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Secretary of State for Business, Innovation and Skills Order 2009

My Lords, the noble Earl should not take what I am saying simply as a love for all things nuclear, although I am very committed to the renaissance of civil nuclear capacity in this country both for manufacturing reasons and for purposes of energy security. Frankly, if the noble Earl is asking me a direct question, I will give him a direct answer. I am not sure that all the decisions that have been taken in the past 10 years on civil nuclear energy were the right ones or the most timely ones to have been taken. There are a whole number of other areas, such as the industrial and manufacturing sectors and policies, in which a little more forethought and activism of the sort that I am trying to create through this new department would have been well used if we had seen more of them not just in the past 10 years but in the past 20 and 30 years. The mistakes in industrial policy did not begin with this Government; they are, I am afraid, very much more long-standing than that. I see from the noble Lord’s response that illustration is clearly the best means of argument, so let me give another example of what our policies mean in action. Earlier this year, Richard Lambert of the CBI said: ""The UK has the capacity to be a serious player in the manufacture of electric vehicles. What’s needed is for the industry to produce a credible road map identifying strengths and weaknesses—and for judicious public funding to support the necessary technology. That’s industrial activism"." He got it in one. We now have that road map, which is one of a number of sectoral strategies that we have produced this year. The UK now has the world’s biggest demonstrator project of its type for low-carbon vehicles. I underline that we have it because my department took the decision and the Government have chosen to fund it. It also has a low-carbon economic area in the north-east of England which leverages low-carbon automotive strengths in the same way as we are doing in Sheffield for nuclear. We are also investing in charging infrastructure and consumer subsidies for the first generation of low-carbon cars. Where have Toyota and Nissan chosen to base their low-carbon operations in Europe? In Britain, and they have done so as a result of our actions over the past year. Britain also now has a new range of demonstrator and product development facilities for innovative small companies in key technologies such as industrial biotechnology, wind power, wave power and plastic electronics, because my department chose to fund them through the £750 million strategic investment fund that was created in the Budget earlier this year. We have a new Office for Life Sciences, which is giving the same kind of strategic direction in biosciences and the medicines industry. Jeff Kindler, the chief executive officer of Pfizer, has described the Office for Life Sciences as unique, forward-thinking and an effective model of government that works with industry and the health system, and he has recommended the model to the US Government. My intention is that BIS will remain absolutely at the front line of public policy for protecting our enterprise environment, as the noble Lord rightly emphasised: getting our productive base through this recession intact, investing in the strategic capabilities that we will need for the future, and putting into place the economic conditions and industrial capabilities that we need for the future economic success of this country. For the present, we remain on a crisis footing as regards business support. Since the global crisis began, more than 95,000 businesses have benefited from a free Business Link health check; some 6,850 businesses have been offered loans totalling £692 million through our enterprise finance guarantee scheme; and more than 150,000 businesses have been able to defer their tax payments by courtesy of Her Majesty’s Revenue and Customs in order to help their cash flow during this last year of economic and financial crisis. Targeted measures, such as our car scrappage scheme and Train to Gain, which are both BIS initiatives—I assume that they have the support of the noble Lord, Lord Hunt—have helped to sustain demand and retain essential skills across British supply chains. Our new strategies for adult skills and higher education represent a cast-iron commitment by us to our world-class university system and a new focus on ensuring that Britain has both the generic skills and the specialist STEM graduates and technicians that our modern economy requires. We are creating the new UK Innovation Investment Fund to create a new public/private source of investment in innovative companies, and we will build on this in our response to the Rowlands review on growth capital for SMEs. I am convinced that long-term finance for industrial investment in this country is not a cyclical problem but a structural one, and we are now responding to that market failure. We have put a lot of time and effort into creative and innovative finance in our banking sector; perhaps now we need a bit more focus on financing creativity and innovation in the rest of the economy. We will also be producing our new tasking framework for regional and local government investment in economic growth, which will further strengthen the role of the regional development agencies in managing national investment and growth strategies across their regions. The RDAs have played a vital role over the past decade, training almost half a million people, securing or creating 200,000 jobs in our regions, and turning every pound that they have invested into £4-worth of economic growth. If noble Lords do not mind my saying so, I think it is characteristic of the tin ear that the current Conservative leadership has for the country’s growth needs that it has committed to scrapping the regional agencies, despite warnings from business that this will be a very reckless thing to do. I conclude by saying with complete conviction that BIS is a department created in the public interest and it is delivering for the public’s economic, industrial and employment future. The immediate costs of setting up BIS have, as I indicated at the outset, been very limited—around £160,000 on changes to signage and offices. That is just 0.05 per cent of our total annual budget. We are also already delivering savings and greater efficiencies as a result of the merger. With a great sense of pride and some satisfaction, I pay tribute to the hard work and professionalism of the BIS staff and their partner agencies, without whom the achievements of the past six months would have been simply impossible. They came to this new department with extraordinary enthusiasm and commitment to the work that they do. We have made painstaking attempts from the very outset, led by an excellent Permanent Secretary, Simon Fraser, to consult staff not just as a one-off exercise but on a continuing basis. We take very seriously what our staff say. I hope that my wider public interest argument today is clear. Britain’s business environment and industrial base are not things that we can leave to chance. The base is strong, but we ignore its future needs at our peril. It needs to be stronger, smarter and more sophisticated. The department’s core remit is to ensure that Government investment in these capabilities ultimately pays for itself in new growth, new strengths and new opportunities in our economy. I believe that BIS is now uniquely equipped to do that, and I believe that it should command respect and support from all parts of your Lordships’ House.