UK Trade and Investment

Lord Haskel Excerpts

Tuesday 9th October 2012 Grand Committee

[Lord Haskel]

My Lords, before I came into your Lordships’ House, I, too, was in business. Many of the points that my noble friend makes about UKTI now were also apparent back then, long before my noble friend was there.

As the noble Lord, Lord Cope, said, I am serving on the committee that is looking into this very matter. As he explained, we have started our inquiry, so what I have to say benefits from our early work. Of course UKTI was a very early port of call for this committee. My impression is that here is an organisation in the midst of change, as my noble friend Lady Liddell pointed out. There are new people in senior jobs, some from the private sector. Some local appointments have yet to be made, but in general their task seems to be to reorganise the way in which they work. I believe that we all welcome this. The proposed direction of travel seems to overcome some of the criticisms that we have heard, such as UKTI making its services known, identifying priorities and getting those parts of government such as the Foreign Office and the Home Office to share these priorities and to work more closely with UK Export Finance, the old ECGD. However, it is early days.

However good UKTI is, its work alone will not improve our balance of payments. It is the businesses that have to export and it is the SMEs that are doing more and more of this. The real task must be to find out what it is that prevents small businesses from exporting. Is it lack of finance, lack of know-how, lack of knowledge about the markets, lack of contacts, lack of confidence or just plain old lack of interest? Perhaps the most difficult of these to deal with is lack of interest. You can demonstrate that exporting provides opportunities to increase turnover and to raise productivity and profitability, but people have to be receptive to these arguments. People also have to be prepared to take the risk as well as to undertake the hard work. So UKTI will have to be selective. It is the people that make the difference—this is the can-do attitude that the noble Lord, Lord Cope, told us about—and I believe that UKTI will have to recognise these people.

The main problem for those businesses that do export seems to be finance. The banks say that they are most anxious not only to finance exports but to provide additional services such as debt collection, document preparation, insurance and seminars on exporting, yet somehow businesses say that the banks are their biggest problem. Indeed, Mr Cable, the Business Secretary, said during an interview at his party’s conference that his department’s research showed a high rejection by banks of SMEs wanting to export. There is a mismatch somewhere. I am not sure what UKTI can do about it. After all, the Government have introduced several schemes to try to put this right with what I can only describe as mixed success.

In addition, there are other organisations trying to help exporters: financial service companies that will discount invoices; organisations that will fund your customer so that they can buy your product; the Institute of Export, which provides valuable and necessary skills training for exporters; market research organisations; mentoring schemes; and some large companies that help companies in their supply chain to export. The British Chambers of Commerce and trade organisations also supply information and try to help. Then there are the European single market incentives that the noble Lord, Lord Hunt, spoke about, such as the Enterprise Europe Network and the internet’s points of single contact. There is a lot on offer. So what is the role of UKTI with all this other help available? It is certainly not to duplicate it.

That brings me back to where I started: people. From the exporters whom I have met and from my own personal experience as an exporter, I know that the one thing that really convinces small businesses to get into exporting is when they meet somebody else who has done it and done it successfully. Perhaps they got into exporting by a chance visit, through some technical, scientific or commercial meeting, or through social networking or selling on the internet. The Government, somehow, have to encourage this. Perhaps one way would be to reduce the cost of travel for exporters by allowing a rebate on the air ticket tax, as they do on VAT. I finish where I started. It is this personal aspect that is the most effective, yet it is the most difficult. This is where UKTI has to work hardest if it is going to succeed.