British Exports

Baroness Burt of Solihull Excerpts

Wednesday 8th February 2012 Westminster Hall

[David Rutley]

Thank you.

I have had great feedback from at least one constituent, but it was a good response and it is the quality, not the quantity that counts. A gentleman from Fibrevision, which creates dynamic measurement tools for textile yarns across many countries, particularly developing countries, got in touch with me to say that he would be retiring soon and wanted to spend time passing on his experience to others in the community, and I am going to tap into that. With Lord Green’s work, there are lots of opportunities now to hold export seminars in our constituencies, and I hope that many Members here will participate in such events. It is important to welcome the energy that Lord Green has brought to the task. He is doing a fantastic job as Minister for Trade and Investment, and has given a lot of focus to his task. He has been travelling tirelessly across the country to raise the profile of this work, and he deserves our support.

Transferring knowledge and educating people will go only so far; without the finance to back it, it will be much more difficult for British business to see the success that we want them to have. Let me cite a different example to show what they are up against—or perhaps where we could start heading. In 2010, Germany’s export credit agency supported SMEs in the German market by facilitating €23.7 billion in exports. In the same year, only a small proportion of the £2.9 billion of business that UK Export Finance underwrote went to SMEs. Furthermore, the CBI survey shows that SMEs and other businesses are simply not aware of the available finance. To address the situation, UK Export Finance will now send trade finance experts into UKTI’s regional facilities and the regional network to bring the expertise closer to business, which is good to see. No doubt, the Minister will want to respond to the concerns raised by hon. Members about finance, but it comes back to awareness and building confidence. It is not only about money being available.

It is good to see that the Government are also building bridges to bring the east to Britain. The Chancellor of the Exchequer’s recent announcement of greater co-operation between financial centres in London and Hong Kong will help the City to become a hub for the Chinese renminbi currency market. It will also give SMEs an advantage over the competition, because they will be able to forge stronger links with the new market on their doorstep and get a step closer to customers in China.

In filling the gap in export finance, we should look not only at what is happening with the Government, but at what the banks should do, because it is clear that they, along with professional advisers, have a vital role in encouraging confidence and building momentum in exports and international trade. A poll of small manufacturing businesses found that 51%—just over half—believed that banks were not helping to support their export ambitions. We see that lack of confidence in other areas, but no doubt confidence in banks on this issue needs to be improved. As the Federation for Small Business has highlighted, banks need to promote better, more tailored products to help SMEs in their export ambitions.

I also welcome the Government’s allocation of £45 million to promote exports in other markets. As I said earlier, it is important to get front-line staff working in the new export markets, because what has to happen after education and finance, is that we must roll out the red carpet for our SMEs—make them feel welcome in such markets and to have worthwhile trade visits, particularly in their first forays into foreign markets. Although large companies are well equipped to take on this task, it is pretty clear that smaller businesses lack the know-how, contacts and network to see success in these endeavours, and we must support them.

For too long, UKTI and other Government bodies have spent too much time doing desk-based research, instead of getting out, knocking on doors, finding opportunities and bringing packaged solutions to big infrastructure problems or other projects in those markets. It is great to see the Government working in that area.

[Lorely Burt (Solihull) (LD)]

I feel like I am in an exports master class, so I am enjoying everything that the hon. Gentleman says. I agree with him about the need for UKTI to get out from behind their desks and knock on some doors, but does he agree that the balance of UKTI’s recent work has been very much towards bringing in inward investment, perhaps at the expense of exporting and encouraging outward investment?

--- Later in debate ---

[Lorely Burt (Solihull) (LD)]

I will adhere to that, Mr Turner.

I congratulate the hon. Member for Macclesfield (David Rutley) on securing this important debate and my hon. Friend the Minister on his elevation; I am sure that he will make a brilliant Minister.

I think that the need for growth is driving every hon. Member in this Chamber. Growth is the engine that will get us out of the financial difficulties that we were left in when we came into coalition government. I attended a Federation of Small Businesses dinner last night at which our Chancellor was speaking. He talked about the importance of exports and the key role of small businesses in driving exports. Small businesses have a pivotal role to play in leading the recovery, because they are flexible and responsive to changing circumstances and to opportunities which can arise even in difficult times.

I am proud of this coalition Government’s approach to international trade. I am told that no Minister is allowed out of the country without a trade brief in his or her briefcase. It is important to recognise the value of emerging markets, not just our traditional European trading partners: in parts of Europe there are a lot of opportunities, but in other parts it is not so good. Colleagues have mentioned China, India and Brazil, which are important areas that we need to exploit.

UKTI provides a wide range of help and services to business. A number of colleagues have mentioned small business help and the need for more of it. On export credit guarantees, I would much prefer to see the help going to small companies rather than to some of our larger companies—perhaps those that are selling quite a number of arms at the moment. For example, why not extend the supplier credit finance facility to small businesses—the guarantee to a bank for a loan for sums larger than £25,000?

We could do more. The hon. Member for Macclesfield has already mentioned that we do not punch at our weight in respect of exports, compared with other European countries. There are things that we can do. Consider UKTI, for example. The hon. Gentleman talked about getting people out from behind their desks and knocking on the doors of local businesses. I berated the regional development agencies for being far too insular and expecting small business to come to them. The whole emphasis must change. We must be far more outward looking and inclusive.

I was particularly impressed by the hon. Member for South Thanet (Laura Sandys) talking about the internet. It is so obvious, but we do not often talk about that as a mechanism for encouraging and enabling exports, particularly for small businesses.

The hon. Member for Poole (Mr Syms) mentioned speed dating. Why not have business-to-business mentoring? I mean speed dating in the strictly business sense, of course. Perhaps I am just compounding my error. I will change the subject quickly. We can do a lot of things. Our local enterprise partnerships can help as well, as can the chambers of commerce.

Manufacturing is playing and will continue to play a key role in exports and in attracting inward investment, because we have all the tools and abilities in this country. The coalition Government are seeking to rebalance the economy. The west midlands, which is my area, is excellent at high-end, advanced manufacturing. Sadly, manufacturing shrank under the previous Labour Government from 20% to 12% of our gross domestic product. That is shameful.

We have major export opportunities. The hon. Member for Macclesfield mentioned Jaguar Land Rover. Automotive is our No. 1 manufacturing export. Jaguar Land Rover has already expanded its Solihull plant and the i54 plant and it is taking on 1,000 people. There are a great number of things that we can do. We have aerospace, chemicals, agri-food and energy, so it is up to us to have a multifaceted approach to ensure that all of us—Members of Parliament and every facet of Government, as well as employers’ bodies—work together to increase that emphasis and ensure that small businesses, particularly, get their fair share of the pie.