China: Investment into the United Kingdom

Lord Cotter Excerpts

Wednesday 7th May 2014 Grand Committee

[Lord Cotter (LD)]

I am very pleased to follow my noble friend Lady Falkner, and I am pleased that she made some points about AstraZeneca, a very current issue and something that we should be majorly concerned about, separately from this debate today. However, it is welcome that the UK is the most popular destination for Chinese investment in the EU. This is good, and it represents an improvement over the past few years.

The recent All-Party Parliamentary Group on East Asian Business review of foreign direct investment into the UK is very welcome, informative and helpful in pointing to areas where we are being proactive in the UK, and where we could do more. I congratulate the noble Lord, Lord Wei, very much indeed on his leadership on this, which is really why I am here today. I am not here to say too many more words, because the report is so comprehensive, but just to give my support to the report and say, “job well done”. I hope that the Government pick up on the points that have been made.

The report is comprehensive and has drawn attention to all concerned about the issues involved. One issue that was alluded to by the noble Lord, Lord Wei, on which I have campaigned for quite a long time, is that this country needs to enable those from China who want to come here to do so. In the past, there have been great stumbling blocks on the issue of visas. There have been enormous and unnecessary problems when people from China have come here for investment purposes but also as tourists. At the end of the day, we want tourists to come here to produce a good return for our economy, but also to introduce people from China to the fact that this country is what it is and is an area in which they can invest if they learn more about us. On an issue that I and a number of my colleagues have raised on a number of occasions, we have had assurances recently from the Government that these concerns are being taken on board. I hope that that is the case; I know that many from the Chinese community continue to monitor it.

We have an issue that came up about visas, with people applying from China finding that the documents that they need to fill out have not been in Mandarin. That is something that we have to address, when it comes to people who want to invest in this country, to ensure that the pieces of paper that they need to consider have been translated into Mandarin.

The point was also made that the regions of the UK should be proactive in helping inward investment, as well as the UK Government. The specific recommendation was made that each UK region should have at least one bilingual adviser in place. We as a country are not particularly as good at languages as some other countries are. I own up to this myself. Some of my colleagues have four or five languages but I struggle with one or two when I am a tourist—but beyond that, I have none at all. It is therefore important to encourage investment from China throughout the regions and ensure that regional advisers are bilingual.

There are many recommendations in this report and I hope that the Minister can confirm that it is being examined in detail, given that there is much to be gained by increasing investment to help growth in this country. I could go on endlessly but look forward to the Minister’s response because there is so much that we can gain. Perhaps I may quote from the report, which states:

“Compared to the country’s overall track record in attracting foreign investment, the UK’s performance lags with respect to China. Much of this potential gap is attributable to failures to recognise and adjust to the unique circumstances of Chinese investors. Faced with a lengthy and cumbersome approval process at home, and a relative lack of deal making experience abroad, Chinese investors take longer to agree to deals, are highly sensitive to price and perceived risks, and require additional levels of professional support throughout the process”.

I again thank the noble Lord, Lord Wei, for instituting this debate, and the Minister for being here. There is an awful lot to be gained by considering this report and the many recommendations within it.

Businesses: Small and Medium-Sized Enterprises

Lord Cotter Excerpts

Tuesday 6th May 2014 Lords Chamber

[Lord Cotter (LD)]

I thank the noble Lord, Lord Cope, for initiating this very important debate. It is very important for our country’s growth and it is so essential that the committee has addressed the issue of exports.

SMEs in particular need every possible help they can get to enable them to negotiate such a difficult and challenging path of business growth. There are many issues to raise and I shall quote from the Federation of Small Businesses which made four key points. It called for more effective sign-posting of existing export support and said that finance is important for small businesses. It talked about more effective targeting of support to microbusiness exporters and said that UKTI should perhaps consider setting up a microbusiness first-time exporter desk in each region so that businesses starting out had an accessible place to go for advice. It also wanted more readily available advice on export finance at local level with the UK export finance regional advisers.

A number of colleagues have already raised the issue of financing. It is a continuing issue for SMEs generally. The business bank was mentioned in the report. In practical terms, will the Minister say how the business bank is operating, in particular with regard to exports? How is it bedding down and doing the work that it needs to do? When it comes to finance for SMEs, in times past there used to be a strong local focus, whereby the local branch manager generally had a good understanding of local businesses. I can attest to that as back in the 1980s and 1990s I was managing director of a small plastics manufacturing company of tubing, cables, and such like, which went to the aircraft and defence industries. We were able to export successfully, but it was very much with the help of a local bank and a local bank manager. The importance of regional finance is just as important today.

Perhaps I may raise a general point on the issue of late payment, which particularly affects small businesses. It comes to quite a point of concern when many small businesses have to wait for 30 or even 60 days to get paid by big contractors, some of which have been given contracts by the Government. This is a general issue, but of course if a small firm has difficulty in financing, it will have difficulty in being able to export.

Will the Minister look into a specific issue that came into the report about UKTI and the Overseas Market Introduction Service? Concern about the Government’s discount scheme, which is covered by OMIS, has been raised because until recently the Government had a discounting scheme whereby 50% was taken off the charge by OMIS to small businesses with their first order. I understand that will not continue after 31 March because the Government say that discounting is not sustainable. But it is really helpful as a doorway for those firms that need this help to get it. Has there been any assessment of how discounting has helped in the past in increasing exporting? It is so important for businesses and this country. Has an examination been done about how the discounting, which will no longer be available, has helped?

Many points have been made by colleagues and we look forward after this debate to the Minister and the Government looking to address the many issues that have been raised. In passing, I would like to ask the Government whether they feel that the local enterprise partnerships have a strong enough focus on export towards the firms in their areas. This debate has been very worth while and I hope that it will encourage more and renewed efforts to help SMEs to export.

UK Trade and Investment

Lord Cotter Excerpts

Tuesday 9th October 2012 Grand Committee

[Lord Cotter]

My Lords, I would like to start with the talk. I seem to remember a recent advertising slogan, “It’s good to talk”. How do we do that, when it comes to business? I believe that too often from the beginning of the current crisis we have heard talk about austerity and cuts. Austerity and cuts were emphasised long before they started happening. I think that that was negative talk, which had quite an impact on business. The continued talk about cuts and austerity, not balanced by talk about growth and going forward, has been a negative aspect. I hope that the Minister, whom I welcome in his role, will consider that point. It is not just for the business department to talk positively about this; it is for the Treasury and others as well. We need to correct the deficit but, as I say, we need the positives.

I congratulate the noble Baroness, Lady Liddell, on securing the debate today, which is about trade and investment. The Government have made a start with the Britain Open for Business initiative, in which there are many encouraging ideas. I hope that the Minister, later in the debate or at another time, will talk about the implementation of that. We need continual monitoring of progress.

I take on board the point made by the noble Lord, Lord Cope, about the need for publicity, so that people are aware of what help is available. A recent FSB report said that, in the case of UKTI, only 6% of small businesses were engaged. Out of those 6%—it may be wrong, but that is what was said—83% were encouraged by their contact. I take on board the point made by the noble Baroness, Lady Liddell, about concerns that too much is directed towards big business rather than small businesses. On publicity and the need for people to be aware of what is available, I know, having been in small business, how little time we have to consider, when we are thinking about how to survive, what else is available out there. I say to the Minister that, in lots of different ways, publicity is needed, direct or otherwise, to ensure that small businesses know that there is something out there that can really help them.

There is a need for us to be welcoming in this country and for Britain Open for Business to actually mean something. In this connection, I again go back to the talk, and to what is said and what happens. I hear quite often that foreign firms and investors have great difficulty in getting visas for key staff, more so than in most countries in the European Union. We need to look at that and see whether it is correct. If it is correct, we need to look at it very carefully, because it does not take much bureaucracy and red tape for someone coming from overseas to feel that this country is unwelcoming.

In this connection, I refer to a recent controversy involving the London Metropolitan University. As a result of it, there was talk of revoking the licence of the university. The implications for students from overseas were such that they could have lost their opportunity of an education in this country. It is a major area of concern. Again, a message was going out, and it is very difficult to counteract messages once they get out and to say, “No, no, that’s not the case”. That was a case where the message was quite negative for this country.

We need to talk up business. For SMEs, publicity is crucial in order to know what is available. We should not go against the need to reduce the deficit; rather, we should emphasise the need to encourage business—not just business alone but the Treasury and other departments in the Government.

I look forward to the Minister engaging with us and reporting back on what progress has been made with the various initiatives. The noble Baroness, Lady Liddell, referred to her time in the other place. When I was in the other place, I argued time and again for the need for Ministers or politicians to appreciate what a small business is all about, and for civil servants and others to have placements in small businesses. I read that the Government were doing that a lot more, but I stress to the Minister that it cannot happen enough. Having struggled myself, I know that a Minister or civil servant would have to work in a small business for only two or three days to realise what a difficult field it is and how many skills you need to run it. I strongly support what has been said by previous speakers and underline to the Minister the points that I have made about involvement and speaking up for business.