UK Trade and Investment

Debate between Adrian Bailey and Laura Sandys

Thursday 15th March 2012 Westminster Hall

[Laura Sandys]

I welcome my hon. Friend’s intervention. I have started two small businesses, both in the middle of recessions. We do not have enough people who have a business focus.

I was quite surprised that 1,000 people work in UKTI in different regions of the United Kingdom, and there may be great value in that. I would like to see a lot more of them in our constituencies, perhaps using the opportunities that Members of Parliament can offer, so that they can understand a particular constituency.

We need a much stronger commercial focus. Small businesses have one language; in a strange way, it is almost a universal language. It can travel even if people do not speak the same language. It is more important to have that business language when people talk to someone else than it is necessarily to have location or certain areas of expertise. We need more commercial people.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The hon. Lady made an extremely important and valid point about using our multicultural and multinational economy and contacts to attract business to this country. Under the previous Government, the strategic investment fund seized upon that idea. To be fair, the current Government, through UKTI, are trying to do that through an organisation known as Catalyst. However, I am unclear as to how much progress we have made. I thank the hon. Lady for raising the subject, because it is important. Perhaps the Minister, given that advance notice, will be able to give us some information.

[Laura Sandys]

I reiterate that question to the Minister. Hopefully we will understand more about the issue.

Another point, which arises from the comments of my hon. Friend the Member for Skipton and Ripon (Julian Smith), is about how we help and assist small businesses—I am talking about very small businesses. For example, some of the ways UKTI is approaching trade are positive, but they are for medium-sized companies. There is a strong internet and web-based opportunity, which I have mentioned before in the House. Why are we not translating one or two web pages about small businesses that we know might be of interest to x, y and z markets? That would offer them an opportunity to market online from their office, rather than having to go on expensive trade missions.

The Minister has had his own small business and knows well that it is not actually money that affects small businesses, but time. The idea of spending three or four days speculatively is not really feasible for many businesses, but we could start to amalgamate websites to push certain sectors. For example, in my constituency there is a little brewery called Gadds’. It has five employees and has just made its first sale to Japan on the basis of somebody picking up a quote from a website about microbreweries—I understand that Japan is very excited by microbreweries. Why do we not have a web page in Japanese on our UKTI site that talks about 20 lovely, exciting and interesting microbreweries? Let us try to use what we tell everybody else to use—internet platforms that can save money and time. It is very speculative, but it does not cost anybody anything either.

In conclusion, I would like to ask the Minister some favours. Can we please try to put enterprise zones and areas that have received regional growth fund moneys on the UKTI website? I have been asking for that to happen for months. It is really important as an inward investment platform, but there is no reference to those important coalition initiatives.

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[Laura Sandys]

It is interesting that we have a very effective organisation, Locate in Kent, which is very Kent-based. From our perspective, regional development agencies did not understand us, so they were never going to have a function. We need speed and flexibility of action, instead of having to wait for bureaucracy. Whatever the organisation and whatever the structure, we need to act fast, and to be nimble and flexible, instead of institutional.

[Mr Bailey]

I accept the hon. Lady’s comments. There were different experiences of the RDAs’ work, and they generally seemed to be more highly regarded the further north they were. However, there was undoubtedly a body of expertise embedded in them, which suddenly found itself unwanted. The introduction of local enterprise partnerships may or may not be able to fulfil part of that function, but for a long time there was no clear source of advice, information or propaganda that could be used to make the necessary local connections by any company contemplating inward investment. That may be changing in one or two places, but we have lost a year at least, and the consequences in some areas are serious.

Overall, the problem has been that because of the delays—there was also a five-month delay in publication of the UKTI strategy—the impression has been that, despite all the public pronouncements, the service is not a serious priority. Not only have we lost some of the services that were previously carried out, there has been a lack of direction and focus for a considerable time as a result. I accept that the perception of UKTI has been mixed, but the Government have failed to make it the sort of priority service that it should be—I totally agree with the comments made by the hon. Member for The Cotswolds—and that has not helped it to perform its function.

I welcome a number of recent developments, which may change that situation, and the Select Committee will consider them, including the extra investment of £45 million. The recently signed agreement between UKTI and the European Chamber of Commerce, which has been anxious for that agreement for a long time, could be a model for the integration of our foreign trading practitioners, with UKTI, the Foreign Office and civil servants pledged to make those connections. There is probably huge scope for reproducing that sort of model in other parts of the world.

UKTI has had its efforts blunted by other problems arising from other departmental priorities. The visa regime has certainly not helped its efforts in China and India. That has been a constant source of grievance in those countries, and it has not created the right sort of climate, or the feeling that Britain is open for business, which should underpin UKTI’s efforts there on our behalf .

The Export Credits Guarantee Department was roundly criticised by the British Exporters Association before the Select Committee. To be fair to the Government, they have tried to act on that in a way that the previous Government did not, but the jury is out on how successful their actions will be. The overall problem for small businesses is access to finance to allow them to invest and to take the available opportunities in foreign markets. I know from personal experience in my constituency of a number of companies with export opportunities that have not been able to realise them because they could not lay their hands on the finance required to invest to meet the necessary production targets.

I return to the point about departmental priorities, and the importance of getting the top people in our ministerial hierarchy to go out and beat the drum for Britain. The hon. Member for The Cotswolds made the valid point that going out to sign a trade agreement is only one thing, and I have heard feedback from companies expressing their concerns that while they do the work to get trade agreements ready, the Ministers just go along to sign them and take part in the photo shoot.

In Germany, for example, political leaders are constantly on the phone to work with and promote industry, but we in Britain do not do that in the same way. That is not a criticism of the current Government; it was the same under the previous Government. One problem is our governmental structure. Why does the Prime Minister return to the House every Wednesday to answer questions when he could be out working to get contracts signed that will help British people get British jobs and strengthen our economy? The Government should consider changing some of our constitutional structures and parliamentary procedures to free up our leaders to carry out that ambassadorial role more effectively than they are able to do at the moment. I do not blame individuals because the nature of their job militates against such involvement. However, if we are serious about trying to refocus the whole Government on such a priority, we must look at government in the round.

A number of other Departments have pursued policies that run contrary to our objectives. The abolition of regional development agencies before there was an effective replacement mechanism is one example, as is the Home Office and its visa regime. Such things work against our trade objectives, because our departmental structure does not consider overall priorities that will help us grow our economy. The hon. Member for The Cotswolds made that point, although perhaps in a slightly less critical way.

The fact remains, however, that the structure within our Government does not focus on growth as it should. If UKTI is to be effective, we must give it more investment, monitor the outcomes of its work, and ensure that other departmental priorities work to maximise its potential. If we do that, UKTI may genuinely be able to lead this country towards export-led growth and the position that we were in many years ago, developing our exports and our role in the world economy.