UK Trade & Investment

Adam Afriyie Excerpts

Thursday 12th September 2013 Westminster Hall

[Daniel Kawczynski]

I certainly agree with the hon. Gentleman that a lot of equipment that the Gaddafi regime had has got across the border into Mali and other countries. We are deviating slightly from the subject of the debate, but I will say that most of that equipment is Russian. I am not sure what proportion is western-supplied arms.

I pay tribute to Mr Richard Paniguian, head of the UKTI Defence and Security Organisation, which is the military security part of UKTI. DSO is populated by people who have been in the armed services. They understand the products and are passionate about them and their work. If UKTI generally can understand how DSO operates and replicate the passion, energy, enthusiasm and calibre of the staff, we will be motoring further ahead.

I shall say a few things about British defence exports because I, for one, am not embarrassed that the United Kingdom exports security—it is extremely important for our country. Many hon. Members have in their constituencies, as do I, defence operators and contractors, firms on which many jobs and a lot of this country’s prosperity depend. The UK has some of the most rigorous export licensing procedures in the world. It considers each application on a case-by-case basis, taking into account, among other factors, the precise nature of the equipment and the identity and track record of the recipient. Her Majesty’s Government do not—and will not—issue licences if they judge that the proposed export would provoke or prolong internal conflicts, or if there is a clear risk that it might be used aggressively against another country or to facilitate internal repression. When circumstances change or new information comes to light, we can and do revoke licences if the export is no longer consistent with the criteria.

Recently, I had to defend the Prime Minister on the radio when he went to the United Arab Emirates and many people criticised him for trying to sell them some Typhoon jets. It would be the height of irresponsibility if the United Kingdom did not collaborate with our Gulf allies—sound, strategic allies such as the United Arab Emirates—to ensure that they had the capability to defend themselves against a belligerent neighbour who might attack them at any time. If countries such as the United Arab Emirates, Oman, Qatar and Saudi Arabia did not have British planes with which to try to pre-empt naked aggression against them from Iran or others, we would see increasing instability in the region.

You will be pleased to hear, Mr Betts, that I am coming towards the end of my speech, but let me just raise one or two remaining points. My hon. Friend the Member for Romford (Andrew Rosindell), accompanied me on the delegation to Gibraltar, and I want to make a point that he wanted to make about the British Council. The United Kingdom has a global British Council network. Its work is very good, but we do not see it providing any information on UKTI. How is the Minister’s Department collaborating with the British Council, utilising its extraordinary network, to ensure that as well as sharing information about British language courses and all the other good things that it does, it communicates about UKTI and British commercial links?

I wish to talk very briefly about the European Union. The Prime Minister hopes to renegotiate various aspects of our position with the European Union, and I hope that one of those aspects will be how we go about international trading agreements. The first thing that happened to me when I was elected in 2005 was that I was sent to the World Trade Organisation talks in Hong Kong. The other two Members of Parliament with me were the hon. Gentleman who is now the Speaker and Lord Mandelson who, as Trade Commissioner, was representing the whole European Union. I found that very frustrating, because the United Kingdom did not have a voice. The UK was represented by Lord Mandelson, who was representing all 27 nations, but different countries mean different things to other countries—for example, Gibraltar and New Zealand are far more important to us than to Poland. I very much hope that there can be some movement on individual countries being able somehow to negotiate with countries of long standing, so that there is no one-size-fits-all criterion for the whole European Union.

[Adam Afriyie (Windsor) (Con)]

My hon. Friend makes a powerful case for a good review of UKTI and how it reports to Parliament and to the Government. Does he share my view that if we want to be a great global trading nation once again, rebalancing our exports further afield than the EU will mean that even some of the arguments about being too dependent on the EU will begin to evaporate? If we increase our trade with the rest of the world to 90%, leaving only 10% with the EU—not reducing the amount but the percentage—all of a sudden some of the concerns that people may have about our EU relationships will begin to ebb away.

[Daniel Kawczynski]

I cannot thank my hon. Friend enough for that intervention, because it brings me to the exact point that I want to make. I was admonished by the shadow Foreign Secretary, the right hon. Member for Paisley and Renfrewshire South (Mr Alexander), on the Floor of the House for suggesting that at 47%—I may be wrong about that figure—the proportion of our exports that currently goes to the European Union is too high. I indicated that I wanted more of our trade to be with the outside world, particularly with the emerging countries. He took that almost as though I was somehow being disrespectful or did not understand the importance of the European Union to us, which, quite frankly, is a very outdated perspective.

The European Union will of course diminish in importance during our lifetimes—certainly during those of our children—to the extent that it will not account for half of our overseas exports, as rapidly emerging markets such as Brazil increase. The traffic is going one way. I completely agree with my hon. Friend the Member for Windsor (Adam Afriyie).

I will end now with an example that relates to the Department for International Development. My last plea to the Minister is: what is his Department doing to work with DFID to ensure that more British products are sent overseas as part of the aid package? I will never forget that, when I served on it, the International Development Committee visited a village on the Ethiopian-Kenyan border and saw a water irrigation project. I met all the village elders, who told me through a translator, “Mr Kawczynski, we would like to thank you and the people of France for everything you are doing for us.” I said, “France! We’re British. What do you mean, France?” Of course, the non-governmental organisation hired by DIFD was French, all the equipment was French, Japanese or Chinese, and the people on the ground had no idea that the aid was British. Clare Short had stripped the British branding from the goods, but I am glad that there is now a British flag on our aid products.

What work is the Minister doing to ensure that, at every opportunity, DFID utilises British products—whether jeeps, water sanitation equipment or anything else? Even if the British product is 5% or 7% more expensive than its Chinese or French equivalent, let us do a cost-benefit analysis to understand the ramifications for the economy and jobs. We must ensure that, whenever we can, a Department such as DFID does everything possible to help British SMEs. I hope that hon. Members have recognised my passion for exports, and I look forward to the Minister’s reply.

--- Later in debate ---

[Adam Afriyie (Windsor) (Con)]

I do not intend to detain people too long, but given the passion, energy and skill that my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) has put into the report on UKTI and its very good recommendations, I want to say a few words in support of what he has been doing. I also want to echo some of the comments made today by the trade envoys and others.

I welcome my hon. Friend’s work and the passion with which the Conservative-led coalition Government, particularly in the Department for Business, Innovation and Skills, have been pursuing the export and economic growth agendas. We all want economic growth, which comes from two places. It comes internally by reducing taxation, improving competitiveness and removing regulation—a good stab is being made at that—but it also comes from trade, exports and inward investment from abroad. His report highlights that we perhaps require a bit more focus on UKTI’s role in bringing about the economic growth and competitiveness that we all want.

We all want Britain to be a great global trading nation, and if that is to be our position in, say, 10, 15 or 20 years’ time, we must up our game on exports. At the moment, we still have a negative balance of payments. That is improving, and the Government have done good work in that area, but the balance of payments is still negative. In a period when we have a weaker currency than previously, exports should be growing at a far faster rate.

UKTI must play its role, and it has a primary function on exports. As chairman of the all-party group on space, it is clear to me that Britain has amazing industries in our space, science and engineering sectors, particularly in robotics. We often talk about the magnificent, double-digit economic growth in China and some of the emerging economies, but our own economy has a major area in which economic growth has outpaced many of those nations. We have seen double-digit economic growth in the space sector and related industries for the past 10 years, so we do not need to look to China; we can look to our own nation to work out which elements of what we do here are exportable. The space sector and the products and services therein, of course, are eminently exportable.

[Sir Roger Gale in the Chair]

We also export our education system, our universities and academic institutions and our research. We punch above our weight on research—we have 1% of the world’s population and 12% of citations and Nobel prizes. The Open university is a great example of a British export to the rest of the world. Again, both BIS and immigration officials can play a role in both the ease with which visas are handed out and the way in which we advertise our wares abroad. Tourism, of course, is another area that could be classed as an export—tourism imports money into our country, at least.

UKTI also has a major role in inward investment. There has been an interesting political narrative over the past decade or so. We have been a little shy and embarrassed about wealth creation. When companies make massive profits and when wealthy people come to invest in Britain, we are all a bit concerned and not quite sure whether it is a good thing or whether we should be nervous or concerned. Unless we love wealth creation and unless we love and welcome people who have the cash to invest in our businesses, we will not go very far very fast because, as we know, the banks here do not yet have money available. Despite the good work of the funding for lending scheme, there is still not sufficient cash available for UK SMEs and exporting companies to produce their wares and make their way.

We must ensure that UKTI is working to attract foreign investors to Britain. Part of what I like about the report, and about a lot of the background work on it, is that the report recognises that it might be a good idea at some point for UKTI to have some accountability. For a region, an area, a country or a district, UKTI should answer the question, “How much foreign investment have you attracted into this area over X or Y period?” Several Members have asked questions along those lines to up the ante and to ensure that Ministers are aware that this would be an important way to focus the minds of those at UKTI on delivering results. They do some great work in facilitating meetings at overseas trade shows, working with DFID and the Foreign and Commonwealth Office and supporting Ministers, but the spotlight would focus sharply on the outputs for inward investment if UKTI consistently answered the question how much direct foreign investment it has seen or facilitated within a region.

My one other general point is on the balance of trade between the EU and the rest of the world. In many ways I understand the Foreign Secretary’s response to the suggestion that we should somehow minimise our trade with the EU, if that is how he heard the question—I say that to him in a good mood. I am certain that he, the coalition Government and all of us would like to see a massive boost in trade with the rest of the world, and with the EU, too. If there were a massive boost in trade with the rest of the world—the BRIC countries and elsewhere—the proportion of our trade with the EU would naturally reduce. Why is that a good thing? Because the rest of the world is growing a lot faster than the EU at the moment and because overall trade would be increased, preferably disproportionately, to the rest of the world.

We have some great connections across the world. My father is from Ghana, although I was born and raised here. Ghana is the gateway to Africa, and it uses the English language and has a similar legal system and attitude to life. There are all sorts of opportunities in such Commonwealth countries, with which we have a natural affinity without the language barrier that many of us here have been hesitant to breach in the past. Therefore, even in our relationship with the European Union and the judgment that we shall make in the referendum, UKTI has a bearing. If it does its job well, we as a nation will feel much more confident in making bold decisions.

[Daniel Kawczynski]

My hon. Friend made a point about Ghana and his family coming from there, so he obviously has a great interest in and understanding of that country. I was born in Warsaw, Poland, and speak Polish fluently, but at no stage has UKTI asked me for any advice about Poland or to take part in any projects involving Poland. Does he agree that UKTI should better understand the interests of Members of Parliament, specifically in such countries, and utilise us more?

[Adam Afriyie]

That is absolutely right. With the trade envoys, for UKTI to focus on MPs who might have natural connections or affinities with countries with which we want to trade would be a good step forward. I therefore welcome my hon. Friend’s important work on the middle east and north Africa council, which connects nations and makes for a more natural route to follow.

As others have pointed out, we have a wonderful brand here in Britain. I am MP for Windsor, where we have a royal presence. The British brand abroad is exceptionally strong, and sometimes it can be frustrating when one is abroad, whether on parliamentary, family or business trips, and one realises that the British brand is not being displayed that well and is not that easily accessible. There is good work to be done in raising our profile abroad, and UKTI has a role to play.

The report is excellent, and I hope that the Government will take the time to respond carefully to each recommendation. Not all of them may be successful, but the direction of travel in each is absolutely right. There might not be a separate agency, for example, but there could be autonomy within the existing structure. Complicated matrix reporting might not continue, but it could be adjusted to make UKTI more accountable to Parliament and more directly visible to Ministers.

I welcome the report, and I hope that the Government will go through its recommendations carefully, although I appreciate that we will have a general response today. For me, inward investment is key. We do not have the cash in our British banks, so let us get it from those who have it elsewhere in the world, to boost our economy here. They will do that with good cheer and good will if we let them recognise that we value and like the fact that they have created wealth and are prepared to spend it here. If we want the UK to be back on top, UKTI must up its game and play its part. I very much welcome the report and thank my hon. Friend the Member for Shrewsbury and Atcham for securing the debate.