Economy: Growth

Lord Bates Excerpts

Thursday 21st June 2012 Lords Chamber

[Lord Bates]

My Lords, I, too, congratulate my noble friend Lady Kramer on securing this debate and on the way in which she introduced it. Like her, I find it quite difficult to come back to work after that inspiring speech in Westminster Hall. I feel as though I have been walked up to the mountain top and then need to come back and start inspecting the sewers. However, the sewers in this case are pretty important, because they have to do with jobs, growth and matters of that nature.

I am pleased to be able to follow my noble friend Lord Clement-Jones, who put his finger on something—in fact, Aung San Suu Kyi also mentioned this; namely, how we are perceived internationally. When we berate ourselves for queues at Heathrow, let us remember that they are queues of people wanting to come in, not wanting to get out. Sometimes, we underestimate the attractiveness of this country around the world. When people of the eminence and experience of Sebastian Wood, the UK ambassador to Beijing, call the current strategy on visas self-defeating, we should all take a bit of notice.

When people come to this country to study, they are coming here not to rip us off or to claim benefits but to invest the thick end of £100,000 in the British economy and probably a lot more besides. Including students, who are effectively investors in Britain, in immigration numbers needs to be looked at very carefully, otherwise we will see pressure put on to reduce their number in the face of massive growth. UK universities have supplied some information and research showing that the number of international students will double in the next seven years from 3.7 million to 7 million. That is a huge market and we need to be at the table for it. The UK is home to four of the world’s top 10 universities. As the Government’s advertising campaign tells us, Britain is great, but we cannot say that we are open for business if, when people try to get here, they find that the door is shut.

The noble Lord, Lord Bhattacharyya, mentioned innovation. Let us consider that most of the people who come to this country and to our universities are often very highly skilled graduates, often in science and technology. That same information from UK universities suggested that 40% of teaching in science and technology in UK universities is undertaken by people who come here from overseas. Instead of allowing people two years’ postgraduate work experience to contribute to the UK economy, to set up businesses, to teach, to train and to innovate—which we desperately need—we have ended up changing the law so that we kick them out after three months. It seems crazy. We kick them out and probably send them to the United States, Germany or France, who of course welcome them with open arms. This is a high-class problem, because Britain is attractive. We recognise that there needs to be a public discourse on this. There is no doubt that in the country, and in the heat of battle during elections, immigration is an issue. However, people need to understand that there is a fundamental difference between those people who are coming to this country perhaps not with the best of intentions and those coming to invest and help create wealth and jobs. I very much endorse the remarks made there.

In many ways, that leads into the general comments that I will make. I had a conversation yesterday with an entrepreneur in the north-east called Graham Robb, who has a small business. He said, in a slightly flippant way, that he had taken on four new people over the past month. When I asked him to what he attributed this rapid growth in his business, he said that what was fantastic was that because of the jubilee and the Euro championships, suddenly debt, gloom and doom were off the TV and out of the newspapers, and people were starting to feel good about themselves. The minute that happens, they start to invest and trade. One of the most telling tables in the excellent briefing paper prepared by the House of Lords Library for this debate is the one on business confidence. When asked if they expected business to improve in the next year, 18% said yes, 29% said it would stay the same and 50% said it would get worse. When that is the perception of the people you are relying on to invest and go forward, you realise that you have a problem.

On the other hand, let us look at what engineering and manufacturing are doing. We are seeing some extraordinary performance there, with exports growing quite rapidly—in manufacturing as well, they are up 8%. I know from the north-east of England that we have record exports for the third quarter in a row and there is no sign of that trend abating. It is as if it is only going to gather pace. This is tremendous news. When EEF The Manufacturers’ Organisation was asked what it thinks the outlook is for the next 12 months, 70% of members have a positive outlook and believe they are going to invest in order to take advantage of the good future that is ahead of them. We need to seize on that, along with the other good things that are happening around the economy, and get behind them.

The UK is moving up the world competitiveness league table again. For the first time since 2007, we are now back in the top 10. That is what the world thinks of us and of British manufacturing. It is pretty popular around the world, which is important. If we want, we can tell young people coming out of school that they have no hope and no future, and that the world is going to hell in a handbasket, but that is not what is happening around the world. The Institute of Directors’ latest economic research predicts that the world economy will triple in size during the lifetime of the person leaving school now and that the size of the middle class will expand from 1.8 billion to 5 billion in 2030. It is not all doom and gloom. There is real momentum and real opportunity out there. However, if we are so beset with focusing on our weaknesses rather than actually heralding, championing and exploiting our strengths, such as education and tourism, we cannot take full advantage of it. My conclusion on the growth strategy is that, yes, all the fundamentals are in place. Of course we need to tackle the deficit, keep taxes down, deregulate, introduce and improve skills, and make it easier to set up businesses—all those things are fundamentally important. However, we also need our sales guys to get out there and promote the UK, and make sure for the people at home that when people want to come and invest in the UK, our doors are open and there is a welcome mat there waiting for them.