Trade and Investment

Debate between Lord Lang of Monkton and Lord Green of Hurstpierpoint

Wednesday 9th February 2011 Lords Chamber

[Lord Green of Hurstpierpoint]

I thank my noble friend Lord Razzall for his comments. I absolutely agree with his first point about the practicalities. As I said, this is a marathon, not a sprint. One of the reasons why that is true is that the production of a White Paper is not the culmination of a process but the beginning. The next step is to translate the White Paper into a large number of action steps, assign responsibilities, time lines and all the rest of it, and drive it through. One of the most important aspects of what we have announced today in the White Paper—this may seem a rather bureaucratic point but I absolutely underscore its importance—is the creation of a new interministerial committee. It is, in fact, a sub-committee of the Cabinet Economic Affairs Committee and the Prime Minister has asked me to chair it. The committee will bring the Ministers in different departments involved in this whole project together on a monthly basis to drive these actions forward. It is in that context that we will review how well it is all going and make any adjustments as we go along.

My noble friend raised some particular issues about banks. For reasons that the House will understand, I am slightly nervous about commenting on banks, but I think there will be considerable recognition in the banking community engaged in commercial banking in this country of the force of a good deal of what my noble friend said. For example, he spoke of the need to ensure that in the context of businesses where there are credit committees and so forth—and rightfully so—nevertheless there is a real relationship that we need to keep alive with individual firms, even small ones, so that there can be a real understanding of the needs of the business.

I do not think anyone in this House would want to go back to some of the culture of lending prevalent in the go-go years in the early part of the previous decade, when lending was carried on as if it was going out of style. There is a need to introduce some prudence and credit control into banks’ business if we want to ensure that banks themselves are stable and profitable. But that must be balanced with an appropriate understanding of the real needs of businesses. We need to monitor that. The Merlin agreement that was announced by the Chancellor of the Exchequer in another place this afternoon includes agreements by the banks on this front, and the Government will hold the banks to account on it.

I have had the opportunity in recent weeks of meeting a number of UKTI people both here and overseas and my experience is that on the whole it is a good institution. There is always scope for improvement, certainly, and in any institution employing some 2,500 people you will find those who are average in quality and those who are very good. But coming at this from the outside, I am impressed by the dedication, hard work, commitment and enthusiasm of UKTI people in the many offices that I have had the opportunity of visiting.

On the specific question of whether to charge for its services, the Government believe that it is appropriate to charge for some UKTI services, but there are plenty of services that are not charged for. OMIS—I am afraid that I cannot remember what that stands for—is a service that is charged for, but generally the feedback is that it is widely welcomed.

[Lord Lang of Monkton]

My Lords, I warmly welcome the well focused nature of my noble friend's announcement. I suggest that the key to growth in the long run is surely increased productivity, as the example that he gave of Germany indicates, though rather to the detriment of Germany's unfortunate partners within the eurozone. Against the background of the sad decline in productivity growth during the period of the previous Government, will he indicate the extent to which he believes the announcements that he has made this evening will stimulate further productivity growth and thus lead to the creation of more jobs and prosperity?

[Lord Green of Hurstpierpoint]

I thank my noble friend Lord Lang for that question because it is an important one. Productivity is indeed something of an Achilles’ heel, at least in parts of the British economy, and we need to work at that. It is a complex matter that involves the whole question of the skills base. There is one very interesting fact about exports that is extremely important to this question. Research shows that as small companies get engaged in the international markets, they not only tend to be the more efficient ones, they tend to get more efficient as they do so. In other words, an enhanced trade performance engaging more SMEs in the international markets has the effect of strengthening the backbone of the whole economy. That is an extremely important consideration that leads me to underscore again the very centrality of this trade agenda to the growth strategy for this economy for the next few years.