Examination of Witnesses (Questions 126
- 139)
TUESDAY 6 JUNE 2000
SIR DAVID
WRIGHT, MRS
BARBARA PHILLIPS,
MR DAVID
HALL AND
MR DAVID
WARREN
Chairman
126. Good morning, Sir David. It is nice to
see you again. You seem to have attracted a fair amount of interest
here. We hope that will equally be held by the end of our session.
This is one of these now increasingly frequent joint meetings
of two select committees, because we felt it was more sensible
to have a joint meeting than go over just about the same ground
twice, so there will be different emphases on different questions.
We are very conscious of the joint responsibilities that the two
Departments have, so we are very grateful to you for coming along
this morning. This organisation grew out of the Wilson Report.
The idea was to set up an organisation—I suppose it is engraved
on your heart now—with "internal coherence and external
clarity of identity and purpose, underpinned by strong branding".
This sounds almost like the mission statement for Star Trek.
Have you been able to boldly go? How successful have you been,
in the short term, in terms of meeting these official objectives?
(Sir David Wright) Thank you, Chairman,
and thank you for your welcome. We have been engaged in setting
up British Trade International for 13 months. As you will recall,
the Wilson Review, which we have been instructed to implement,
sets us a number of targets in one of its annexes, in terms of
an implementation programme. I think it is fair to say that with
the launch of our new brand last week—and that is why, if
I may say so, this hearing is a particularly timely event—we
had pretty well completed, or have under way, all the agenda items
which were given us by the Wilson Review. Indeed, you mentioned
yourself the strong branding. That was the purpose of the branding
exercise last week, which led to our introducing Trade Partners
UK as a brand for the services of British Trade International.
If one examines the programme which we were instructed to implement,
I think it is fair to say that we have either achieved everything,
or we have one or two issues still in progress. Particular ones
we have in progress are issues like establishing our objectives,
working out the targets for our operation, identifying the outcomes
and the outputs, which we will be expected to measure ourselves
against. The last 13 months has very much been a period of process
in terms of getting the organisation up and running. I think I
owe my team a great deal of thanks and appreciation for this support,
which they have given me, in what has been a pretty demanding
and challenging operation. But in response to your question, I
think we have done what the Wilson Review told us to do. We still
have a number of on-going projects. Achieving that internal coherence
that you mentioned at the beginning—and which, of course,
is very difficult when you are trying to bring together staff
from two different Government Departments, issues like that, and
issues like handling our information technology activities—will
remain a focus for activity for the coming year.
127. Before we go any further, can you explain
to me the rebranding process. Do I take it that British Trade
International remains and that Trade Partners UK is just an offshoot
of it? There is, in my mind, a wee bit of confusion that after
12 months you reinvent yourself as Trade Partners UK. So why?
And if not why, how is it different from BTI?
(Sir David Wright) That is an extremely good question.
When we came into existence on 4 May 1999, we came into existence
with a name. When the Government announced the results of the
Wilson Review, it felt that it could not announce the establishment
of a new organisation without giving it some title. Of course,
as you yourself have identified in the Wilson Review, there was
a clear instruction to develop a strong and coherent brand. If
I might just explain why that is very important to us, and to
the findings of the Wilson Review: One of the main problems, which
Government trade services faced over the last 40 years or more,
is a lack of coherence and a lack of real identity. There have
been too few companies aware of the Government's services on offer,
hence the requirement to develop a brand which will cover all
the services. So that whenever we offer a service of a particular
nature to a mission or a trade fair or a company seeking a market
report, that brand should be on it and that brand should, in a
sense, advertise itself and advertise the whole operation. What
we did after we came into existence was to do customer research
about the name British Trade International against the objective
of developing a strong brand. The customer research revealed that
British Trade International, although it has resonances as a Government
body, did not establish a sense of appeal on the part of our customers.
They wanted something rather snappier. They wanted something that
embodied the sort of concepts which they attached importance to.
So the customer research was done and a number of alternatives
were considered. Trade Partners UK was selected for three reasons.
First, trade. Secondly, partnership, which is very important,
because a lot of what we do is designed to operate with partners.
We do not deliver a lot of our services ourselves. They are delivered
for us by Chambers of Commerce or Business Links or the like,
so we wanted to embody a sense of partnership. Then the UK, to
make it clear that it is a British organisation. This is because
the resonance of attachment to Britain—and, indeed, attachment
to HMG, which appears in the Internet URL we use, Trade Partners.gov.uk—all
that was thought by our customers to be attractive. Hence we have
launched a services brand. British Trade International will remain
in existence as a departmental title, which will appear in official
documents; appear in the information we distribute in Whitehall.
It is, as one of our Ministers has described it, a sort of holding
company now. But the brand for our services will be Trade Partners
UK. That will be the name which will be emphasising and give its
distinctive qualities. We hope very much it will deal with this
problem of identity and recognition on the part of British business.
Sir John Stanley
128. Sir David, the reference to the word "coherence"
in the Wilson Report is in relation to internal coherence. Perhaps
I can focus on that. In your forward to your report, you say and
I quote: "We have to work within a complex set of relationships
between two sets of Ministers and the Board which oversees our
activities." Could you explain to us why you see your organisational
structure as being complex; and what do you see as the respective
roles of your two Ministers and the two Ministers in relation
to your Board?
(Sir David Wright) May I deal with the Ministers and
then the Board, and then answer the question of what that means
for complexity. I am responsible to two Secretaries of State:
for Foreign and Commonwealth Affairs and Trade and Industry. I
am, in a sense, a virtual employer since the staff, for whom I
am responsible managerially, come from those two Departments of
State. Those two Departments of State and those two Secretaries
of State are responsible for supplying me with the resources which
I employ and am accountable for. They bid for those resources
in the spending round. At the same time, there are two junior
Ministers, Ministers of State in the two Departments, who have
a sort of vocational responsibility for trade promotion: Richard
Caborn and John Battle in the DTI and FCO. They chair the Board
on a rotating basis. The Board meets each month, but it is chaired
on a rotating basis by Richard Caborn and John Battle. The Board
itself is composed of a variety of groups of people meant to represent
the broad spectrum of our responsibilities. It has a preponderance
of people from the private sector, private sector business people.
It has representatives of the three devolved administrations.
It has representatives of the two parent Departments at official
level, senior officials, and also a representative of ECGD. I
meet with that Board on a monthly basis and I am responsible for
reporting my actions to that Board. I have to say that it is quite
a challenging and demanding experience. I do not think that there
is any Department in Whitehall which has a private sector dominated
board to report to on a monthly basis. In fact, it has been quite
useful over the last year in keeping us very well focused, not
just on implementing the Wilson Review but on keeping our focus
upon what business wants. After all, it is the business customer
that we are seeking to satisfy. Now that is quite a complex set
of offices and people to keep in play. I have to make sure that
a broad strategy is acceptable to the two Secretaries of State.
I have to work on a very regular basis with the two Ministers
of State and ensure that they are well up to speed with the way
in which we are moving forward; and, equally, that they are alert
and able to handle any issues which emerge from the Board meetings.
As I said, with the Board having a heavy dominance of people from
the private sector, they are pretty demanding in terms of what
they expect of us. Indeed, I would say that they are possibly
rather impatient from time to time with the problems that we have
to handle as a bureaucracy, in meeting and delivering services
for business customers. It is that relationship which I have described
as complex.
129. You have given a very eloquent description
of a classic, divided responsibilities situation, in which responsibility
falls between Ministers and Board members, and falls between one
Department and another. How do you answer the possible source
of criticism that you are neither fish nor fowl? You are clearly
neither within Government with clear ministerial accountability
and responsibility. Equally, you are clearly neither out of Government
and you are clearly neither part of the Foreign Office, or wholly,
or the DTI. You seem to fall between two stools in two different
directions: the ministerial stool and the external board stool
and between the two Departments.
(Sir David Wright) I do not dissent from any of that,
Sir John. The first answer, of course, is that this is what the
Wilson Review recommended. This is the formulation, which they
devised in the review, to provide an answer to their conundrum.
The conundrum was: how can we have a single organisation pulling
together all trade promotion activities in the United Kingdom?
The Wilson Review considered a number of options. The option which
came up is the one which I have just described, and it is indeed
a complex and quite difficult one to manage, but it is my task
to try to make it work. Although it is difficult, I think it is
fair to say that over the last 13 months we have succeeded in
bonding the Board together as a group. We have succeeded in engaging
them in the long-term objective, which we are seeking to achieve,
which is more success for business overseas and a better set of
services in support of that. That has been a welcome outcome of
the first 13 months. Then, at the same time, I have to maintain
my relationships with the two Departments. I have had an awful
lot of help and assistance in that from the Ministers, whom I
see on a regular basis, and also from the Permanent Secretaries
of the two Departments. In addition, having representatives of
the two Departments as members of the Board, ensures that they
are both aware of the demands of the Board, the possibility of
tensions, and are able to express themselves freely in that regard.
It is not easy. It is a very unusual formulation but after 13
months I think we are on the right side of success in that regard
rather than facing problems.
Mr Berry
130. Sir David, arguably the complexity of the
work of BTI has increased with Richard Caborn's announcement,
(I think a fortnight ago), that the Invest in Britain Bureau would,
in his words, "move along side Trade Partners UK . . . under
the BTI umbrella". Does that mean the two organisations are
to merge? Does it mean an amalgamation or, as I say, simply that
BTI now has more complex responsibilities? What is the reason
for that statement?
(Sir David Wright) The use of the word "umbrella"
takes me back to the Chairman's original question about the position
of the name British Trade International and my reference to a
holding company. In a sense now, we will be developing a holding
company with two main pillars. One pillar will be Trade Partners
UK. A further pillar will be IBB. If one goes back to the Wilson
Review, one finds in the review a reference to the separation
of inward investment promotion from trade promotion, as I think
the words are: "not perhaps best exploiting the mutual synergy
between the two activities". As time has moved on since that
report was written, the strength of that view has grown. It has
particularly grown in respect of the way in which we have found
ourselves operating. If I can give you three examples. Firstly,
the staff whom I manage and we manage in embassies overseas, are
not all 100 per cent working on trade promotion. Many of them
handle other issues. Perhaps the one issue, which is most common
as an add-on to trade promotion, is inward investment promotion;
so you have in one person the two functions already operating
overseas in our embassies and high commissions. Secondly, as a
result of the decision to locate our regional delivery system
through the Regional Development Agencies, we have found ourselves
positioning our people, our trade promotion and trade development
people, with the same RDA officials and RDA personnel who are
handling inward investment promotion. It is very interesting,
when one has debates with RDAs about this whole series of issues,
how trade promotion, investment promotion, R&D promotion,
none of it is split up. It is all very much part of the economic
strategy for the region. So there are no clear boundaries there.
Those are some of the reasons why the decision was taken to bring
the two organisations together under the single holding company.
That is, if I might say so, my next task. I have spent the last
13 months trying to work out how British Trade International would
formulate itself, and achieving the position we have achieved,
which I explained to the Chairman at the beginning. Now what I
have to try and do is to see how we can best work together with
the investment promotion arm of Government, in a way to ensure
the synergy to which the Wilson Review referred; and also to ensure
that the success that we have had in inward investment promotion
is not lost. If I can give you a little bit more of my preliminary
thinking—I emphasise "preliminary" because this
decision was only announced two weeks ago and it is now one of
the challenges I face -clearly there are issues relating to what
I call "back office activities" like resource management,
personnel management, communications, where we could perhaps make
sure that the two organisations are using the same groups of people,
the same staff, simply to improve efficiency. There are examples
increasingly of major support activity by inwardly invested companies.
I was very struck some months ago, when I went to talk to Foster
Wheeler in Reading, who are essentially a United States oil and
gas exploiting company but they are based in the United Kingdom.
I discovered that a huge amount of our activity on the oil and
gas promotion side is done with a company like them. If you take
Motorola. Motorola's exports account for something like 90 per
cent of their total production. There is a clear link now between
the inwardly invested companies and exporting. Finally, one is
finding that a number of new small companies are looking at ways
of both investing in Britain, not just to manufacture here, but
also to do R&D here and to export. These are the sorts of
synergies to which the Cabinet Secretary was referring.
131. Is there any chance that this might reduce
the amount of duplication overseas in promoting investment in
the United Kingdom? I seem to recall, when we visited you in Tokyo,
I met about every RDA in the United Kingdom and hangers on and
so forth. Without being too disparaging, it did seem to me that
there are a lot of people competing for inward investment in the
United Kingdom. Is this one of the duplication of effort issues
which you might be addressing? Do you see it as a problem?
(Sir David Wright) I do not see it as a problem at
the moment, no. In fact, going back in my own career in these
matters, I would say that it was a problem in the early 1980s
when this operation was getting off the ground and when there
was a great deal of competition for new investment. I emphasise
that I am coming new to this side of things, so I am not an expert
witness on issues of inward investment promotion. I can only comment
on them by my previous experience. I think we have got over that
stage of competition. I think that inward investment is now less
a function of the competing blandishments of regions in the United
Kingdom than of the particular skills and facets of different
regions, for companies to build on perhaps their existing presence
in one or other region. But in seeking to work this one through
into a successful organisation, I am certainly going to be wanting
to ensure that we have a good trade and inward investment operation
in our regions; that it is well connected with central Government;
and that there is no waste.
132. So you do not see any difficulty with perhaps
ten RDAs having offices in the same city?
(Sir David Wright) Well, if the RDAs decide that this
is the way they wish to use their budgets, then there is nothing
which I, myself, can actually control. What I have to ensure is
that if they decide to do that we have a cooperative structure
which ensures they do not get across each other and give a mistaken
impression of the UK as a location for trade and investment.
Mr Rowlands
133. In the last couple of answers I do think
you have been describing not the British situation but the English
situation with the Regional Development Agencies and English Development
Agencies. Is now the Invest in Britain Bureau based in the Invest
in England Bureau?
(Sir David Wright) Mr Rowlands, I think I owe you
an apology in the way I have used terms. When speaking of RDAs
I was talking in a sense of all the regional operations which
exist in the United Kingdom; and intellectually I was including
in my words the three—
134. I think your language has portrayed the
reality of the situation, in fact. Is it not a fact that right
now both the WDA and the SDA are totally separate bodies; they
are not going to be tucked into this arrangement in any shape
or form?
(Sir David Wright) As I said to Sir John Stanley earlier
on, we have representatives of the three devolved administrations
on the Board. I did not say, in response to Mr Berry, that one
of the consequences of bringing IBB alongside will also be a small
expansion in the Board membership to include some representatives
of inwardly invested companies. We have the three devolved administrations
represented on the Board who ensure that we remain UK-focused.
We have Mrs Phillips who deals with the regional side of my operation,
who not only deals with the English RDAs but maintains close contact
with the three devolved administrations. I have close contacts
with them myself. I had a meeting only on Friday with the head
of Scottish Trade International to talk about the jointness of
our operation. Tomorrow I will again be in Scotland seeing people
from Scottish Enterprise to talk more broadly. I maintain the
same relationships with Northern Ireland and with Wales. I was
with the head of the WDA again last week on an occasion when these
issues came up. There is certainly no sense at all that what we
are talking about is an English organisation. We are talking about
a UK organisation, hence Trade Partners UK; and it is very important
for me (and perhaps I have committed this error now) to ensure
that when we present ourselves we do so in a way which does not
give that mistaken impression.
135. The budgetary facts of life are that the
Invest in Britain Bureau is on a DTI Vote and tied into your Votes;
where as the WDA and SDA budgets are now totally separate and
totally accountable only to the Scottish Parliament and the Welsh
Assembly. How, in budgetary terms, does this still become a British
or UK operation?
(Sir David Wright) What you say is entirely correct
about the budgets of the three devolved administrations, and I
have no control over those. However, the principal delivery mechanism
for our services and our activities overseas, particularly in
trade terms and, to a lesser extent, in investment promotion terms,
remains the UK's diplomatic service posts. Those posts represent
the United Kingdom as a whole. They are accessible and can be
used and their services can be employed by companies from Scotland,
Wales and Northern Ireland, just as they can be employed by companies
from anywhere in England. It is also true, as Mr Berry was saying
a moment ago, that the three devolved administrations have their
own offices. It is not just English RDAs that have their own offices.
The sort of "concertation" and cooperation which I mentioned
a moment ago in posts overseas with those offices is a fundamental
function of the Ambassador and his staff dealing with investment
and with trade promotion. Indeed, a very good example of where
it works well is the Scottish case. There is a now a Scottish
Trade International representative working inside the embassy
in Paris. They have their Scottish focus in the French market,
but he is working as an integrated part of the operation.
136. I have seen for myself that in missions
there is an integrated approach. I slightly doubt whether now
the Invest in Britain Bureau is really a British bureau any longer.
Will there be funding from the Invest in Britain Bureau going
to Wales or Scotland on top of our Welsh agencies?
(Sir David Wright) Chairman, I emphasise what I said
a moment ago, that this is not an area where I am currently qualified
to speak, although I would, after I have four or five months of
this next task, be happy to reappear and give perhaps a more informed
reply to the Committee. One of the functions of the Invest in
Britain Bureau is to manage a committee on overseas promotion
which is meant to be a UK-wide committee, which is meant to use
and employ the best advantages of the UK as a whole in that investment
attraction business. I think it is fair to say that as this business
gets more competitive, which it has done over the last four or
five years, we are going to have to make sure that that UK-wide
operation works effectively.
Ms Abbott
137. I have been listening very carefully to
what you have had to say, and I have already tried to read your
booklet. I do get the sense that I have heard an awful lot about
nameplate changing, but I have not got any clarity as to how this
changing of nameplates has affected outputs. I have two questions
to ask you on outputs but before that—you have talked about
re-branding, market research and customer surveys and, I have
to say, whenever I hear the words "re-branding" and
"customer research" I see shadowy armies of consultants
and marketing specialists. I do not expect you to have the figures
at hand, but I wondered if you could give the Committee a note
on how much it has actually cost to set up BTI, to re-brand Trade
Partners UK, all the marketing, research and consultancy costs
because those would be of interest. The two specific questions
I wanted to ask you on outputs are these: despite all the nameplate
shuffling, and no doubt the thousands and thousands of pounds
spent on consultancy and research, I am not quite sure how much
leverage you have when it comes to increasing outputs. On the
question of our posts overseas which, as you said earlier, are
the main instrument of delivery, in practice what can you do either
to raise standards or get rid of inequalities, because different
posts do this export promotion work very differently? In practice
do you have any management leverage over posts to try to raise
standards or to spread best practice?
(Sir David Wright) Thank you for your questions. There
are a lot there and I will try to deal with them all.[1]
138. Answer the actual question. What can you
do in practice to raise standards and spread best practice in
overseas posts concerned with export promotion?
(Sir David Wright) One of the essential features of
the Wilson Review was to ensure that the activities of posts overseas
in commercial promotion are answerable to this single trade promotion
body, now entitled Trade Partners UK. In the past that was not
so. In the past what we had was a wholly fragmented organisation
and fragmented arrangements. The Export Promotion Directorate
of the DTI, as was, held the budget for promotion and, in a sense,
set the strategy for trade promotion. It had no sanction at all
over posts overseas. The purpose of the Wilson Review proposals
is to ensure that ambassadors and high commissioners overseas,
heads of posts overseas, are responsible for the performance of
their promotional responsibilities to my organisation, not to
the Foreign Office as such.
139. How does that work in practice?
(Sir David Wright) That will work in practice in two
main ways. First of all, we are putting in what you have sought,
which is a set of outputs and quality measurements which have
not existed in the past. Secondly, those outputs and quality measurements
will be what the staff in London, the staff in headquarters, will
judge those posts against.
1 See page 12. Back
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