Trade and Investment

Lord Young of Norwood Green Excerpts

Wednesday 9th February 2011 Lords Chamber

[Lord Young of Norwood Green]

My Lords, I thank the Minister for sending me a copy of the White Paper earlier today and for notice of the Statement. I welcome the broad thrust of the Statement, so far as it goes. However, may I remind him that exports alone will not deliver without a credible plan for growth across our economy? Putting new tyres on the car will not make it perform better if the engine has not been fixed. We welcome the importance given to exports and export support, and support the increased focus on the major emerging markets such as Brazil, China and India without neglecting our longer established markets. We also welcome the commitment to opposing protectionism and promoting free trade. Subject to the detail, we will support the particular measures that the Secretary of State proposes to develop export support for SMEs, although I hope the Minister can give us a timetable for their implementation. I hope he acknowledges that all those measures build on work done by the previous Labour Government.

Like the previous Government, this Government are committed to the completion of the Doha round of global free trade talks. Given the difficulties that those talks have had in the past, can the Minister tell the House what specific new initiatives he will take in the coming year to ensure that talks are completed successfully? His predecessor and my right honourable friend the former Prime Minister played an active and engaged role in trying to move the WTO towards agreement. What personal role has the Secretary of State played and what commitments has he gained from the Prime Minister about his personal involvement in securing agreement this year? Does the Minister accept that the Doha round must foster development, and will he respect and build on the work of his department and the Department for International Development under the previous Government to ensure that trade agreements support poorer developing countries? The White Paper recognises the potential benefits of completing European free trade agreements. What specific new initiatives will the Secretary of State take within the Council of Ministers to get things moving forward? Finally on Europe, what specific measures will he take to broaden and deepen the single market, as the White Paper puts it?

There appear to be some significant problems underlying the White Paper. Can the Minister assure me that the cap of £25 million does not create a gap in export support for mid-range companies? Will he confirm that the UKTI budget will be cut by 19.5 per cent in real terms? Given the expansion of activities in the White Paper, where and how will cuts be made without damaging support for exporters? What role will the Science and Innovation Network play in supporting the export strategy? Does the Minister recognise that a successful export drive depends fundamentally on having goods and services to sell and on having the companies that can provide and sell those goods and services? Does he therefore also recognise that the Government’s reckless approach to deficit reduction is damaging the prospects for growth and jobs? Can he tell the House why the strategy for growth has still not been published when he promised it in October? Does he acknowledge that the new director-general of the CBI has now joined the previous director-general in criticising the Government for having no plan for growth? Without a clear vision for the economy and a plan for growth, we will not have enough companies to export all the products to sell.

Will the Minister confirm that pharmaceuticals and the life sciences are some of the knowledge-based industries by which we can hope to earn our way in the world? Last week, Pfizer announced the closure of its Sandwich plant. Is that not a chilling message that one of the world’s leading pharmaceutical companies looked at its global activities and decided that it no longer needed to be in the UK and that it could afford to leave the UK outside its global research strategy? How much more investment will we lose before this complacent Government produce a credible plan for growth?

The White Paper says that the Government will invest in UK infrastructure. Will the Minister confirm that the introduction of universal broadband has been delayed by three years and that there is no credible plan for fast broadband? Does he accept that those failings make the UK a less attractive place for investment by companies that support the digital economy? Does the Minister recognise that a recent report by Experian and the National Endowment for Science, Technology and the Arts concluded that there are companies with the potential to grow and export in every region of the country and in many different sectors of the economy? Does he recognise that regional development agencies often work with UKTI to support exporters? The Secretary of State has abolished RDAs, but can the Minister explain why the White Paper contains only one passing mention of regional support for exporters and support for exporters in the regions? How will he ensure that potential exporters get the right support in every part of the country?

The White Paper praises higher education as a gross export earner of £5.3 billion, so why is the Secretary of State supporting changes to student visa policies which will do real harm to the country's seventh biggest export earner and undermine our long-term trade and development interests? The White Paper speaks of investing in science but does the Secretary of State recognise that, with science investment cut in real terms and other countries increasing their science investment, we are in danger of losing world leadership in this area?

We welcome the recent performance of manufacturing exports which have taken advantage of the competitive pound. Will the Minister confirm that the strength of the manufacturing sector has been supported by the previous Government’s support for science research and development tax credits and capital allowances and that, in the worst of a global recession, the scrappage scheme, Time to Pay and flexible tax credits all helped manufacturers to retain more of their workforce? Does he recognise that we now have a unique opportunity to use manufacturing exports to strengthen the supply chain companies and to develop the next generation of world-beating export products? What is he doing to ensure that we take advantage of that opportunity? There is much common sense and continuity in the White Paper and no need for artificial arguments about it, but the Minister must recognise that its impact will be severely limited without a credible plan for growth.