Exports: Government Support

Lord Risby Excerpts

Thursday 29th January 2015 Lords Chamber

[Lord Risby (Con)]

My Lords, it is a great pleasure to follow my noble friend Lord Cope, who has always been such an admirable advocate for small businesses over so many years. I also warmly congratulate my noble friend Lady Wheatcroft, who introduced this debate so effectively.

Our trade surplus, or more likely our deficit, has historically affected the fortunes of Governments from time to time. Happily, this is not the case today. Nevertheless, we have struggled to enjoy the export success of others over the years. The financial crisis that we suffered has been a real wake-up call. We as a country were particularly hard hit, but what the crisis told us loud and clear is that financial services had become disproportionately important as an engine for growth in our overall economic landscape, yielding substantial tax revenues which then vanished, with all the adverse consequences for us. What we suffered in the financial crisis left its mark on all of us in public life and in consequence, rebalancing and reorienting the economy has taken on a fresh and vital significance.

In fairness, successive Prime Ministers have for many years sought to promote exports and, more latterly, enormous efforts have been made to encourage exporting and finding new markets. However, by any objective standards, the personal role in this of this Prime Minister has been remarkable—as have the efforts of other senior Ministers, most notably the Chancellor of the Exchequer. Politicians are often criticised for having insufficient knowledge of the real world but we have been hugely fortunate with two exceptional Ministers in this House who have restructured and spearheaded UKTI to promote this export effort, based upon an incomparable personal understanding of how the private sector works, namely my noble friends Lord Green and Lord Livingston.

Regrettably, the performance of the eurozone economy has been anaemic. If we were to look at our top 10 markets, the USA would lead the way but if we take out China and the UAE, the seven remaining export destinations are all in the eurozone, which still accounts for nearly half of our exports. In December, UKTI published its 2020 Export Drive, focusing on new sector and country opportunities. It has the objectives of doubling our exports by 2020, embracing a series of key tasks to help our exporters, and building on the immense success that we are seeing in sectors as diverse as car and food production, both of which offer products of the highest quality and are brilliant success stories.

In 2013, I was appointed as one of the Prime Minister’s trade envoys: a cross-party group of 14 from both Houses of Parliament, most of us with private sector experience. I have therefore seen at first hand the high levels of professionalism and support which UKTI now offers. In recent years there has been a considerable change and the Department for Business, Innovation and Skills now works very closely with the Foreign and Commonwealth Office to promote exports and attract inward investment. There certainly was a time when some of our diplomats may not have endorsed this part of their role; now it is the reverse. I pay unreserved tribute to the two ambassadors I have worked with in my role in Algeria and to the UKTI support there. All my trade envoy colleagues would express the same sentiments. As it happens, we have increased business in Algeria, but other trade envoy colleagues cover areas as diverse as South Africa, Vietnam, Indonesia, Tanzania and Mexico. These are countries with which, in the past, we have had either insubstantial or insufficient commercial contact but where new opportunities most certainly lie.

In Algeria, there is a massive $280 billion social and infrastructure programme in place. Any day now, we will sign a double taxation agreement and finalise a hospital contract worth some $1 billion. What has become a really important force in this new bilateral partnership is the most welcome and much enhanced role of UK Export Finance, which can offer guarantees in support of export projects. In Algeria alone, there is currently a capacity of some £1 billion to support such investments and this is truly transforming. Also, Ministers fully understand the importance of these new country relationships and I am most grateful to Foreign Office Ministers, from the Prime Minister downwards, who have made the time to go there and welcome their ministerial counterparts here. This is where the cultural and organisational change is clear, with BIS, the FCO, UKTI and UKEF working together in export promotion.

Despite the financial crisis, this country has the finest brains in the world engaged in insurance, banking, the law and accountancy and not only in the square mile. Our Stock Exchange, with its outreach programme, is very much part of this but I also acknowledge the positive role played by the City of London Corporation and the sheer energy and commitment of successive Lord Mayors—which I have seen myself—in promoting UK plc abroad. Our reputation and competence is enormously admired internationally. Our financial services and their ancillary activities are increasingly part of our export topography. It is said that we benefit from our time-zone position, and we do. We are also in an open society and much has been done to encourage business start-ups which are so attractive to young people from many countries, as we see in Tech City, for example.

Additionally, we have something precious that the world really wants: the English language. At the British Council’s Hammamet conference in Tunisia last year—at which the noble Baroness, Lady Prashar, played a leading role—I learnt that the intense desire to learn English extends beyond Algeria to its neighbours. It is said there that this is a window on the world of modern business activity and technology, and it is. I applaud the British Council for responding so positively to this. Huge numbers of young foreign students and adults simply want to learn English. Training programmes for this for civil servants, teachers of English and others are now in place. So many want to study here and this cements irreplaceable personal relationships and contacts which are all, ultimately, in our business interest.

Recently, President Obama generously said of the British economy that we must be doing something right, but our export performance has insufficiently contributed to that perception. However, the structures, objectives and priorities have now been firmly put in place to change that. All of this is now well recognised by our business community and fully supported by the Government, as I have seen. As comprehensive new support and awareness strategies have been introduced, I am confident that our export performance will improve markedly in the years to come.