UK Trade & Investment

Debate between Nick de Bois and Andrew Bingham

Tuesday 19th March 2013 Westminster Hall

[Nick de Bois]

My hon. Friend anticipates some comments I will make shortly. Even within that good news story, it is worth remembering that the success of our services exports perhaps masks an underlying problem in our not being successful in selling our capital goods to emerging BRIC countries. He is absolutely right, however, and since 2009 the volume of exports to the rest of the EU has probably risen by some 5%, but exports to the rest of the world have increased by 30%. The trend is definitely the right one. There are encouraging signs, and we should be quick to recognise that and to endorse such efforts.

We are coming together this morning as a constructively critical friend to the work of UKTI and the FCO. Since entering Parliament, I have found an admirable determination in Ministers and officials to deliver on the often quoted target for exports of £1 trillion by 2020. I have no doubt that this is the first Government to put trade and inward investment at the heart of government and, in particular, to make them a cornerstone of the wider economic resurgence of the UK. I count myself lucky, because there are Government Members present today—I welcome such a strong showing—who have witnessed the work of the Government after a career in business and are therefore qualified to fulfil the role of constructive friend. On that note, I remind the House that I spent 25 years in business, actively supporting SMEs and large corporations in their efforts to trade abroad, which involved working in the exhibition and events industry, which in turn involved working with trade associations and UKTI’s predecessor, British Trade International. I remind the House that my wife runs the company that I was involved with, which still works with some trade associations, so I can put on the record both my experience and a declaration of interest.

Today, I want to deal with both the strategic and tactical aspects of UKTI-FCO work, and I am grateful for the support of the CBI, the Federation of Small Businesses and other organisations, not least SMEs and trade associations from whom I have gleaned advice. Let us start with a premise. One in every four SMEs in Europe is an exporter, but the figure in Britain is currently one in five. What is holding back a nation of entrepreneurs that has an enviable track record in trading and a history of unique historical ties with Commonwealth countries, and that is now host to large diasporas from many parts of the world? Many of our competitor countries would envy such a pedigree as a platform for exporting, so what is allowing our neighbours to outperform us?

As my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) said, there are some success stories, which should not be overlooked. Our service sector is buoyant, and that has hidden some of the goods sector’s decline, although we have excelled in pharmaceuticals and chemicals. Sadly, however, manufacturing as a whole has declined.

Even when we are doing well in pharmaceuticals and chemicals, our rate of growth still compares unfavourably with that of Germany, because we have not sold to high-growth economies. However—I speak as a former owner-manager of an SME—where SMEs have the right goods and services for high-growth economies, the reluctance to export is a combination of risk management assessment, operating outside the comfort zone and, of course, fear of failure. That is often fuelled by what seem daunting and in some cases very real barriers to export, but also by a fair share of myths, without necessarily recognising the hidden and transparent benefits of export markets.

[Andrew Bingham (High Peak) (Con)]

I thank my hon. Friend for securing this important debate. Does he agree that the fears and concerns that he highlights among SMEs are more prevalent with micro-businesses, which, despite their smallness, have a lot to offer and have great potential up and down the land?

[Nick de Bois]

My hon. Friend is absolutely right that micro-businesses will be more inclined to stay in their comfort sector. When they are successful and they grow, it is hard for them to shed the fear of the unknown and of recognising the extra management time that would go into breaking down the barriers to export. Success as a micro-company often brings with it concerns about entering the export market. However, the answer is staring us in the face: engaging with those that have succeeded and letting them drive those that are inclined to go—or thinking of going—into the export market.

Recently, I went to an exhibition where I spent the day with SMEs exporting to the Gulf—I hasten to add that I went at my own and not the taxpayers’ expense, en route to a delegation. I was hosted by UKTI for the day, and I spent the whole day with SMEs. A number of things came out that I thought were very encouraging, but let me focus on one issue.

When I asked SMEs how they broke down the barriers, why they were successful and what they were achieving, they all had innovative ideas, as we expect from SMEs in this country. They had all used the support of UKTI and the FCO, which, in the Gulf region, is exceptional. However, they all wanted more British companies to be there with the British pavilion, supporting a British presence in the region, because it was as much in their interests to have that greater commercial and intellectual capital in a region in which they were operating. When I asked, “Would you attend forums and speak to contemporaries that are either thinking of, or may not even have considered, going into export markets?”, “Would you come and tell them about your experiences?”, and “Would you help them learn the lessons that you have learnt?”, every single company—these were small to medium-sized enterprises—was willing to do so.

My challenge is that perhaps UKTI should now seek to leverage the good will of the work that SMEs have been doing, where they have been successful, to reach new potential exporters. Why? Despite the success of UKTI, we are still not reaching enough people. I suspect that my hon. Friend the Member for Shrewsbury and Atcham will touch on that point when he talks about how UKTI’s work must expand—I do not wish to anticipate him unfairly, but I have read his report, and he has done some excellent work on the future of UKTI. Therefore, with the companies that want to leverage more activity in a region, it is a win-win, no-cost option for UKTI and the FCO to capitalise on those who are successful in order to breed more success.

During the few parliamentary delegations that I have attended, I have always met local embassies, and local UKTI representatives and staff. Every time I visit, I ask the staff a simple question: “What are the top three UK companies doing business in this region?” I confess that the answer is often mixed. Some do not know, some waffle, while others are extremely well briefed. The picture is mixed, but what all have in common is that although the large exporters may be identified and known to them, very few of the SME companies, which might even be in the same supply chain as the well known prime contractors, are known. That worries me. At delegation level, led by senior Ministers, I cannot recall how often SMEs were included in the teams accompanying Prime Ministers or Foreign Secretaries.

My specific interest is with the “M” in SMEs. Medium-sized businesses will be crucial to driving export growth, because it is not realistic to presume that our export goals can be achieved by securing large, single-group contracts. The critical mass achievable by the vast swathe of medium-sized companies will lead growth and I suggest that UKTI overseas representation is spread more evenly across the company base to reflect that fact.

Budget Resolutions and Economic Situation

Debate between Nick de Bois and Andrew Bingham

Thursday 24th June 2010 Commons Chamber

[Nick de Bois (Enfield North) (Con)]

Thank you, Mr. Deputy Speaker. I shall do some immediate live editing to meet your request.

As a relative newcomer to the Chamber, let me say that we need to remember that there is no such thing as free money. The vast sums that we are discussing have had to be earned by people, and those same people will pay the price for the failed policies of the previous Administration. We should bear in mind the fact that they will be making sacrifices because of Labour’s mistakes.

In a former life, I was fortunate enough to be able to run my own business. During 20 years in the private sector, I have enjoyed the ups and downs that go with that territory, as well as sharing the challenges and opportunities that all families face. Given that reality, I recognise that this Budget, and the legacy we have inherited, will hurt people, and will hurt some in their pockets. Obviously, no Chancellor would wish to give such a Budget, but it is the one that any responsible Chancellor would have to give.

We are like the receivers coming in to clear up the chaos left by the previous owners. It falls to us to tell the shareholders, the staff and stakeholders what must be done to save them from bankruptcy. In government, Labour Members were always keen to hold company directors to account for their mistakes, and would often pursue criminal prosecution. I notice that there is not the same alacrity to do so with the right hon. Members for Kirkcaldy and Cowdenbeath (Mr Brown) and for Edinburgh South West (Mr Darling).

In the limited time available, I want to focus on enterprise in the Budget, because my constituents in Enfield North will welcome steps to protect jobs and create an enterprise environment that can create new jobs—and why not? Given the 15% annual increase in the number of jobseeker’s allowance claimants under 24 and the 30% drop in the number of vacancies, jobs are clearly a key issue in our area.

By reducing the burden of taxation and regulation, the Budget will give business the confidence to invest in the long term, which is crucial. The hon. Member for Chesterfield (Toby Perkins) suggested that the tax cut for companies would be of no value and would do nothing except, perhaps, create extra profits for those involved. That is nonsense. According to a survey of its members by the Federation of Small Businesses, 42 per cent. of small firms will use savings from tax cuts to invest in growing their businesses, 20% will use them to employ more staff, and some 22% will try to invest in new services and products. We must allow our companies to invest and, in doing so, create jobs.

I welcome the benefits to increase the level of business rate support temporarily for new businesses. We are trying to introduce help in the regions, and the exemption from national insurance for the first 10 employees will certainly be welcome. Let me, however, introduce a note of caution, and ask my colleagues to bear it in mind. I do not want to see the emergence of a series of phoenix companies that may wish to take advantage of the exemption as an aside. This is not the occasion on which to discuss the merits of phoenix companies, but they have the potential to abuse what is otherwise a very welcome policy.

Above all, I welcome the Government’s commitment to urging banks to promote small and medium-sized enterprises in particular. That too is crucial. Many people in my constituency and—I declare an interest here—in my own experience have seen the abject failure of banks, some of them owned by the people, in that regard. Many pursue a twin-track approach: they tell us that they are publicly committed to lending to SMEs, while in the real world actively discouraging them from applying for loans. Such disgraceful behaviour should not be allowed to continue without comment. I for one will be watching the banks carefully and holding them to account in the future. Their behaviour explains why, according to the FSB report, only 18% of its SME membership apply for loans, and only 9% are awarded them. SMEs are being discouraged from applying, and that is distorting the certificates.

[Andrew Bingham (High Peak) (Con)]

I agree with what my hon. Friend has said about the banks. Will he also acknowledge that hard-working counter staff are being criticised by members of the public although they are not to blame for the difficulties that the banks have caused? They have been working very hard, and they are being unfairly criticised.

[Nick de Bois]

I thank my hon. Friend for highlighting that distinction. Indeed, it does not apply only to those working on the shop floor. Many senior managers are clearly being directed to follow a policy which—I am extremely pleased to note from the Budget—we are prepared to challenge. The Red Book refers to a review of the way in which banks should respond to the need to lend in the future. I realise that Britain needs its banks, but the banks need to play their part openly and honestly, and I look forward to seeing that happen. It is a key part of the proposals outlined in the Red Book.

This is a necessary Budget. It is a tragedy for our country that every 20 years or so Conservative Chancellors must make difficult decisions and accept public unpopularity for sorting out the mess left by their opponents. That has now happened again. I dislike many of the measures in the Budget, but I support them because I dislike even more the idea of our country literally going bankrupt. I hope that many of the tax rises that have been announced will eventually be reversed as our economy grows over the coming years, but our priority now is to stop the country slipping into a spiral of debt-driven decline, to rebuild our businesses, and to create jobs and opportunities to turn our economy round.