One of the many heavyweight MPs to lose their seat at the General Election was Vince Cable. As well as suffering defeat in his Twickenham stronghold – the constituency he had held since 1997 – Dr Cable also lost his role as Secretary of State for Business, where he has been replaced by Sajid Javid.
Dr Cable’s five year-term at BIS made him the longest serving holder of the post, and he certainly made his mark. His key moments included:
1. Establishing the British Business Bank – An organisation that brings all of the government’s business finance initiatives together as one. This has allowed it to invest alongside the private sector to “increase the level and choice of finance options” for UK businesses. He also encouraged the growth of medium-sized corporations to compete with Germany’s much-hyped ‘Mittelstand’.
2. Backing gender diversity in FTSE 100 companies, especially at board level – There is no doubt that, as former business secretary Vince Cable gloriously put it, ‘FTSE 100 boards have made enormous progress.’ There was uncertainty over whether companies would get on board, but the FTSE 100 is now just 17 female directors away from reaching its 25% target by the end of the year. There are also no more male-only boards, according to the Cranfield School of Management. Excellent progress has been made, but there is still potential for the new business secretary to do more. Labour would have the equality on boards agenda extended to ethnic diversity too, so it will be interesting to see if Mr Sajid picks up the baton from Dr Cable on this and goes even further.
3. Privatising the Royal Mail – a bold and controversial move by Dr Cable, which cost the taxpayer £180m. Yes, many mistakes were made during this process – for example, those that applied for a larger number of shares ended up with nothing, rather than the same small number allocated to everybody else. This damaged the demand for future government asset disposals. But, in all fairness, the privatisation of the Royal Mail was a great victory, leaving the UK’s postal industry in a strong position as it now adjusts to new technology and deregulation.
Mr Javid, who was previously a successful investment banker before entering politics five years ago, is a stark contrast to Dr Cable, whose distain for the banking sector came across very clearly.
Mr Javid on the other hand is a Thatcherite who believes in minimal government intervention in markets, and has already gone big on passionately promoting free-enterprise. Immediately Mr Javid is prioritising the Conservative policies that Dr Cable rejected during his time as Business Secretary (reducing trade union/worker rights for example). Vince once said such moves were “an example of the Tories being the “nasty party” as they tried to “chisel away” at the rights of workers and trade unions”.
As the first Conservative Business Secretary in almost 18 years, Mr Javid will undoubtedly embrace the mandate, which will be welcomed in some quarters. However, he will certainly have his work cut out for him with a critical role to play as the Government prepares to hold an in-out referendum on EU membership in late 2017. This is particularly interesting as he has positioned himself as a ‘leading Eurosceptic’ in the party, saying in the past that leaving the EU “isn’t something we should be afraid of,” saying recently that he “wouldn’t shed a tear” if we left. This would put him at odds with David Cameron’s preferred position for Britain to remain in the EU on a renegotiated basis.
So, it’s a big job and a worthy promotion and early signals suggest Mr Javid is going to put his own stamp on it pretty quickly.