Cable quizzed

• [Dec 08] Tristram Hunt (Stoke-on-Trent Central, Labour): WHAT recent steps his Department has taken to support the manufacturing sector.

• Vincent Cable (Secretary of State, Business, Innovation and Skills; Twickenham, Liberal Democrat): The Government are taking action to support and grow modern manufacturing in the UK by encouraging higher levels of innovation exports, business investment and technical skills.

Tristram Hunt (Stoke-on-Trent Central, Labour): In the last few weeks, five ceramic and brick companies have gone bust in the UK, including the Jesse Shirley bone china works in my constituency. The energy-intensive industry measures announced in the autumn statement did little for our pottery industry. Can we now have some movement from the Government on capital allowances for the ceramic sector, which is a vital part of our manufacturing industry?

• Vincent Cable : I will look at the specific issue of the ceramics industry. I know that the hon. Gentleman was involved in promoting an anti-dumping action. We considered the matter carefully, and there were not sufficient grounds to support the rather disproportionate action advocated by the European Commission. Indeed, the Chinese market share has remained pretty unchanged over the past decade. However, we will certainly consider what else can be done to help the industry.

Laurence Robertson (Tewkesbury, Conservative): Is the Secretary of State aware of the excellent cutting-edge technology in my constituency in the aerospace industry? Is he also aware that one of the biggest problems that the industry has is in attracting young people into manufacturing? What can he do to encourage that?

• Vincent Cable : I was in the west country just over a week ago looking at the aerospace industry, which is a considerable success story. My hon. Friend is quite right that one of the constraints is the need for skilled manpower, which is why in our rapidly growing apprenticeship programme we are setting aside funding specifically for advanced apprenticeships in engineering skills of the kind that firms in his constituency need.

Adrian Bailey (West Bromwich West, Labour): There is an increasing body of evidence to show that small manufacturing companies are not only having difficulty in accessing finance to expand but are discouraged from applying for it because of a lack of confidence in

the ability to sell any increased production. What is the Secretary of State doing to persuade the Chancellor that the time is right for a stimulus in the demand side of the economy as well as provisions for the supply side?

• Vincent Cable : A stimulus to demand is coming from two sources. One is rapidly growing export markets in emerging markets, where our export growth is very substantial. Manufacturers, including small and medium-sized enterprises, are taking a substantial part of that. In addition our monetary policy, which is supported by the Bank of England, with low short and long interest rates, quantitative easing and credit easing, is supporting demand.

Matthew Hancock (West Suffolk, Conservative): In his efforts to support manufacturing, will the Secretary of State agree that high executive pay that rewards not success but failure can inhibit growth, and that dealing with it is an important part of supporting manufacturing, financial services and other parts of the economy?

• Vincent Cable : My hon. Friend is absolutely right, and the point is very well made. There is now a remarkable consensus. We have had evidence to the inquiry that I initiated into executive pay from, among others, the CBI, showing a high level of social responsibility and an acknowledgment that much executive pay has been disproportionate and unrelated to performance in the past. We intend to reform that.

Iain Wright (Hartlepool, Labour): Mr Speaker,

"Germany has had an industrial strategy as well as an economic strategy. Applied with huge consistency of purpose. This has greatly helped German industry plan for the future. Let us compare this with the position in the UK…In terms of industrial policy there are serious deficiencies."

Those are not my words, but those of Lord Heseltine in a speech only a couple of weeks ago. Given yesterday's dire figures from the Office for National Statistics, which showed the biggest output drop in manufacturing since April, and three times the fall forecast by analysts, is it not time the Secretary of State listened to Lord Heseltine and provided a comprehensive well-planned industrial strategy for the long term that supports British manufacturing and helps it become more competitive?

• Vincent Cable : I often wonder which Opposition Front Bencher will be courageous enough to talk about manufacturing, reminding the House that we lost 1.7 million jobs in manufacturing in 13 years of a Labour Government, and manufacturing's share of the economy shrank from 18% to 10%. We are addressing that, and I certainly listen to Lord Heseltine, who has an office in my Department. We frequently interact, and he has some very good suggestions.

We are pursuing support for innovation through the advanced technology innovation centre, pursuing support for advanced apprenticeships, on which we are doing a great deal, and co-financing private investment through the regional growth fund and the Green investment bank, which is due to start. As I announced yesterday, we are also considerably increasing support for supply chains using a new £125 million fund.

. . Regional Growth Fund

Esther McVey (Wirral West, Conservative): What assessment he has made of the effect of the regional growth fund on private sector investment.

• Vincent Cable : In April we announced that the regional growth fund would conditionally support 50 projects, amounting to £450 million of Government investment and leveraging an estimated £2.7 billion of private sector investment. In October we announced that 126 projects would receive conditional funding of £950 million, leveraging an estimated £6 billion of private sector investment.

Esther McVey (Wirral West, Conservative): I welcome the regional growth fund, in rounds 1 and 2 of which, companies on Merseyside, including Stobart, Pilkington, Liverpool Vision and Trinity Mirror, have done very well. Wirral Investment Network, a business network for smaller companies, wants to know by what routes it can apply to the regional growth fund.

• Vincent Cable : Our estimate is that roughly a third of all regional growth fund money is going to SMEs, and there are several routes through which it goes. First, there are packets of SME loans, one of which was in Liverpool, while another is in Plymouth. Indeed, I saw that one a couple of weeks ago, and it is going extraordinarily well. There are specifically tailored schemes-for example, the RBS-HSBC scheme linked to asset finance-and programme bids, as in Manchester, all of which are targeted at SMEs.

Geoffrey Robinson (Coventry North West, Labour): The Secretary of State will be aware that in the last round an SME in Coventry was turned down for a major investment from the regional growth fund. Despite the fact that the council and, more importantly, the local enterprise partnership were in full support, the company was turned down-I am not particularly grumbling about the decision, disappointed though we were, of course-on the grounds that the ownership was wrong. Will the Minister put in place better criteria for sifting schemes locally and regionally? The company wasted an awful lot of time and money in preparing its bid.

• Vincent Cable : I would certainly be happy to look into the background of that particular case. As the hon. Gentleman knows, we have an impartial process. Applications come to Ministers and then go through Sir Ian Wrigglesworth and Lord Heseltine, who sift and assess them properly. There is a new round for the regional growth fund, and if the project that the hon. Gentleman mentions can be reworked, we would certainly be very happy to look at it.

. . Green Investment Bank

Glenda Jackson (Hampstead and Kilburn, Labour): What recent progress he has made on the Green investment bank.

• Vincent Cable : The development of the Green investment bank is making good progress. Prior to its establishment, the Government are planning to invest in projects from April 2012, including in renewable energy and the non-domestic energy efficiency and waste sectors. We will announce the process for deciding the location of the bank shortly.

Glenda Jackson (Hampstead and Kilburn, Labour): There are reports that the Government have dramatically lowered their funding for this potentially innovative venture, so when, if ever, will what threatens to become a mere piggy bank be open for business?

• Vincent Cable : Those reports are simply incorrect. The Government's commitment was for £3 billion, and that remains the case. We expect the bank will have leveraged in another £15 billion by the end of this Parliament. That is our commitment, which we will stick to. I am relieved that Hampstead and Kilburn are not adding their names to the list of cities hoping to attract the Green investment bank.

Michael Crockart (Edinburgh West, Liberal Democrat): I welcome the Secretary of State's statement of a few moments ago. May I press him to tell me and the poised Edinburgh Green investment bank bid team when he will publish the criteria for deciding the location for the bank and what those criteria are likely to contain?

• Vincent Cable : We shall set out the process in the next few days. There are a great many bids from different cities and, indeed, some quite small towns around the country, all of which must be assessed properly and fairly.

Mark Lazarowicz (Edinburgh North and Leith, Labour): Will the Secretary of State confirm that investment in wind turbine technology is a potential recipient of Green investment bank funding? Gamesa has been considering locations in various parts of the United Kingdom for a major scheme with which it is proceeding, and has identified Leith, which is in my constituency, as a possible location. Will the Secretary of State work with the Scottish Government to try to bring this important facility to Scotland and to the UK?

• Vincent Cable : That is exactly the kind of project that the bank will be considering, and a team of people are already preparing projects for submission.

. . Business Taxation

Edward Leigh (Gainsborough, Conservative): What assessment he has made of the effect on the growth of small and medium-sized enterprises of planned reductions in the level of taxation; and if he will make a statement.

• Vincent Cable : Many SMEs will benefit from lower corporation tax, reforms to research and development tax credits, relief of business rates, increases in employer national insurance contribution thresholds and tax advantages in the 22 new enterprise zones.

Edward Leigh (Gainsborough, Conservative): We already have the longest tax code in the world. Does the Secretary of State accept that what business wants are not more allowances from the

Government but across-the-board tax cuts so that they can get on with running their own business in their own way?

• Vincent Cable : Many businesses, as I have just said, receive substantial tax cuts, which is absolutely right. As the economy progresses, there will be more, and there is also an exercise in tax simplification, the results of which will be announced at the beginning of next year.

. . Topical Questions

Sajid Javid (Bromsgrove, Conservative): If he will make a statement on his departmental responsibilities.

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

John Bercow (Speaker): We are all intrigued by the Minister's exploits, I am sure.

Dennis Skinner (Bolsover, Labour): When the Secretary of State was talking about the running down of British industry, he failed to mention that, in the 1980s, the Thatcher Government employed MacGregor to come over here and close large parts of the steel industry, and he almost destroyed the whole mining industry. Does the Secretary of State not realise that, surrounded by all those Tories, he is a mini-MacGregor of his day, carrying out the dirty work of the Tories and overseeing the demise of the rest of British industry? He does it not for the money that MacGregor got but for a ministerial car and a red box.

• Vincent Cable : After the hon. Gentleman's previous contribution, I set up a visit to his constituency, which will take place, I think, in the first quarter of next year. I can discuss these matters in depth with him then, which I think is rather more than my Labour predecessor did. The hon. Gentleman has been a Member for a long time, but he has overlooked the fact that in the 13 years of Labour Government there was a decline in manufacturing output averaging 0.5% a year.

Gordon Banks (Ochil and South Perthshire, Labour): Last week we heard how Project Merlin had failed and was going to be bailed out by credit easing. How many banks have signed up to credit easing, how many small businesses will be helped by that, and will it be more successful than the business growth fund was?

• Vincent Cable : The Merlin project certainly did not succeed in its central objective, which was to achieve growth in gross lending by banks. There has been a contraction in net lending for a variety of reasons, not least the fact that many companies are holding more cash. Credit easing will be commenced soon. The Treasury will maintain a metric of performance by individual banks, and this will lower the cost of capital for many of their customers. The cost of borrowing and covenanting, as much as access, has now become the central concern.

John Pugh (Southport, Liberal Democrat): Will the Minister explain how revising TUPE will actually create more jobs, as opposed to facilitating outsourcing?

Edward Davey (Parliamentary Under Secretary of State (Employment Relations, Consumer and Postal Affairs), Business, Innovation and Skills; Kingston and Surbiton, Liberal Democrat): My hon. Friend will know that there are mixed views in the business community about whether or not the current TUPE regulations are gold-plated, which is why we have called for evidence. We have not published a consultation with specific proposals as we want to have evidence from all stakeholders, so that when we make our proposals in a future consultation they will be well evidenced.

John Denham (Southampton, Itchen, Labour): May I draw the Secretary of State's attention to the £150 million worth of entirely private investment that Associated British Ports wants to spend now to equip Southampton for the next generation of container ships? Instead of creating and supporting 2,000 or more jobs, this project is mired in red tape in the Department for Environment, Food and Rural Affairs and its agencies. Will he speak to his colleagues to try to get this vital project under way?

• Vincent Cable : Yes, I will certainly do that-that seems a very helpful intervention. As the right hon. Gentleman knows, logistics, including ports, were a major part of our work in the growth review. A lot is now happening to open up British ports and invest in them, and I will certainly pursue his inquiry.

Tessa Munt (Wells, Liberal Democrat): The county of Avon was abolished in April 1996. The Somerset village of Shipham was never part of Avon and has always been in Somerset, so it is a constant irritation to my constituents that post, including that from all Government agencies and any organisation using the Royal Mail's database, is addressed to Shipham in Avon. When complaints are made to the Royal Mail's headquarters, they elicit the reply, "We like to give users an historical perspective." That is complete tosh. The Royal Mail does not update its database and will not correct inaccuracies in the address details. Will the Minister wade into this ancient, decades-old dispute on behalf of the long-suffering villagers and get this bizarre-

John Bercow (Speaker): Order. I think we have got the thrust of it.

Edward Davey (Parliamentary Under Secretary of State (Employment Relations, Consumer and Postal Affairs), Business, Innovation and Skills; Kingston and Surbiton, Liberal Democrat): I am very grateful for my hon. Friend's question. She will be aware that her constituents in this village share their concerns about postcode issues with many other residents in many other constituencies across the UK. I have raised this matter in the past with Royal Mail, and it believes that the costs of changing its systems would be disproportionate. Of course I will raise her point, but I do not want to raise her expectations.

Chris Bryant (Rhondda, Labour): The Labour Government introduced the artists resale right, which has made an enormous difference to many artists in this country. The law requires that it is introduced for the estates of deceased artists from 1 January next year.

When I last asked the Secretary of State about it, he said that he could not confirm that it was going ahead and he still looks as bemused as he did then even though it is his responsibility, but the Arts Minister has told me that it will go ahead as long as I do not mention it to anybody else. Will the Secretary of State please now inform us exactly what is happening on the artists resale right?

Edward Davey (Parliamentary Under Secretary of State (Employment Relations, Consumer and Postal Affairs), Business, Innovation and Skills; Kingston and Surbiton, Liberal Democrat): rose -

Chris Bryant (Rhondda, Labour): The Secretary of State.

• Vincent Cable : I believe it will go ahead; I have made further inquiries since the hon. Gentleman's original question.

Martin Vickers (Cleethorpes, Conservative): The Secretary of State visited my constituency in July, closely followed by the Minister of State, Department for Business, Innovation and Skills, Greg Clark, clearly recognising the need to boost the local economy. Since that time, we have had two enterprise zones, regional growth fund successes, a new road scheme and the halving of the Humber bridge tolls. My constituents are asking: what next?

• Vincent Cable : I think there is an expression that goes, "post hoc ergo propter hoc". It is not just a coincidence.

John Bercow (Speaker): I once used that on "Any Questions". I say to the Secretary of State that it does not work.

• Full Debate in Parliament