Prospects for Growth

Huw Irranca-Davies (Ogmore) (Lab)
3.  What assessment he has made of the prospects for growth in 2012.

The Secretary of State for Business, Innovation and Skills (Vince Cable)
The Office for Budget Responsibility produces independent forecasts for the economy and  for the public finances. The OBR’s November 2011 economic and fiscal outlook predicts that the UK economy will grow by 0.7% this year and by 2.1% in 2013.

Huw Irranca-Davies
I thank the Secretary of State for that answer, but consumer confidence is plummeting, the retail sector is struggling, the growth in jobs in the private sector is not matching the losses in the public sector, and in my constituency scores of people are chasing every single job. So if not Labour’s five-point plan for jobs and growth, what? This Government are not working.

Vince Cable
If the hon. Gentleman actually read the analysis produced by the Bank of England and, more recently, the Institute for Fiscal Studies, he would understand why the economy is growing slowly. The combination of higher commodity and oil prices last year and, more recently, the crisis in the eurozone is affecting all developed countries, many of them much more than the UK.

Mr Brian Binley (Northampton South) (Con)
As confidence in growth continues to diminish among members of the small business community, does the Secretary of State share my view that the Chancellor should use more than one tool to get the economy moving? Many people think that he has lost the tool box. What influence is the Secretary of State bringing to bear on behalf of small businesses to nudge the Chancellor into creating greater private sector demand?

Vince Cable
My hon. Friend is absolutely right to stress the crucial importance of small business. As he well knows from the autumn statement, the Chancellor has come forward with ideas about credit easing to make credit more easily available at lower rates to small companies, and we will wait for the Budget to see how that will be elaborated.

Mr Gordon Marsden (Blackpool South) (Lab)
Our economy contracted in the last quarter, with small business confidence at rock bottom in the latest Federation of Small Businesses survey, and we teeter on the edge of recession, yet Ministers have lost control of the levers that active government has for growth. Why, 10 months after the first regional growth fund winners were announced, do a third still wait for their money while £1 billion from Europe lies idle? With national apprenticeship week about to start, why are Ministers not, as we have urged them, taking unused money from the growth and innovation fund to expand local schemes for small businesses to take on thousands more young people? Is it not true that today, under this Government, growth is just as glacial as the weather?

Vince Cable
On the specifics, as the hon. Gentleman will know, a third of regional growth fund projects have already started. I am surprised that he picks up apprenticeships as a theme, because we have increased their number by 50% in the last year from the rather depressed levels we inherited. In terms of broad policy, I understand that the hon. Gentleman is standing in this morning for my opposite number, the hon. Member for Streatham (Mr Umunna), who wrote to tell me that he has gone to Germany looking for inspiration. I think the first thing the Germans will tell him is that if he wants sustainable growth, there has to be fiscal discipline.

Roger Williams (Brecon and Radnorshire) (LD)
In these difficult times, the food and drink sector is an example of success with year-on-year growth. I commend the report by the Department for Environment, Food and Rural Affairs and UK Trade and Investment entitled “Driving Export Growth in the Farming, Food and Drink Sector”, but trade barriers still exist. Will the Secretary of State ensure that such trade barriers are broken down so that this sector can go from strength to strength?

Vince Cable
My colleague is right to stress the importance of the food sector, including food manufacturing. We often talk about advanced manufacturing, but some of the most sophisticated industries are often in those traditional product areas. He is right about the importance of opening barriers. In the European Union context, my team is actively pursuing trade liberalisation with a variety of Asian countries, the Mercosur countries and others. We hope that those agreements will be delivered soon.