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UK Trade and Investment

Volume 557: debated on Tuesday 22 January 2013

Motion made, and Question proposed, That this House do now adjourn.—(Mr Swayne.)

I am pleased to have secured this Adjournment debate on the performance of UK Trade & Investment. The last time we had a debate on UKTI on the Floor of the House was last March, when it was secured by my hon. Friend the Member for South Thanet (Laura Sandys). I very much regret that there are not more opportunities for Members to scrutinise UKTI’s performance.

I very much welcome the work done by Lord Green and his colleagues at the Department for Business, Innovation and Skills, but it is regrettable that so few Members of Parliament seek opportunities to scrutinise UKTI’s performance. We debate a great deal in this Chamber about how to slice up and apportion the cake, but exports are about making the cake bigger. I spent most of my working life before entering this House in exports, and I feel passionately about their importance in bringing wealth and prosperity to our nation.

As the European Union continues to diminish in importance vis-à-vis British exports, so I turn to the middle east and north Africa. I pay tribute to my American intern, Mr Justin King—it is entirely plausible that one day he will become a congressman, and I very much hope so. He is helping me greatly to interview hundreds of small British companies. They are coming from all over the United Kingdom to my office in the House of Commons to show me their evidence and experience of UKTI, and of trying to interact with it.

Before I continue with my speech I want to give three examples of why the MENA area—middle east and north Africa—is so important. I am chairman of two all-party two groups: the Saudi Arabia all-party group, and the all-party group on Libya. When we went to Saudi Arabia, the Saudi King himself admonished me saying that the lack of British exports to that country was regrettable. He said that all our European Union competitors were motoring ahead, and that it was regrettable that the United Kingdom is falling behind our main competitors in exports to Saudi Arabia.

Sixty British companies operate in Tunisia, compared with 1,800 French companies. I will repeat that—60 compared with 1,800. I was the first British Member of Parliament ever to go to Mauritania since its independence in 1960, and almost no British companies export there. We are good at exporting to countries that speak English, but the French-speaking part of the world is almost a vortex for British interests, particularly commercial interests. If this week has shown anything, given the problems in Algeria and Mali, it is that it is essential that we engage with those strategically important countries of north Africa, primarily by assisting our own companies to interact with those countries, and help them with exports, and—vitally—technology transfer.

I congratulate my hon. Friend on securing this debate. Does he also agree that there is a role for promoting our higher education institutions in those countries? My hon. Friend does a great deal, and as Parliamentary Private Secretary in the Wales Office he does a lot for Wales. I am sure he will be aware of the significant and important businesses we could be exporting that originate in our universities in Wales.

I concur with my hon. Friend and he reminds me of an important point. Whenever I go to the middle east I see that the British brand is so strong. Because we are British we tend to hide our light under a bushel, but overseas the British brand is incredibly strong—it is sterling, A-plus, gold standard—and people are desperate to buy British.

My hon. Friend is correct. Shrewsbury school, one of the best private schools in the world, is so popular that we cannot accommodate all the foreigners who wish to study there. They have had to build a Shrewsbury school in Bangkok, and there are current negotiations to build another in the middle east. I completely concur with my hon. Friend.

Let me say how important advertising is. I understand there are constraints on Government budgets, and that the Cabinet Office is obviously not keen to loosen the purse strings. There should, however, be a significant increase in the budget for UKTI. I want a nationwide campaign in this country, through the television, media, newspapers, and even product placements in soap operas, by which we constantly inform small and medium-sized companies throughout the country that UKTI exists and that there are opportunities to engage with it and for them to receive support to export.

I still remember the “Tell Sid” campaign in the 1980s to try to get us to buy British Gas. I want such a campaign now—a campaign that people talk about and get excited about.

The best campaign I have experienced in my seven years as a Member of Parliament was Joanna Lumley’s Gurkha campaign. She revolutionised the campaign when she took it over. The media suddenly became extraordinarily interested. I want a national figure—somebody of renowned business intellect and experience, whether Richard Branson or Alan Sugar—to have a programme on television. It could be called “Export Apprentice” rather than just “The Apprentice”. They should also be a guru and a champion and spearhead a nationwide campaign to ensure that our small and medium-sized companies are passionate about exporting.

I will not endorse my hon. Friend’s support for Joanna Lumley, who has inflicted 10,000 elderly Nepalese on my constituency—he will forgive me if I do not hold her up as a role model—but, the Defence and Security Organisation, which is part of UKTI, has magnificent champions in Richard Paniguian, the head of DSO, and his entire team. The UK defence industry owes a huge amount to the energy and enthusiasm of DSO. The Prime Minister, who has been the key champion of defence exports, particularly in the middle east and north Africa regions of which my hon. Friend speaks, has been hugely well supported by UKTI and our noble Friend Lord Green of Hurstpierpoint. DSO is doing a superb job and yielding results.

Of course, parts of UKTI are extremely successful. If DSO’s success could be replicated in all other sectors, we will be firing on all cylinders.

Is my hon. Friend aware that the video games industry added £1.4 billion to exports in 2010? Would he support UKTI giving appropriate resource to the creative industries?

I concur with my hon. Friend. We should support overseas all the industries that we are good at.

UK export finance is available, but many of the small and medium-sized companies I speak to in my constituency of Shrewsbury are not aware of the export finance support they can get from UKTI.

I asked a very good friend of mine who works in the private sector what he would do if he were promoting business in a country such as the United Arab Emirates, where 130,000 British citizens reside. He said he would put just four people in an office in the UAE and give them the sole task of constantly updating a database of all the public and private sector procurement opportunities in the country. The database would have to be updated daily and constantly reviewed to include not just the large, multi-million pound opportunities, but smaller ones.

The database could be relayed daily to the regional directors of UKTI in the UK. I recently met Paul Noon, the UKTI regional director for the west midlands. The regional directors should in turn create databases of all the companies in their regions, so they understand every company in, for example, the west midlands, and what they can do. Like a telephone switchboard operator, they could then marry up each company in the west midlands to each opportunity identified in the UAE. I know from the discussions I have had with Shrewsbury businesses that they are simply not being told of the opportunities that exist in the UAE. That is just one case in point.

The support I have received from UKTI in the south-west for businesses in my constituency has been fantastic. It put on an export fair with me this summer that attracted more than 90 small businesses in Cornwall. A tea-growing company in my constituency now exports lots of tea to China. Small businesses in Cornwall get a lot of help from UKTI.

I am very pleased for my hon. Friend and wish the company every success in exporting tea to China.

UKTI should appreciate these debates. I am proud of its achievements, but of course we should always scrutinise it to see if it can do more. This country became one of the greatest countries in the world through its ability to trade. We are not exporting as much as I would like, which is why it is so important to have these debates, and I am pleased that my hon. Friend has had a positive experience.

I do not want salaries to be just mediocre or okay for UKTI staff—many do a very good job. I want them to be the best, because I want UKTI to recruit the best. I want them to have greater incentives and bonuses to push for trade. My understanding—the Minister may correct me if I am wrong—is that UKTI staff are monitored as a whole, rather than as individuals. It is extremely important that we start to monitor individual performance. When I was in exports, if I did not hit my one-month target there would be problems; if I did not hit the two-month target, there would be serious problems; if I did not hit the three-month target, I would be out of a job. We have that pressure in the private sector, and it focuses the mind on delivering what is expected. I hope we can bring that private sector focus to UKTI.

I mentioned co-ordination across the country. I am the chair of two all-party groups: for Saudi Arabia and for Libya. Not once have I ever been contacted, in seven years, by anybody in UKTI about all of my delegations to Saudi Arabia and Libya—not on a proactive basis anyway. We, as parliamentarians, do an important job when we go to such countries. We meet important officials and leaders, so it is important for UKTI to understand all-party groups. Some are very active and UKTI should be engaging with us to find out what we are doing and try to have a common approach.

Does the hon. Gentleman see that it is the export not just of UK products, but of skills that help to increase business in Libya and the other countries in the middle east to which he has referred?

I spent the afternoon with His Excellency Mustafa Abdul-Jalil, the former Libyan Prime Minister, who, with his counterparts, bravely brought about the revolution. He said the very same thing to me: that they are desperate for British skills, not just exported goods. They desperately need our experts in the fields of banking, commerce, education and health care. I agree with the hon. Gentleman.

The Prime Minister has started to appoint trade ambassadors and I have not heard from any of them so far, apart from my hon. Friend the Member for Gloucester (Richard Graham), who I think has been appointed to look after Indonesia. He is not in the Chamber at the moment, but I pay tribute to how he has been trying to engage with parliamentarians in a proactive way, and explaining what he is doing with companies from across the UK. He is helping them to enter Indonesia, and encouraging other hon. Members with companies that could benefit from participating. The Middle East Association and the Arab British Chamber of Commerce are also acutely involved in exports to the middle east. I hope that the Minister will give me an assurance that efforts will be redoubled to co-ordinate with all trade ambassadors, all-party parliamentary groups, the MEA and the ABCC to ensure that we have a co-ordinated approach as one country with one strategy, with all of us who are interested in exports consulted and utilised constantly to update our constituents on all the opportunities that exist.

I have come across instances where business has been lost in the United Arab Emirates, Iraq and other countries, when business men from those countries have wished to come to the United Kingdom to visit a particular project or institution—to see whether it is appropriate to build in their country or whether their company has the calibre to undertake such a project—and their visas have been rejected. As a result, the business has been lost, obviously to the great annoyance of the host country and the business people involved. There must be greater co-ordination between UKTI and the Home Office to ensure that visas are granted to the genuine business men from all over the middle east who are trying to come to the United Kingdom either for training courses or to look at projects and companies.

UKTI is good at high-value opportunities. As I have said, I recently had the privilege of meeting Paul Noon, the director of UKTI in the west midlands. I applaud the work that UKTI does and I am grateful to the Minister for all his efforts. In my view, there has been a radical shift over the last two and a half years. The Prime Minister has said that he wants our embassies to be shop windows for British businesses. To a degree, I can see a vast improvement in our embassies. A lot of that is a tribute to my hon. Friend the Minister and his colleagues who have ensured that all the people at our embassies, from the ambassadors downwards, are focused on supporting small and medium-sized companies to export overseas to the middle east and north Africa, but too many of these opportunities are the really big ones. We need a massively increased focus, drilling down in every MENA country to the smallest of opportunities, no matter how small. We also need the sharing of information between all British companies. We are very bad at exchanging information with one another in this country compared with our European Union counterparts.

This debate follows the last one, almost a year on. My colleague Mr Justin King and I are writing a report—it will go to every Member of Parliament, including the Prime Minister—about the real experiences of small and medium-sized companies and their feedback. I very much hope that the Minister will give me an assurance that he and his Department will take seriously that report and our passion for increasing British exports.

I join others in congratulating my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing this important debate and putting on record his dedication not just to his constituency, but to driving the UK’s recovery by rebalancing the economy, based on export-driven recovery. He was absolutely right to highlight at the beginning of his speech the importance of the progress made since May 2010, with the refocusing of the Foreign Office on the prosperity agenda and the refocusing of the Department for Business, Innovation and Skills on the strategy of pursuing an export-led recovery.

My hon. Friend was also right to highlight some of the progress made in exporting expertise, particularly in responding to our hon. Friend the Member for Ceredigion (Mr Williams) about its importance in the education sector, and also in discussing other key areas. My hon. Friend the Member for Shrewsbury and Atcham was right to point out that the UK is highly regarded elsewhere in the world, not just in traditional Anglophone countries, but in the French-speaking world, in which I travel quite extensively given my additional and other responsibilities in Africa. He was also right to imply that more needs to be done. We certainly should not rest on our laurels, but ensure that we are maximising the opportunities for UK businesses elsewhere in the world.

The support provided to businesses by UKTI has created significant economic benefits since May 2010. Indeed, some £45.6 billion-worth of total additional sales have resulted from UKTI assistance. In 2011-12, UKTI support helped firms to create 36,400 jobs and secure a further 68,500 jobs. The role of UKTI is not just to maximise exports, for both large companies and SMEs in the UK, but to persuade foreign companies to invest here in the UK too. In that regard, the UK has benefited from 1,406 inward investment projects in 2011-12 in which UKTI has been involved, which have helped to create or safeguard more than 112,000 jobs in the UK. It is therefore fair to say that UKTI is making a significant contribution to driving the UK’s economic recovery.

I want to say a little about the background—the architecture—against which UKTI operates. In early 2011, the Government published the White Paper “Trade and Investment for Growth”, which outlined our commitment to an open trading system and to removing barriers and supporting UK firms that wished to export. The Government’s “Plan for Growth”, which was published at the time of the 2011 Budget, linked the policy objectives for greater global trade to our economic aim of providing a climate that would help businesses to grow and prosper. The key objective was to encourage investment in exports as a route to a more balanced economy.

Some of the issues that my hon. Friend has raised are particularly pertinent. It might help his constituents and others who are unaware of the opportunities that UKTI offers to know that those opportunities are posted on the UKTI website, and that companies can sign up to alerts for any opportunities that might be relevant to them. I would certainly be happy to provide him with details of how to access that information, which he can pass on to the relevant businesses in his constituency.

My hon. Friend also raised the important issue of the Prime Minister’s appointment of trade ambassadors. I can give him an assurance that all the trade ambassadors—not just my hon. Friend the Member for Gloucester (Richard Graham)—are very significantly engaged in the countries for which they are responsible. Many of them have already made visits, and many are planning—with the missions on the ground as well as with the Department for Business, Innovation and Skills—to lead trade delegations to those countries.

It is also important to put on record that the Government are seeking a transformation of the UK’s export and inward investment performance—so much so that, in November 2011, the Prime Minister and the relevant Minister, the excellent Lord Green, launched the national export challenge, to encourage more SMEs to export. As my hon. Friend rightly pointed out, in some markets, the UK is below the EU average percentage of exporting SMEs. We want to see it achieve at least that level, if not higher. To that end, the Prime Minister has set the extremely ambitious target of getting another 100,000 companies exporting by 2020 and doubling UK exports to £1 trillion.

However, UKTI cannot deliver the Government’s ambition to transform the UK’s export and inward investment performance alone. It is working in close co-operation with the rest of Government and particularly with the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office. Outreach with business intermediaries such as banks, lawyers and accountants is also playing a major role. We aim to access their client bases to help businesses to expand into key markets.

My hon. Friend also raised the important subject of marketing. He will understand the very challenging—to put it politely—macro-economic situation that we inherited, and it was absolutely right that when we came into office, we looked at every aspect of Government expenditure to ensure that UK taxpayers’ money was being spent properly and that we could make a significant inroad into the huge deficit that we inherited. That does not mean, however, that we have been unable to persuade the Cabinet Office, which is the responsible Department, to put in place marketing budgets when and where appropriate. Perhaps the best example is the “Great” campaign, which was linked to the Olympics and to our Olympic legacy. I can inform the House that that campaign has had a significant positive impact, persuading businesses based abroad to invest here and enabling our missions abroad to persuade UK companies to invest elsewhere in the world.

Indeed, the House has played its part, too, with Members of Parliament hosting seminars in their constituencies to highlight the opportunities that exporting can offer businesses, especially to small and medium-sized enterprises. I am grateful to my hon. Friend the Member for Stourbridge (Margot James) who has played such a significant role in engaging and encouraging MPs across the House to hold such meetings in their constituencies. If Members either here this evening or reading the debate in Hansard tomorrow are interested, I would urge them to contact my hon. Friend who will provide them with the information necessary to enable them to hold such meetings in their constituencies.

That is not all. Last August, the Government announced additional support to help UK businesses. There will be more money available for SMEs to attend trade shows abroad, and I very much hope that the constituents of my hon. Friend the Member for Shrewsbury and Atcham will access this funding. There will also be increased support available for travel on overseas missions. Substantial discounts will be available and will be offered through the Overseas Market Introduction Service, which provides targeted research to help businesses find those first crucial contacts in the markets. In addition, the autumn statement provided a further resource allocation of £70 million a year for the next two years.

This package of support will play an important role in helping realise the Government’s ambitions, by building up the capacity and capability of the British Chambers of Commerce overseas, where we lag behind competitors such as the Germans. Lord Green has made this a personal crusade, and I am 100% supportive of the direction of travel. It is focused initially on 20 pilot chambers in key export markets. Once again, I very much hope that my hon. Friend’s constituents will engage with this excellent new initiative.

Increasing the number of international trade advisers in the English regions is a key part of how the money will be spent, offering additional funds to SMEs with high-growth potential, enabling more companies successfully to export. I can inform my hon. Friend that some of these advisers are private sector employees, who are performance-related rewarded—exactly the agenda he talked about—and I think that is exactly the right direction in which to go. We hope that this additional funding will double the number of companies given financial support towards the cost of exhibiting at their first overseas trade shows; and double the support for private sector-led project teams campaigning for UK success, by enhancing inward investment support in growth markets, such as the UAE, Qatar, Kuwait and Russia. I hope that some of that inward investment will end up in my hon. Friend’s constituency. This is also about positioning the UK as the leading location of choice for European headquarters and elite global enterprises, building on the success of Tech City and developing further inward investment campaigns as well as building on the Olympic legacy.

This has been an important debate. My hon. Friend is right to continue the work he is doing to raise the significance of the contribution that UK exports can make to our own UK economic recovery.

Question put and agreed to.

House adjourned.