Vince Cable should not be posturing on pay, he should be gunning for growth

Craig Barrett 11.59am

As the conference season close, a short mental review of politically offensive soundbites leaves one that jars with me above all others. Not, as Nik and I wrote, Ed Miliband’s schizophrenic tax regime; not the fact that the Lib Dems felt the need to paint the Tories as the villains of the piece (contrast that with our praise for their commitment), not the awkwardness surrounding the Human Rights Act.

It is Vince Cable’s statement that the biggest regret of his time in charge of the Department for Business, Innovation and Skills (BIS) is that he has failed to curb bankers’ bonuses.

Cable can only be playing to the crowd. To an extent, that is what a party conference is about but when you have the ministerial profile that Cable does, words should be chosen more carefully. We are all aware that he is a loose cannon, e.g. his statements about “war” with News International, but I remain of the view that his reputation as some kind of economic visionary is ill-deserved. The joke about him having predicted 50 of the last 35 recessions is a fair one.

John Denham, one of the more effective members of the shadow cabinet, summarised the offensive nature of Cable’s regret rather well:

“Vince Cable says his biggest regret from the last year is not tackling bank bonuses but it should be his complete failure to support business, create jobs, help small and medium enterprises to access finance and to build on the growth he inherited from Labour.”

We can dispute the final part of the sentence but the rest is true. Cable should not be posturing on the subject of pay, he should be gunning for growth.

The clue is in the real title that Cable holds, the one that existed before it was changed by New Labour: he is the Secretary of State for Trade and Industry and President of the Board of Trade. It is within his remit to regulate industry or rather, to de-regulate it.

Unfortunately, as Camilla Cavendish notes in The Times (£) this morning, companies appear to have an ever-increasing regulatory burden, arising I assume from Cable’s misguided belief that he needs to act to prevent rather than to create.

Whilst bonuses may be offensive to many in society, what is more offensive is a total absence of growth and a deeper recession. Nothing rewards success like excess and our economy needs to remain competitive. That must incorporate the ability to reward people appropriately - this is symptomatic of the need, as far as is possible within the realms of sanity, to let industry get on with being industrious. Compliance costs money and when cash is tight, an ever-increasing amount of red-tape makes a precarious economy start to teeter on the edge of the proverbial precipice.

In my legal field, we recognise the fundamentally asphyxiating nature of a narrow interpretation of the egregious new Bribery Act - a piece of legislation currently preventing effective marketing. To take another example, the thoroughly un-British Working Time Directive has created less experienced junior doctors in our hospitals. These, amongst many others, are burdens that urgently need to be examined to see if they genuinely add anything or are simply exercises in collating forms.

There is a solution. Vince Cable is the least effective member of the Cabinet; whether because he temperamentally unsuited to government or whether he is more interested in his own reputation is entirely a matter for him.

At the same time, there is a man who it could be argued is in the wrong job, as events of this week have shown. Step forward the Lord Chancellor and Justice Secretary, Ken Clarke.

The old cliché about him being the man who got us out of recession last time still holds true. He really understands what it takes to get things moving, having presided over a strong economic recovery as Chancellor of the Exchequer in the 1990s, but also having been a minister at the Department of Trade and Industry. He shadowed the business brief in Opposition and his “one in, one out” approach to regulation would make a dramatic difference to businesses who must despair at each latest edict from BIS.

Famous for his relaxed attitude to life and politics, a Ken-driven relaxation of red-tape would get our nation trading again.

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Joining the Jungle VIP: Government announces eleven new Enterprise Zones

Nik Darlington 0.01am

A higher than expected hike in inflation. Miserable job statistics coming out of the North. Frustratingly low growth figures. Julian Glover is right to sound a note of optimistic caution - the world really is not as bad as it seems. Notwithstanding financial contagion, famine and collapsing morals, humanity is stonkingly well off, historically speaking.

Yet for British business, it really is still a bit of a jungle out there. Survival of the fittest is de rigeur on the High Street, and at the best of times it is invigorating - at the worst of times, maybe these times, it is terminal and inhibiting.

Who is a good person to count on in a jungle? Tarzan. As the Economist noted in March, today’s political leaders - including David Cameron, George Osborne, even Tory card bearing Nick Clegg -  came of age in the 1980s. Enterprise Zones were a genuine success story, the 70,000 Canary Wharf workers today being a living testament to that. So it is no wonder that they have returned to what they know best. TRG patron, Lord Heseltine, was the Minister who brought them in. He remains one of the Conservative party’s most able communicators and has close links to Number 10.

The Government has already announced Enterprise Zones for Birmingham, Bristol, Leeds, Sheffield, Manchester, the West of England, Tees Valley, the North-East, the Black Country, Derby, Nottingham and London’s Royal Docks.

Later today, Ministers will announce a further eleven new zones (see below), which aim to help create over 30,000 new jobs by 2015 and attract hundreds of new start-ups through simplified planning rules, super-fast broadband and more than £150 million of tax breaks. Local authorities will also be able to keep revenues of business rates from within their zones.

The Chancellor, George Osborne, is expected to say that the country needs more “balanced growth”, with less reliance on the City of London.

The Communities Secretary, Eric Pickles, will place great emphasis on local solutions to growth: “This Government’s job is to foster local enterprise and create the conditions for businesses to thrive in.”

The Chancellor’s original announcement in March was welcomed positively on the whole. However, two think tanks - the Work Foundation and the Centre for Cities - dismissed the enterprise zones of the 1980s as having been misleading and ineffective. The Government contends that things will be different this time because the new zones will focus, as the BBC reported, on areas with potential rather than those in decline.

Robert Halfon, the Conservative MP whose Harlow constituency is amongst the new zones, certainly agrees.

“Our town has an excellent reputation for industry. In fact, we are one of the most entrepreneurial towns in England, as our rate of new start-up businesses is well above average.”

Mr Halfon played a significant personal part in winning the prize for Harlow, lobbying the Government and fighting a sustained publicity campaign since being elected at the third attempt last year.

But above all, says Mr Halfon, this decision is “a vote of confidence in Harlow” and thanks to “the combined efforts of local businesses, residents, Harlow Council, and hard-working councillors, without whom this would not have happened.” As part of an aggregated new zone comprising areas in Kent, Essex and East Sussex, Harlow will be able to retain the revenue from future business rate increases for the next 25 years.

These are bold ambitions and, as the Spectator’s David Blackburn notes, “timely” in the context of worsening economic malaise here and elsewhere. Letting local authorities keep their business rates is a good idea, but this sort of devolution of tax policy must now be extended more widely.

Nevertheless, the Government’s expectation of tens of thousands of new jobs looks optimistic, considering the convincing evidence that Enterprise Zones, however successful at attracting investment, also mostly attract existing jobs from elsewhere. Moreover, relying on “simplified planning rules” is genuinely worrying, considering how ill-advised and potentially damaging is the Government’s new planning policy framework.

Of course, the long march to growth is exactly that, a long march. It is not the sprint that the ‘plan B’ advocates in the Labour party and the press like to imagine. It took this country several decades to achieve [sic] an economy as imbalanced as this one, and it will take more than one term of the coalition to rebalance it.

The Enterprise Zones will be rubbished by many as a hackneyed old idea that had its time and whose greatest success - London’s Docklands - only helped to suck even more wealth and talent southwards. But they are long-term measures, with a time-span of as much as 25 years. The Prime Minister who eventually benefits (one hopes) from these policies is probably still at university, forming their thoughts and ideas about the world.

Mark Twain said that history doesn’t repeat itself, but it rhymes. Cameron and Osborne say that they aren’t repeating Tarzan’s task, but they’re humming a very similar sort of tune.

The full list of new Enterprise Zones - or the Jungle V.I.P., if you will:

• Rotherwas Enterprise Zone - in Hereford led by the Marches Local Enterprise Partnership

• Northampton Waterside Enterprise Zone - led by the South East Midlands Local Enterprise Partnership

• Newquay Aerohub Zone – led by the Cornwall and Isles of Scilly Local Enterprise Partnership

• Alconbury Airfield Zone - near Huntingdon, led by theGreater Cambridge and Greater Peterborough Local Enterprise Partnership

• Great Yarmouth and Lowestoft Enterprise Zone – led by the New Anglia Local Enterprise Partnership

• Daresbury Science and Innovation Zone - in North Warrington,led by Liverpool City Region and Greater Manchester Local Enterprise Partnerships

• Humber Waterside Enterprise Zone - in Kingston upon Hull, led by Humber Local Enterprise Partnership

• Discovery Park in Sandwich and West Essex Enterprise Zone in Harlow– led by the Kent, Essex and East Sussex local enterprise partnership

• Science Vale Enterprise Zone – led by the Oxfordshire local enterprise partnership

• MIRA Technology Park in Hinckley – led by the Leicester and Leicestershire local enterprise partnership

• The Solent Enterprise Zone at Daedalus Airfield in Gosport – led by the Solent local enterprise partnership

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The new Creative Industries Council is good mood music but can it deliver?

Sahar Rezazadeh 6.44am

The launch of the Creative Industries Council has received a good reception from leading heads of industry, such as the Music Industries Association, the Design Council, the British Academy of Songwriters, Composers and Authors and UK Music.

Chairing the new council are the Culture Secretary, Jeremy Hunt, and the Business Secretary, Vince Cable. It is anticipated that it will comprise representation from across the creative industries such as music, film, gaming, design and TV production. The Chancellor, George Osborne, has said that the purpose of the council is to ‘provide a voice for the sector with the financial community and coordinate action on barriers to growth…as well as access to finance, the CIC will look at other issues in the sector, which may include skills, export markets, regulation, IP and infrastructure.’

The UK’s creative industries face a host of challenges. Foremost is a lack of investment, which has handed an advantage to global competitors, mostly in the United States. Despite the fact that the music industry alone contributes nearly £5 billion annually to the UK economy and employs over 130,000 people, the growth potentials for creative industries go unrecognised.

The Chancellor and the Treasury recognise that investment possibilities are regularly misunderstood and financiers are ‘more likely to turn down a request for funding from a creative industry player than a company from another sector with a similar risk profile.’

Feargal Sharkey, former lead singer of The Undertones and now the head of UK Music, has pointed out that talent needs time and patience to develop over five years or more, but the eventual returns can be very beneficial to all stakeholders and the wider economy. Instead even when artists do attract investment their work can be compromised in the search for higher returns. Musical themes of sex and violence are invested in for quick profitable returns. Other themes and genres might be more narrowly appreciated but that shouldn’t mean they can’t be profitable long-term. In any case, the creative industries will be more successful when appreciated for their artistic worth as opposed to short-term financial gain.

Sharkey has outlined three key areas of attention for the UK music industry:

Help the creative sectors gain access to the financial and investment communities; develop the necessary education, skills and training; and enforce tougher copyright protection.

Given that almost 85 per cent of businesses in the creative and cultural sectors employ less than five people, independently focused measures will go a long way to supporting talented designers, artists and producers who are unable to get exposure for their work. Independent artists are squeezed out by the four major record labels.

Businesses in the creative sector play huge social and cultural roles. Music and film have massive influence. Creative industries also have enormous economic potential. For the next decade, we must ensure that British entertainment and design gets the investment it needs to showcase all our best talent to the world. Most industries have their own vested interests and the creative industries are no exception. It is important that we do not shut out the next generation of talented artists, producers, designers and innovators. The new Creative Industries Council is apposite mood music. Now it has to deliver.

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Vince Cable claims green agenda is failing British business

Matthew Robertson and Nik Darlington 2.00pm

“I incline to Cain’s heresy,” he used to say quaintly: “I let my brother go to the devil in his own way.”

The Business Secretary, Vince Cable, has given a stark warning of the damages that could befall the British economy by following too ‘green’ an agenda.

At a public meeting on climate change yesterday in Richmond, Dr Cable described how the Indian giant Tata is closing its steel plant in Scunthorpe because of the UK’s strict environmental regulations. He said that although green technology could promise thousands of new jobs in the UK, the decarbonising of our economy leaves us with difficult decisions about communities who rely on industries such as steel and chemicals. The skills of a steelworker and not exactly readily transferrable to those of a manufacturer of photovoltaic cells.

Dr Cable was at the centre of a recent Cabinet battle over the Committee on Climate Change’s Fourth Carbon Budget. A leaked letter to Nick Clegg and George Osborne spelt out the Business Secretary’s deep concerns about its impacts on British competitiveness. In a strange alliance, Cable sided with Tories like Osborne and Philip Hammond against the Lib Dem Energy Secretary, Chris Huhne. The Government eventually accepted the carbon budget but not before inserting a get-out clause to appease Dr Cable.

Almost overnight, Dr Cable became Dr Jekyll. The man usually loathed by many of the Tory right was suddenly its hero, standing up for British business against woolly climate change targets.

But befitting his position as a Lib Dem MP, Vince Cable has a touch of Mr Hyde to him. At the climate change meeting last night, he declared that in the 1980s he had written environmental speeches for government ministers and today he focuses heavily on environmental concerns in his Twickenham constituency. He spoke in detail about the merits of the coalition’s Energy Bill and the new Green Investment Bank.

When an audience member asked whether Britain could impose environmental tariffs on other countries, Dr Jekyll Cable said that we rely heavily on trade, especially as we try to export out way out of recession. We must be very cautious about damaging the competitiveness of British businesses, to which someone rebutted that it was a bit like a burglar saying he wouldn’t stop stealing because it would benefit his competitors. Touche.

Soon he was back to being Mr Hyde. Sharing the platform with him was Zac Goldsmith, the local Conservative MP, who said that the environment “is not top of our individual lists but it is the most important issue facing us today.” Vince Cable nodded sagely and agreed by saying solemnly, with a face as straight as a mine shaft, that climate change is our biggest problem and it was a shame that not more people made it a priority.

A man with words for any and every audience, evidently.

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PMQ’s review: Ken Clarke in dock over rape comments

Nik Darlington 12.59pm

Last Saturday evening, whilst the rest of the country was dusting off atlases to determine the location of Azerbaijan, I was watching Piers Morgan’s endearing interview of Lord Prescott. The former deputy prime minister is fast become a national treasure. Hull’s newest aristocrat was jovial and honest; frank and humorous. Even Tories have warmed to him after his prominent role in the No2AV campaign.

What astonished me when looking back over John Prescott’s life story (even more than his matinee idol good looks) was how he got away with it all. The trade union totem was indispensible to Tony Blair in keeping Old Labour remotely on side. But above all, as Blair said after his deputy punched a voter, “John is John.” Somehow, the incident even increased his standing. No one else could have got away with that.

If you’ve been following the airwaves this morning, you might have an inkling of where I’m going with this.

When a journalist friend’s e-mail landed in my inbox with one word - “Clarke” - in the subject line, I rolled my eyes. What had Ken done this time?

Now, Ken Clarke is the President of the TRG. You will struggle to find anyone in that organisation who holds him in anything but the highest regard. These pages are not under any corporate diktat (we have editorial independence) but I’m loathe to attack Ken - not least, as I wrote here, because his policies and presence in Government are commendable and valuable. So when Peter Hoskin asks on Coffee House - “Has Ken Clarke just signed his own political death certificate?” - I am at pains to answer “no”.

And certainly so if you compare this morning’s faux pas to Chris Huhne’s speeding points scandal. Huhne must be relieved today to have the heat on someone else, for he is wise enough to know that even poking fun at Liberals cannot stir the antipathy of the Tory grassroots more than Ken Clarke’s ‘soft’ justice policies.

So, can we turn, shrug, and once more utter, “Ken is Ken?” The Prime Minister did his best at PMQ’s, saying that he hadn’t heard the radio interview and that sentencing of rapists is a matter for the courts. Yet when Ed Miliband said that Ken Clarke “shouldn’t be in his job by the end of the day”, Cameron didn’t exactly say that he should.

However, he did give something amounting to a defence of Clarke’s policy, if not his wording of it, pointing out the depressing statistic that “only 7 per cent of rapes are prosecuted”. Altering sentencing could encourage more defendents to plead guilty; it could also save rape victims the harsh ordeal of being branded liars in court by defence lawyers, perhaps avoiding the 688 days of trial endured by the female Radio 5 listener this morning.

Honestly, I don’t know how this will play out. My instinct, and my hope, is that Ken Clarke will be safe. Tony Blair retained faith in John Prescott despite his many gaffes and misdemeanours because Prescott could reach out to areas of the country and his own party that Blair could not.

Most importantly, what happened this morning was no more embarrassing, nor a sign of poor judgement, than Vince Cable’s slip-up in December, Chris Huhne’s insubordination during the referendum campaign, or Huhne’s current imbroglio. Perhaps we are soon to see confirmation of whether or not the rules that apply to Liberal ministers apply to Conservative ones too.

UPDATE, 2.50pm: The Times (£) reports that Number 10 is demanding Ken Clarke clarify his views on rape. A spokeswoman said: “I would hope the Justice Secretary would want to make clear how seriously he takes rape and what an atrocious crime it is.” David Cameron retains confidence in Clarke but a U-turn on the controversial proposals is in train.

UPDATE, 3.10pm: Ken has been on Sky News (NB: not BBC, like this morning) to clarify his comments. No outright apology but an insistence in less legalistic language that the policy is the right one. Also insists that he was not forced to apologise by Number 10. I still believe this will blow over but time will tell. The Prime Minister does not want to - indeed, I don’t believe he can - sack Clarke; but if a swift U-turn is indeed in train, it might force him to resign.

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