Oral Answers to Questions

Debate between Iain Wright and Mark Prisk

Thursday 15th March 2012 Commons Chamber

[Mr Prisk]

That was a tricky question. My hon. Friend is absolutely right and is a fantastic supporter of industry. I think that the Labour party, beyond the jokes, needs to remember that 1.7 million people lost their jobs in manufacturing over the 13 years it was in government.

[Mr Iain Wright (Hartlepool) (Lab)]

The Secretary of State, in his leaked letter last week, wrote that “a connecting thread” in the failure to provide a “compelling vision” or economic growth is

“the need for strategic and long term thinking about supply chains and the role played in them by public procurement decisions,”

but that there is

“no connected approach across Government.”

That is presumably the objective of the advanced manufacturing supply chain initiative, which was launched in December. Almost five months after the launch, however, will the Minister of State confirm that no firms have yet received help because not a jot of progress has been made? In the light of missed opportunities throughout Whitehall, whether in green technologies, feed-in tariffs, trains, Royal Navy tankers or nuclear technology, how on earth does Ministers’ dawdling help British businesses grow and win contracts? No firms helped—yes or no?

[Mr Prisk]

In that diatribe—[Interruption.] In that diatribe, which I think we all recognised—

[Mr Wright]

Yes or no?

[Mr Prisk]

The point—to answer the hon. Gentleman’s question, if he would like to have an answer—is very simple: we are making good progress on skills, innovation and the supply chain. But is it not right for a Secretary of State to look at progress over 10, 15 and 20 years? Is that not what Governments should do? The Opposition need to bear it in mind, because, if the Labour party in government had looked 10 or 20 years ahead, this country would not be in the mess that we are having to clear up.

UK Trade and Investment

Debate between Iain Wright and Mark Prisk

Thursday 15th March 2012 Westminster Hall

[Mr Prisk]

Absolutely. One of the key elements of the Automotive Council road map we developed is demonstrating the depth, but also the gaps, in the supply chain, and our ability to recruit substantial prime investment. We are all familiar with the good news across the automotive sector. Part of the issue is then about how to strengthen tier 2, tier 3 and so on. That is why, when I go to the Paris motor show or the Berlin air show—as jolly and entertaining as it may sound to those who do not go, it is a very carefully worked programme—I talk to the key tier 2s and tier 3s, making it clear to them that not only do we have good indigenous businesses but we have growing markets for the components they generate, in which they may wish to invest. That supply chain thinking is very important.

[Mr Iain Wright]

Will the Minister answer the question that I asked him during Business, Innovation and Skills questions this morning? Five months after the launch of the advanced manufacturing supply chain initiative, no firms have been helped because it is not yet fully formed. I talked about a sense of urgency and that is a good example. Can the Minister get a wriggle on, and make sure that firms benefit as quickly as possible?

[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.