Industrial Strategy

Earl of Effingham Excerpts

Thursday 1st February 2024 Lords Chamber

[The Earl of Effingham (Con)]

My Lords, I thank the noble Lord, Lord Watson, for raising this debate and congratulate the noble Lord, Lord Rosenfield, on his maiden speech.

I spent 20 years advising and winning business from over a third of the companies in the FTSE 100, and I now try to help SMEs. I refer the House to my entry in the register of interests. During my time with the multinational corporates, I enjoyed many trips to Derby to see Rolls-Royce, Farnborough to see BAE and Coventry to see Jaguar Land Rover. I now travel to different parts of the country to see SMEs, but whether it is Lichfield, Exeter or Portsmouth, it is striking that wherever I go, the enthusiasm and the commitment of the workforce is the rock that allows these companies to thrive. All over this country, we have a truly amazing industrial and manufacturing sector. We should be doing everything that we can to help it.

I will therefore focus on SMEs and exports as part of a wider industrial strategy. I will give noble Lords a crucially important statistic. If you were to go to Companies House today, you would find around 5.4 million firms registered. However, of those, only 8.8% export at all. UK exports are now at the highest level we have seen in our history, and it is clear that we have a very experienced and successful team at UK Export Finance. None of that is in doubt but, taking a purely objective view, 8.8% appears to be at the low end of expectations. Will the Minister say why he believes that number to be where it is and how he believes we can help it to flourish and grow? Is it a case of allocating more resource to UK Export Finance so it can visit more companies? Do we need more material to deliver the message that exporters are more productive, diversify their risk and drive their own growth? Should the Government be working with the big banks to laser focus on promoting the benefits of exporting to those companies which are best placed to benefit from an export strategy?

Another of the companies I did business with was ARM, the chip maker and one of our great UK success stories. However, it is listed in the US, not the UK. When our brilliant companies grow and think about raising capital they should, one would think, look to list in London. However, the FTSE Small Cap index is seeing its constituents decline as well as its market capitalisation, which materially impacts the investor funds available to support our businesses which want to borrow money to expand. What steps are the Government taking as part of an industrial strategy to encourage investment in UK small caps and make the sector great again?