Eric Joyce (Falkirk) (Ind)
We go from one important debate on a primary industry—farming—to another. I want to say a few words for the next short while on mining, a subject that gets too little attention in the UK. Like the shipping industry, we rely on mining for pretty much everything we use daily, but it is invisible to most of our constituents and most consumers. We do not mine that much in the UK, although it is still an important industry to an extent in parts of the country; we still have aggregates on the go and there is still quarrying, but mining is something that happens abroad. Like other primary industries, it can be more important in developing economies than it is in the UK.
I want to emphasise the UK’s contribution to international mining, which primarily comes through trading in the City of London. Most large mining companies, or certainly many, choose to be listed in the UK for the prestige and the convenience, and because they can raise capital here, and many that are not primarily listed in the UK are present in a large way. The large mining companies are listed here—smaller ones are on the AIM, the alternative investment market—and UK industries such as financial and legal services service the mining industry. Arguably London, along with Toronto, is at the forefront of the international mining industry, but much like shipping, we often do not realise that, because most of the mining goes on abroad.
In developed states, the things that we think of and speak of most and that dominate our daily lives are the services that we consume—the constant flow of ever more astonishing inventions, technologies and concepts that make our lives easier, more fulfilling or, often, simply better. People’s creativity often seems boundless. That ability and instinct to improve design means that new, astonishing things appear almost daily. The acceleration of ideas and technologically intelligent advances seem to be on a near-constant upward convex curve.
As an eight-year-old, I remember very well—I checked on Google to see whether it was a false memory—my dad getting me out of bed at 4 or 5 o’clock in the morning to watch Neil Armstrong and Buzz Aldrin landing on the moon. They played a bit of golf and turned the moon into a fairway for a brief period. That seemed like the apex of technological advancement for a very long time, but when we look back, we can see that technological advances have continued on a remarkable upward curve. The moon landing seems a very long time ago in technological terms. It is almost a bore to reflect on how things have changed. One thinks about computers in the period since then; the technology involved in that amazing scientific advance and historical event is very far behind where we are today.
We tend to reflect on what affects our daily lives and our services at the expense of the primary industries that facilitate them. In fact, mining uses many technological advances. One sometimes makes a false dichotomy between complexity and cleverness and the services we use daily. We sometimes forget that the primary industries on which the service industries rely are very sophisticated.
One reason why technology dominates our daily discourse is that we quickly adapt to new ideas, come to rely on them and want yet more. We adapt using our intelligence, and that is fabulous—we expect fabulous things and see them every day on the internet. The internet itself is a fabulous thing. Not everything that evolves through it is the best, but much of it is.
I am not complaining about new technologies dominating our daily lives, but they often challenge us to think about what values lie at the heart of the way we live. We have to consider whether certain new developments are advantageous, such as the potential meeting of the internet, DNA and new insurance products. We have to decide whether to allow them to happen and to go with the flow. We have to make a value judgment: perhaps we will know more about our futures and our own likely means of death if we choose to allow such things. That might or might not be desirable, but technology makes us make such value judgments. I guess that that is why these things are often at the forefront of minds in the developed world.
What is often at the forefront of people’s minds in the developing world is that the mining industry is potentially the only way of getting early money other than aid into the economy. Aid is very nice, but it is on a relatively small scale and can only ever be a sticking plaster. Often, the international mining industry comes along and has a transformative effect on the economy in the developing world, although not always. People talk about the resource curse, but we never think of calling oil and gas in Scotland a curse. We think, in a rather superior fashion, that it is okay if we have it, but that perhaps it is a curse to people in the developing world.
Of course, the result is not simply a function of the mining industry. It is usually a function of local governance and the capacity of a country to benefit from the exploitation of its natural resources. Sometimes other variables have to be fixed. Expectations can be high, and mining is very capital-intensive—it takes many years before the money is won back in profits, which is when populations start to benefit. Another variable is that people are sometimes moved out of other necessary parts of the economy, such as agriculture, into mining; there is a drag factor that takes people away from essential parts of the economy, often primary industries themselves. However, there are places in the world where it has been got right—in Africa I think of Zambia, and elsewhere I think particularly of Brazil. In many places, developing economies are being pulled out of low income into middle income and potentially, in the future, even into high income. I think even of Rwanda, where mining is not a large industry but a significant one all the same and makes a very important contribution.
I wrote down a few ideas for this speech last week having spent a month in Cornwall, as I do every year. I was in a very beautiful part of Cornwall—I should say that I informed the hon. Member for St Ives (Andrew George) that I was going to mention his constituency. I was staying in a cottage with my partner, and I looked out at what appears to be a memorial standing on the edge of a promontory, sticking out over a point where two seas join, which I discovered when I was down there is called Cape Cornwall. It is quite a remarkable sight—it looks like a memorial, but it is actually a chimney stack on the very edge of the promontory. Underneath the chimney, out to sea in the cape itself, is a set of rocks called the Brisons, where the mining industry pulled tin out of the ground, as it did right across Cornwall, effectively starting the industrial revolution. Hayle, the local port, was involved right at the start of the industrial revolution.
In due course, Cornwall’s mining industry had its time and then declined, which was largely to do with world tin prices. It was cheaper to extract it elsewhere in the world, and we became a different type of economy. As I said earlier, the service industry and new technologies came along, and other countries took over tin production. I will not bore the House with where tin extraction takes place now, but it is concentrated in a small number of countries, as is the extraction of things such as bauxite, which potentially will be concentrated in Guinea. That development is very much led by Rio Tinto, a UK company based and listed in London. The ground has already been broken for the initial infrastructure work, and when that development takes place, it will lead to the employment of thousands of people, and in many years to come—hopefully not too many years’ time—that will lead to substantial tax receipts for a country that currently has very few. It will also lead to infrastructure, because a railway will need to be built to export the bauxite from the site.
It is easy for us to forget the benefits of mining. I well understand why many good people I have known over the years through my involvement with the mining industry and the non-governmental organisations that are interested in it are often very negative. In this place, I hear more negative things being said about the international mining industry than I hear positive ones. To some degree, without wishing to be critical of people per se—certainly not Members of this House—there is a lack of awareness. Among our constituencies and our constituents, very few have a direct or immediate interest in this sort of mining—unlike with oil and gas—and their experience of mining is modest.
My constituency is just outside a next-door-neighbour refinery, so everybody understands the oil and gas industry. Everybody in the UK consumes oil and gas, and everybody sticks petrol and diesel into their cars as well as use gas in their homes. In the end, while there is much discussion and debate about the consumption of energy, I think people get a balanced perspective. The NGOs and the environmental bodies will lobby for good reason and encourage us to consume less and look for other ways of fuelling our lives. People also understand that we rely heavily on fossil fuels as well—and will do for some time to come. I often think, however, that when it comes to the mining industry, the public understanding is not there.
I am glad to see here on this occasion a Minister from the Department for Business, Innovation and Skills and not one from the Department for International Development. We tend to view mining as an international development issue when it is, in fact, very much a BIS issue. It is about UK businesses, and UK-listed businesses generating revenue for the UK and for overseas states. It is about helping with all sorts of areas of technological training within the UK and in the United States, contributing tax dollars or tax pounds. It is something we hear very little of.
People tend to hear the message that mining has had a chequered history. We all recognise and know about the many legacy issues throughout mining. For a period, and particularly in Africa—I know this very well—many deals and sales of assets were made that were very dubious. Mining companies bought assets off middle men, and 20 years ago, many questions were asked about mining companies. Now things are really quite different. The mining industry, including very large operators, as well as middle-sized and small operators, are very aware of public scrutiny of what they do, and they have very high standards of governance. That is sometimes not reflected in this place. It sometimes seems very hard to get a balanced debate or a balanced sense of what the mining industry is about.
When I engaged with the Government in the past, I tended to find myself having conversations with DFID. I understand why the matter will not be a top priority for all BIS Ministers, because this is not a big industry as such for our constituents, but in the end, I think the UK is probably in the leading position when it comes to this industry.
The Minister will probably be aware that I sit on the UK EITI—extractive industries transparency initiative—multi-stakeholder group. People might say that the UK does not need to sign up to the EITI. The initial concept was that it was for the developing world. Then Brazil and other countries such as India said, “If it is just for us, we are not going to sign up to it.” The UK sensibly decided to sign up, and we are going through the process now. So is the US, which is moving a bit faster, I suspect, because it has pretty much unlimited resources.
At the same time, legislation involving transparency and accounting directives to which we are signing up has by and large gone through with the consent of the whole House and, in the context of Europe, Britain has been at the forefront of those standards. In terms of who benefits, beneficial ownership from shares in large operators will pretty much be a feature of an open book as well. That is not to say, however, that the legacy issues do not exist. They certainly do, but sensible, well-governed mining operations need an opportunity to present their case to the public, so that we can understand the benefits, as many of the people they employ understand.
I will conclude on that point. No doubt the Minister will have a number of things to say about the support that his Department gives the mining industry in the United Kingdom, but I wonder whether he would consider meeting me, along with representatives of the mining industry, to discuss what the Government and the industry can do together to give people a much clearer understanding of the benefits that the industry brings, in balance with the important nature of governance under the control of the NGOs that we all know and love.
The Minister for Business and Enterprise (Matthew Hancock)
I congratulate the hon. Member for Falkirk (Eric Joyce) on securing the second debate on this subject that he and I have enjoyed. I think that his approach—including his emphasis on the role of mining in helping developing economies to trade their way out of poverty and into prosperity—is precisely the same as the approach that the Government take. It should be borne in mind that without the extraction of minerals such as coltan from developing countries such as Ethiopia, Mozambique and Brazil, it would not have been possible for his mobile phone to ring at the start of the debate. That approach is telling and practical, as well as being the right approach and one that we have taken at national and international levels.
The hon. Gentleman observed that some countries had used mining to take themselves out of poverty. He mentioned Rwanda, Zambia and Brazil, but it is also true that Botswana, which became an upper-middle-income country in 2007, was one of the world’s poorest countries when I visited it for the first time in 1996. Its success has been due largely to well-managed mining revenues from diamonds.
The hon. Gentleman spoke about the transformative effects of mining, pointing out that in some parts of the world such transformations are not positive. The success of mineral exploitation is down to governance as much as to physical extraction, low bribery rates, and law and order. The problem of conflict diamonds, for instance, arises when law and order and governance break down. This country has experienced the benefits of mineral extraction under good governance. That began in Cornwall, and evidence of the tin mines still litters the peninsula, but it has also happened in the midlands and the north of England where coal has been extracted, and, of course, in Scotland. The potential boost to economic growth is strong, is recognised, and is due to good governance as much as to the minerals themselves.
We take a cross-Government approach, which includes the Department for Business, Innovation and Skills and, of course, the Department for International Development. DFID has invested more than £50 million in bilateral aid spending on support for trade structures—for instance, building trade capacity and promoting regional integration to help to ensure that the governance is in a good place. The hon. Gentleman rightly emphasised that trade can serve as one of the most powerful functions ever introduced to increase prosperity and remove countries from poverty, but, as has been demonstrated throughout the world—not least in China—DFID also has a role to play in strengthening institutions, and strengthening the structures and the governance under which trade operates. We know, from our experience over the past few decades, of the enormous benefits that that engagement under good governance can bring. Indeed, extractives companies are important partners for us in government, ensuring that we help developing countries to make the most of their riches when they find them under their soil in order to drive up growth. That is the approach we take.
The hon. Gentleman mentioned the extractive industries transparency initiative. This is about progressing towards a common global standard of extractives transparency so that more citizens in poor countries share the benefits from natural resources. We are working with the World Bank, for instance in Mozambique, where we are investing in mining and gas sector reforms. We will support the Government of Mozambique to make sure that the laws on the ground are supportive, that operational standards are good, that health and safety is supported and that geological information systems are helpful. I pay tribute to the work that the hon. Gentleman has done as part of the EITI.
In May last year, the Prime Minister announced that the UK would sign up to the EITI. It is designed to build trust and dialogue between companies, civil society and industry. This is all about putting information into the public domain to promote public debate.
I also want to pay tribute to my hon. Friend the Member for Worcester (Mr Walker), who instigated the Business, Innovation and Skills Committee report into this area. This transparency is important, and many extractive companies are listed or headquartered in the UK and are supportive of the EITI. That stakeholder engagement has been very beneficial. For example, Rio Tinto and Shell sit on the multi-stakeholder board. Furthermore, in taking forward the beneficial ownership rules—pushed by the Prime Minister internationally and in the small business Bill—and in abolishing bearer shares and increasing the accountability of international business, we are acting in support of the direction of travel that the EITI plays such an important role in encouraging.
I note the presence of the hon. Member for Linlithgow and East Falkirk (Michael Connarty), who plays an important role in driving this agenda and helping to ensure that, through engagement and improving policy at a global level, mining and industrial development in developing countries can, through good governance, benefit the whole of those countries.
I reiterate the Government’s support of the EITI multi-stakeholder group, of which the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for East Dunbartonshire (Jo Swinson), is the Government representative. I acknowledge the rapid progress that has been made to date. The UK successfully submitted its candidacy application on 5 August this year. That is a key milestone in taking the EITI forward, and we look forward to the outcome in October of the next international board meeting. By signing up to the EITI, we want Governments to know that the EITI is not just for developing countries but that it is a global standard, and we have a stronger argument to encourage emerging and developing countries to adopt similar rules if we have adopted them here at home.
Finally, I want to reiterate the importance of the trust and transparency agenda more broadly. It matters in mineral extraction, but it also matters across the board: making sure we know who really owns and controls UK companies, which will help us to have a publicly accessible central registry of people with significant control; improving the transparency of corporate ownership; and making sure that the UK is a trusted place to do business and invest.
The UK has a specific role to play in driving this agenda because of the number of global companies headquartered here, and because of London’s role as the pre-eminent global centre of international finance. Therefore, taking steps here in this House of Commons, such as allowing overseas conduct to be used as a basis for disqualification here in the UK and increasing the time limit within which proceedings can be brought following an insolvency, have an impact across the world in driving this agenda forward.
I hope I have assured the hon. Gentleman that the Government recognise the important role of mining companies in developing economies, as well as the role of good, strong governance domestically and internationally in ensuring that bringing prosperity out of the ground through the extraction of minerals has a positive economic impact on the local economy, supports prosperity and ultimately supports what we are all here to do—namely, to improve the well-being of our citizens and other citizens around the world.
Question put and agreed to.