UK Trade and Investment

Debate between Adrian Bailey and Mark Prisk

Thursday 15th March 2012 Westminster Hall

[Mr Prisk]

I am not quite sure about the manoeuvre the hon. Gentleman described, or how graceful it would be. What I can say is that there was a discussion on whether Birmingham city council should lead in this field, as part of the LEP. That delayed it by six or eight weeks. We wanted to ensure that we did not just do something from Whitehall and ignore that local expertise. It has now agreed to take on a core of the initiative and will be able to mount something very shortly. There has been a little delay, which I think is rightly because the idea of the supply chain, particularly in the automotive industry, came from Birmingham. I did not want—I suspect that the Chair of the Select Committee, the hon. Member for West Bromwich West (Mr Bailey) would haul me over the coals if I did—to sweep past a really good west midlands proposal just to ensure that we delivered on a set time frame. We are about six to eight weeks behind where I would like us to be, but we will be in a position to develop it shortly. It is part of a bigger picture, which is a broader figure of approximately £125 million. The delivery of the automotive supply chain package is imminent, but the hon. Member for Hartlepool is right to make sure that we keep to a sensible time frame.

I am aware of time, and I must give my hon. Friend the Member for South Thanet time to respond before the debate ends. I will turn to how we measure effectiveness and then go on to some of the specific points that have been raised by right hon. and hon. Members.

It is fair to have balance, and, rightly, criticisms have been raised. That is fine—I take those criticisms as a constructive process. UKTI is a successful and often well regarded agency when compared with its competitors abroad. I use the word “competitors”, because that has to be the mindset of Ministers and Departments. In 2010, UKTI won the prize for the best trade promotion organisation in the developed world. However, as several hon. Members have pointed out, UKTI can only succeed when it works in a leadership role and works with others. That is a really important point that has come out of the debate.

My hon. Friend the Member for The Cotswolds mentioned chambers, which he has rightly championed for a long time. Chambers are a part of a number of private sector consortia that are delivering foreign direct investment. To confirm where and how at this point, they deliver for UKTI in the north-west, the west midlands, the south-west and, soon, in the north-east. The delivery partner that UKTI operates in the east midlands is in fact owned by the local chambers, which I think is good.

My hon. Friend has been a keen supporter of the Council of British Chambers of Commerce in Europe and has seen its work. A memorandum of understanding was signed just last month which will enable it to be part of the service delivery overseas. That is a very good way to move ahead. The idea that somehow the Government are all-seeing and all-powerful, and that any one agency has all the networks that we need to tap into, is mistaken—getting that breadth is important.

On how we measure the fitness or capability of the agency, the danger is that we will get into which survey says what and when it was cast. The hon. Member for Brent North flagged up the National Audit Office report. My understanding was that those were the 2009-10 survey figures. Clearly, we need to move ahead from them, but I understand the point he is making and I do not dismiss it. UKTI has tried to get an independent assessment of the people who use the service. What is their independent view of the quality of that service? Without going into great detail about how the survey is undertaken, the key point is to receive feedback on the satisfaction, or otherwise, of the service. What difference—this is important—has UKTI made to the company? In particular, what added value has it generated?

The figures up to 2011, if I can update the House, from the most recent study—clearly, the 2012 survey is in hand now—demonstrate that 70% of companies report significant business benefits. Some 75% of companies were satisfied or very satisfied with their overall experience with UKTI. I am not putting those figures on the record to say that we do not need to worry about the situation, even though a much smaller proportion, I think 7%, were dissatisfied or very dissatisfied with UKTI. In my book, that is useful and helpful, but we also need to listen to the experiences of real businesses, and today’s contributions have been very helpful. For example, my hon. Friend the Member for Stroud (Neil Carmichael) mentioned a couple of businesses—Tudor Rose was one, if I wrote that down correctly. Those are good stories, but we need to hear from hon. Members when there are weak stories. I am keen to find out where the weaknesses are. Sometimes the business itself might get the wrong end of the stick, but other times we need to make sure that we have that channel. I therefore encourage hon. Members to make sure that that is fed through to UKTI, because it is important.

On what we can do to change the strategy, structure, calibre and so on—good points raised by a number of hon. Members—Lord Green has set out an ambitious programme for increasing the number of small and medium-size enterprises that export. We want to get up to the European average of 25%. The proportion is below the European average, a point raised by several hon. Members. In practice, that means getting an extra 100,000 SMEs exporting by 2020—that is the benchmark. Lord Green and the new chief executive, Nick Baird, who came into office in September, have set about making important changes that respond to some of the specific points raised by a number of hon. Members.

My hon. Friend the Member for South Thanet is absolutely right about SMEs, particularly with regard to her micro argument. In an age when a start-up business on a laptop in a back bedroom has the capability of being a global business from day one—which was certainly not the case when I started my business, like my hon. Friend the Member for Enfield North, in 1989—we need to think about where Government intervention needs to sit in terms of quality, and, frankly, there are a lot of very good commercial services that the Government do not need to duplicate. That thinking is important and that is a good point, which I will flag up with Lord Green myself.

I have said that UKTI is making changes. What are they in practice? First, it is bringing in private sector expertise—this alludes particularly to the point made by my hon. Friend the Member for Skipton and Ripon (Julian Smith)—into the senior leadership of UKTI. As we have already heard, it has already outsourced the inward investment services, creating, through PA Consulting, a coherent investment service right across the English regions outside of London. Those teams have incentives built in to their contracts to bring new projects to our shores. In other words, it is moving towards being outcome based—if not as ideally as we would always have in the private sector, then much closer to that—rather than, necessarily, what I would describe as the conventional salaried model.

I would like to pick up on a couple of points that have been raised on the regional development agencies, UKTI and LEPs. One of my problems with the RDAs was that, when I went to Shanghai, I discovered that UKTI had its own operations running very positively, but there were eight separate independent trade organisations—all fully funded, all competing with each other, and all in Shanghai—from the eight RDAs outside London. To my mind, that was bonkers. There needs to be a clear, co-ordinated UK presence, while making sure that, within the UK, communication is strong. Removing the RDA layer—for many other reasons beyond this one—helps us to co-ordinate or focus the effort on UKTI—a single, clear UK message. Then what is needed is to ensure that there are proper links to the grass roots. That means working with the devolved Administrations and having a proper understanding with the LEPs in England. That is where we are. We have memorandums of understanding in place, which are crucial because they allow a strong UK voice. If Kent or Essex wish to do their own thing, that is fine, but let us co-ordinate and work together. That is an important shift.

[Mr Bailey]

I accept the Minister’s point about the duplication of effort of RDAs—an issue highlighted in previous BIS reports—but I am not totally convinced that the best way of dealing with that was to scrap the RDAs before having an alternative.

[Mr Prisk]

We have wound them down, although they still operate in technical terms, as the hon. Gentleman knows, until 1 April. We have tried to wind the RDAs down while building the LEPs up. The key point is that, in trade terms, we have made sure that UKTI is in the saddle, rather than having nine horses running consecutively, if I can say that during Cheltenham week. That was the important point, because there was a danger.

A German business in Shanghai told me, “Look, I’m confused. Two agencies have come to me. One says they do wonderful things in Coventry, the other says they do wonderful things in Leicester. Frankly, I can’t spot the difference between the two. Why am I being sold competing bids?” That is a good point. Co-ordination is crucial.

The second change that Mr Baird and the noble Lord Green have made is that, from April, there will be incentivised contracts for the private sector to deliver trade support in the English regions. On the sales culture, which several hon. Members mentioned, those two things—getting private sector into the business and moving towards incentivised contracts —will make a significant difference.

Hon. Members raised a couple of broader issues about how we deal with trade as a Government. That is a good point. Right from the start, the Prime Minister made it clear that there would be a trade Minister, and we have an excellent trade Minister in Stephen Green. All of us must regard our role as part of the trade and investment portfolio. That is why more than 400 separate ministerial engagements have been undertaken by Ministers from all Departments—I have a feeling that that even extends to the Department for Work and Pensions—because it is important that, when we go abroad, we are part of a trade mission. That is my background and, I am happy to say, that of most of my ministerial colleagues.

That is why today, for example, the Prime Minister is in New York, having had his business dinner at the White House yesterday with UK and American businesses, building on those contacts—if that answers the hon. Gentleman’s question. That is why the Foreign Secretary said, right at the beginning of this Government, that we want to put commerce right at the heart of what the Foreign and Commonwealth Office does, in collaboration with BIS and others, including UKTI, because we need to change the culture that says that the diplomatic role does not sully its hands with the process of commerce. That is fundamental. We are, as I said at the beginning, a trading nation. It is in our blood. Therefore, getting that change is important.

On the calibre, selection and recruitment of individuals—I am married to a classicist, so I need to be careful about what I say next—we need to ensure that there is the broadest recruitment possible, which is why the private sector infusion is important. I am a great believer in a greater interplay between private and public, which is why, when I started in my role, I said to the team dealing with small businesses, for example, “Let us spend a working week in a small business.” Obviously, I had done it before professionally, but it was crucial for the civil servants to understand what it was to be in a commercial environment, especially in a small business, which does not only have to get the business, but has to do the business and fill in the VAT form on a Sunday afternoon, as I recall.

Hon. Members mentioned being more French. I put it that way because, as hon. Members have correctly put it, it is about moving away from Ministers only attending events to cut ribbons once the deal is done. If we do that, it is too late. I tried to get the point across during my few months covering this role at the beginning of the Government, before Stephen Green was able to join us—it was worth the wait to get the right calibre of individual—that it is no good Ministers rolling up when the deal is done; we have to be there building the relationship. That is what Business Buddies is all about. Part of my role is ensuring that I have an ongoing strong relationship with many major automotive businesses. That is fundamental. Such relationships are crucial because, as the French have learned and known for many years, the deal comes at the end of building such a relationship, not at the beginning. That is why the process, of which UKTI is a fundamental part, reaches across the whole of Government, ensuring that Ministers, from the Prime Minister downwards, are involved.

Let me wrap up, because the hon. Member for South Thanet needs to respond to the debate; that is the courtesy of this House. The noble Lord Green rightly said at the start—he is wise and right about this—that changing the way our trade balance operates is not a sprint but a marathon. That means, not that we want to ensure that we are going at a good pace but that, if we are to change the industrial strategy and the way we deliver inward investment and the operation and communication of exports, and so on, we must ensure that we get this right. It is true that, although there are strengths in the current system, we have inherited a number of weaknesses and we are trying to iron those out. Personally—this is also the view of my ministerial colleagues—I welcome constructive criticism and ideas and want to ensure that those will be fed through, both to the organisation and to the Minister responsible in the next few days.

Oral Answers to Questions

Debate between Adrian Bailey and Mark Prisk

Thursday 14th July 2011 Commons Chamber

[Mr Prisk]

I am disappointed by my hon. Friend’s comments. I have visited 25 of the 36 LEPs and they are already setting up boards to make sure that they are ready to involve small businesses. Now they are going to be able to lead on enterprise zones, lead on the regional growth fund and make sure that we strip away some of the local regulatory problems on the ground, which I am afraid the Labour party did nothing about.

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

As LEPs are business-driven, they could have businesses working with local authorities and local education providers to provide a much better and more localised match of skills needs and skills provision. Will the Minister say how many LEPs are taking that responsibility on and whether any examples of best practice will be rolled out with other LEPs?

[Mr Prisk]

It is encouraging that almost all the LEPs that I have visited have demonstrated that they are involving FE colleges in their programmes. The hon. Gentleman is right that that is crucial. They are ideally suited to get FE colleges producing what local businesses need; that is one of the crucial projects that at least half a dozen of them have already begun.

Oral Answers to Questions

Debate between Adrian Bailey and Mark Prisk

Thursday 17th February 2011 Commons Chamber

[Mr Prisk]

My hon. Friend is absolutely right. With 87% covered in less than 22 weeks—unlike the progress that we often saw from Labour—there has been positive progress. On the private sector issue, LEPs are specifically business-led, and most encouragingly, in her local LEP, eight of the 14 participants—over 60%—are from the private sector. That is a very good example, which I know other enterprise partnerships intend to follow.

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

In their response to the Select Committee report on LEPs, the Government have said that they will not impose performance management criteria on them. Will the Minister explain just how the performance of LEPs will be monitored and assessed?

[Mr Prisk]

The whole point about partnerships is that local priorities will lead, not central diktat. That is why we believe in ensuring that we enable partnerships to come forward and that they judge the issue on how they break down the local barriers to growth. We are committed to ensuring that the economy grows; these will be excellent vehicles to achieve that locally.

Oral Answers to Questions

Debate between Adrian Bailey and Mark Prisk

Thursday 18th November 2010 Commons Chamber

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

I welcome the commitment, given by the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Wantage (Mr Vaizey), in response to my first question, to setting up structures to access European regional development funding. Will the Minister confirm that money will be available to get the projects together to do that?

[Mr Prisk]

The officials are dealing with that issue at this precise moment. Once we have an answer, I will come straight back to the hon. Gentleman.

Oral Answers to Questions

Debate between Adrian Bailey and Mark Prisk

Thursday 14th October 2010 Commons Chamber

[Mr Prisk]

This is something that we have raised with the banks. On Monday, however, I want to go further—that is when we will convene our new small business economic forum with the express intention of bringing Government, businesses and the banks together so that we can deal with these issues and start to ensure that credit is available for all businesses, large and small.

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

The Secretary of State has rightly commented on the obligations of state-supported banks to do more to help our small businesses in the interests of the national economy. Will the Minister tell us whether the new growth fund set up by the banking taskforce and announced yesterday will have on its board a Government representative in order to influence policy decisions?

[Mr Prisk]

We met the banks yesterday and are perfectly willing to engage with them on how that could happen. We may well wish to ensure that the Government have a stake in that role, but as we received the recommendations just yesterday, I am sure the hon. Gentleman and the Committee that he chairs will understand that we want to examine them more closely. The new growth fund is a positive step which will deal with the gap that Rowlands identified in the case of mid-cap businesses. It is a welcome step, and the Government want to work with the banks to make it work effectively.

Oral Answers to Questions

Debate between Adrian Bailey and Mark Prisk

Thursday 8th July 2010 Commons Chamber

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

I think that there is cross-party consensus that major infrastructure projects such as high-speed rail and new nuclear and renewable energy schemes are essential not only for the future of our economy but for the greening of the economy. However, they often attract local opposition. There is huge concern within the business community about the proposed abolition of the Infrastructure Planning Commission. What representations is the Minister making to ensure that the successor planning regime does not allow nimbyism, masquerading as local democracy, to strangle those schemes at birth?

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

What we are changing is the quango that will report on the final decision. We are not changing the streamlined system that will sit behind it—we think it is good; for business and for infrastructure—but we do think it important that when a final decision is made on a major infrastructure programme, it is made by a Minister standing at this Dispatch Box who is accountable to this House. I think that is an important principle; it will not undermine business investment and it is good for democracy.