Palestinian Territories
Lord Cope of Berkeley Excerpts(6 years, 6 months ago)
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Lord Cope of Berkeley (Con)
My Lords, I am grateful, as I am sure the whole House is, to the noble Lord, Lord Steel, for introducing this debate and for the excellent speech with which he did so. The noble Lord, Lord Luce, said that the question is: what should we, the United Kingdom, do now? I believe that it is time for us to recognise Palestine—that is, for Her Majesty’s Government to recognise it, as the House of Commons and so on already have.
As the right reverend Prelate the Bishop of Chester suggested, it would perhaps have been best if we had been able to recognise Palestine at the time we recognised Israel. That was, after all, the start of the two-state solution, when the United Nations set it down. It had been discussed a great deal but that is when it was first laid down by the UN. The two-state solution has existed since then and it goes on from there.
However, the reasons I support recognition now are not merely historical. The two-state solution, as has been said by the noble Lord, Lord Hain, is at risk because of the huge amount of Israeli building and development in the Occupied Territories since 1967 and because of the ruthless and brutal nature of the occupation, both generally and particularly, of course, in Gaza. The United States has long helped Israel ride roughshod over the United Nations’ authority in that part of the world, and now President Trump and his Administration have broken ranks again by moving the United States embassy. Peace can come only by wide agreement, and in my view British recognition of Palestine would help to redress the balance between the two and change the terms of the argument.
As a matter of fact, it is the symbolism of this that matters most—as it was, indeed, with the recognition of Israel all those years ago. It is the symbolism of moving the embassy that matters most. The present symbolism is of the United Kingdom refusing to recognise Palestine, which 130 out of 193 members of the United Nations have done. Palestine, after all, is a country which Britain told the Security Council in 2011 had developed the capacity to run a state; we said that that was the best way for it to live in peace with Israel. Above all, recognition would give the Palestinians hope. Over the 50 years that I have been going to Palestine and Israel as a result of my wife’s family connections, there have been times when hopes have risen. The Oslo accords were a prime example, when the PLO recognised Israel. But these days it is very difficult to see any hope in the present situation. Of course, when people have no hope they despair, and desperation is the seedbed of terrorism.
So we in the United Kingdom should not simply go round and round the old arguments, deploring the killings, the fighting, the settlements and so on. We should do what we can to move it all forward. We should recognise Palestine as soon as we can.
United States: Foreign Policy
Lord Cope of Berkeley Excerpts(6 years, 11 months ago)
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Lord Cope of Berkeley (Con)
My Lords, this has been a wide-ranging debate instituted very well by the noble Lord, Lord Ashdown, to whom we are all grateful. As one or two others have done and the noble Lord, Lord Turnberg, just did, I want to concentrate on a decision that throws light on the activities of the United States. That is the recognition of Jerusalem as the capital of Israel.
My interest, as I have outlined before, is that my wife was the third generation of her family to be born in Jerusalem, having gone there for Christian reasons in Ottoman times. The family still has interests and friends on all sides of the religions and confessions there. The noble Baroness, Lady Tonge, pointed out that over that period we British failed to protect the existing inhabitants of Palestine as Balfour’s letter promised. We also failed to prepare Palestine for independence, as we were required to do under the mandate. Now we find ourselves facing problems there again.
It interested me that the noble Lord, Lord Turnberg, made such a clear distinction between east and west Jerusalem and suggested that east Jerusalem, in spite of the statement by the President the other day, might indeed be the capital of Palestine. He is right to concentrate on the Old City as the focal point. Every effort to settle the problems of these two countries by partition, from the Peel commission in 1937 to UN resolutions over the years, has recognised the inescapable fact that the status of Jerusalem needs to reflect its importance to Jews, Muslims and Christians if peace is to be secured and to last. Of course, it would be easier to be consoled by the remarks of the noble Lord, Lord Turnberg, if one did not also know of the tremendous pressure put on the residents of east Jerusalem by the Israelis through residence restrictions, movement restrictions all the time, building restrictions and the building of settlements in east Jerusalem, which has been going on ruthlessly for many years and which continues to this day.
It is significant, particularly in the context of this debate, that we and other western democracies have not followed the United States in this initiative. The noble Lord, Lord Ashdown, hoped that, in the United States, democracy might help to curb the excesses of Donald Trump, and we all hope that. However, we the allies of America also have a duty in this respect not necessarily to follow all his policies over the years and to lean out of the boat in the other direction.
The damage that was done by the statement on Jerusalem was, first, a blow to the United Nations and its resolutions and the rules-based order that the noble and gallant Lord, Lord Houghton, referred to in his excellent maiden speech, as did other noble Lords. The statement is also a blow to the idea that America might be a broker between Israel and Palestine, as previous US Presidents have done their best to be. I am particularly sad about that because for a brief period last year, when American policies seemed to be developing, particularly in the Gulf, Saudi Arabia and so on, it seemed that the great dealmaker, as he is said to be—at least by himself—might open up new possibilities of reconciling this stubborn problem. I fear that has become much less likely and less possible.
In the face of US policy, we in this country, with our other allies in Europe and elsewhere, need to redouble our efforts to try to bring peace in Israel/Palestine but also in other parts of the world, not just sit back and bemoan what is happening. Of course, many Israelis and Palestinians want to get on with one another. Those are the people we should help, while doing our best to marginalise the zealots on both sides of this terrible divide.
Exports: Government Support
Lord Cope of Berkeley Excerpts(9 years, 10 months ago)
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Lord Cope of Berkeley (Con)
My Lords, I, too, am grateful to my noble friend Lady Wheatcroft, both for this debate and for her speech.
Some colleagues and I worked hard a couple of years ago on the Select Committee on SMEs to look into the assistance that the Government were giving for SMEs to export. Of course, your Lordships’ House debated that report; indeed, it has done so a couple of times. It is a crude summary of our report to say that we were favourably impressed by the progress of UKTI but were more concerned about the financial assistance available. Since we did that work, there have been very positive signs of improvement in both aspects, largely along the lines that we hoped for.
It is always difficult to be precise about the scale of exports by SMEs or the number of companies involved, but we all know that we need SMEs to export more. That is indeed a large part of the efforts of UKTI. It does a very good job in that respect. But the problems of exporting for SMEs include difficulties of local knowledge of one’s potential market. This includes languages and customs, as well as knowing what goods they want to buy. In a recent survey, for example, the habit of late payment in many markets came out as one of the problems. We have discussed late payments in the UK in recent debates on the small business Bill, for instance, but of course no Act of Parliament can help with overseas markets where there are very long payment periods. The first thing is knowing where the opportunities lie for one’s particular business. The UKTI and, particularly these days, the overseas posts of the FCO, have much improved their work in identifying opportunities and introducing UK companies to potential customers. All companies, including SMEs, benefit from improved services available in that way.
As my noble friend Lord Lang said, a strong pound is a problem for exporters where price is an issue—as it so often is. We all know about the troubles of the euro. It is not only the rate of exchange that is the problem, it is also the uncertainty involved when making plans. That applies in other fields. The suddenness of the drop in oil prices made it a mixed blessing. Of course, we all like lower petrol and diesel prices, but if you are supplying the oil and gas industries—particularly in exploration and development—that is a problem.
As for uncertainty, I read that some prudent airlines bought large quantities of fuel forward before the oil price dropped, and now find themselves facing severe price competition from apparently less prudent airlines, which did not buy forward.
The UKTI and Ministers, from the Prime Minister downwards, have been working hard at trade missions and boosting our exports in all sorts of ways—particularly my noble friend who will reply to the debate. We have already been reminded of the PM’s visit to India. He took with him 100 companies, including 30 SMEs. Similarly, many went to China. China is a very important market, and UK exports there are at a record level and have more than doubled, I believe, since 2009, growing faster than France and Germany—although obviously they have done better than us in the past.
That reflects the emphasis that there has been on newly emerging markets, which is clearly very important to counteract the eurozone’s problems. When we were doing our work, there was much emphasis on the BRICs—Brazil, Russia, India and China. Russia is now on the—how should I put it?—“more difficult” list. On the other hand, to South Korea, for example, with a new trade agreement in 2013, exports are showing 82% growth. Perhaps we should talk not about BRICs but about BICSKs.
The next big trade deal is of course the Transatlantic Trade and Investment Partnership. Perhaps my noble friend can give us an update on progress on that.
Returning briefly to export finance, since we reported, I am glad to say that there has been a lot more progress from the Government’s point of view. I am told that we have doubled direct lending for small business exports to £3 billion. UK Export Finance—better known to some of us as the ECGD—has been able to expand its services, but it needs to grow faster. The banks are criticised but, as we pointed out, there are hundreds of banks in the UK, not just the handful of clearers whose names are well known. There are also other providers of finance to draw on. The current small business Bill is intended to make it easier for SMEs to draw on that.
My noble friend Lord Lang and the noble Lord, Lord Stoneham, spoke of the car industry. I find it interesting that British luxury cars, such as Rolls-Royce and Bentley, are selling fantastically well in China and the USA. Both of them are made here, despite their companies being German-owned. It is difficult to think of a better tribute to British engineering and design.
In all this talk about what the Government are doing, one good thing is that they are working with various other organisations which exist in the private sector. Let us not forget the work done by the chambers of commerce or by the sectoral organisations for specific industries or parts of the world, such as the task force on the creative industries, mentioned by my noble friend Lady Wheatcroft. Many businesses are more inclined to go to this sort of organisation than to expect help from government but they should not be. They are wrong to do that these days because UKTI and the FCO are much more focused on practical help than they used to be.
The Government’s new trade ambassadors are opening opportunities, too. They are all appointed from among people experienced in business and knowledgeable about the countries that they cover. Some of course are Members of your Lordships’ House and across parties, including my noble friend Lord Risby, who I hope is about to tell us about it. They seem to have excellent backing from the FCO and UKTI. All this helps SMEs to overcome the problems of lack of local knowledge and contacts, which feature so high on the list of factors which inhibit SME exports. The Government are working hard and imaginatively on building the UK’s export performance, but we need that. We have always lived by trade and we still do.
Middle East and North Africa
Lord Cope of Berkeley Excerpts(10 years, 1 month ago)
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Lord Cope of Berkeley (Con)
My Lords, my interest in the Middle East also centres on Palestine-Israel. Like others, I have come to the opinion that Britain should now recognise Palestine. My interest stems from the fact that my wife was born there and, indeed, was the third generation to be born in Jerusalem of western Christian families who went to the Holy Land in the 19th century. Her family, with others, still owns a hotel there and is involved in a children’s charity. I am a trustee of the UK friends of the Palestine music conservatory.
I have therefore been visiting occupied Palestine, primarily east Jerusalem, for more than 45 years. I was last there in August during the latest blitz on Gaza. My visits are for family and charity reasons. I meet friends, businessmen, clergy and so on but rarely politicians. For that reason, I have rarely spoken about the subject in your Lordships’ House. But when you are there you cannot help seeing the politics.
I have seen the settlements grow and grow over the 45 years. My noble friend Lady Warsi gave some figures. I was interested and pleased that the noble Lord, Lord Mitchell, and the noble Lord, Lord Palmer, withheld their support from the settlements policy of the Israeli Government. I have seen the razor wire, the wall and the checkpoints. You only have to go by bus from Jerusalem to Bethlehem to know how appallingly the Palestinians are routinely treated at the checkpoints.
The two-state solution, which I believe is the only hope of lasting peace for Israel and Palestine, is evaporating before our eyes. Huge new illegal building projects have been announced recently. Another 1,000 homes in Har Homa have been announced this week. This is more modern subsidised housing for Jewish immigrants but no building permits, even for a home extension, are allowed to native Palestinians. On Tuesday, I read in the newspaper that Palestinians are to be barred from using public buses in the West Bank. They are already forbidden from using many of the main roads in their own country.
The noble Lord, Lord Sacks, who has just left, made a moving speech but I say to him that it is these actions of the Israelis which make them hated, stoke up violence and act as recruiting sergeants for Hamas. The noble Lord, Lord Mitchell, objected to the use of the word “apartheid” in respect of Israel, but “apartheid” is not too strong a word to describe Israeli policy in the Occupied Territories. Archbishop Tutu used the word after he had been to see it for himself.
On Tuesday, in another place, my right honourable friend the Foreign Secretary said:
“The settlements are illegal and building them is intended to undermine the prospects of the peace process. We must not allow that to happen”.—[Official Report, Commons, 28/10/14; col. 171.]
I agree with that but have we any influence left? It still is happening.
The late General Matti Peled was one of the toughest Israeli soldiers in the 1948 and 1967 wars. After retiring, he became a professor of Arabic literature. Just after the 1967 war, when the Israeli army captured the West Bank, Gaza and the Golan, he told his fellow generals that Israel should offer the Palestinians a state of their own. He forecast that if it kept those lands it would turn Israel into an increasingly brutal occupying power. He was right in his forecast.
Some time ago, Her Majesty’s Government concluded that the Palestinian Authority fulfils the criteria for statehood and UN membership. We were told that recognition was a tactical matter and should wait until there is progress on negotiations. In other words, as has already been said, Israel should have a veto. We know that they will use the time for their extremists to build far more homes over the occupied land, to oppress the people and to drive them out.
If we are to influence it, we need a dramatic gesture from this country to shake the peace process out of the mothballs. I believe, with Sir Vincent Fean, until recently our consul-general, that recognition would advance the peace process by giving hope to Palestinians and by helping the moderates on both sides: that is, the Palestinians who believe in peace and work for peace in co-operation with Israel; and the Israelis who hate what is done in their name—the separation wall, the house demolitions and the imprisonment of thousands without trial—who think about the long-term future and who do not think it inevitable that they should for ever live behind walls in a permanent state of war with their neighbours.
I also believe that recognition could start the sort of process, about which the noble Lord, Lord Hylton, spoke, as regards development in Gaza and elsewhere. If we believe, as I do, that the two-state solution can bring lasting peace to the Holy Land, we should act on that basis and recognise Palestine as the second state, just as we recognised Israel all those years ago. Sometimes it seems as if we British are bystanders who can have no influence on what happens. But we helped to create the situation and we have a special responsibility in all this. My father was a soldier in Palestine under General Allenby in 1918. In 1920, we—the British—undertook the mandate to guide Palestine to independence. Recognition is our last duty under the mandate.
Republic of Sudan: Human Rights
Lord Cope of Berkeley Excerpts(10 years, 5 months ago)
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Lord Cope of Berkeley (Con)
My Lords, the noble Baroness, Lady Cox, is remarkable for her vigour and tenacity in standing up for so many of the most oppressed people in the world. I congratulate her on it. Some years ago, it was my duty to withdraw the Conservative Whip from her. Some might take that as a hostile act, but she never seems to mind.
My interest in this debate stems from a small charity called Kids for Kids, of which I am a patron. It is a highly focused UK charity, which works only in Darfur to help people to stay in their villages rather than be forced to flee into the vast camps as refugees. Its first programmes, which still continue, were about lending goats to starving families, hence the name. I hear about Darfur in particular through this charity. It has a big enough task because Darfur is the size of Spain.
To be driven from one’s home and livelihood is to be deprived of a most basic human right. The camps do amazing work, but nobody wants to leave their homes and land in order to be dependent day by day and year by year on food handouts. Over the years, drought and sheer poverty have been powerful drivers, creating refugees as well as waves of sickening violence, particularly from militias. NGOs such as Kids for Kids can and do help to fight drought with wells; they can fight poverty and malnutrition with goats, donkeys and agricultural advice; but NGOs cannot fight violence. That has to be done with politics. The international agencies have worked to bring about agreement and find solutions, but have not succeeded and the situation keeps getting worse.
This year so far, another 250,000 Darfur people have become refugees. Some say it is more like 500,000—the figures are not clear. They are added to the 2 million to 3 million Darfuri residents already displaced and in camps as refugees, many for some years. That is out of a total population of 7.5 million in Darfur in 2008. The Abuja agreement of 2005 and the Darfur peace agreement of 2006 have not brought peace. The Doha Document for Peace in Darfur, signed in 2011, might still provide a basis for a settlement, but it simply has not worked so far or been implemented properly.
The Sudanese Government have to take primary responsibility, but the UN and other states like ourselves have, as the noble Baroness made clear, an important role to play and we must recognise that we have not yet been effective. Can the Minister tell us what progress has been made since the Security Council resolution was adopted in April? Can the UN-African Union Mission in Darfur be given new vigour and impetus to make a difference to this appalling situation?
After more than a decade of violence, the whole area seems to be getting stuck in a permanent state of violence, with millions of permanent refugees. It is getting like Palestine, which we were discussing a few minutes ago, where UNRWA does its best for millions of refugees from half a century ago but who are still refugees, where UN resolutions are flouted with impunity and where violence is seen as the only way forward.
Violence is no solution in Palestine or, for that matter, in Darfur. Agreement must be found by negotiation. The bitterness does not deteriorate over time; it festers and feeds on itself. It leads to appalling inhumanities and the crushing of all human rights. As the noble Baroness indicated, it exaggerates religious and tribal differences to lethal degrees over a short time. Peace efforts must be redoubled in Darfur and the whole of Sudan to bring about more inclusive government and more equal treatment.
Businesses: Small and Medium-Sized Enterprises
Lord Cope of Berkeley Excerpts(10 years, 7 months ago)
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Lord Cope of Berkeley
That this House takes note of the actions which have been taken following the publication in 2013 of the Report of the Select Committee on Small and Medium Sized Enterprises (HL Paper 131).
Lord Cope of Berkeley (Con)
My Lords, I welcome particularly the former members of the Select Committee which produced the report which is the subject of this debate—the members of the old comrades association, if I may say so, of the Select Committee. Our committee report had a good reception from the Government and others last year. We were particularly glad that the Government agreed to report again on developments a year later, which my noble friend the Minister did on 27 March, and to facilitate this further debate.
The theme of our work was government help for SMEs—small and medium-sized enterprises—to export. Exporting is obviously good for SMEs and essential for the prosperity of our country. Government help for this purpose is not controversial between the parties or, for that matter, within the coalition but it is also supported and assisted by many outside bodies. The Government’s support is of course shown by the appointment and excellent work of the Ministers concerned, particularly, until not long ago, by my noble friend Lord Green of Hurstpierpoint and now by my noble friend Lord Livingston of Parkhead.
Our report was very strong about the need to improve awareness of UK Trade & Investment and UK Export Finance—UKEF—among businesses. It is after all no use for UKTI to make excellent services available, as it does, if not enough SMEs know about them. The Federation of Small Businesses, among others, emphasises that increasing awareness of the services available is the most pressing need. It is of course not always easy to get through to SMEs. They are very busy and self-reliant, almost by definition. They are used to working out problems for themselves. They have a lot to think about and their dealings with government and their many agencies are usually about taxing and regulating them. So the message “We are here from the Government to help you” does not immediately switch on the “Welcome” sign. I hope that my noble friend the Minister can tell us a little more about the progress and effects of the effort, mentioned in a recent paper, to contact all the 8,900 medium-sized businesses by this summer. The Bank Holiday weather has encouraged me to believe that summer—that most flexible of dates—is about to arrive. How, too, are they getting on with the “Exporting is GREAT” campaign?
A real shock to us on the Select Committee was the tiny number of firms, or at any rate of SMEs, being supported by UKEF. We were told of UKEF’s new marketing campaign, which of course I welcome; that three new schemes had been introduced in 2011, particularly to help SMEs; and that UKEF was recruiting additional staff. In the recent Budget, some further proposed improvements to UKEF’s terms were announced, whose purpose included trying to ensure that smaller companies could benefit. Can my noble friend the Minister tell us what is now expected to be the level of UKEF support to SMEs in the coming period?
On SME finance generally, we were, like many others, critical of the banks. Recent figures suggest that the borrowing environment for smaller businesses has improved. Certainly, when one goes into branches of the large clearing banks one sees trays of leaflets encouraging SMEs to approach them and start-ups to come and see them. However, I have also seen recent evidence that decisions are still made well above the branch level and take a long time to gain approval, longer sometimes than the timetable that export sales require. Captain Mainwaring of Walmington-on-Sea is dead—replaced, one feels, by distant computer watchers.
One of our points was that businesses can borrow from a much wider range of sources than just the clearing banks. This has been widely discussed since, with much talk of challenger banks and so on. SMEs can and should look around. There are many ways to access finance and the clearing banks have lots of competition in this field nowadays. Some of it was formally considered novel but is now thought normal, such as internet banks, crowd funding or peer-to-peer lending—a term that can be misunderstood in your Lordships’ House. SMEs have a vitality that needs to be matched by flexible financial backing, and that is available.
We did not deal separately in our report with the effects of technology on SMEs, although the amazing changes that it continually makes ran like a thread through much of what we did. My noble friend Lord Livingston has great expertise in this area, not least from his period as chief executive of Dixons plc and PC World. As technology connects the world at an ever faster rate, it changes markets radically. You can find and reach customers much more widely across continents. The English language is helpful in this. After all, it is so often the language that computers use to speak to humans. But retail customers in particular need to be spoken to in their own language and with regard for local customs. Finding customers by technology is one thing, but selling also depends on how easy it is to deliver to your customers in distant places. More and more can be delivered electronically—books are the obvious example—and other products of the creative industries, which are so important in this country.
We have always been an innovative and outward-looking country, and IT gives us so many extra chances both to innovate and to reach out to the world. SMEs, with their flexibility, are in the forefront of all this. However, IT also makes the world more complicated. It is partly responsible for the increase in regulations and forms of every kind in all countries. That is one reason why the Government need to help SMEs to export through UKTI, the FCO and other bodies such as the chambers of commerce.
I particularly want to mention two more detailed matters that we referred to in our report. The first is intellectual property. As we learn with morbid fascination of the latest developments in that great lawyers’ feast, the titanic intellectual property struggle between Samsung and Apple, which I think is now in its third year, we should remember that for SMEs such things can be an existential challenge. How can you protect your idea or special product in foreign markets in many countries? I am not going to go into all the aspects, but I ask the Minister how the new IP attachés in our overseas embassies are doing in China and elsewhere. Is there any recent progress to report on international negotiations on IP? China at least is said to be realising that it has intellectual property to lose these days as well as to gain from.
I also want to mention bribery law. The definitions of what precisely constitutes a crime remain only partially understood by SME exporters despite 40 pages of careful legal guidance from the Ministry of Justice. We on the committee worried that the Government were waiting for case law to remedy this deficiency—in other words, that some businesses may suddenly find themselves the specimens being pinned down for examination in the courts while lawyers and judges work out in their confrontational way, in ever higher courts, what this Parliament intended the legislation to mean in practice.
The International Chamber of Commerce wrote after our report saying what was needed was not more parliamentary scrutiny or change in the law or guidance, but more efforts to promote awareness of the present guidelines, particularly by our embassies in relevant countries. We agree about awareness, but we thought that further consideration in a Lords committee might help both awareness and clarity.
All are agreed that the Government should, through their agencies, help SMEs to export in whatever ways are effective. I welcome the appointment of Dominic Jermey as chief executive of UKTI. He has unusually wide experience, including in both UKTI and the FCO, recently as ambassador to UAE.
I pay tribute to my noble friend Lord Green of Hurstpierpoint for his unceasing efforts while he was in the Government. He invigorated the whole process, and UKTI in particular. He proved once again the case for people of energy and expertise to be appointed to the House of Lords specifically to be Ministers. I am delighted that he is here today to speak. His successor, my noble friend Lord Livingston of Parkhead, has brought his own successful high-level commercial and financial experience, as well as his vigour, to the job over the past few months. It is essential work for our national prosperity. We wish him well and look forward to his speech today. I beg to move.
Lord Cope of Berkeley
My Lords, I thank everyone who has contributed to the debate. I thank particularly my noble friend the Minister for a clear and encouraging speech, for which we are grateful. I am grateful to all those who complimented the Select Committee’s report, particularly those who were not on the Select Committee.
I am excited about the prospects for Britain in the digital revolution, which I think are as great as they were in the Industrial Revolution all those years ago. That is partly why I worry about IP and issues of that sort.
The Minister spoke about “salesmanship” being the word of the debate, as it were—at least following the speech of my noble friend Lord Grade. After all, if the House of Lords cannot confer respectability on salesmanship, who on earth can? It is our job to try to do that, and I would add engineers to the list—as was suggested from the opposite side. By the way, if anyone wants to look up the exquisite hand-made cakes, the reference is on page 65 of the report. One can follow up from there, and I believe that the cakes are delicious.
Also mentioned was my noble friend Lord Green’s reference to the task of rebalancing the economy as being a marathon, not a sprint. That may also prove to be true of debates on SMEs and exports. I feel sure that we will contrive further debates to monitor the progress of UKTI in particular and rebalancing the economy in general. My noble friend Lord Popat started something when he godfathered the creation of the committee. This will run and run until the economy is rebalanced.
Small and Medium-Sized Enterprises
Lord Cope of Berkeley Excerpts(11 years, 5 months ago)
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Lord Cope of Berkeley
That this House takes note of the Report of the Select Committee on Small and Medium Sized Enterprises (Session 2012-13, HL Paper 131).
Lord Popat
My Lords, there are 14 speakers in this debate. If Back-Bench speeches were kept to a maximum of eight minutes, with 10 minutes each for my noble friends Lord Cope and Lord Green, we can expect to conclude this debate just before 9 pm.
Lord Cope of Berkeley
My Lords, I was delighted to be appointed to this Select Committee and honoured to chair it. I have long thought and argued that SMEs—small and medium-sized enterprises—are the single most important variable in whether our economy is successful, and that the Government have a duty to do what they can to help them succeed.
Economists argue, particularly on days like today, about what the Chancellor of the Exchequer and the Governor of the Bank of England should do. That is interesting but not the real clue to whether our grandchildren will live in prosperous times. I am an accountant and have seen some companies falter and others flourish because of the enterprise, long-sighted decisions and flair of the people who run them. These days, it is no easy task to run an SME at a sustained profit. Regulations of every kind stand around you to prevent you doing the wrong thing. However, a positive attitude matters—spotting the opportunities and making the right decisions on time. If we can get the climate for SMEs right, if our entrepreneurs are motivated and successful and if sufficient of our young people have the optimism to take responsibility for their own future and for employing others, we will prosper as a nation. If we value our SMEs, we lay the foundations of the future. In particular, if our SMEs can export, we can thrive in world markets and pay our way in a vastly changing world.
Our committee was set up to see if government could help more. The initiative came from my noble friend Lord Popat, and we are grateful to him for that. He served on our committee until he was—as one can see—rightly appointed to the Government. The noble Lord, Lord Mitchell, was also promoted to the opposition Front Bench from among our ranks. The committee members have proved to have huge practical experience in running businesses of very varied kinds. Two of our members have apologised to me for not coming today because of board meetings that they have to attend.
Personally, I found serving on the committee most encouraging. Wherever we went—we travelled widely across the UK and a bit in Europe, too—we met vigorous businesses, many of which were taking advantage of the Government’s various programmes of assistance and finding them valuable. In south Wales, Concrete Canvas impregnates fabric with cement so that one can line a ditch or erect a hut with fabric that turns into concrete when you wet it. It is selling that all over the place, including to the MoD for use in Afghanistan. Viv Parry from Leeds opened up a market in New York for her Exquisite Handmade Cakes, although she was allowed to take over only a sample of the tin she sells them in, not the cakes. Noble Lords will understand that they are food products. Who would have thought a few years ago that a combination of plasticine models and sheer wit would give rise to Aardman Animations, which we met in Bristol and which sells all over the world, including in China? We give other examples in our report. We had to pick only a few and I have picked those, which is unfair. However, I wished to give some examples.
There is a whole series of ways in which UK Trade & Investment—UKTI—and other government agencies help SMEs, both directly and, most importantly, through local enterprise partnerships, chambers of commerce and so on. Our message to SMEs, if there is a single message, is, “If you have a problem, share it. Don’t be frightened of the undoubted complexities of exporting. Take them on and get advice”. Our main criticism of UKTI was not the services it delivers but the fact that it is too little known and therefore too little used. In the case of UK Export Finance, the very low take-up of its programmes shocked us, and very little use is made in the United Kingdom of the European Investment Bank facilities to support SMEs.
There is no doubt that availability of finance is a most serious problem for SMEs, as your Lordships’ House discussed again only yesterday. The large clearing banks did their best to reassure us. However, as we went round we heard constant criticism of their distant, formulaic and sometimes slow decision-making processes, which inhibit the ability of SMEs to borrow from them. We also heard of other options for funding, which are available and growing. The Government’s agencies, including UKEF, the coming business bank, Funding for Lending and the new regional export finance advisers are addressing the problem. We shall see in the next few years how successful this proves to be.
In the time available I will mention briefly three of the other specific areas that concerned us: languages, intellectual property and the Bribery Act. Languages are important in exporting. As we all know, English is very widely spoken in the world and for that reason we are not good at speaking other languages. Some businesses in very expert sectors said that they needed no other language. Clearly, however, in most sectors people prefer to buy from someone who speaks their own language. We drew attention in our report to the fact that these days the United Kingdom has a high degree of linguistic diversity as a result of immigration. We should use that fact more to help exports. I also think that more careful thought about how languages are taught could prove valuable.
Intellectual property protection is ever more important as the world gets smaller. The Government have been negotiating hard internationally and stepping up their ability to advise firms on the risks and what to do about them. It is most important to keep up this work.
The vagueness of the Bribery Act 2010 also proved a controversial issue. In the two years since it came into force, there have been no prosecutions, but it has caused constant worry to exporters about just what is permissible. We want more clarity about all this and suggested post-legislative scrutiny to find out what the authorities and others concerned think the Act means and promulgate it more widely. The Government’s attitude, shared, it seems, by the House of Commons Justice Committee, is that until the courts have pronounced, there is no value in having post-legislative scrutiny. In other words, we have to wait until some particular businessmen are selected to spend months and no doubt much money being dragged through the courts over some practice deemed doubtful in this country, but normal in the country in which they were trying to sell. Meanwhile, everyone concerned becomes thoroughly inhibited when selling in some markets by comparison with their competitors.
It has been an interesting time for me and I want to thank all my colleagues on the committee for their very positive and supportive approach. We had first-class help from our clerks, firmly led by Christine Salmon Percival, even after an accident from her sick bed. The noble Baroness, Lady Cohen, did the same, when she, too, suffered in the snow and ice. We had an excellent adviser in Professor Robert Blackburn of Kingston University, one of the most entrepreneurial universities in the land. By the way, in case any noble Lords read the small print in some of the Sunday papers, I should make it clear that they advised me as chairman what I might say, as you would expect, but I chose what to say and bear sole responsibility for my words. Our committee was also assisted by the positive attitude to our work of my noble friend Lord Green and his colleagues.
We were an ad hoc committee, which means, of course, a temporary one. Our collective work as a committee is finished, but the Government’s work goes on. It is urgent but long-term, and given the importance of SMEs, I think our most important recommendation was Recommendation 1—that the Government should report back, not only now, but in a year’s time. I am delighted that the Government have committed themselves to do this in 2014 and 2015. We are promised further debates then. In that way, I hope, the work of our committee will live on. Meanwhile, I commend the report to the House.
Lord Cope of Berkeley
My Lords, it has been an interesting debate and I am grateful to all those who have taken part, both members of the committee and the others who have come and joined in and for the kind remarks about myself. I would also like to congratulate those who took part in the debate for very nearly sticking to the advisory time limits, which is more than you can say for the previous debate.
The noble Lord, Lord Mitchell, was concerned that the report might sink below the parapet. I know exactly what he means, but as the Minister has just been emphasising, this is an ad hoc committee which has, if I can put it this way, life after death. That is to say, we are promised a further update on these long-term matters. These are not matters which will be solved quickly. We are promised an update and we are promised further debates, next year and the year after. I am very grateful to the Minister for his positive approach to all our recommendations and, indeed, to his duties as a whole, and the way in which he is carrying them out. I do not want to go back over the ground we have been discussing today, but I thank everybody who took part in the committee and in this debate.
UK Trade and Investment
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Lord Cope of Berkeley
My Lords, I am delighted that this debate is taking place. I thank the noble Baroness, Lady Liddell, for instituting and promoting it. The timing, however it has come about, means that its chimes well with our work in the Select Committee on small and medium-sized enterprises and exports, which I have the honour to chair. Our remit is rather wider than this debate. We are concerned with all the Government’s work to support SMEs in exporting. We are interested not only in UKTI, on which this debate has focused—which is fair enough; I am not criticising it—but on UK export finance and the Government’s role in deregulation, tariff negotiations, tax issues, procurement policy and so on.
The Government can help through diplomacy over tariffs and other restrictions on trade, as well as by their purchasing policies, and by Ministers actively promoting trade, as the Minister does so energetically around the world. I hope that I am correct in saying that the promotion is for SMEs as well as for large businesses such as those mentioned by the noble Baroness.
Commentators write about the difficulty of exporting manufactured goods, for instance to India, because labour there is cheaper. They do not often mention that there is usually a 30% to 40% tariff barrier to be overcome. The same is true in Brazil with many goods. That is also a great part of the difficulty that the Government can help with by their energetic diplomacy to try to get free trade.
Our committee published a call for evidence before the recess and received a large volume of responses from organisations, companies and individuals, including academics working in the field. We and our staff are busy going through them—as the noble Lord, Lord Haskel, who is a fellow member of the committee, will confirm. We have also started taking oral evidence. We are in the middle of a series of visits to different parts of the country to meet SMEs of every size and kind, and next month we plan to visit Brussels and Germany.
Visiting companies and organisations in the recess, and looking through the evidence as it came in, I was struck again by the variety among SMEs. It is something we must always remember when we talk about them. Variety is one of the essential facts about SMEs. They come in all sizes, and very different dynamics drive them. They are in all kinds of business. We are very conscious that they are in every sector. We will not be able to ignore the food sector, for example, because the noble Lord, Lord Haskins, is on the committee and he will see to that. Nor can we ignore the creative sector because we have the noble Lord, Lord Grade, as well.
If successful SMEs have one characteristic in common, it is above all that they are problem solvers. They do not let difficulties stop them. If they do not have a can-do attitude, they simply do not succeed. That does not mean that government in its various forms cannot make life easier for them, if only by getting out of the way. Positive help by Government for SMEs has existed for a very long time—since before I was small firms Minister in the Government of the noble Baroness, Lady Thatcher, 25 years ago. These days, of course, much of it is channelled through UKTI, but it also comes from local enterprise partnerships, chambers of commerce and so on. I will not comment directly today on the work of UKTI, as we are in the middle of our evidence taking and deliberation, but we are interested in, for example, whether the criticism made by the noble Baroness—that UKTI is too big business-oriented—is valid.
Nor do I want to comment today on the role of UK export finance with respect to SMEs, which is developing once more after a period in which it was not. I look to my noble friend the Minister for reassurance that his colleagues in government take SME exports as seriously as I know he does. I hope that he will also set out what UKTI is doing to reinvigorate its pitch to SMEs. As far as I can see, too few of them know of the help that they can get from UKTI, either directly or sometimes indirectly, channelled through other organisations, such as the ones that I have mentioned.
We have to recognise that many SMEs either cannot be helped by the Government or do not want to be helped by the Government or anyone else. After all, as far as many of them are concerned, the whole point is to do their own thing. In some cases, people are trying to do something differently from what they did when they worked in large firms and so on. Nevertheless, others want reassurance that it is all possible—it is possible to create a business and to export to difficult countries around the world. The fact is that it is possible. We have already come across some remarkable stories of SMEs doing business and exporting. Britain needs SMEs to flourish and particularly to export. We need to stimulate more potential entrepreneurs and to try to help them when they want to export. UKTI has a very important job looking after the interests of the entrepreneurs, the people who work for them, their customers and, of course, the UK itself.
Queen’s Speech
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Lord Cope of Berkeley
That an humble Address be presented to Her Majesty as follows:
“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament”.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, first, your Lordships might like to know that this summer, which will be a very busy one in this nation, we expect to welcome and look after about 120 foreign leaders and Prime Ministers and their entourages for the Olympic Games, as well as some 40,000 foreign media personnel. I hope that there will be no doubt in your Lordships’ minds that we at the Foreign and Commonwealth Office will be working hard to look after that lot.
On Tuesday last, my right honourable friend the Foreign and Commonwealth Secretary set out the Government’s two principal foreign policy aims: first, to respond to urgent challenges and crises in a way that promotes Britain’s national interest and our democratic values; and, secondly, to equip our country to be a safe, prosperous and influential nation in the long term, in the service of poverty reduction and conflict prevention, and in the upholding of human rights, religious freedoms and environmental safeguards.
To do this successfully, our nation needs to adapt. Wealth and power are shifting globally, so once again in our history we need to look beyond our traditional partners of recent decades to the new and emerging economies of Asia, Latin America and Africa. The world’s pattern of energy resources and energy powers, too, is being transformed by new gas discoveries and low-carbon aspirations. To make the most of the enormous opportunities that these shifts offer, we must move to reinvigorate and refocus our diplomatic network and our policy priorities.
Of course, that does not mean forgetting old friends. The United States of America will remain our strongest ally; our relations with our European partners will remain an essential pillar of our foreign policy; and we should recognise the growing importance of the Commonwealth, which is evolving into one of the most relevant networks in the changing world, embracing some of its most dynamic economies. I have called it the necessary network of the 21st century. It is certainly one of the key gateways to the great and rich new markets of the future, in which we must succeed.
I will say a word about the Arab spring and the developments of the past 18 months. Obviously, 2011 was a momentous year. Already, the Arab spring has brought huge changes to the Middle East and north Africa. Significant challenges remain, but the Government are optimistic about the road ahead. This summer, Libya is set to hold its first democratic elections in more than 40 years. Egypt’s citizens are about to choose their next President, and we hope that this will be an important step towards building a prosperous and stable future for the Egyptian people. Bahrain has committed to a reform process and has made some progress, although there is a good way to go. Peaceful reform is under way in such nations as Algeria, Jordan and Morocco.
However, there is still much to do. The region now needs to consolidate and build on these gains, taking further economic and political measures to entrench stability. The events of the Arab spring have also made ever more pressing the need for a two-state solution to the Arab-Israeli conflict. We urge both sides to avoid any steps that would undermine the prospect of successful negotiations. In this House on Tuesday, I welcomed the news of the Egypt-brokered deal on the Palestinian hunger strikers.
The Government will continue to support the process of reform that is under way in the Middle East and north Africa. In February last year we launched the Arab Partnership Initiative, which aims to support long-term political and economic reform in the region. We committed £110 million over four years through the initiative. Last year the joint FCO-DfID Arab Partnership Fund funded more than 50 projects in 11 countries in the region. We intend to intensify that work over the coming years.
Meanwhile, Iran’s stance and influence remain dangerous. We have yet to see any firm indication that it is willing to take concrete action to address concerns about the potential military dimension of its nuclear programme. We want Iran to take steps to build confidence in its nuclear activities, and we will maintain the pressure until genuine progress is made, including through sanctions and the current EU embargo on oil imports.
In Syria, the situation clearly remains completely unacceptable. More than 10,000 people are estimated to have been killed and many thousands displaced or detained. While we welcome the deployment of UN monitors in Syria in accordance with Kofi Annan’s six-point plan, which is already having an impact, it is deeply concerning that the violence continues. The Annan plan remains the best chance to find a way through Syria’s crisis, but we will not hesitate to return to the UN Security Council if rapid progress is not made.
I turn now to the broader pattern and the rise of Africa and the emerging powers. The positive developments in north Africa reflect a broader trend on the continent as a whole: that is, the gradual realisation of Africa’s enormous potential. Significant challenges, of course, remain in sub-Saharan Africa, as we all know. We are very concerned, for example, by the rise in military tensions between Sudan and South Sudan, and urge both parties to comply with the African Union’s action plan. In fact, al-Qaeda in the Islamic Maghreb and associated groups in Africa remain a threat, particularly across the Sahel. We have seen an increase in terrorist attacks in Nigeria, and the Sahel and the Horn are suffering food and water crises.
These developments, however, should not dilute the broader message: it is a time of significant change in Africa. Many commentators need to catch up with that new reality. Infant mortality is down; foreign investment is up. The IMF forecasts that the African economy will grow by 5.8% this year, which sounds a lot from our perspective here in Britain. The continent has an increasing presence on the international stage. South Africa, a member of the G20, is playing an increasingly active role globally. Angola, Mozambique, Tanzania and Ghana are the new potential stars. I visited Ghana the week before last. Nigeria, with its wealth of natural resources, is unlocking its potential as a considerable regional energy power. Even in Somalia there is new momentum in the political process following the successful London Conference on Somalia. It is right, therefore, that we develop and strengthen our relations with Africa.
Equally, we need to raise our game in the emerging and already advanced economies of Asia, particularly in China and in Latin America, but also with the Korean and Japanese giants and world leaders. We have already increased our efforts to promote trade in these markets. In 2011, UK goods exports to Columbia increased by 35%. In India the figure is 37% and Indonesia an impressive 44%. We believe that we can do even better and will intensify our efforts. We have to recognise and work constructively with massive Chinese involvement and investment right across the globe, including in the UK, and not forgetting our continuing ties with Hong Kong.
In doing so, we will not lessen for a moment our focus on human rights, which remain at the core of Britain’s values. In particular, discrimination and violence against women and girls remain among the most widespread human rights abuses. Tackling these issues is a priority for the UK and central to our work to advance gender equality and empower women.
It is Britain’s leadership, supported by our international partners, that has helped to secure tangible, real reform in countries such as Burma, where we are finally seeing a hopeful path forward and which my right honourable friend visited only recently. Meanwhile, nearer home, Europe is seeking to recover from the biggest financial crisis for generations. In Chancellor Merkel’s words, we are in a period of great uncertainty. That is very apparent.
Europe faces two big economic challenges: resolving the eurozone crisis, if that is possible, which remains a major obstacle to our economic recovery, and responding to the relative shift of economic power to the east and south—all predicted by some of us 15 years ago and to which rather slow-learning commentators have at last woken up.
While it is for each eurozone member to decide how to handle the crisis, particularly the immediate Greek crisis that fills our newspapers, we continue to believe that control of public finances and structural reform to increase productivity and competitiveness are the only realistic ways forward. We have just introduced a Bill to approve an amendment to the EU treaties and confirm the compatibility with the treaties of the eurozone-only European stability mechanism. We have ensured that the UK will not be liable through the EU budget for any future EU eurozone bailouts once the ESM comes into force.
We share common values and interests with our EU partners, and can use the collective weight of the EU in the right situations to increase our impact on the international stage. But the European Union must reform as well, and we will play a strong part in that. The EU must support peace and stability in the western Balkans. We look forward to Croatia’s accession to the EU, due in July 2013, and will bring forward a Bill to approve this. We will also continue to develop our co-operation with Russia.
On Afghanistan, my noble friend Lord Astor will have more to say on this issue and on our defence dispositions when he winds up this evening. However, I would like to pay a very strong tribute to all the British personnel who have lost their lives or been injured serving their country there. The process of transitioning security control to Afghan forces is on track, and we expect the ANSF to take a lead on security responsibilities across the country by mid-2013, with ISAF moving to a supporting role.
The Chicago summit later this month will focus on the size, make-up and funding of the Afghan national security forces. My right honourable friend the Defence Secretary has already announced that Britain will contribute £70 million a year from 2015 to fund the ANSF. As the transition in 2014 approaches, it is more important than ever that we engage with Afghanistan’s neighbours, including Pakistan and the central Asian states, and this we are most certainly doing.
A common theme in what I have outlined today is the role of networks in the modern, globalised world. States are increasingly organising themselves into networks, ranging from the political—I have already mentioned the European Union—to the economic, social and cultural. Let us take one of the world’s greatest networks, the Commonwealth. This Government are committed to making more out of the Commonwealth, an organisation uniquely placed to advance our foreign policy and trade objectives. This is why Commonwealth Heads of Government agreed in Perth last year—a meeting I attended—to some of the most significant reforms in the organisation’s history. More than ever, now is the time, as we celebrate Her Majesty’s Diamond Jubilee and welcome the world’s leaders here, to make the most of our Commonwealth connections.
We will in due course publish the Government’s new White Paper on our relations with the UK’s overseas territories, another important network. Their future welfare forms part of our larger determination to assist small island states, not least those in the Commonwealth in the Caribbean, which face major challenges; for example, climate issues and crippling energy costs. I stress that we remain absolutely committed to the rights of the people of the Falkland Islands to self-determination and to develop their own economy.
That brings me to the network of the Foreign and Commonwealth Office itself, my own department. Over the past year we have taken steps to substantially reinvigorate our diplomatic network. We have put the Foreign and Commonwealth Office back at the heart of government in the making of British foreign policy. By the end of this Parliament, we will have deployed 300 extra staff in more than 20 countries around the world, and we will have opened up to 11 new British embassies and eight new consulates or trade offices in the emerging nations. We are achieving this while making £100 million per year in savings in the Foreign Office budget, as required by the FCO’s spending review settlement.
At this point I would like to pay a warm tribute to the FCO’s committed staff across the globe, often operating in very difficult conditions, and those of the Department for International Development and Ministry of Defence, who work tirelessly in support of our country around the world.
In security terms, the same kind of attitude and priority shift as on the economic and trade fronts is warranted. There is no dispute that America remains the most powerful hard-power military nation and ally, but in a world of dispersed power, cloud information stores and e-enabled, non-state threats, new instruments and techniques of influence and persuasion are required to underpin security and prevent the exercise of hostile force against British citizens and interests. We need, if I may quote Her Majesty’s own words, the,
“camaraderie, warmth and mutual respect”,
of other countries, which our overidentification with past policy and approaches failed to deliver and, in some cases, repelled.
Instead, we need to rely on new network and soft-power intimacies through: local government links; educational links; language links; cultural links such as our museum activities branching out from the UK; the BBC World Service and the British Council; parliamentary links; common judicial practices; common law similarities; common professional standards in medicine, science, accountancy and advanced research of all kinds; civil society networks, religious and faith ties; and the enduring power of ideas and innovation in all fields and every kind of service and design package that our creative and original thinking can generate. Alongside all this, we have become, in the words of the former Prime Minister, Sir John Major, a “development superpower”. It was good that, last year, no fewer than 143,710 Commonwealth students sought to come here. More British students should be encouraged to go to the great new universities of modern Asia.
Sixty years after Dean Acheson’s jibe about Britain having lost an empire and not found a role, we are now finding a role, despite misplaced American comment to the contrary. Britain is emerging as an agile new network power, positioning itself consciously and effectively in line with the new global patterns of economic power, trade flows, markets and influence. We are becoming a safe haven for the world’s investment and wealth.
Europe is our region and neighbourhood; America is our ally and friend; the Commonwealth is our family; and the changing world is our stage. If we are clever, wise and patient, we have every chance on this stage of maintaining and building on our prosperity and contributing decisively, as we must and should, to world stability and peace.
Gaza Flotilla
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Lord Howell of Guildford
I shall have to check on whether we have been in touch with the Egyptian Government. Obviously, the Egyptians are very much part of this story. They have very recently removed their part of the blockade on Gaza. More generally, we are hoping for a more positive and active role in this whole area by Egypt, which is an enormous country, than we have seen in the recent past. This may be because the Egyptians face certain internal problems, but a more active role by Egypt and the regional partners generally in this whole affair would be very welcome indeed.
Lord Cope of Berkeley
My Lords, in his Statement, my noble friend spoke of the possibility that some of those aboard this ship may be charged with offences against the Israelis who boarded it. What right would Israeli courts have to try anyone for offences apparently committed in international waters on a Turkish ship? What on earth would be the jurisdiction of the Israeli courts over any such offence?
Lord Howell of Guildford
That raises the broader question as to whether the operation in international waters was legal and covered by the provisions of war or whether it will turn out to have been illegal. Obviously, the Israeli authorities consider that those individuals who they believe took violent action against the people parachuted on to the deck of the “Mavi Marmara” are people who attacked their soldiers and should be charged. That is the view of the Israelis and, although we may think that other issues should be resolved first, the Israeli authorities clearly wish to examine whether these people who attacked their soldiers should be charged.