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Vince’s bambalicious apple pie

I like Vince Cables reluctance to over-simplify. He’s keen on highlighting competing tensions. But then sometimes he just leaves me utterly bamboozled. Take this from his speech on 10 June addressing the important question of Can we pay down the deficit and invest in growth?:

“…it is both possible and necessary to both cut the deficit and invest in growth. Not least because they are in fact in an important sense the same thing.”

I can see what hes driving at – this comes at the end of a speech where hes argued that the deficit itself is a constraint on growth,and that growth is necessary to pay down the deficit. But to say they are the same thing is just bewildering. One is spending money, the other is not spending money.

He does this quite a lot, so maybe he likes to baffle.The end result is that we dont really know anything more than before he stood up. On any given choice, eg funding for the research councils, is he in favour of cutting or spending? All we know is that he sees there are two sides to the coin.

In this speech, Cable mentioned science 7 times,innovation 6 times and research 4 times. The recognition of the importance of universities, science and innovation was welcome. But it was all apple pie stuff.

As is often the case, it was what he didnt say that is most interesting. The key part of his speech was the section, “Growth policy on a tight budget”, which includes this passage:

“But there are other areas where we do have to recognize that some forms of public investment are key to rising productivity and growth.

One of the realities of globalisation is that the UK cannot compete internationally without high levels of private and public on high levels of public and private investment in sophisticated skills,knowledge, technology and innovation.

One of the problems with the growth pattern in the UK economy over the last decade is that instead of being built on business investment, rising skills, rising entrepreneurship and strong exports it was built on consumption, asset price rises and a rapid expansion of the financial services sector. Banks made hay while manufacturing declined.

If we want to avoid this mistake again, we will need to ensure that we have the kinds of skills that are needed by sectors like low carbon and advanced manufacturing. We will need to ensure that tax and regulation do not disincentivise the kinds of productive activity that we want to encourage.

Of course sectors like Higher and Further education and science and research cannot escape their share of deficit reduction. But when we design it right, the way we fund higher and adult learning and our science and research base is a direct contributor to our growth capability. And we must not put this capability at risk.

An early signal of this is my decision to redirect savings within the department to strengthen, rather than reduce, both investment in FE colleges and to create 50000 new apprenticeships.”

So when Cable looks at what the government needs to do to stimulate growth, he turns to education and research. That is reassuring, as far as it goes. But if you look at the paragraph italicised by me, it shows how far Vince is prepared to commit himself when talking about the hi-tech economy.Hes sure we need skills, and to avoid driving firms off with tax and regulation. And thats it.

In fact, he doesnt have a word to say about how the research base should be linked with commercial and social objectives, an area in which the UK is currently spending around £1-1.5 billion a year. Two months after the election we are still waiting for any minister to say anything supportive of the TSB, NESTA, HEIF, KT activity by the research councils,impact incentives in the RAE – the entire third pillar of support built up by Labour in recent years.

On the other hand of course, none of these schemes have been summarily scrapped, as BECTA was.

I think what this adds up to is that Cable doesnt know what to think or say about this third pillar. All that apple pie and bamboozling? Its the bambalicious smokescreen of cleverness behind which stands a minister that is hesitating.

Perhaps the hesitation is understandable. This is not a brief for which Cable prepared before the election. But events are moving fast. Shortly, hestitation will become dithering.

Postscript 4.30pm

David Willetts made some relevant comments in the chamber of the House of Commons yesterday evening. Where Cable was neutral towards the third pilarl, Willetts comments (for the first time) tended towards the hostile. He said:

“The Government are committed to a strategy for growth that involves an enterprise-friendly tax system, support for science, support for free trade and competition, a belief in investment in skills and training, and rolling back the burden of regulation, setting British industry free. As every contribution to the debate has revealed, there is a simple difference between the Government and Opposition. The Government believe in freedom, enterprise, initiative and competition, and the Labour party still believes in state control, higher public expenditure, more regulation, more RDAs, and more interference in the wealth-creating sector of the British economy. That is not the way in which we will recover from the recession in which the Labour party left the country.”

You can see in the words Ive italicised the kind of language that could be used to justify the complete eradication of the third pillar.