Business Certainty

Oral Answers to Questions — Business, Innovation and Skills – in the House of Commons at 9:30 am on 7th February 2013.

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Photo of Stephen Doughty Stephen Doughty Labour, Cardiff South and Penarth 9:30 am, 7th February 2013

What assessment he has made of the need for business certainty for firms to secure investment and long-term growth.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Industrial strategy sets out a long-term approach to deliver greater certainty and growth in partnership with business. We will publish 10 sector strategies jointly with business throughout 2013.

Photo of Stephen Doughty Stephen Doughty Labour, Cardiff South and Penarth

Whether it is on energy, infrastructure or Europe, the Government are sending out confused signals, no signal or the wrong signal to business. On the latter point, what representations has the Secretary of State had from businesses on the impact on investment and growth of his Government’s decision to hold an in/out referendum on EU membership in 2017?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Inward investors always make it clear that they want certainty and clarity in that matter. TheCityUK recently did a survey which suggested that the stability of our membership of the single market accounted for roughly 40% of decisions to commit to the UK.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

I am sure my right hon. Friend agrees that it serves no good purpose at all in the context of certainty to delay airport decisions until way after the next election. Will he confirm that he has put pressure on his colleagues in government to use the opportunity of the interim report at the end of this year to provide clarity for businesses, residents and communities?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I know that the hon. Gentleman shares many of my concerns about airport expansion. The wider national interest must be safeguarded and we have commissioned Sir Howard Davies to do a proper and thorough investigation into the extremely difficult issues associated with Heathrow expansion.

Photo of Iain Wright Iain Wright Shadow Minister (Business, Innovation and Skills)

Tomorrow marks the first anniversary of the leaked letter from the Business Secretary to the Prime Minister, in which he acknowledged the need for

“a compelling vision of where the country is heading…Where we know big investment decisions are going to be made…we need to…provide certainty to business.”

In only the past few weeks, Bloomberg New Energy Finance stated bluntly:

“Investors have made clear to the UK government that policy uncertainty has undermined investment”,

and the National Audit Office said in its report on infrastructure that

“uncertainty over government policy might lead project sponsors, lenders and contractors to defer or abandon projects in the UK for opportunities elsewhere.”

One year on from his letter, why has nothing improved?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

A great deal has changed. There is now a great deal of support not only in government but across business for the industrial strategy. If the hon. Gentleman had been following the news he would have seen that some sectors, particularly the car industry and aerospace, have highly impressive growth and a long-term commitment to Britain. That is what we are trying to achieve.

Photo of Ian Swales Ian Swales Liberal Democrat, Redcar

Will the Secretary of State look again at the sudden change in the combined heat and power regime announced in the 2012 Budget? The CHP provisions are expected to last until 2023 and the change has resulted in a severe financial penalty to energy investors, such as Sembcorp in my constituency.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

My hon. Friend’s question more directly relates to the responsibilities of my colleague the Secretary of State for Energy and Climate Change. On the broader point about energy policy, however, there is much greater clarity with the electricity market review. Particular sectors and their treatment under it, such as those involved in CHP, perhaps need to be reconsidered and I am sure that my hon. Friend will talk to my colleague about that.