Is Vince Cable failing businesses?

He was once known as 'the Saint', but a committee of MPs is less than impressed by the business secretary's efforts so far...

by Emma Haslett
Last Updated: 06 Nov 2012
It branded itself the ‘Department of Growth’, but MPs don’t seem convinced by the Department of Business, Innovation and Skills’ ambitious rhetoric. MPs on the Commons Business, Enterprise and Skills committee will today publish a scathing report, saying business secretary Vince Cable and his department have so far failed to produce a comprehensive strategy to help the economy grow. It’s a crushing assessment of the Coalition’s first nine months in office – and, they’d argue, a little unfair, given that only last week they managed to seal the deal on increased bank lending for businesses. Then again, Cable does admit that there’s ‘more to be done’…

In fact, it’s the BIS’ record on growth that comes top of the committee’s list of gripes. According to the report, the department has so far been all talk and no action, giving out a ‘positive message that it will focus its efforts on creating the right environment in which business can flourish’. But growth figures (which were negative for the last three months of 2010) still don’t seem to have responded to that message, so ‘what is needed now is the delivery of tangible policies for business’. The committee is also unimpressed that BIS has so far failed to deliver the Growth White Paper promised by David Cameron during his speech at the CBI conference in October. At the moment, it’s been pushed back to after the Budget (due in late March).

The report is slightly less critical of Project Merlin, the deal between the Government and banks on business lending, pay and transparency. The deal forced banks to reveal pay details of some of their top executives and, crucially, made £190bn available to businesses, £76bn of which was ring-fenced for small businesses. Adrian Bailey, the leader of the committee, said the agreement is a step in the right direction, but added that the ‘jury will remain out until it delivers real benefits to industry’.

Businesses, for the large part, have been voicing their frustration at the lack of action taking place for some time. As Steve Radley, the director of policy at manufacturer’s organisation the EEF said, there are still a ‘number of key areas’ (like red tape) where the Government has so far failed to take action. ‘It is right to emphasise the role the Department for Business has in supporting the private sector. Government must now go even further and elevate the focus on growth to the same level as its fiscal mandate’, he said. So while placing an emphasis on cuts is all well and good, the same level of importance needs to be given to helping the economy grow again.

Some of the committee’s frustrations might be justified, but it’s still relatively early days for the new kids on the block at BIS. They may have yet to deliver on red tape, lending and growth – but they’ve only been at the job for nine months. The other lot had 13 years to get things going. Businesses might like to give them a bit longer before they’re condemned outright.

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