By Peter Hoskin
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Fallon gave a speech last night. In many respects, it was exactly the sort of
speech that you’d expect from a minister of state for business. It gambolled through
many of the measures included in last week’s Budget, from the “£2,000 jobs tax
cut” to the Heseltinian initiatives for local growth. It brushed into Mr Fallon’s
specialist subject, and the subject of a speech he delivered
last month
, which is deregulation. And it landed on well-worn topics such
as infrastructure and apprenticeships. All very normal, all very easy to ignore.

– hang on a second – there was actually something quite unusual about this speech.
Placed throughout it, with some regularity, were little baubles of pessimism
and grim realism. This wasn’t the usual “everything’s great under us” that we
hear from politicians. It wasn’t even the platitudinous “times are difficult”
and “we must do better” that they sometimes deliver. This was something else,
with specific areas of strife and disappointment noted. Five stood out to me:

  • Inflation. This was
    perhaps the most ear-catching of Mr Fallon’s Eeyore-style groans. “It’s
    painfully slow progress,” he said of the Government’s efforts to fix the
    economy, “made worse by the deepening problems in the Eurozone which takes half
    our exports, by unexpectedly high commodity prices, and by the persistent
    failure to meet the inflation target.” Not many ministers have referred to the “failure”
    – presumably the Bank’s – to “meet the inflation target”, and they’re even less
    likely to do so now that George Osborne has loosened
    . These are words to treasure.
  • Employment
    and apprenticeships.
    Given recent labour market trends, you might think that Mr Fallon
    wouldn’t have anything gloomy to say about employment – but you’d be wrong. “Youth
    unemployment here,” he emphasised, “is far, far too high at 21 per cent
    compared to 8 per cent in Germany.” And what about the apprenticeships designed
    to tackle such unemployment, and which ministers tend to present as an
    unalloyed success? “We know that quality is not consistent across the
  • Lending. As with
    apprenticeships, Mr Fallon wants to fine-tune the various lending schemes that
    the Government is currently promoting. For instance, “Because [the Bank of
    England’s] Funding for Lending is indiscriminate, covering all different types
    of lending, there’s no distinction between its usefulness as lending for
    mortgages and lending to small firms … we are working with the Bank of England
    to review how Funding for Lending might work better for SMEs.”
  • Trade and businesses. Mr Fallon began
    the section of his speech on trade with a disheartening statistic: “it is
    striking that in the five years since the financial crisis, and despite the
    depreciation in sterling, we have rated no better than 16th out of the G20 in
    balance of trade.” And he went on to question businesses themselves: “Too few
    firms in fact export, and our competitors still do so much better … Why is that
    three quarters of those SMEs that export only did so first in response to
    external inquiries?”
  • Trade and Europe. And don’t
    think that Europe escaped criticism, either. “Too much of the single market
    remains incomplete,” argued Mr Fallon, “in energy, in telecommunications, in
    services, especially in digital services, what we are encouraged to call the
    single market remains a series of highly protected markets.” And he continued: “Europe
    is too inward-looking. Why isn’t it championing free trade across the globe?”

isn’t to say that this was a disloyal speech. Quite the opposite: Fallon stated
the Coalition’s case as well as he always does. Wherever he aired his dissatisfaction,
he generally attacked Labour’s record in that area. And, as I said above, he highlighted
the policies and measures that the Government is implementing to make this
better. “Our reforms mean there has never been a better time for companies to
do business in Britain,” is how he put it in his peroration.

the low-spirited parts of the speech were still striking, and may, I suspect, represent a new template
for these things. What David Cameron calls the “global race” – a phrase that Mr
Fallon used twice – is tough, and the Coalition wants you to know that. “Good
no more.