Bilateral Trade (Israel)

Lord Evans of Rainow Excerpts

Wednesday 13th June 2012 Westminster Hall

[Graham Evans (Weaver Vale) (Con)]

I am pleased to raise Government policy on bilateral trade with Israel in this half-hour debate. First, let me draw Members’ attention to my entry in the Register of Members’ Financial Interests, in which I declare my trip to Israel and the Palestinian Authority in September.

The relationship between the UK and Israel has always been strong, and the UK has always been a constructive partner in the peace process. Britain can and should be a force for good in the region. With a balanced approach, we can exert our influence as a strong and impartial mediator with the ability to corral both parties to the table.

Alongside our role in the peace process, Britain should be making the most of investment and trade opportunities with the economic success story that is the modern state of Israel. Since its creation in 1948, Israel has been involved in near-continuous conflict. In 1948, 1967 and 1973, Israel’s Arab neighbours vowed to destroy the Jewish state, but, despite being vulnerable on all borders, Israel fought back and prevailed in those wars. The state has also survived several intifadas imposed on it by the Palestinians. The continuous threat of terrorism and suicide bombings has affected life in the country in ways that the UK cannot truly understand. Despite those near-impossible conditions, Israel has developed into an economic and industrial power that is admired the world over.

Israel is a country that is low in natural resources, and, to succeed, it must depend on the inventiveness of its people. Indeed, its people are its greatest asset. Israel has done well not because it has vast mineral wealth, oil or huge natural resources, but because its people are enterprising, extremely innovative and able to apply high technology.

I have had first-hand experience of those qualities, as I spent many years working for HP Indigo with Israeli entrepreneur Benny Landa, who pioneered the invention, development and commercialisation of ink-based electro-photography—digital printing. It was Benny’s vision and determination to bring the printing industry into the 21st century, despite the difficulty of overcoming traditional thinking and aggressive competitors, that were most impressive. The fact that Indigos are still made in Israel and Hewlett-Packard is the country’s second largest employer after Intel is indicative of Israel’s creative and entrepreneurial culture.

My perceptions were further reinforced when on my first visit to the country last year I had the privilege of visiting the world-class Weizmann Institute and meeting some of the professors of science.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this matter to the Chamber. Many of us are interested in this subject and are keen to see how we can advance the relationship between Israel and the United Kingdom. One of the areas in which Israel clearly leads the world is medical and pharmaceutical innovations. Does he feel that those advances and opportunities in the medical and pharmaceutical industries should be exchanged, so that we can build up a trade exchange that would advance both Israel and the United Kingdom?

[Graham Evans]

The hon. Gentleman makes a good point. I totally agree that we can work more closely with Israel, and later in my speech I will bring in some specific examples of medical advances in Israel and show how they have helped citizens in the United Kingdom.

Meeting some of the professors of science at the Weizmann Institute was most welcome and inspiring. Institutions such as the Weizmann, the Hebrew university of Jerusalem and the Haifa Technion are all rightly considered to stand alongside top institutions throughout the world, especially in the US and the United Kingdom, in academic excellence. The energy and resourcefulness that I witnessed working for Indigo and at Weizmann and among the population in general explain how Israel has converted what was once a land of citrus groves and kibbutzim into a high-tech powerhouse. Israel is now a modern industrial state, producing some of the most advanced and sophisticated technology in the world.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate the hon. Gentleman on securing this important debate. Does he agree that a distinction must be drawn between trade with the state of Israel and trade with illegal settlements in occupied Palestinian territory, and does he intend to address that aspect of the relationship in his speech?

[Graham Evans]

I am grateful to the right hon. Gentleman for raising that matter. The institutions that I have visited are not on any so-called settlements. Israeli settlements occupy roughly 1.5% of Palestinian land. I appreciate the question, but this debate is really on bilateral trade, and to my knowledge, I have never done any trade with those settlements. If I may, I will now carry on with the point of the debate.

The state is a world leader in medical devices. The hon. Member for Strangford (Jim Shannon) has just referred to medical advancements, devices and electronics. Military electronics, civilian and military aviation, agri-technology, telecommunications, computerised graphics, cellular telephones, microchip, voicemail, and water technology and desalination are just a few areas of Israel’s expertise.

Agricultural technology is playing a pivotal role in efforts to alleviate disease, hunger and poverty throughout the developing world. When asked to explain the $4.5 billion investment in an Israeli company, Warren Buffett replied:

“Some Americans came looking for oil, so they didn’t stay in Israel. We came looking for brains, so we stayed in Israel.”

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate the hon. Gentleman on securing this debate. I want to follow up on the comments made by my right hon. Friend the Member for Oxford East (Mr Smith). I hope that the hon. Gentleman is not seriously saying that we should not consider the political climate in Israel when we talk about the important bilateral aid relationship. We need to consider the activities that are taking place in illegally occupied territories. Yes, we need to consider the tremendous innovations that are helping to fight poverty and to create opportunities rightly around the world, but what about the poverty and the killing of opportunity that is taking place in the illegally occupied territories as well as in the west bank and Gaza strip?

[Graham Evans]

I am most grateful to the hon. Gentleman for that intervention. I merely point out that the illegal settlements are a relatively small part—1.5%—of the Palestinian territories. One of the best ways in which we can encourage and influence solutions to these issues throughout the world, especially in Palestine, is through trade. It gives us an opportunity as a nation and as a member of the European Union to speak to both parties about a two-state solution that is right for both parties. The point that I am trying to make is that trade is vital and that Israel can play a role in global economics and technological and scientific development.

[Chris Kelly (Dudley South) (Con)]

On that very point, will my hon. Friend join me in welcoming Israeli high-tech firms partnering with British manufacturers? For example, Eurocraft Enclosures in my constituency of Dudley South has partnered with ECI Telecom to provide the technological internals that are encased in high-quality British engineering. That is providing jobs in my constituency. Does he agree that that is an example of what we need in the future?

[Graham Evans]

My hon. Friend makes a valuable point, and I wholeheartedly agree with him. This is about creating wealth and jobs in our country and within Israel. Partnering with such innovative companies in Israel will lead to job security and wealth creation in all our constituencies and in the whole country. In the 21st century, Great Britain has to pay its way in the world. If we look at the growth in the Israeli economy, we can see that Great Britain has a few things to learn.

[Jim Shannon]

I thank the hon. Gentleman for giving way again and for his graciousness in doing so. Perhaps one of the best ways to build relationships between the Palestinians and the Israelis is to build up economic relationships and the job opportunities that come from those relationships. Does he feel that Britain can perhaps have a greater influence on what takes place in Israel by building those economic and employment opportunities?

[Graham Evans]

I am most grateful to the hon. Gentleman for that intervention. I totally agree with him that the more that we work with nation states and create innovation, jobs and wealth, the more everybody benefits from that creativity and bilateral trade. It benefits all nations.

A little earlier, the hon. Gentleman mentioned some Israeli medical advances. The example of such an advance that I should like to give shows Israeli ingenuity and brain power. In April, I participated in the London marathon. I might not look as though I am fit enough to run the London marathon, but I ran it with my hon. Friend the Member for Dudley South (Chris Kelly); I hasten to add that he beat me, but there we are. A lady called Claire Lomas, a paraplegic British woman, was able to walk the entire route of the 2012 London marathon, thanks to a futuristic Israeli medical device. Her amazing achievement was made possible only because of Argo Medical Technologies’ ReWalk, which is a futuristic Israeli product. ReWalk is the world’s first commercially available upright walking technology for people with lower-limb disabilities. The 44 lb device comprises a brace support suit that integrates motors at the joints, sensors and a computer-based control system, and it has rechargeable batteries. Sophisticated algorithms analyse body movements, and then trigger and maintain gait patterns, as well as stair-climbing and shifting from sitting to standing. ReWalk transforms the lives of paraplegic people.

Claire Lomas was permanently paralysed below her chest as a result of a riding accident in 2007. However, she was determined to participate in the 26.2-mile marathon, even though she could cover no more than 2 miles a day. It took her 16 days to reach the finishing line—

--- Later in debate ---

On resuming—

[Graham Evans]

As I was saying, it took Claire 16 days to reach the finishing line, accompanied by her husband, Dan Spicer. That is an inspiration to us all.

Aside from the inventiveness of its people, what is it about Israel that makes it such an economic and high-tech success story? A well-established and fully functioning democracy, a western legal system, the full infrastructure of transportation, communication and utilities, and an educated and motivated population make the country attractive to foreign investors and industry. For that reason, virtually all major US high-tech companies have installations in Israel, and companies such as IBM, Intel and Motorola have established plants in the industrial parks that are expanding around the country’s academic institutions.

It is most heartening to see how we in the UK are now taking advantage of the business opportunities provided by Israel. Israel is one of the UK’s key strategic business partners and has become its largest individual trading partner in the near east and north Africa. Over the past 10 years, the value of bilateral trade in both directions has increased by 60%, from £2.3 billion to more than £3.7 billion. In 2011, the value of British exports to Israel reached £1.57 billion, and Israel’s exports to the UK, primarily machinery, diamonds, technology and pharmaceuticals, totalled £2.18 billion. In fact, the Israeli pharmaceuticals company, Teva, is the largest supplier of generic drugs to the NHS. More than 300 Israeli-related firms operate in the UK, of which 34 are listed on the alternative investment market and 11 on the main market of the London stock exchange, and more than 75 major UK companies have offices in Israel.

Israel’s success in integrating into the global market has been facilitated by an enormous number of free trade agreements with the US, Europe and other countries, including Canada and Mexico. In fact, Israel’s approach to free trade is one that we in this country could learn from. UK-Israel business is strongly assisted by the existence of a free trade agreement between the EU and Israel, which provides import duty exemptions for most Israeli-made products arriving in the EU. I urge the detractors who argue that that trade agreement benefits only Israel to reconsider in the light of the bilateral trade figures. It is in the interest of both the UK and Israel to develop bilateral trade, which is hugely significant to the UK’s economy in encouraging growth, employment and the creation of wealth—factors that we all know to be crucial in our economic recovery. To that end, will the Minister give assurances that trade that benefits both countries will not come under threat from pressure by politically motivated groups and organisations?

In addition, are there any plans to develop a bilateral investment treaty between the UK and Israel along the lines of the one between Israel and Germany? A 2011 UK White Paper, “Trade and Investment for Growth” pointed to Israel as a pivotal strategic partner for Britain’s future. The White Paper stated:

“The Government will encourage a stronger partnership between British and Israeli companies to exploit the potential synergies between Israel’s high levels of innovation and British strengths in design, business growth and finance, as well as the UK’s own high technology and scientific strengths.”

I was therefore delighted to learn of the work that our excellent ambassador, Matthew Gould, is doing to build a stronger partnership between Israel and the UK.

As part of that, the UK-Israel technologies hub was launched in October 2011. It is tasked with promoting economic growth and innovation in the UK and Israel by creating lasting partnerships in technology between the two countries. It is also important to note that, since both nations boast active fields of research and development, the UK has been particularly committed to enhancing ties in that area. For that purpose, £10 million will be awarded over the next five years to the Britain-Israel research and academic exchange, whose aim is to bring together British and Israeli scientists on academic research projects. Furthermore, the recently established UK-Israel Life Sciences Council was formed to enhance scientific collaboration. To that end, 19 leading scientists from both countries, including four Nobel prize winners, three Members of the House of Lords and presidents of universities, among others, have come together.

I applaud those initiatives and collaborations in the fields of business, science and academia. What discussions has the Minister had with his Israeli counterpart to increase such co-operation? Israel is a phenomenal source of innovation, with more start-ups per capita than anywhere else in the world. Israeli companies need foreign partners for capital, business and product development, and access to global markets. With market access to Europe, the world’s strongest financial centre, world-class professional and creative services, and complementary strengths in technology emerging from our world-class academic institutions, Britain can and should be a natural partner for Israel.