Daniel Kawczynski (Shrewsbury and Atcham) (Con)
My debate is on the performance of UK Trade & Investment in the west midlands, and especially Shropshire. I have spent the past year producing a report on UKTI, on which we had a debate last year to which the Minister kindly responded. Hundreds of small and medium-sized enterprises from around the United Kingdom were interviewed about their perception of UKTI and what assistance they were receiving from this important Government body on exporting overseas.
Once the report was finished, it was important for me to expand and extrapolate from the work to focus on Shropshire, particularly Shrewsbury, to try to find out how UKTI is performing to help Shrewsbury companies not only to export but—this is the second part of the body’s responsibilities—to secure direct foreign inward investment into our county. I therefore invited the head of UKTI in the west midlands, Mr Paul Noon, to visit Shrewsbury to meet representatives of Shropshire council and the local enterprise partnership, including the officer responsible for business development at Shropshire, Mr Mark Pembleton. I said to Mr Noon, “Can you list the top 10 inward investment opportunities in Shropshire?” Unfortunately, he had no idea, which was of great concern to me. I could not understand how, given all the resources that UKTI has, it had not carried out work in the west midlands to identify and agree on the top inward investment opportunities in Shropshire. I therefore tasked Mr Noon to work with the local council and the LEP to identify them.
I am pleased to state that, as a result of that work, the top inward investment opportunities in Shropshire have now been identified. They include an innovation park, a new shopping centre for Shrewsbury, opportunities in transport, leisure and tourism, and agriculture—of course, Shropshire is an important agricultural community. I have sent the Minister an electronic copy of “Invest in Shropshire”, and I am pleased to be able to show him a printed version today. All the opportunities in the brochure are now agreed between UKTI and the local council. I hope that he will talk about those opportunities when he responds.
This work was carried out very well towards the end of last year. I pay tribute to Mr Paul Noon and his team for working so assiduously with the council and the LEP to identify the projects, to agree on them, and then to start to move them forward. However, I worry that such work has not been carried out in the past and that it took such a concerted effort by me to get all the parties together. Interestingly, I have spoken to many fellow MPs in other shire counties—I will not name them all—who are quite surprised by the work that has been carried out in Shropshire. They do not see similar activities in their own counties, and they are starting to get interested in what we are doing. If the project is successful and the newly formed LEPs, the councils and UKTI agree to co-operate, I very much hope that the best practice of the work we have done in Shropshire can be disseminated to other shire counties.
The work was implemented very well because I invited Mr Nick Baird, the former chief executive of UKTI, to visit Shropshire on 5 November. There was a real sense of impetus among UKTI and everyone concerned that, in advance of his visit, opportunities ought to be identified and agreed by all relevant parties. I am extremely disappointed that Mr Baird has now left the organisation, although I am not sure why he has done so. We had a wonderful day with him in Shropshire and he seemed extremely enthusiastic about identifying opportunities. He promised that he would take a leading role in ensuring that they were sold overseas. I wish him every success in whatever he has chosen to do, but it is nevertheless disappointing that he has left the organisation.
On 5 November, we took Mr Baird to see various projects mentioned in the “Invest in Shropshire” manifesto, which is now in the public domain. We took him to see the flax mill, which according to a report in The Daily Telegraph this week is one of the top 10 most important buildings in the United Kingdom. The flax mill built in Shrewsbury was Britain’s first skyscraper. It is in need of a huge amount of investment, and significant work is being done to transform it into a new facility.
We also took Mr Baird to the Harper Adams agricultural college in Shropshire, which is one of England’s leading agricultural institutes, so that he could see some of its extraordinary and pioneering agricultural work and research, which is another extremely important field in which Britain can excel for exports. We all know that farming techniques in England are among the best, and the most efficient and productive, in the world. I am keen to ensure that UKTI does everything possible to sell that agricultural expertise, especially to countries in the middle east that are looking for innovative and pioneering ways of farming.
We took Mr Baird into the town centre of Shrewsbury so that he could look at the immense opportunity to construct a brand new shopping centre. We also took him to the shire hall to meet councillors, local business representatives and the LEP so that he could identify key areas with which Shropshire needs assistance to sell itself to overseas markets.
We ended the day by taking Mr Baird to one of my favourite pubs in the village of Atcham, the Mytton and Mermaid, where he met more than 50 small and medium-sized business leaders from throughout Shropshire, many of whom are already exporting. He had the opportunity to find out about some of the extraordinary success that SMEs in Shrewsbury and Shropshire have had in exporting, in certain cases with the assistance of UKTI.
I was due to meet Mr Jon Harding of UKTI to continue discussions this week, but unfortunately, owing to a family bereavement, he was not able to come to the House of Commons. I hope to see him in due course, however. We also have meetings planned with Michael Boyd, and I have met Lord Livingston, the new Minister in the other House, whom the Prime Minister has appointed to take the lead on running UKTI. For the record, I have asked the chairman of the 1922 committee to invite him to address all Conservative Members of Parliament. He felt that he was not yet ready to address us, but I very much hope that when he is more settled in the job, he will do so formally. I want Lord Livingston, the successor to Lord Green, to have far more interaction with us in the House of Commons.
I berate, decry and am genuinely concerned about the fact that this debate is only the fourth or fifth on British exports in this Parliament, four of which I initiated. I find that staggering, given that we all think that exports are so important to the balance of payments and the prosperity of this country, and for attracting inward investment to our country and getting hard currency for our communities and the country as a whole. I am amazed at the general lack of interest in UKTI and the lack of scrutiny generally in the House. I very much hope that Lord Livingston, when he has settled in properly to his role, will try to change that and that he will engage with the House of Commons so that we are more involved in scrutinising UKTI.
All the opportunities identified are now listed on www.investinshropshire.com. I very much hope to hear from the Minister what UKTI will do in the west midlands and nationally to promote and sell the opportunities overseas.
It is brilliant that the United Kingdom is the top destination for foreign inward investment in the European Union. The Minister may correct me if I am wrong, but my understanding is that the United Kingdom has the No. 1 ranking in the EU for attracting such direct investment. That is an extraordinary achievement, and I certainly pay tribute to the work of UKTI, the Minister and others for ensuring that the United Kingdom is in such an extraordinary position.
There is, however, an over-dependency on London and the south-east. What steps is the Minister taking to ensure that the whole structure of UKTI is more focused on selling opportunities in shire counties and areas outside London? Our capital city is of course very important and will inexorably attract the lion’s share of direct foreign inward investment. Many of the foreign business men I know gravitate inextricably to London, barely venture outside it and always look at opportunities there. UKTI therefore has a responsibility to try to present equivalent like-for-like investment opportunities, or tangibly similar opportunities, outside London to calibrate foreign direct investment more across the whole of England and the United Kingdom, rather than just in London. London accounts for 13% of the United Kingdom’s population yet, according to Ernst and Young, it receives 45% of all projects involving foreign direct investment.
I am now involved in only one all-party group. I have been the chairman of the all-party group on Saudi Arabia for the past eight years. I feel passionately about that country, and we ought to engage far more with it to secure foreign investment from it. I will play my part in trying to sell the opportunities in Shropshire, but I look forward to hearing what steps the Minister will take to support us.
According to a UKTI report, 1,559 projects across the United Kingdom were financed by foreign direct investment last year. Those projects created more than 59,000 jobs in this country, which is a staggering amount of additional employment. That FDI not only secured those jobs, but protected an existing 110,000 jobs in the United Kingdom. We cannot overestimate the importance of securing foreign direct investment into the United Kingdom.
I understand why the Government are focused on a localism agenda. Shropshire borders Wales, and it has lost business to Wales because of the incentives and grants that the Welsh Assembly can offer to certain companies. When there are different Assemblies and Parliaments, there will be differences across national boundaries as different parts of the United Kingdom try to attract investment. Being a border town, Shrewsbury is very conscious of that. There are discussions about giving Wales separate tax-raising powers and there is, of course, a big debate going on in Scotland. I will be interested to hear the Minister’s long-term plans on empowering local councils, such as Shropshire council, eventually to have the ability to differentiate themselves so that they can attract foreign direct investment, whether that is through taxation or by charging different rates.
We are still borrowing more than £100 billion a year to balance the books. There is nothing more important than securing foreign direct investment. We are the fifth largest economy in the world, but only the 12th largest exporter. I, for one, will not rest until we are the fifth largest exporter in the world and until shire counties such as Shropshire start to receive greater assistance compared with London and the south-east so that we can attract our fair share of foreign direct investment.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I congratulate my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing this debate and thank him for his comments on the work of UKTI in the west midlands. I know that he is a great supporter of local businesses and that he encourages them to trade internationally.
Last year saw a significant rise in the export of goods from the west midlands. The region exported goods worth more than £22.5 billion in 2012-13. In the first three quarters of this financial year, goods worth more than £19 billion have already been exported, with a total of 6,222 companies exporting goods from the region. That success is being led by companies such as Jaguar Land Rover and JCB, but I am sure that some of it can be attributed to UKTI’s team in the west midlands.
There are 39 UKTI international trade advisers in the west midlands, including four who cover my hon. Friend’s constituency. They are employed by the chambers of commerce under a contract with UKTI. More than 2,200 small and medium-sized enterprises were supported across the region in 2012-13 and nearly 2,700 have been supported so far in this financial year. That is a 20% increase. That is partly due to six additional advisers being appointed this year. UKTI has two specialist mid-sized business advisers in the west midlands, who support companies with a turnover of between £25 million and £500 million. Those businesses include Bournville college, with its links to India and Malaysia, and Morgan Advanced Materials, a defence company based in Coventry that is looking to south America and the middle east.
In the first nine months of this financial year, businesses supported by UKTI in the west midlands declared that they had secured business wins of more than £281 million. Those businesses include Serious Games International, a Coventry-based company that uses video games technology to solve business problems. With UKTI’s help, the company has secured business in Singapore worth £250,000 this year.
A range of support is provided for companies in the west midlands, including Passport to Export for novice exporters, and Gateway to Global Growth for more experienced exporters. Help and advice are also provided to carry out research, visit and exhibit overseas, and to find the right contact in more than 100 international markets. For example, as my hon. Friend may know, the Shrewsbury-based diamond chainsaw and blade supplier Toolguy Ltd has been supported by the UKTI west midlands Shropshire team through the Gateway to Global Growth programme. That company now exports to France, New Zealand, Brazil and the United States, with exports accounting for almost a third of its total sales.
UKTI also introduced the Whisky Trading Company based in Shrewsbury to one of Japan’s leading travel agencies, Japan Travel Bureau. That deal has seen the company exhibited in catalogues on planes and trains all over Japan. Working with UKTI’s international trade advisers is a UK export finance adviser based in the region, soon to be increased to two UKEF advisers. The current adviser has been invaluable in supporting companies to take up UKEF’s range of short-term export finance products. For example, working with HSBC, support was provided through the bond support scheme to Vee Bee Filtration UK based in Stourbridge. UKEF helped the company obtain two letters of credit in lieu of a performance bond and a warranty bond worth £175,000 in total. That helped the company to start work on a £1.67 million contract with a large US construction and engineering business.
Many events are arranged and held in the region by UKTI and its partners throughout the year. For example, last November, 1,250 west midlands firms attended more than 20 events as part of export week—the biggest turnout of any region in the country. Explore Export, which took place at Edgbaston that week, saw 350 firms meet commercial officers from 65 countries.
The first major event of 2014 will be on 22 January at JCB’s “Meet the Mittelstand”. That will introduce medium-sized businesses to what makes German companies of that size so successful in the global market place. Lord Livingston will be speaking at the event in his first regional visit as the new trade Minister. UKTI in the west midlands will again be organising events in the two export weeks in April and November this year. It will also take part in the international business festival in Liverpool starting in June, including arranging an event on India.
UKTI west midlands also works closely with BIS growth accelerator and the manufacturing advisory service to provide ongoing appropriate support to companies. Meetings are held on a monthly basis, sharing data and developing case studies to aid mutual referral. UKTI works closely with local enterprise partnerships. For example, UKTI in the west midlands has developed an international trade plan with The Marches LEP. That is pending formal sign off, which is expected at the next LEP board meeting this month. UKTI is represented on two of The Marches LEP’s three business boards, where input is provided into the business support agenda covering both trade and investment.
UKTI also supports joint events and activities within the LEP, running five Export for Growth events across Shropshire in 2013. The next event is this month and will involve my right hon. Friend the Secretary of State for the Environment, Food and Rural Affairs. UKTI is working with the LEP on the opt-in for the new European regional development fund programme, which has the potential to bring in an additional £426,000 a year for export support.
UKTI Investment Services also works with partners across the west midlands. It is focused on delivering new investments and creating jobs within existing foreign direct investment companies. In 2012-13 it was involved in 88 projects leading to the creation of 4,600 jobs and the safeguarding of a further 4,583 jobs—a total of some 9,189 jobs across the west midlands. UKTI Investment Services has also developed closer working relationships with The Marches LEP in the past 12 months, leading to safeguarding jobs and securing new jobs within existing local investors. UKTI Investment Services, as my hon. Friend said, is supporting Shropshire council to develop a number of sectoral propositions, which include: agri-tech, food and drink, environmental technologies and creative industries. They will be incorporated into The Marches LEP offer this year.
My hon. Friend has worked with UKTI Investment Services and Shropshire council over the past four months to prioritise and develop opportunities to attract inward investors to the area. I understand, as he said, that templates have now been developed for six key opportunities aimed at securing future overseas investment into Shropshire. Indeed, I understand that representatives from the Regeneration Investment Organisation will be visiting the west midlands on 17 January, and that they have arranged to meet Shropshire council to develop an action plan to promote those opportunities.
My hon. Friend asked me one specific and fair question. How much of UKTI activity, he asked, takes place outside the capital, where there are more obvious opportunities to encourage overseas inward investment? I can tell my hon. Friend that 70% of UKTI activity takes place outside London.
I thank my hon. Friend once again for securing this debate. I hope he agrees that UKTI in the west midlands is having an effective impact on trade and investment not only within his constituency but across the region as a whole.
Question put and agreed to.