Why can they not do the same for high-need, high-unemployment Birmingham?

• Vincent Cable : There is no fire sale of regional development agency assets. There was always a process of disposal of those assets by the RDAs themselves, and roughly 20% of their assets are likely to be sold. The others are being passed on through the different channels, which the hon. Gentleman knows about.

Sarah Newton (Truro and Falmouth, Conservative): The Minister will be aware of the outstanding Truro and Penwith college, which is based in my constituency. In recognising the new opportunities to expand its provision of higher education, he will also be aware of the constraints on the ability of further education colleges to award degrees. At the moment, they need a university partner. What support can he offer to excellent FE colleges to enable them to award high-quality degrees?

David Willetts (Minister of State (Universities and Science), Business, Innovation and Skills; Havant, Conservative): I support the excellent work of FE colleges in providing higher education in Cornwall and elsewhere. I am concerned, as is the Secretary of State, by reports that some universities might be threatening to end their partnerships with FE colleges without good reason, but I reassure my hon. Friend that FE colleges are indeed eligible to apply for their own degree-awarding powers. In addition, our White Paper will propose making it easier for FE colleges to access a wider range of external degrees.

John Denham (Southampton, Itchen, Labour): I welcome the good news from Nissan and BMW, which, despite the Secretary of State's curmudgeonly response, built on Labour's support for those companies' investment in the UK. In 2006, he was very clear when he said:

"The DTI, and its army of Sir Humphreys, should be scrapped."

Then he was offered the job of running it, and said that it would be the Department for growth. How is the Department for growth getting on?

• Vincent Cable : The Department for growth is getting on extremely well. The right hon. Gentleman seems to have forgotten that a change took place after 2006, and that my Department was amalgamated with the one that he used to run. He might want to speculate as to why we took it under our wing. Certainly, growth is taking place. There is rapid growth now beginning to take place in manufacturing and exports. That is a consequence of this Government's determination simultaneously to get on top of the fiscal deficit and to rebalance the economy, and that is happening.

John Denham (Southampton, Itchen, Labour): Actually, the old DTI was merged with my Department. The truth is that in the past year the Office for Budget Responsibility has lowered its growth forecast three times, long-term unemployment has been at its highest since 1997, retail sales are down, construction is in the doldrums and consumer confidence has been at record lows. Is it not the truth that the Business Secretary has wrecked support for the regions, cut consumer protection when prices are raising ahead of wages, talked tough and delivered nothing on bank lending, bungled higher education and produced a growth plan so unconvincing that it is being rewritten as we speak? The Business Secretary is wrong, is he not, to think that his Department cannot make a difference. It could. It is not just the Chancellor who needs a plan B, is it?

• Vincent Cable : The right hon. Gentleman has a short memory. He does not seem to appreciate that the failed model of growth that we inherited was not simply a question of the budget deficit, as we had a massive problem with consumer debt, which inhibits consumption; we had a massive property bubble, which collapsed; and we had a banking system, the largest in the developed world, that collapsed on us-and we are having to dig our way out. A major rebalancing of the economy is having to take place. It is difficult, it is painful, but as I said in response to the earlier question, that rebalancing is now occurring through the growth of manufacturing and exports and through business investment, which is where it needs to be.

. . Nick Smith (Blaenau Gwent, Labour): Given the public outrage at the "quick buck" strategy at Southern Cross, the Financial Timessays that the future of 31,000 elderly people is in jeopardy. Will the Secretary of State investigate the conduct of the directors and consider whether regulation should be extended to ensure the financial stability of companies that care for our parents and our relatives?

• Vincent Cable : My colleague the Secretary of State for Health has made it absolutely clear that no resident, whether publicly funded or self-funding, will be left homeless or without care. In other words, the residents will be given priority and the Government have taken the responsibility to ensure that they are protected. As to the company itself, it had a long-standing failed business model. The Minister of State, my hon. Friend Mr Hayes has been in touch with the banks to ensure that the their credit is properly managed in this critical period so that it happens in an orderly way. There is no way in which we can bail out the company, but I have asked my officials to look carefully at the business models of companies that provide public services to ensure that they are stable and that the responsible sector regulators are able to act appropriately.

Gordon Banks (Ochil and South Perthshire, Labour): We have heard from the Secretary of State's own mouth that Project Merlin has fallen at the first hurdle. We also now know that one of the promoters of the business growth fund, Santander, has withdrawn from the fund. What impact will that have on Project Merlin, on the business growth fund, and on growth and investment in the United Kingdom?

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• Vincent Cable : The business growth fund is an extremely promising initiative, filling a gap in capital markets that has been left empty pretty much since the 1920s: the provision of equity for rapid growth mid-cap funds. The £2.5 billion fund is committed to by the main banks, and Santander wishes to pursue its own initiative, which is additional to the fund. The business growth fund is a great success. It was launched in Birmingham-I was there a few weeks ago-and it will achieve a lot for British industry.

• Full Debate in Parliament