During the third day of debate on the Queen's speech – Business and the Economy, Bill Cash made the following interventions:
The Secretary of State for Business, Innovation and Skills (Vince Cable): The measures set out in the Queen’s Speech reassert the coalition Government’s fundamental commitment to rescuing the UK economy and promoting growth. There is no easy route out of the debris of a financial collapse. I start with that point, since one of the most important pieces of legislation in the Queen’s Speech is structural reform of banking, which I have worked on closely with the Chancellor.
More broadly in relation to pursuing growth, it is clear that the economic model that produced growth in the past decade and a half was fatally flawed. It rested on the illusion that growth could be created by a bloated banking sector, a bubble in property values, ballooning household debt and an unsustainable budget deficit. In practice, what we saw was that business investment stagnated, and British manufacturing industry was left to decline as a consequence of an overvalued exchange rate that resulted from the imbalances in the economy.
The ongoing crisis in the eurozone makes the task even harder. The turmoil in Europe serves to illustrate the wisdom of creating a firewall of confidence in the UK against otherwise panicky financial markets. The low interest rates that our policies have created provide an economic platform for support of private and public investment in infrastructure and housing. We are very conscious that the absence of growth is a major challenge and it accounts for much of the frustration of the public, who are understandably impatient to see a recovery from the financial crisis and its aftermath, which wiped out 10% of our economy, dragging down the living standards of many families.
Mr William Cash (Stone) (Con): We have been here before. We have heard about enterprise and regulatory reform Bills and all the like. Will the Secretary of State categorically assure us that he will arrange in the Bill for the overriding of that European legislation that imposes an impossible burden on small and medium-sized businesses? He knows it, the Government know it, promises have been made, and the Prime Minister said that he regarded it as an imperative necessity. Will the Secretary of State please get on with it?
Vince Cable: I think that I can deliver the spirit if not the letter of the hon. Gentleman’s intervention. I do not think that we can override European legislation in quite that way, but I do agree that there is a lot of unnecessary and burdensome European regulation, and I am working with what we call like-minded Ministers in other European Governments to get rid of it as much as possible.
Mr William Cash (Stone) (Con): The Queen’s Speech has not been universally well received in the press—we saw that yesterday—or by the electorate. However, I want to concentrate on the broader landscape, and on the question of what is at the root of the problem that we face today. It is partly the level of debt. We are not really telling the British people the truth about that, as my right hon. Friend the Member for Wokingham (Mr Redwood) and I, as well as others, said repeatedly before the general election. If we include pension funds, Network Rail and all the rest, the level of debt is probably about three trillion pounds. That debt has to be serviced, and finding the money to pay for it presents an enormous challenge.
The second point that I want to make is that this is not just a question of austerity or no austerity. Yes, we must be efficient and we must reduce public expenditure, but as I must have said a thousand times before the general election and on other occasions—and in a paper that I wrote only last year—the main issue is growth. I agree with earlier speakers who have pointed out that that growth must be demonstrably produced, and that cannot be done without a prescription. Small and medium-sized businesses must be given the oxygen that will enable them to provide employment and generate the revenues that pay for public expenditure.
Let us consider what is going on in the rest of Europe. Mr Hollande has just said that he does not want austerity and he does want growth, but the problem is that when he applies his test to austerity, he will not be able to secure growth. Let me say this to some of my friends on the other side of the Chamber. The fact is that employment regulations, the working time directive, paternity and maternity leaves and so forth have reached a point at which—in aggregate; I do not refer to any individual measure—they have strangled the small and medium-sized business environment of Europe which, in the real world, must compete with the Indias, the Chinas and the South Americas. For practical purposes, we in this country must recognise that growth will come only from the generation of small and medium-sized businesses and a reduction in legislation. Yes, there is massive youth unemployment in other countries, but we cannot grow within a European Union which itself represents about 40% of our trade with those countries, and they cannot grow because they themselves were inhibited by the strangulation of small businesses, and also by the increase in legislation. As Chairman of the European Scrutiny Committee, I can assure the House that there is no stopping that; every week we are given pile after pile of it.
Another problem is caused by the treaties themselves, and by the whole construction of the economic governance. I ask Members on both sides of the House to try to see the broader landscape, and to recognise that this cannot go on. It is destroying not only our economy, but other economies throughout the European Union. This is not just about the amounts of bail-outs; it is about the reason for the bail-outs. This is the message: the reason for the bail-outs is the fact that there is no growth and no competitiveness. Young people are out of work because there is no means of giving them work. We need a convention of the whole of Europe, at which the leaders of Europe sit down opposite each other and talk this through in a sensible, rational manner, admitting that what has gone wrong has to be remedied. Representatives of the national Parliaments must be present, too, and there must be a constructive dialogue about the kind of Europe we want, because at the moment it is heading for disaster.
In the meantime, we have to deal with our own immediate problem, which is that there is no growth in this country either, and there is the massive debt, and the deficit is not really being reduced at all. The Opposition’s criticisms are therefore justified in theory, but in practice they offer no remedy. I strongly believe that we should override the European legislation. I was disappointed in what the Secretary of State said in response to an intervention of mine, because it is essential that we kick-start our small and medium-sized businesses and reduce the burden of regulation.
In 2005, the current Prime Minister described it as an imperative necessity to repatriate powers. On 16 May 2006, I proposed an amendment to the Legislative and Regulatory Reform Bill that, notwithstanding the European Communities Act 1972, would have enabled us to override European legislation where necessary. Some 50 current Government Ministers—Conservative Ministers—supported my amendment. It was then “three-lined” in the House of Lords, and it was opposed by the current Deputy Prime Minister and the Lib Dems. No repatriation of powers is a suicide note for the British nation. That is the message. We have to deregulate; we have to give oxygen to the SMEs. That is in the national interest.