UK Trade & Investment

Debate between Barry Sheerman and Daniel Kawczynski

Thursday 12th September 2013 Westminster Hall

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

Thank you, Mr Betts, for calling me in this important debate on UK Trade & Investment and British exports. We spend a great deal of time in Parliament debating and having robust political exchanges about how to spend taxpayers’ money, yet we seem to spend very little time considering how to create greater wealth for this country. It is a great sadness to me that we have had only about four debates about British exports during this whole Parliament, and three out of four of them have been initiated by me. This debate will be the longest of all of them. Very few Members of Parliament have come to take part in this important debate, scrutinise UKTI and work on a cross-party basis to discuss how that body can become ever more productive in using taxpayers’ money well to ensure value for money and make Britain one of the world’s top exporters.

I have spent the past 12 months writing a report on UKTI, which I have sent electronically to all Members of Parliament. If anybody would like a hard copy, I would be grateful if they got in touch with my office. My office and I have spent the past 12 months writing the report and interviewing more than 220 British companies, which sent representatives to our office in Parliament from all over the United Kingdom to give us their analysis of and feedback on UKTI, highlight their recommendations and sometimes frustrations with UKTI and advise how the service could be improved.

One of the first things that we say in the report is that the United Kingdom is the fifth largest economy in the world, yet only the 12th largest exporter. That is an important figure, and I would like the Minister and everybody to keep it in the back of their minds. This small country of ours has managed to become the fifth largest economy in the world. Sometimes we forget what an extraordinary achievement that is. However, we must ask ourselves why and how we have become the fifth largest economy in the world but only the 12th largest exporter. Why are we not the fifth largest exporter, commensurate with our international standing as a global economy?

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I congratulate the hon. Gentleman on this debate and his fantastic campaign. As I am co-chair of the all-party group on manufacturing, he will know of my passion for and interest in the subject. Is not part of the problem that we have shrunk the manufacturing base to the point where only 9.5% of people in this country work in manufacturing? That has affected things. He is absolutely right that getting through to small and medium-sized enterprises is what UKTI finds most difficult.

[Daniel Kawczynski]

Absolutely. I have agreed to meet the hon. Gentleman to discuss those points further. SMEs will be critical in the renaissance of exports that we hope to achieve, and a little later in my speech, I will explain how they must play their part. I will not rest in probing the Government until we have achieved the position of fifth largest exporter in the world. I do not think that that is an unrealistic target.

--- Later in debate ---

[Daniel Kawczynski]

The hon. Gentleman will have to wait and see.

The report makes three or four specific recommendations, which I will highlight to the Minister. One of the most critical is extra parliamentary scrutiny. In the process of writing this report, we went to see the Select Committee on Business, Innovation and Skills and interviewed its esteemed Chairman. The Department for Business, Innovation and Skills is a large Department, and the Committee is focused on domestic business and skills matters. During this Parliament—I may be corrected if I am wrong—I understand that the Committee has not undertaken any reports specifically scrutinising UKTI.

The Committee and the Department are so large that we need a subsection of the Committee or even, dare I say it, a separate Select Committee. The Minister and others might say that that is unrealistic, but I am putting the suggestion out for deliberation and consideration. Some form of body or mechanism is needed to perform ongoing scrutiny of the work and performance of UKTI. Let us not forget that UKTI receives hundreds of millions of pounds of taxpayers’ money. It is vital that all of us in the House play our role in scrutinising how that money is spent.

If we have additional scrutiny in the House, we can be confident in going to the Exchequer and others when things need additional funding and saying, “This is the work that the House of Commons has performed in scrutinising UKTI, and these are the deficiencies and shortfalls that UKTI faces. We need to secure additional money for it.” One mistake that the Government made at the outset, although I completely understand that budgets had to be cut across the board, was cutting the communication and advertising budgets for UKTI and others a little too much. I am certainly making representations to the Prime Minister to ensure that additional funding is given to UKTI so that it can advertise itself in providing service delivery and market itself to SMEs.

The hon. Member for Huddersfield (Mr Sheerman) rightly referred to SMEs. About 47% of British SMEs have never heard of UKTI. They do not know anything about it; they do not understand what services it can provide. How can we expect cutting-edge SMEs, some of which have the most extraordinary innovation and ability to export, to use UKTI if they simply do not know what resources exist? I want UKTI to have product placements, even in soap operas. There could be a storyline where a local UKTI chap comes to see a company to help it export. I want advertising in national newspapers and on the radio and television, so that everybody starts to talk about export and understand that we can use our experiences in other markets to help SMEs export. We all remember the “Tell Sid” campaign, whether or not we agreed with—

[Mr Sheerman]

Some of us are trying to forget it!

[Daniel Kawczynski]

I thought the hon. Gentleman would say that, but whether or not we agreed with privatisation, we all remember the campaign. That is the sort of campaign that I want the Government to proceed with, so that everybody understands and is cognisant of UKTI, and so that no matter how small a business is, if it has the ability to export, it is given that opportunity.

The report also suggests that UKTI should be a single entity. Ideally, I would like it to be an Executive agency. At the moment, it is split between the Department for Business, Innovation and Skills and the Foreign Office, so it straddles two Departments. I fear that when a body reports to two Departments, there may be a degree of overlap or too much interference. I would like it to be a single entity and an Executive agency. What is an Executive agency? The definition is as follows:

“Executive agencies are part of a government department which enables executive functions within government to be carried out by a well-defined business unit with a clear focus on delivering specified outputs within a framework of accountability to ministers.”

I believe that UKTI should be a single entity, with a chief executive who is directly accountable to Parliament for the strategy, focus and organisation of that body.

At this stage, I pay tribute to Mr Nick Baird, the chief executive of UKTI. I think that when I started the report, he must have had a voodoo doll of me in his office into which he stuck pins, because I have been a real pain, but he has always interacted with me, no matter how difficult I have been with him, no matter how many probing questions I have thrown at him and no matter what barbed comments I have thrown his way. He has always been extremely civil, courteous and polite. He is doing great things at UKTI. He is appointing more business people to the organisation. However, I want him to have more autonomy and to be accountable directly to Parliament.

Following all the research that I had done, I wanted to utilise all the passion that I had for exports for my constituency of Shrewsbury, so we have moved on to the next step. Let us not forget that although UKTI is meant to help companies to export, it is also responsible for attracting direct inward investment into our constituencies. We all know that the vast majority—a massively disproportionate amount—of direct foreign inward investment into the United Kingdom goes to London. I want to ensure that UKTI on the ground in Shropshire is working in conjunction with my local council, the local enterprise partnership and the chambers of commerce directly to identify the top 10 inward investment opportunities for Shropshire. I have therefore tasked the UKTI team in the west midlands—Mr Paul Noon is the director of UKTI in the west midlands, and his staff includes Nicky Griffiths and others—with getting round the table with Shropshire council, the chambers of commerce and the LEP. I have brought them all into the same room and said, “What are the top 10 inward investment opportunities for Shropshire?” They are currently working on identifying those opportunities.

However, I suspect that the level of activity that I have described is not going on in every part of the country. I have spoken to many Members of Parliament who have told me that they are unaware of any interaction between their local UKTI teams and their local councils and LEPs, yet in Shrewsbury we have taken the bull by the horns and ensured that that work is happening. My office and I are at this moment writing a case study of exactly what we are doing, which we will share with every Member of the House, so that they can experience what we are doing in Shropshire and, we hope, try to replicate it in their own constituencies.

I pay tribute to Paul Noon and Nicky Griffiths and to Mark Pembleton from Shropshire council for their co-operation, their sterling work and their enthusiasm for getting together, with my encouragement, to start working on the top 10 inward investment programmes.

The critical point that I want to make to hon. Members is that it is no good a council or a LEP coming up with 10 opportunities that are not costed or not properly tabulated in a business format. They must be agreed with UKTI staff in such a way that those staff are happy and confident to sell them overseas, and that is precisely the work that is being carried out now. To ensure that we get extra resources for that project, I have invited Mr Nick Baird to come to Shrewsbury on 5 November. The chief executive is coming to spend a full day in Shrewsbury, so I hope—I am sure this will be the case—that everybody completes the work on those top 10 inward investment opportunities before his visit. Once they have been identified, I will play my part, as someone who is passionate about exports to the middle east and who knows the area. All other Shropshire MPs and everybody else who has a passion for Shrewsbury will also have to play their part in selling the top 10 inward investment opportunities to foreign sovereign wealth funds and countries abroad.

I would like the Minister to follow very closely what is happening in the case study in Shrewsbury and to give us every support in the run-up to Mr Nick Baird’s visit. It is very important that we can show success—that we can show how UKTI can work with the local councils and LEPs on the ground.

I want UKTI to leave no stone unturned when it comes to scrutinising every market in the world as a potential market for British exports. Of course UKTI is focused on the large emerging markets of Brazil, India, Indonesia and others, but we must never forget the very small markets. I came back yesterday evening from Gibraltar, where I had the great honour of addressing thousands of Gibraltarians. Most of Gibraltar came to the square to celebrate national Gibraltar day. I have to say that seeing 20,000 people singing “God Save The Queen” and “Rule, Britannia!” and flying the flag meant that it was a very emotional day for me. I pay tribute to the Gibraltarian spirit. However, because of my passion for exports, I started to ask a few questions about what is happening with Gibraltar. Of course it is a tiny market; of course it has a population of only 30,000 people, but my goodness me, it is more British than we are in many aspects and if we cannot sell to the Gibraltarians, who can we sell to?

I spoke to the deputy to the Governor and was told, “Oh no, it’s not my job to relay any opportunities to UKTI.” Then when I asked the question of the Governor, he looked at me with incredulity: “Oh no, of course it’s not my job.” By the time I had got through everybody, I had found that nobody was relaying business opportunities in Gibraltar to UKTI. Luckily, I have spoken to the Chief Minister, Mr Fabian Picardo, and put him directly in touch with Mr Nick Baird, and they are having a telephone conversation this afternoon to see how UKTI can interact directly with the Government of Gibraltar to ensure that the United Kingdom is aware of every opportunity, whether in construction, tourism or anything else, that exists in Gibraltar.

However, the thing that really upset me was that I found out that exports to Gibraltar are run out of offices in Madrid. I hope that I am not the only one who finds that rather ironic, given everything that Spain is doing to try to strangle Gibraltar at this time. I said to the chief executive, Mr Nick Baird, that it is completely unacceptable. The Foreign Office and UKTI seem to have these hubs. They do not have officials on the ground in certain countries, but commercial activity in smaller areas is directed from a bigger hub somewhere else. I understand that in certain cases, but it is completely unacceptable in the case of Gibraltar. The gentleman in Madrid who is dealing with Gibraltar obviously is very focused on the Spanish market, which probably accounts for 99.9% of this trade. He does not want to upset his Spanish partners. We must have direct contact with the Government of Gibraltar at the highest levels, and I will be monitoring that very closely.

Over the past year, I have created the cross-party British middle east and north Africa council, which more than 200 parliamentarians have joined. I feel passionately about the importance of the Arab world. The 22 members of the Arab League are, after all, our neighbours and of huge strategic importance to the UK from a security perspective. Hon. Members will be horrified to learn that only 5% of British exports go to the region—just 5%, to the whole of north Africa and the middle east.

What is striking when travelling around the middle east is the incredible strength of the British brand. We have good commercial links in the United Arab Emirates, but there is almost no commercial activity in countries such as Mauritania. When I visited Mauritania a few years ago, I was the first British MP to go since 1960. I asked some of my colleagues what they thought of Mauritania and they said that they thought it was a ship. They did not understand that it is an important, up-and-coming country of huge strategic importance with huge mineral resources.

When I went to Tunisia and met the Anglo-Tunisian chamber of commerce, I was notified that only 60 British companies operate in Tunisia, compared with 1,800 French companies. Tunisia is a close, Mediterranean country on our doorstep.