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The Minister for Small Business, Industry and Energy (Mr. Richard Page): The hon. Lady says that the Government are holding back inward investment into this country. As we literally have the world record, how can she say such a thing?
Mrs. Roche: The Minister must not go on living in the past. The CBI is looking to the future and how we will progress. I have mentioned the interdepartmental rivalry and the scepticism of some of his governmental colleagues about inward investment, which is often acquisition based, rather than entailing the attraction of new plant and machinery and job creation, as the Government like to portray it.
The second factor highlighted by the CBI was Britain's lack of infrastructure, and especially its transport problems. The third factor, and possibly the most
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As the CBI stated that
Our congested and crumbling transport infrastructure is a huge problem for business. As I travel around Britain meeting business people, they tell me that that is one of their main difficulties.
The CBI is not alone in identifying Britain's low-skill economy as a problem for inward investors. Last month the Financial Times described Britain's
If hon. Members want evidence from inward investors, perhaps they should heed the words of the chief executive of Siemens' UK company. Mr. Jurgen Gehrels made some important comments on the skills base. He said that any belief that the way forward for Britain was as a
Mr. Tim Smith:
Can the hon. Lady name one hon. Member or one serious political commentator who has ever suggested that the way forward was for Britain to be a low-skill, low-wage economy?
Mrs. Roche:
I would name every hon. Member on the Conservative Benches. The entire purport of the Government's economic policy is to imply that Britain can compete as a low-wage, low-skill economy. Mr. Gehrels, whom I quoted, speaking on behalf of one of our major inward investors, said that that was the wrong road for Britain to go down.
Britain deserves a Government who can put matters right. We deserve a Government who will encourage inward investment and create a structure that supports business operations. We pay tribute to the Invest in Britain Bureau--an initiative established in 1977 by a Labour Government. Labour local authorities have played a decisive role in attracting inward investment. For example, Labour-controlled local authorities in the
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The Minister for Small Business, Industry and Energy (Mr. Richard Page):
The President of the Board of Trade began his speech by comparing the world attitude to the United Kingdom in the 1970s with its attitude today. I came to the House in 1976 and I remember travelling abroad and meeting foreign Members of Parliament and industrialists who regarded us almost with pity, coupled with puzzlement that a great nation could behave in such an incredible fashion--I refer to the strikes, 26 per cent. inflation and the fact that we were viewed as the sick man of Europe.
As a Minister, virtually every week I see some overseas delegation--this week it was a delegation from India, last week from the Kansai region of Japan and the week before that a Swedish delegation. Every delegate asks, "Please tell us how you are doing it? What can we learn to take back to our countries?" That is the judgment that counts--not that of the Opposition or the media, but the world's judgment. It is why overseas companies are flocking to the United Kingdom to take advantage of the Government's open and free approach to trade and commerce. Those companies are producing quality British goods at a competitive price and selling them extensively throughout the world. It has reversed the down-trend that has plagued us for decades.
Trade and inward investment are two sides of the same coin. For Britain to have the right formula to spawn good business, we must have the right policy. When our trade and investment policy is right, business has the right attitude and assistance to enable it to succeed. My right hon. Friend referred to his aims for the Singapore ministerial meeting, and I am sure that all hon. Members wish him success. Success in opening up free trade will bring success for British industry which will be translated into jobs throughout the length and breadth of this country.
My right hon. Friend referred also to some of our inward investment successes. I shall mention only a small fraction of those as I do not have time to recite the whole list. BMW is not the only company to recognise the advantages of investing in the west midlands. Unipart, for example, recently announced another investment in Coventry that will create 150 new jobs in that area. In July this year, Unipart, Honda and its Japanese affiliates announced a joint venture programme worth £63 million.
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The list continues. Indeed, it is a roll call of success. As sponsor Minister for Yorkshire and Humberside, I go to the region regularly. Whenever I go there I open more factories and more extensions. There is more growth and I announce more jobs coming into the region.
In October, K and L Microwave, an American company, announced plans to invest £4.6 million in a factory at Bridlington, east Yorkshire. This investment will create more than 170 new jobs over the next five years. Companies from Korea and Germany have also decided to invest in the region over the past 12 months.
My right hon. Friend the President of the Board of Trade, in his few words, said that he felt that there were two other announcements coming today. Literally hot off the press--this will be good news for the hon. Member for Bridgend (Mr. Griffiths)--is the news that Sony will be announcing an expansion of its operations at Bridgend. It will be a £50 million investment, and promises the creation of almost 1,000 new jobs.
The 11 Members who represent Glasgow will be delighted to know that Polaroid will set up an international shared service centre in Glasgow which will create another 150 new jobs over the next three years. It is success, success and success.
Our success in attracting such investment is a tribute to the dedicated work of the Invest in Britain Bureau, regional development officers and the efforts of staff in overseas posts. I am glad that the hon. Members for Middlesbrough (Mr. Bell) and for Hornsey and Wood Green (Mrs. Roche) both paid tribute to the work that is done by our overseas posts. We, the Government, see at close hand what they do. They have achieved magnificent results over past years and I am confident that they will do even better in the future.
That is only part of it. We must also have the ability to take advantage of inward investment. That means that we must have a good supply system from our smaller and medium-sized companies. That is why we have set up 10 regional supply offices in England. The organisation was set up in April 1995, and it is starting to produce more and more work for small and medium-sized businesses when they become involved in a supply chain that comes from inward investment.
The RSOs have an in-depth knowledge of their local supply base. They work closely with purchasers to identify precise purchasing needs and to match those needs with validated suppliers. The RSOs, therefore, can give independent and expert help on sourcing. They will help companies that are looking to set themselves up in operations in England. They will continue to help after their involvement is up and running.
I shall give an example. Samsung was looking to set up operations in the north-east. The local RSO helped to compile profiles on potential suppliers and organised some extremely well-attended seminars to brief local firms on how to do business with Samsung. As a result local firms won supply contracts worth £2.4 million.
There is another example of a United States company that was looking to set up a plant in the UK. It was helped by the east midlands RSO. That led to suppliers in the
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As a result of a great deal of activity inward investment has undoubtedly been able to source from the United Kingdom components that otherwise would have been imported. That has benefited inward investment companies and the UK economy. That is vital because we have a company profile that I wish to see changed.
We have a few large, well-run companies, but thereafter we come down to a broad base of about 3.6 million small companies. We must create larger small businesses. We must create a middle ground so that we have a company profile that is more of a triangle rather than an upturned golf tee. That is what I, as the Minister with responsibility for small businesses, want to happen. I have a keen interest in the work that we must do to encourage small businesses to export.
In business development in general, not just in terms of promoting export success, the role of the business link is crucial and is becoming ever more so. Business links act as local one-stop shops where businesses can go to access all the support programmes offered by the Government. To quote the Trade and Industry Select Committee:
Export development counsellors not only add value in their own right, through the specialised advice that they provide to companies, but help companies to plug into the whole range of overseas trade services, whether from DTI market desks or commercial posts overseas.
One of the best ways to make a case is to quote firm examples. Last December, Aston Fittings, a small company in Birmingham, contacted its EDC at its local business link. At the time, it was exporting very little but wanted to expand. After discussions with the company's director, Mr. Brown, the EDC suggested a three-pronged attack, making best use of all the resources available: to commission a market information inquiry from the relevant post to look into Malaysia and Indonesia; attend a DTI trade mission to Iran; and attend any FCO commercial duty officer visits that were relevant.
Following on from the market information inquiry, Mr. Brown contacted the companies listed and now exports regularly to Malaysia and Indonesia. The amounts involved are not vast, as it is only a small company--only £75,000 between them--but business is building. Aston Fittings hopes that exports to these two locations will exceed £120,000 in the next 12 months.
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Having been on the DTI mission to Iran, Mr. Brown made several useful contacts, and Aston Fittings now has several regular export contracts with orders valued at more than £20,000 each and growing.
Two months ago, Mr. Brown was asked to meet a visiting officer from Kuwait. The officer gave him contacts in Qatar and Kuwait, as a direct result of which Mr. Brown has subsequently appointed distributors in both areas.
Since contacting its local business link, that one company, has had some £20,000-worth of help towards new CNC equipment, a £10,000 regional selective assistance grant and a £10,000 regional enterprise grant.
The business link was also able to direct the company to a local scheme run by Aston university--the teaching company scheme--whereby the company can employ a graduate for three years at approximately £10,000 per annum, the balance being paid for by the scheme. That is just one example of the way in which business links operate throughout the country.
"the UK's continued participation in the Single Market is of major importance to manufacturing investors, guaranteeing access to large markets. For companies making decisions about the location of a European Head Office, the country's ability to be at the centre of economic and political development of Europe is of critical importance. This may detract companies from choosing the UK".
This week's shenanigans do nothing for our image as good Europeans, but they will continue this weekend and every day of the short time that the present wretched Government remain in office.
"worrying skills gap which inward investors have been quick to experience."
As I go around the country employers tell me about bright young boys and girls whom they would like to take on but who do not have basic literacy and numeracy skills. The Labour party is determined that Britain will have an educated and skilled work force. It is no wonder that employers are concerned, when one third of teenagers cannot reach even the basic NVQ level 2 for literacy and numeracy, and Britain ranks with Turkey near the bottom of the European league for the numbers of 17 and 18-year-olds staying on in full-time higher education. When the President of the Board of Trade visits Singapore, he will have an opportunity to see how skills training is undertaken there and to bring back some valuable lessons.
"low skill and therefore low wage economy"
was totally unfounded.
"the establishment of Business Links is likely to be seen as one of the most important reforms of the 1990's. The creation of the network within a short space of time is a considerable achievement, and the potential for improving competitiveness is enormous".
Out of 87 partnerships nationwide, 48 now have their own export specialists. Export development counsellors enable business links to give tailored support to companies that have the motivation and ability to succeed in export markets. At present, 53 export development counsellors are in post and we have received bids for a further 20. We will grant those bids. Those counsellors will be recruited from the private sector, and they will have practical first-hand experience of exporting. EDCs see business people locally. They are familiar with local commerce and industry and speak business people's language.
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