UK Trade and Investment

Debate between Iain Wright and Adrian Bailey

Thursday 15th March 2012 Westminster Hall

[Mr Wright]

That is an important point. I am interested in looking at where we can gain knowledge and experience from other successful exporting nations. I look to Germany, although we cannot replicate Germany in the UK. It would be wrong to suggest that we can. However, a successful ingredient of the German economy, with its emphasis on manufacturing and engineering, on the long term, on worker and management co-operation and on good regional financial opportunities, is the Mittelstand, the medium-sized companies often seen as Germany’s economic backbone. It is interesting to see what they have. They have a relentless focus on export markets, often in global niche markets, allied to close relationships with their supply chains, as the hon. Member for Gloucester (Richard Graham) mentioned, and distribution networks. Will the Minister tell us what steps UKTI has taken to embrace mid-sized companies? How often have mid-sized companies been taken on trade delegations?

[Mr Adrian Bailey]

One of the points made in the CBI report was that more needed to be done for medium-sized businesses that are exporting at the moment to find a wider range of export opportunities. I hope that the Minister will respond to that as well.

[Mr Wright]

The Chair of the Select Committee is right.

UKTI is suggesting new products: the “passport to export” for new-to-export companies, and the “gateway to global growth”, aimed at helping established exporters tap into new markets. This seems to be a good approach that has the support of the wider business community, but I want to press the Minister on the benchmarks for success. What are they? What progress has been made and how many companies have benefited from those two new products?

That leads me to the strategic document that UKTI published a year or so ago, “Britain Open for Business”. The strategic approach that it suggests—expanding exports by securing new businesses overseas, especially through increasing exports to high growth and emerging markets—seems appropriate, given what hon. Members have said today. We also welcome the sectors that the strategy identifies in which Britain has a competitive advantage and from which we could derive greater growth in exports in the next few years.

There can be a greater link-up between industrial and trade strategy. “Britain Open for Business” hints tantalisingly at that, but more can be done. The document is light on detail, which in many respects is understandable, given that it is a high-level strategic document. However, it does not set out very clearly what actions UKTI will take and how success based upon outcomes will be measured.

On that basis, may I ask the Minister a few questions about some of the tasks and actions that “Britain Open for Business” pledges? UKTI states that it will bring more private sector expertise into the strategic relationship management of major exporters and inward investors. That important point has been mentioned a number of times by hon. Members. Will the Minister update hon. Members on how that is progressing? Will he specifically outline how private sector expertise with that commercial know-how is being brought into the business?

Similarly, UKTI strategy has stated that a new private sector delivery partner operating in England outside London will be tasked with bringing in high-quality inward investment projects. Will the Minister say what the latest is on that and what progress has been made? UKTI has also pledged to develop new partnerships with key businesses that support SMEs, trying to tap into their networks to raise awareness of the benefits of exports. Time and again today we have heard about the huge importance of the chambers of commerce and about the excellence that sector-led trade associations can provide in batting for British companies outside the UK. What is being done to exploit that great expertise more? How will that be evaluated, and what progress is being made?

UKTI has pledged to create a new online self-help community for UK SME exporters to provide business-to-business support, advice and mentoring. Again, will the Minister update hon. Members on that? With regards to the document, will the Minister tell us about the high value opportunities programme? How successful has that been and can he identify specific export opportunities that have been realised as a direct result of that initiative?

Let me turn to the cuts, which have been mentioned a number of times, not least by the Chair of the Select Committee. UKTI faces a cut of around 17% over the next few years. In contrast, its French equivalent has had an increase in its budget of 14.2% in 2011 to €105 million. Germany Trade and Invest had a budget increase of 10%.

Manufacturing

Debate between Iain Wright and Adrian Bailey

Thursday 24th November 2011 Commons Chamber

[Mr Wright]

I heartily agree with my hon. Friend. My questions for BIS Ministers relate to having an active industrial policy. Where is the assessment of the sectors in which Britain has unique competitive advantages and of where we can sell our unique products to the rest of the world rather than lamely following the rest of the pack? Where are the clear milestones along the way that would allow investment and business decisions to be taken with some degree of certainty and stability?

A recurring theme of today’s debate has been the role of research and development and associated capital allowances. Again, I want this country to be the best place for any investor in manufacturing to invest in research and development, but R and D tax credits, the industry tells me, are not working. What can we do on capital allowances and R and D spend? When can we expect some clear vision from the Government about the road map that is needed as part of an effective and active industrial policy? We have had welcome announcements about funding for technology and innovation centres—I think the Minister mentioned them in his remarks—but the ad hoc decision is a diluted version of what was set up and planned under the Labour Government, with businesses now unclear about how they fit into the bigger picture. The Department promised us its manufacturing framework document over a year ago, but it has still not been published. Where is it?

Another common theme has been the concern—expressed by the hon. Members for Hexham and for Burnley (Gordon Birtwistle)—about the inability of manufacturers to secure access to finance for growth. The Secretary of State’s initiatives have not worked. Project Merlin has not secured its aims and the regional growth fund is not delivering on the ground. In the space of 55 seconds—I timed it—in yesterday’s debate, the Secretary of State went from claiming that as a result of the RGF,

“factories have been built and the jobs are being created”—[Official Report, 23 November 2011; Vol. 536, c. 333.]

to acknowledging, in response to the Chair of the Select Committee on Business, Innovation and Skills, that he could not provide a figure on the number of jobs created by that fund at all. Will the Government look again at this crucial issue of access to funding?

Many companies are sitting on a pile of cash on their balance sheets, largely because they have little confidence in economic prospects, but is anything being done by this Minister and the Department to free up some of that cash to provide much needed finance to manufacturers? I hope that the Minister will intervene to provide a degree of clarity on that; otherwise, I am happy to wait for the Chancellor’s autumn statement on Tuesday.

Several hon. Members mentioned the huge opportunity for export markets. We have been behind the curve in emerging markets for some time. The CBI and Ernst and Young have just published a report, which demonstrated that UK businesses tend to rely on the US and continental Europe for their main export markets. The report quotes the chairman of a Mexican automotive parts manufacturer, stating:

“Overall I think the UK and its companies should pick the right battles and the right countries, and focus on specific sectors within those markets. There’s a lot of goodwill out there that’s not been exploited.”

Will the Minister respond to that and set out what has been done—he touched on it in his opening remarks—to strengthen our export capability? Time and again, firms say that they cannot exploit their potential by gaining access to export finance, that the range of such finance is limited and that things such as the export credit guarantee do not specifically address business needs. How can the Government address that?

Industry states that the supply chain to UK manufacturing needs to be improved. That is crucial in ensuring that British manufacturing is competitive in global markets throughout the world. The Secretary of State acknowledges that. In his speech to the Policy Exchange last month, he talked about how

“Government can support UK supply chains across a number of sectors critical for future growth.”

Since then, however, we have had no information or detail, or even an announcement as to when we might be given any. Industry is crying out for that as a means of boosting its competitiveness, so it would be helpful if the Minister could provide further detail.

[Mr Bailey]

Will my hon. Friend give way?

[Mr Wright]

Yes. I would very much like to hear from the Chair of the Business, Innovation and Skills Committee, as he has great expertise in this area.

[Mr Bailey]

Given the potential to expand the supply chain in the west midlands through the Jaguar Land Rover development and the possible repatriation of the supply chain for many of the Japanese manufacturers because of the problems in Japan, does my hon. Friend agree that the Government must come up with measures to bridge the capital funding gap, so that small businesses can exploit these opportunities?

[Mr Wright]

I entirely agree. One of the central themes of my remarks is that we have a huge opportunity, and that in the long term we can thrive as a leading manufacturing nation, but first we must overcome some very serious short-term difficulties involving finance and both domestic and international demand. Despite the warm words and fine rhetoric from the Government, I am not convinced that we are addressing the issues that industry wants us to address.

Manufacturing can play a leading part in Britain’s 21st-century economy, but in order to succeed in the modern era we need an active industrial strategy of partnership, where the join between industry and Government is not visible. Instead, we have a Department and a Government who lurch from one ad hoc announcement to another, via a series of wrong industrial policies. We need something better and more ambitious, so that we can tap into this country’s enormous potential and ambition in manufacturing, including in innovation. I want Britain to be the best place anywhere in the world in which to carry out manufacturing, but in order to secure that for the long term we need Government to act now.

Education Maintenance Allowance

Debate between Iain Wright and Adrian Bailey

Wednesday 19th January 2011 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

This has been an important and good-quality debate, characterised by knowledge, determination and passion. It has been crowded and busy, with many more Members wishing to catch your eye, Mr Speaker, than have been able to speak. That reflects the importance of the matter and is a sign of the intrinsic unfairness that hon. Members and people outside see in the Government’s decision to scrap EMA. It reflects the number of young people who benefit from it who feel angry, betrayed and let down by the Government’s broken promises.

The Government’s approach to EMA, like their record throughout their education policy so far, is a curious mix of ideological zeal and simply making it up as they go along. On the one hand, their rhetoric is that they are keen to help young people to raise their ambitions and break down social, cultural and economic barriers to help them succeed. The whole House could agree with that, but on the other hand, as hon. Members have exposed time and again in the debate, the Government have disregarded clear evidence and gone back on their promises by scrapping one of the most successful policy interventions for decades in helping to achieve fairness.

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

Will my hon. Friend give way?

[Mr Wright]

Very briefly, as I am short of time.

[Mr Bailey]

Since EMA was introduced in my local authority area of Sandwell, the number of students getting A-levels has doubled and the number of students from my constituency going to university has increased by 78%. Does my hon. Friend agree that those statistics underline the importance of the matter?

[Mr Wright]

Absolutely, and I shall come in a moment to how young people have benefited from impressive ways of raising attainment, encouraging increased participation and encouraging better behaviour.

I wish to take the House back to the points that the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), made in June. As has been mentioned a number of times, he confirmed categorically in the House that the Government were committed to retaining EMA. A matter of weeks later, they scrapped it. I have to ask, is anybody in charge at the Department for Education? Does anybody have a clue what is going on there? What utter incompetence!

The justification for scrapping EMA keeps moving, from “It hasn’t been successful” to “Its impact has been limited” to “It hasn’t been an effective use of public money.” I suggest that the Government simply fail to recognise the improving life chances that it has provided. It has been a success, as my hon. Friend the Member for West Bromwich West (Mr Bailey) has just mentioned and as many other Members have said. It has started to break down the link between participation and success in further education and household income, as my hon. Friends the Members for Huddersfield (Mr Sheerman) and for Gateshead (Ian Mearns) said.

For far too long, there has been a direct correlation between post-16 participation rates in education and household income. Frankly, moving on from school to the sixth form or an FE college depended not on whether a person was bright enough but on what their parents earned and where they lived. We have started to break that link with EMA. It has been subject to one of the most extensive and robust evaluations of any education policy ever undertaken in England, begun and presided over by my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). He made a fantastic contribution to the debate, and I thank him for the points that he made.

An evaluation by Ipsos MORI concluded that the majority of providers believed that EMA had been effective in reducing the number of NEETs, increasing learners’ attainment and having a positive impact on their attendance and punctuality. It has raised participation by about 5% and attainment by about 3%, and the Government seem to acknowledge that. In a ministerial answer in another place in July, the Under-Secretary Lord Hill acknowledged that

“the monetised benefits of EMA outweighed the costs”.—[Official Report, House of Lords, 13 July 2010; Vol. 720, c. WA118.]

Sadly, the Secretary of State did not acknowledge that today.

We heard from the Secretary of State an elegant, articulate and incorrect argument about the economic picture. We heard about academies, free schools, the English baccalaureate—everything, in fact, except EMA. I seem to recall that it took 19 minutes for those letters to pass his lips. Frankly, we saw alarming mood swings in him. It got to a point where we were really quite concerned about his behaviour. He had a bit of a hissy fit—a bit of a moment. It got to the point where the hon. Member for Wycombe (Steve Baker) said that it was slightly unfair of the Opposition to hold the Government to account.

The Secretary of State rather lost control, just as he has lost control of his Department. Given his comments before the general election and the comments of the Minister of State, the hon. Member for Bognor Regis and Littlehampton, in June, to which I alluded—he committed to retaining EMA—what has the Chancellor done to wreck the economy that means they have to go back on their word? The Secretary of State said this afternoon that to govern is to choose, and that to choose is to prioritise, but it is very clear from his remarks that young people—or children, as he patronisingly referred to 16, 17 and 18-year-olds—are not the Government’s priority.

The Secretary of State made encouraging noises. He acknowledged that greater flexibility is needed in the system, and spoke of individual circumstances, courses that might be selected, rural areas and travel costs. The Opposition are keen to work with him to look at the matter again. However, I was surprised and shocked when in one of his more surreal, bizarre and psychedelic moments, he urged the good people of Hull to vote Liberal Democrat. That is a worrying trend among senior members of the Government. We saw it in Oldham East and Saddleworth. We look forward to the formal merger of the Conservatives and Lib Dems—or is it a takeover of the Conservatives by the Lib Dems?

Moving away from the Secretary of State’s more psychedelic moments, let me go back to his point about flexibility in the system. I agree with him that more flexibility is needed, but by introducing more flexibility, he runs the risk of making the system more complex, more bureaucratic and therefore more expensive.