British Exports

Debate between Jeremy Lefroy and Robert Syms

Wednesday 8th February 2012 Westminster Hall

[Mr Robert Syms (Poole) (Con)]

First, I welcome the Minister to his post. We look forward to what he has to say later. I congratulate my hon. Friend the Member for Macclesfield (David Rutley) on securing an important debate. We do not talk about these issues enough in this House. It is vital to the future of our country that we get out and sell both manufactured goods and the services that we produce, because that is the only way that we will remain a first-class economy.

Poole, although it is a place with sandy beaches and is pleasant to live in, has a lot of industrial estates and a lot of small companies that are successful. It has a large number of people employed in manufacturing. When I go around, all the companies that are involved in exports seem to be very busy. If the trade figures have not turned yet, I am sure that at some point they will. All the evidence that I see on the ground is that the devaluation and the rebalancing is taking place and will eventually show results.

One of my biggest companies is Sunseeker, which employs nearly 2,000 people. It exports nearly all the yachts that it produces. There are not many people in this country who can afford a £20 million, £30 million or £40 million yacht. It is a great exporter. We have companies such as Siemens, which, although it came in for some criticism recently on the rail contract, is a great British company. It may be German-owned, but it has been in this country for a century and in terms of exports and investment is important to the UK. Siemens in Poole exports to China, the United States and all the way around the world. It produces a lot of the technology for the congestion zone and a lot of signalling technology and it is cutting edge. There is a whole array of businesses.

I want to pick up on a few concerns. There is an equity gap. There are some small successful companies that want to grow and they face a dilemma: they either have to sell, or, if they do not sell and remain owned by their existing directors, they cannot raise the equity or the loans from banks to be able to expand. I have come across a number of companies in Poole that say that they could double or treble their turnover—a lot of it by export—but they cannot raise sufficient funds from the banks. That is the main area where they are being held back. It is not that they cannot sell the products; it is that they cannot raise the capital. That is a big issue.

[Jeremy Lefroy (Stafford) (Con)]

I welcome this debate. Does my hon. Friend agree that the business growth fund—not the regional growth fund—set up by the banks precisely to put equity into such businesses should look at companies that are slightly smaller than the current benchmark? There are plenty of businesses employing 30 or 40 people which could double their employment and vastly increase turnover if they had access to that particular fund, where the limit is currently set a little high.

[Mr Syms]

My hon. Friend makes a good point. We still need to zero in on the small growing companies to see how we can help them with equity and loans.

The other thing is the supply chain. When one hears of a big export order that requires offset, that often means British suppliers down the line losing the ability to supply a big export order. What frustrates many small companies in my constituency is trying to get on the tender list of Rolls-Royce and British Aerospace. I went to see one company that was convinced it had the best product at the best price, but it could not get Rolls-Royce to buy its product. Rolls-Royce bought a German product and that same company beat the German company to supply the Germans with the same product. That was supplying the air tanker project in Germany. It was that frustration. We need a speed-dating process, so that small companies can marry up with British Aerospace and Rolls-Royce, which have been tremendously successful, to see whether we can supply some of these big companies, which are used to getting their supplies from all over the world when there are people in Poole, Macclesfield and, no doubt, Penrith who could produce the goods. There could be a degree of import substitution, simply because we marry up British skills and British companies. That needs to be considered.

The other area I want to touch on, which affects a lot of companies in Poole, where we have communications and quite a lot of military stuff, is the licensing regime for exports. I get a lot of moans from British companies when they have to go through the export licensing process. The difficulty is that it goes into Whitehall and weeks go by. It is difficult when someone is trying to promise the person they are supplying a delivery date for a product and they do not know what is going on. I think that the Government need to go back and look at this. Of course we must have proper safeguards and licences for some of the equipment that we export, but at the moment I am not sure that the system is helping those exporters.

Northey Technologies, a local company in Poole, was supplying the Chinese nuclear programme and had two export orders approved, but the third, for an identical product that they were selling, was held up for three or four months while the Government decided what assurances they needed. I repeat that the third order was identical to the first two, which were approved. Eventually, the Chinese went elsewhere.

The other day I visited AB engineering, another great local company in Poole, which produces robots for defusing bombs—one of two companies in the UK producing those. Of course, because of our experience in Northern Ireland we produce some good robots for doing that. That company exports all the way around the world. I said to the managing director, “You’ve asked me to visit your company. I’m impressed with what you do. Do you have a message for me to take back to the Government?” He said, “Yes, it’s the export licence regime. It’s frustrating. We find it difficult. We can’t find out what’s going on and there are occasions when sometimes we lose exports.”

My main message for the Minister is this: being new to his post, will he please go back and have a look at this area and see whether we can make it a little more efficient? Perhaps we could, at least, have a card system so that people can know when they will get a decision. The most frustrating thing is when people have an order for a good product but find that the Government are not getting on with the process of licensing it when it should be properly licensed. Anecdotally, people think that, since the Arab spring, the Foreign Office has got a lot more involved in exports, which has made things a lot worse.

We have some great British companies and some enterprising people. Going around the world, people will find some Scotsman on top of a mountain trying to sell British products. The reality is, though, that if we could do what we do well a little bit better, we could get better outcomes.