Emerging Economies Debate
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Chris Bryant
Main Page: Chris Bryant (Labour - Rhondda)Department Debates - View all Chris Bryant's debates with the Foreign, Commonwealth & Development Office
(13 years, 10 months ago)
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Chris Bryant (Rhondda) (Lab)
Thank you, Madam Deputy Speaker. It is a great delight to see you in the Chair. I shall not reveal how I voted, but I did nominate you. This is the dawn of a new parliamentary era. [Hon. Members: “Oh!”] I apologise to the House for the quality of that remark.
I also welcome the Minister to his new responsibilities. He will be backed by a fine team of people, some of whom used to work to me. The quality of the advice provided in the Foreign Office is second to none, not only in relation to other Departments in this country but in relation to other foreign departments in other countries. I hope that the Minister lives up to them.
I have been looking at the Minister’s campaign website, which includes an interesting list of endorsements. Indeed, they have something of a theme. There is one from Janet, who lives in Taunton. She says:
“Jeremy is clearly the best candidate. He will be supported by former Conservative voters.”
Jez, also from Taunton, says:
“I’m afraid the idea of Mark Formosa”,
who sounds more like a plant than an animal—I mean, candidate—
“as an MP terrifies me! He is worryingly extreme.”
And Lavinia, from Wiveliscombe, says:
“Why is Mark Formosa so negative and nasty? I’m a natural Tory but I’m not supporting him!”
It is clear that throughout the election campaign the Minister had his eye on a Conservative-Liberal Democrat coalition. It was seated in his mind. It is little wonder that, with him in his new job, the Tory Back Benches have as many noses out of joint as the England rugby team—
Chris Bryant
No, we tend to specialise in ears.
The Minister is the first Liberal in the Foreign Office for some 60 years, so I did a little research into previous Liberal Ministers there. Captain Neil Primrose, who was one of the last four, lasted less than five months—
Madam Deputy Speaker
Order. The hon. Gentleman’s points are very interesting, but he needs to ensure that he stays in order and relates his remarks to the subject of emerging economies.
Chris Bryant
Captain Neil Primrose, who took a strong interest in emerging economies at the time, and particularly Turkey, which we shall come to, unfortunately lasted only five months in government, because the Government collapsed, and his daughter ended up marrying a Tory. Cecil Harmsworth, who also took a strong interest in emerging economies, is someone whose family gave us the Daily Mail—we often forget that it was the Liberals who did that. The Marquis of Reading had to resign for insider dealing after just three months in the job, while John Simon ended up virtually a Tory, so I look forward to observing the Minister’s career.
There can be little doubt that the shape of the world’s economy is changing, as the Minister said, and it is changing at a pace that few would have anticipated just a decade ago. Over the past 10 years, the BRIC countries, as they are often referred to—Brazil, Russia, India and China—have alone contributed more than a third of world GDP growth, growing from one sixth of the world economy to almost a quarter. There is also a growing confidence in many of those countries about their economic and cultural future, and they want a far greater impact on the world stage. Indeed, they are often impatient with progress at the United Nations and elsewhere. Thus, in April, Brazil saw its lowest unemployment figures since 2001, and it confidently expects growth to reach 6% this year, and this from a country that in 2002 had to secure an IMF loan—the largest IMF loan ever at the time—of $30.4 billion. India’s growth rate is expected to be 8.6%, while China has been averaging at 10% not just for the 10 years to which the Minister referred, but for the past 30 years.
Nothing, however, is certain—we only have to look at a little bit of history to see that. In 1913, Argentina was the 10th largest economy in the world and enjoyed significant advantages over many others: great natural resources, a well educated population and strong international ties to the United States of America, Spain, Italy and the United Kingdom. Today, however, Argentina languishes. Why? In part, I believe, because of the self-inflicted political turbulence that it has experienced; in part, because of—[Interruption.] I do not think that it was socialism—if anything, it was national socialism, which was rather closer to Tory philosophy in those days. In part, the reason was that Argentina failed to deal with inequality, but it was also—and primarily—an economic nationalism that created unnecessary barriers to trade. I would say to Argentina today that economic nationalism will do it no favours at all in the years to come either.
Sajid Javid (Bromsgrove) (Con)
Does the hon. Gentleman agree that one of the reasons why Argentina had all those problems was that when it defaulted on its debt a few years ago, it had both the largest budget deficit and the largest debt per capita on its continent? Does he see any parallels between that situation and the one that his Government left behind after 13 years of power?
Chris Bryant
Nice try, but we will come a little later to the problems that I see with the Conservative-Lib Dem Government’s approach to growth and why I think this debate points to some of the problems that we will see over the coming years. But no, I think that the problems in Argentina stretch back across 100 years. The Argentines failed to take advantage of their many strengths and they played their politics extremely badly. My fear is that they are doing exactly the same thing today.
The task for all those countries is to ensure their growth, while the task for us is to ensure that we match their performance pound for pound, real for real. It is worth bearing in mind how significant those economies are to the UK. To all intents and purposes, we are Russia’s banker, while we are Brazil’s seventh trading partner in terms of exports and India’s fourth. The emerging economies have become increasingly dependent on each other in recent years; thus China has now overtaken the USA as Brazil’s major partner. Our position in relation to the emerging economies should be to seek to do three things: first, build UK growth; secondly, fight bilaterally and on an international level for free and fair trade, rather than protectionist measures, which is something to which the Minister referred; and thirdly, constantly underline the importance of the rule of law and human rights.
Let me start with growth. I simply do not believe that it is possible for the UK to achieve a greater share of the markets, or a stronger role in the world, without a strategy for UK economic growth. The Foreign Secretary can huff and puff as much as he wants, but if the Chancellor is focusing only on cutting the deficit—whether through cutting expenditure or increasing taxes—and has no strategy for growth, we will have nothing to sell abroad, we shall lose out economically, and the Foreign Secretary will simply be left to manage the decline of our reputation abroad.
Gordon Birtwistle
Does the hon. Gentleman agree that, over the past 13 years—and probably even over the past 25—the products that we sell abroad have diminished because of Government policy? We now have very little to sell, apart from in the financial markets, because most of our manufacturing has moved to the emerging economies.
Chris Bryant
Strictly speaking, that is not statistically right. Yes, when Burberry tried to close its factory in my constituency, I fought hard to ensure that the business would not be taken to India or China. I do not think that most people would want to buy a high-quality Burberry product that purported to be British if it had not been made in the UK. Unfortunately, we lost that battle. However, we export a lot more than just financial services. For example, a lot of our exports relate to extractive mineral industries, which I shall come to in a moment—[Interruption.] I sense that Hartlepool is springing to its feet.
Mr Iain Wright (Hartlepool) (Lab)
I welcome my hon. Friend to the Opposition Benches, and I hope that he will apologise for the appalling nature of the gags. May I first take up the point made by the hon. Member for Burnley (Gordon Birtwistle)? I disagree with him, because the UK is still the sixth largest manufacturing nation on earth. We have moved along the value chain, in that we now provide high value-added manufacturing, such as that produced in Hartlepool by Heerema and by JDR Cable Systems. May I also press my hon. Friend on a point that he was starting to make? A UK growth strategy is sadly lacking in the new Government. The prospects for growth in relation to supporting and nurturing higher education and to higher value-added manufacturing are lacking. What does he think the Government could do to remedy that?
Chris Bryant
I am a bit distressed that my hon. Friend has just welcomed me to the Opposition Benches, but there it is. We came into the House at roughly the same time, and I will take that matter up with him later. He also made a good point about a growth strategy, which I will come to in a moment. First, I will give way to the slightly older Member.
Malcolm Bruce
Just refer to me as the old lag. On a detailed point, the Crombie overcoat company in my constituency went out of business—or at least contracted its business—because it had a major contract with the KGB, not because it had been successful in the free market. The point that the hon. Gentleman is making about a growth strategy is all very well—yes, we should have one—but can he divorce that from spending even more Government money and getting ourselves further into debt? Can he explain how we can have a growth strategy that does not involve spending more taxpayers’ money that we cannot afford?
Chris Bryant
Sorry—the honourable old lag. He is probably extremely right honourable, learned and gallant as well, for all I know.
We need to focus on three elements of a growth strategy in relation to the emerging economies. First, we need active investment in the industries of the future. We have only to take a cursory look at our exports to many of those countries to see that a large part of our engagement relates to old, extremely well established industries, notwithstanding the significant advances that have taken place in some others. For example, it is a simple fact that petrocarbons form the backbone of our world trade with many of the emerging economies. In India, pearls and rough diamonds are key exports, and, in many places, extractive industries dominate our balance of trade. In recent years, we have added telecoms to the list, as well as the pharmaceutical and IT industries, but the UK’s future has to spread further, especially into the low-carbon, green industries. I do not believe that that will happen without some degree of Government investment, however, and if we are too slow, others will gain first player advantage.
I presume that a Minister will be winding up the debate?
Chris Bryant
I am grateful for that. The Minister who does so may not be able to answer all my questions, but I hope that he will write to me about any that he cannot.
What support will the Government give to British industry to compete in these green markets? The budget for UK Trade & Investment in 2008-09 was £316 million, with which it assisted 21,800 businesses that recorded an additional £3.6 billion of profit, which is equivalent to a £16 benefit for every £1 spent by UKTI. Will that budget rise or fall next year, and by how much?
Mr Ellwood
May I also welcome the hon. Gentleman to the Opposition Benches, and may I welcome, too, the many Labour Back Benchers who are present for this debate?
Mr Ellwood
Absolutely right.
The hon. Gentleman talks about the importance of green technology, but I am reminded of a fantastic company on the Isle of Wight—not far from my Bournemouth constituency—that made blades for wind turbines. For some reason, they could not be used in the UK, but they were manufactured to be used in the United States. That company closed down because it did not receive the support it needed from the previous Government. Does he now regret that decision?
Chris Bryant
Yes, of course I do—and I am looking forward to welcoming the hon. Gentleman to the Opposition Benches as well. Whether he will have to transfer his allegiance or we will have to change the Government in order to achieve that is another matter, but he makes a very fair point. I would, however, gently say to him that of course I accept that there will have to be cuts in the coming months and years, but I also believe that we must prioritise those industries where we can make the most dramatic difference and where we can maximise our chances of succeeding in the emerging economies.
The second thing we need to do is to learn some lessons about modern foreign languages. The Minister of State was rather complacent about the facts that India now uses English as its business language and many people in China learn English, rather than French as in the past. Unless we have a cadre of young people, and not only those working in the Foreign Office—[Interruption.] I think “cadre” is now a sufficiently anglicised word to be allowed in a debate and not to be out of order. Unless we have a sufficient number of people who speak modern foreign languages, and not just the useless modern foreign languages such as French, but the—[Interruption.] I have said that to the French; I think they realise there are problems.
Dr Murrison
Is the hon. Gentleman aware that not only has he just insulted the French, but he has also insulted a large swathe of the Maghreb, which has not been mentioned at all in the debate so far? That is a bit of a pity, in particular because one of our major trading partners in north Africa is, of course, Morocco, where the diplomatic language is French.
Chris Bryant
Yes, but I think that one of the things that has changed over the past 30 or 40 years is that whereas French used to be the most useful language because it was, for the most part, the diplomatic language around the world, that is certainly no longer the case. The most useful languages to speak at present are Mandarin, and Spanish and Portuguese because of Latin America, and we need to focus on Arabic as well.
My biggest concern is that the effortless British superiority with which we stride around the economic world means that all too often we are the only country that presents business people in other countries who do not speak even the rudiments of a foreign language. That is a big problem. [Interruption.] The Minister of State refers to the Deputy Prime Minister, and it is a delight that he speaks so many foreign languages, but I just gently say that it is important that the Government focus on this.
We did not get it right, and ever fewer people in the UK are learning foreign languages. My experience in the Foreign Office was that the number of people who spoke foreign languages has diminished, and the number who can confidently speak them is pretty low.
Mr Jeremy Browne
I am grateful to the hon. Gentleman for giving way as I wish to find a point of consensus with him. It is important not only that the Foreign Office trains to a high standard a sufficient number of diplomats who can engage with the emerging economies in the language spoken in each of those countries, but that we appreciate the wider challenge to our country, which I posed, of the educational curriculum and how well suited we are, not only within the Foreign Office or the Government, but as a nation, to deal with the emerging changes in the world.
Chris Bryant
Well, indeed.
The third thing that we need to do to enhance UK growth relates to students from emerging economies. In all, some 48,000 overseas students study in the UK and they are vital to the UK’s universities, as they bring in fees, ideas and an international perspective. Ever since Wong Fun graduated as a doctor from Edinburgh in 1855 there has been a large number of Chinese students in the UK. Their number has grown significantly in recent years, with nearly 5,000 starting new courses in 2008, along with 1,581 students from India.
The Conservatives were direct about this issue during the general election campaign, saying that
“our student visa system has become the biggest weakness in our border controls.”
They said that they would
“insist foreign students…pay a bond in order to study in this country, to be repaid after the student has left the country at the end of their studies”
and
“ensure foreign students can prove that they have the financial means to support themselves in the UK”.
By contrast, I note that the coalition agreement simply says that the Government will introduce new measures
“to minimise abuse of the immigration system, for example via student routes”.
I hope that the Minister will be able to tell us precisely what the Government’s intentions are. Will a bond be payable? Does he expect that this will cut or increase the number of students coming to the UK from emerging economies? Has the Foreign Office been consulted on this process? In particular, what plans does he have for the Chevening scholarships? The Chevening website already says that this year’s places cannot yet be confirmed, which means that people who have been offered places do not know whether they will be coming. When will the review be completed? How many students will be studying this year and for the next three years, and from which countries will they come?
Mr Ellwood
The point about visas is important. Bournemouth has a number of English language schools, which attract people from places such as China. The Labour Government introduced new guidelines so that people had to have a certain standard of English before they could even come to this country, thus defeating the purpose of their coming here to learn English in the first place.
Chris Bryant
I am only asking what the Government’s policy is—that is the job of the Opposition. The Labour Government did some things to ensure that significant loopholes that were being used to circumvent the proper immigration process were tackled. In particular, we decided to restrict the number of places available in northern India because there had been a sudden spike in the number of applications. Of course one has to be rational about this. I just want to know what conciliation has taken place between the Conservative and Liberal Democrat positions on this issue since the election.
In each of the countries that we are talking about there remain significant barriers to free and fair trade. In some instances we need to be sensitive to the political and cultural realities of those nations. For example, Mexico’s constitution forbids the ownership of that which lies under the earth by anyone other than Mexico. I hope that the Minister will press the Mexican Government for further reform of the energy law, so that British companies can help Mexico to realise its resources—I hope that he will write to me on that point. Likewise, we need to restart the Doha round with an enhanced offer from the European Union on the common agricultural policy, especially now that the EU-Latin America banana war is over.
In that regard, an additional issue needs to be tackled: the casual approach in several countries towards intellectual property. Every report on intellectual property has suggested that those countries that most carefully delineate and protect the fruits of human intelligence are those that stand the best chance of prosperity. That becomes a virtuous circle, because people invest in ideas, commercialise them and then reinvest the profits in education and research. I hope that the Government will use the international institutions to push through a stronger global understanding of intellectual property issues—particularly in relation to China—be it in respect of the work of a musician or a playwright, an engineer or a scientist.
One other barrier to free and fair trade is corruption. Many of these emerging economies still languish a long way down the list of openness and transparency, with South Africa 55th, Turkey 61st, Brazil 75th, China 79th, India 84th, Mexico 89th and Russia a shocking 146th on Transparency International’s corruption perceptions index, which I think is much respected by all.
As I have said, we need to use bilateral and multilateral levers to try to change all that. The most important of those is the European Union. For too long, Europe has allowed itself to be run ragged by the likes of Russia, China and India. If European countries are to flourish economically, we have to realise that we need greater unity based on self-discipline in our approach to those growing economies. Likewise, we need a common approach to Turkey—a country that is all too often left off the list of emerging economies, despite already being the 16th-largest economy in the world, and on the up. It must be in the UK’s interest for the Bosphorus tiger eventually to join the European Union.
On human rights and the rule of law, it is always tempting for a British company or Government to sideline human rights abuses when trying to secure an important new contract. However, that is always a mistake, as tacit acceptance of the status quo in terms of unscrupulous business practices all too often rebounds on the careless investor. In many of the countries that we are talking about, the human rights record is truly appalling. Russia, for example, is, economically, virtually a monogorod, or a town built on a single industry—petrocarbons. As the petrocarbons industry involves massive investment projects with potentially high returns and equally high risks, the Russian Government take a very direct interest in every aspect of it, but anxiety about excessive state intervention, about state appropriation of private assets and about corruption at the highest level has made it difficult for British companies to make the long-term investment needed to keep pipes running. When one adds to that the scandalous oppression of the media, the murder of journalists, the imprisonment of dissidents and the regular use of torture by the police and in prisons, it is a pretty heavy indictment of the Russian leadership. I am delighted that President Medvedev has made some excellent comments about tackling corruption, but so far that is just rhetoric, and very similar rhetoric to that used by Mr Putin when he was President.
I could make similar comments about China, which executes more people than the whole of the rest of the world and where there is the ongoing disgrace that is the treatment of the people of Tibet. In Brazil and Mexico, notwithstanding the efforts of Presidents Lula and Calderon, drug-related violence is endemic, especially in Mexico, torture is commonplace, and the rights of indigenous people are not fully recognised. In India, too, there have been unprovoked attacks on minorities—in Orissa state against Christians, and in Assam and Andhra Pradesh against Muslims. In that context, I ask the Minister which human rights projects in each of the emerging economies he proposes to continue and which he will cut. Will the project on the rights of children in the legal system in Brazil survive? Will the training of judges aimed at reducing the use of the death penalty in China survive? Will the civil society project in Chechnya continue? Or will all the human rights work in India, Russia, China and Brazil that is sponsored by the Foreign and Commonwealth Office be cut?
There is a tendency for Foreign Office Ministers—I confess that I did this myself—to declare whenever they arrive anywhere that they want to improve relations with that country. After all, it is only polite, and that is normally the aim of the visit. I am sure that we all want to improve trade with the emerging economies, but that requires a consistent approach to free and fair trade, a determination to assist British businesses abroad and a commitment to the British values of the rule of law and human rights. Above all, it requires a strategy for UK growth, but through all the hype, spin and glorious guff that we have heard from the new Government, the one thing we have not yet had is any sign of a strategy for growth.
Kwasi Kwarteng (Spelthorne) (Con)
I have been privileged to hear maiden speeches by my hon. Friends the Member for South Thanet (Laura Sandys) and for Hereford and South Herefordshire (Jesse Norman), who illustrated very well the nature of the threats that we face. My hon. Friend the Member for South Thanet talked about carers, and about the particular character and fortitude of the people of her constituency.
The House could have a no more important debate than this, and it is disappointing to see it so poorly attended by Labour Members. The nature of this country’s relationship with the wider world and how we can hold our own position in it, not only in terms of economics and culture, is the fundamental issue that will determine the next 10 or 20 years—a long time in which I hope that many Members present will sit in this House, obviously provided that their constituencies return them. It was revealing to hear the shadow Minister speaking on the subject. He said that Argentina was the 10th richest country in the world in 1913, but seemed to suggest that it had then fallen back because of its politics. He failed to analyse the political position and consider what sort of political regime operated in Argentina. He will remember that Juan Perón ruled for a long time after the second world war and was perhaps that country’s most disastrous ruler. He openly espoused a socialist programme. There was vast confiscation of wealth and manipulation of the unions. As my hon. Friend the Member for Bromsgrove (Sajid Javid) pointed out, Argentina defaulted in 1999 because of its huge debt. Yet the hon. Member for Rhondda (Chris Bryant) elided all those facts.
Chris Bryant
Juan Domingo Perón was more of a syndicalist, closer to Mussolini than to the socialism of the Labour party.
Kwasi Kwarteng
May I retort that Mussolini was originally a socialist? He was a left-wing journalist. It is no accident that those people had many shared ideas. However, whether Perón was a socialist or a syndicalist is neither here nor there.
The hon. Member for Rhondda alluded to our problem as a country. He suggested that we had problems with education. He rightly mentioned that many people in this country are not learning foreign languages. Indeed, the number has declined since 2001. However, who was in government at the time when, as he pointed out, the figures were declining?
We must also confront a decline in educational standards. It is an open secret that we have had grade inflation. In China or other parts of the world, the education systems are highly competitive and rigorous. If we are seriously to compete with the emerging nations, we must sort out our education system and return some rigour to the process.
Kwasi Kwarteng
I was making a broad point about 13 years of Labour failure, which is central to the debate. If we are serious about competing with China and India, we must have much more rigour and a little more discipline and focus in our education system. Those are obvious facts, but Labour Members seem to ignore them completely.
Kwasi Kwarteng
With respect, I am talking about the emerging economies, and the point about education is central to the debate. If the country is to improve and compete with other countries, we need much more rigour and discipline. That was palpably lacking in the Labour Government’s actions in the past 13 years.
We must approach the problem much more broadly. Britain was so successful in the past because we had a thriving economy. The industrial revolution powered Britain’s ascent to world dominance in many ways. Leaving a country economically crippled is the worst thing that we can do to our standing abroad. We must tackle our domestic economic situation before we can even begin to try to compete with emerging economies. I just wanted to put those broad points on the record, and to say that Labour failure has once again damaged—