Select Committee on Welsh Affairs Minutes of Evidence

Examination of witnesses (Questions 59 - 79)




  59. Good morning, Sir David. Welcome to the Committee. Would you start by introducing your colleagues and perhaps you could describe the BTI's two branches of Invest UK and Trade Partners International?
  (Sir David Wright) Thank you, Chairman. Can I introduce, on my left, Ian Jones, who is the Director for Regional Business in Trade Partners UK, and on my right, Alastair Morgan, who is the Director of Operations in Invest UK. As you and the Committee will recall, the Government decided in 1999 to set up a single body to bring together all the various components of trade promotion for the United Kingdom. So, on 4 May last year, I began work implementing the results of a report which was written on the instruction of the Prime Minister by the Cabinet Secretary, Sir Richard Wilson—which is, as you know, referred to as the Wilson review. We began the implementation of that report in May last year. At the time we were dealing solely with trade promotion. However, for those who examine the report they will find that it was inconclusive on the question of what should be done about investment promotion. Indeed, the report suggested that it thought it would be preferable if investment promotion and trade promotion were brought alongside each other in this new organisation, but it made no recommendation to that effect. However, in the course of the last 12 months Ministers have reflected further upon this matter and in May this year they announced that they would move what was then described as the Invest in Britain Bureau alongside Trade Partners UK under the umbrella of British Trade International. So what we have now, I believe—and so, I think, do the private sector—is a well-balanced structure, which is what I choose to call a holding company, British Trade International, which has two brands, or two products; one product is Trade Partners UK, which looks after export promotion and investment promotion, and the other is Invest UK, which has been re-branded from the Invest in Britain Bureau to have a sort of parity with Trade Partners UK. Invest UK deals with the promotion of inward investment. We are, and this is my concluding remark in answer to your first question, now pretty well at the end of the implementation of the recommendations of Sir Richard Wilson's review. The review gave us a two-year implementation timetable, we are now 19 months into that timetable and we have one matter on which we need to conclude arrangements, and we are, I believe, very close to that now. Since Ministers decided, in the course of that 19 months, that they wanted to bring Invest UK alongside Trade Partners UK, we have had an added agenda to our business. So we are now working hard at the process of integrating Invest UK into the entire organisation and, in particular, looking at areas where we can find commonality for the work that we do. That is particularly and obviously so, I suggest, in terms of common service issues like resources, staffing and training. However, we are also looking at ways in which the promotion of trade and investment has potential synergies. Of course, by bringing Invest UK alongside Trade Partners UK, their work, as part of British Trade International, is reviewed on a monthly basis by the board of British Trade International, on which, of course, sits a representative of the National Assembly of Wales.

  60. Thank you very much. Obviously from the title of our inquiry we are concerned with the promotion of Wales abroad. We have had evidence from a number of organisations, including the National Assembly, who suggest to us that Wales does not enjoy a high profile abroad, and certainly one lower than Scotland and Ireland, for example. We often, I think, get portrayed in a very stereo-typed and old-fashioned way, if we are portrayed at all. Do you think this is the case? Does your organisation think that is the case? If so, do you think it has a negative impact on trade and investment?
  (Sir David Wright) I do not think that the image is any more or less stereotypical than that of England or Scotland. My experience of working abroad for more than half of my professional life has shown me that we, as the United Kingdom, have a stereotypical problem, but it is a stereotype which can be turned to the advantage of the United Kingdom. In particular, in relation to Wales, I have been very familiar in both Japan and Korea with the considerable and, I believe, successful efforts made by the representatives of Wales to develop—if I might put it—this stereo-typical image to their advantage. There is no doubt at all that the strong body of sentiment and affection for Wales which exists among those, for instance, Japanese company employees who have worked there, has been fostered whilst they have been working in Wales, and continues—and I believe successfully so—to be fostered on their return to Japan. There is a club which exists in Japan which brings these people together. They use this as an occasion for engaging in a Japanese version of choral singing. This is all part, I believe, of the fabric which exists in various parts of the United Kingdom, and can, if it is developed whilst the company representatives are here in the United Kingdom, be turned to the advantage of, in this particular case, Wales on their return to their homeland.

  61. This is very interesting to hear, Sir David. Something we had not considered is people who had been working in Wales and being suitably impressed by our culture. That is interesting. Can you tell us what your role is in promoting and improving the image of Wales? Obviously your main concern is trade and investment, and on a United Kingdom basis, but do you see yourself as having a role in promoting Wales specifically?
  (Sir David Wright) I see myself as having a role in both the work I do here in the United Kingdom and the work which I do on my frequent visits overseas as promoting all parts of the United Kingdom. I am always keen when I am overseas to be associated with particular events which might relate to those promotional interests. I was, for instance, in India last week when, I hope, I took forward a little a project which is now being developed by Professor David Owens of the Diabetics Special Unit in Cardiff University to promote a process of diagnosing diabetes in India in particular (where it is a specially critical problem) using the base of activity which exists in South Wales and using the technology of a company called Orion, which is a small software house. This would be developed as a relationship between the university and between two hospitals in Chennai and Mumbai (which are the new names I have had to learn for Madras and Bombay) which would not only be useful for the medical needs of the area but would also lead to increased business for this company called Orion. That, I think, is the sort of example—though it is a fairly micro one—of the sort of activity which I can become involved in in promoting the interests of any part of the United Kingdom overseas.

Mr Livsey

  62. Sir David, to what extent does British Trade International direct its overseas clients towards particular parts of the United Kingdom?
  (Sir David Wright) The approach which we adopt, Mr Livsey, to the client base which we have in promoting investment in Britain essentially reflects what are the business drivers of those particular clients. Invest UK is very much a client driven body; it is responsive to the needs and the questions which are put to us by those clients. On the basis of what they say are their needs in business terms we, in Invest UK, will suggest to them what parts of the United Kingdom may seem most closely to meet the needs of those companies. The client then, effectively, makes his choice. At the same time, of course, we normally find that because those clients have also had links, very often, with WDA representatives or, in other cases, Locate in Scotland representatives, in their countries, they will have built up a relationship with them and will want to visit particular parts of the United Kingdom. What we have to do is try to pursue as dispassionate an approach as we can to the express needs of the client as far as their business is concerned, then put them in the way of the parts of the United Kingdom where we think their needs can best be met and where that particular part of the United Kingdom can make an offering to those companies.

  63. From what you have said, you have got to have more than one suggestion to put to them; perhaps two or three different regions where activities are taking place that they are interested in?
  (Sir David Wright) It is not at all unusual to find that such a client will be looking at three or four parts of the United Kingdom. Our interest is to ensure that in examining the needs of the company there is an appropriate degree of communication of their respective needs. However, in the end, it is down to the client to make the decision as to where he wants to go, and, indeed, as to the area in question—whether a devolved administration or an RDA in England—to make an offering which is the best.

  64. As you know, these things are pretty cut-throat and very often very competitive. You do not get involved in that kind of hurly-burly at all, do you? You just leave it to the agencies involved?
  (Sir David Wright) I think it would be wrong to suggest that we are not unaware of that hurly-burly—as you described it. However, since Invest UK has to stand as the United Kingdom's single investment promotion operation, we have to stand in a position where we can offer the dispassionate advice which is available to those companies. Indeed, we maintain a process of furnishing each development agency (the WDA in this case) with a list of the companies that are coming into the country every quarter, with their particular interests, with their particular priorities, and we try to maintain a dialogue with the development agencies about those individual cases.

  65. Could you tell me, finally, what impact has the creation of the RDAs in England had on your work, in particular as it relates to Wales? Do you find it much more difficult? Are you lobbied a lot from the English RDAs? What is going on?
  (Sir David Wright) It has certainly added a new dimension to our work. We now have nine clear focuses in England for both trade development and promotion. We have recently appointed nine international trade directors to those regions. We are, therefore, establishing an enhanced relationship with each region for both trade and investment promotion. That was a recommendation of the Wilson review. It is an added feature of what we are now seeking to achieve. I do not think the lobbying—as you describe it—is any less or any greater than it was before. There have been, as you know, regional development organisations in England before the establishment of the RDAs. They lobbied actively before the RDAs were set up.

Ms Morgan

  66. What steps do you take to ensure that your staff overseas understand what has happened in Wales with devolution, understand the implications of devolution and the benefits of investing in Wales, and information about Welsh companies?
  (Sir David Wright) If I may say so, I think that is an absolutely crucial question, and it is something which preoccupies me a good deal. As Mr Jones knows, during the process of setting up British Trade International we have been devoting a good deal of time to seeking to get a better understanding on the part of our posts overseas of what is going on in this rapidly changing and rapidly evolving map in the United Kingdom. We have a pretty well structured programme of exchanges for staff overseas with Wales. I can give you a list including the new ambassador in Korea who was in Wales in July and those representatives of our offices in the United States who were in Wales in November, and in March this year we brought home all the science and technology promotion teams from our United Kingdom and Asia posts to meet all the regional representatives. So there is a process whereby we bring staff from overseas back, and when they are back—particularly when they are back from countries where investment promotion is a major part of their agenda—it would be unthinkable for them not to go to Wales. I, of course, have to try to spread myself around the entire United Kingdom, all nine RDAs and all three devolved administrations, as well as being overseas. So I try to get to Wales as frequently as I can, and I was in Wales about four months ago for a full day session with the WDA, Brian Willett, and, also, with Wales Trade International to bring myself up to speed on their priorities. Mr Jones and his staff are now developing a frequent trade promotion and trade development dialogue with Wales Trade International. As I said earlier, they of course sit on our board, so they have an opportunity to express their views to us then, and I know that Alastair Morgan took a group of his people from Invest UK—16 people—into Wales for a session in Cardiff in May this year.

  67. Would you say this was a structured programme?
  (Sir David Wright) Yes, I would.

  68. So it is built in that your people will go to Wales and find out about Wales.
  (Sir David Wright) I would say that I would like to believe that we are not complacent about it, particularly since the establishment of British Trade International with this clear responsibility of bringing together the foreign promotion of British trade and investment with what happens in the United Kingdom, and making a single whole of this; I would like to believe that we are trying to make it more structured than it has been in the past. Of course, the change in the Welsh constitutional arrangements makes it possible for it to be more structured. I think, also, that the National Assembly missions overseas—of which I think there have been eight in the last year—provide another opportunity for our posts overseas to become aware of some of the issues which they need to know in order to represent the interests of Wales adequately.

Mr Llwyd

  69. Sir David, when you say that you would hope that the system would be a little more structured than it has been in the past, do we take it from that that there is room for some criticism about the current way in which the WDA is represented in all this?
  (Sir David Wright) No. I think my wish to make it better than in the past is a reflection of my wish that British Trade International should do a better job overall than government services have done in the past in the promotion of trade and investment. We have had a good working relationship with the WDA. I have had a personal relationship with the WDA since, I think, 1983 when it was first established and I was then dealing with the promotion of inward investment in Japan. We have worked at it; we have daily if not hourly contact on the Invest UK side with those who work there. I think we have got a good working relationship and I think that the opportunities which the WDA have to express their views to us and Wales Trade International come up through the meetings of the Committee on Overseas Promotion, which meets three times a year and which concerns itself with investment promotion, and the meetings of the board of BTI every month.

  70. I am afraid I do not think the WDA agree with you that the partnership seems to be working as well as that. In their memorandum the Government says that Invest UK works closely with the WDA and others but that, unfortunately, the development agency says it has been poorly supported by Invest UK, and that a number of high profile investment missions from Japan and Korea have left Wales off their itineraries. That is particularly disturbing when you referred earlier to the way in which the Welsh, apparently, successfully used the stereotyped image in Korea and Japan. They further suggest that "Investment opportunities in Wales are not properly understood by key Foreign Office or DTI staff." I am afraid the rather happy and good working relationship you refer to is not actually a view shared by the WDA.
  (Sir David Wright) I would certainly be very keen to deal with any specific issues and complaints which the WDA have about the work of our posts overseas in relations to investment promotion, if either they or the Committee could give them to us. I have to say I look back, for instance, at the visit which Rhodri Morgan made to Japan in September of this year, which was a hugely successful visit, on trade investment and, I might say, image promotion. It was an event which took place with the support and active participation of the embassy and it was a good example there of the co-operation between the WDA office in Tokyo and the embassy. We have had a number of Invest UK missions from Japan which have visited Wales. There was a mobile telecoms missions this year, an auto-components mission, flat panel display, and there have been several manufacturing missions which have been to Wales from foreign countries at the instigation of Invest UK and with co-operation between them and the WDA.

  71. Nevertheless, what they say—and I repeat it (and you ask for specific examples)—is that there have been a number of high profile investment missions from Japan and Korea where Wales was left off the itinerary altogether.
  (Sir David Wright) As I say, I would be pleased to take notice of which those missions were, and if necessary examine with the officials in Invest UK why Wales was left off. All I can say is there are a large number of cases where we go out of our way—as we do with all the regions of the United Kingdom—to arrange for investment missions to visit parts of the United Kingdom where there is a particular appropriate need. Flat panel display is a very good example. Auto components is another good example. Could I, Chairman, enquire whether my colleague Mr Morgan wants to add to that?
  (Mr Morgan) It is correct that not every incoming mission has gone to Wales, though a very large number have. I know of two missions (and there may be others) where the Welsh have expressed concern to us and we have looked at that. One was a recent mission of component suppliers to Mazda, which I believe was the first automotive mission not to go to Wales. That mission was led by the procurement director from Mazda and they were particularly interested in visiting automotive assembly operations. We originally planned a mission that would have taken them over to the south west and west but we were not able to get access to Honda, so the mission went to the north east instead. Another mission I am aware of, and I do not have the full details—

  72. Before you proceed with the second example, why on earth was it not considered right for the mission to go to Wales? We are not exactly unable to put components together in Wales, you know.
  (Mr Morgan) Of course that is correct, but the time for the mission was limited and they were not able to visit all regions of the United Kingdom. We took them to the north east and the time did not allow them to go to Wales on that basis. Had we been able to take them to the south west we would have tried to take them to South Wales as well.
  (Sir David Wright) Could I answer on that, Mr Llwyd? The fact is we are not just dealing with Japan in this; we are bringing over a successive and successful number of missions to the United Kingdom from prospective investors—Korea, Malaysia, Singapore and China being cases in point. I can give you a list of those missions which have all visited Wales.

  73. With respect, that is not the question. I am asking you about why those missions from Japan and Korea were left off?
  (Sir David Wright) I think there is always, as Alastair Morgan has explained, a problem over fitting into the limited time available for missions all the possible places where they might visit.

  74. Mr Morgan was going to refer to a second example.
  (Mr Morgan) A second mission, where I have not got the details so freshly in my mind, was an R&D mission where we asked all 12 regions of the United Kingdom to put together their proposals for what they would show the missioners, which we then sent out to Post and which were discussed with the missioners. The missioners elected where they would visit, and elected not to visit Wales. I know that caused some discomfort in the WDA at the time.


  75. We are talking with the WDA, of course, and it may be that we will get some examples from them and pass them on to you for your specific answer.
  (Sir David Wright) These are, as was implied by your colleague, Mr Livsey, difficult matters and very sensitive. All I can say is that our wish is to be as aware of the sensitivities and as aware of the interests of Wales and other individual parts of the United Kingdom as we can when planning these missions.

Mr Llwyd

  76. Nevertheless, it has to be said that the relationship between Wales and Japan is exceptionally good. For example, at least two Japanese universities have fully booked courses for the teaching of the Welsh language. I would have thought that Wales would be a priority area to put before any potential Japanese investor. I understand the point you are making. Much of the evidence we have received addresses the question of whether or not Wales—and this is really a tangential point—attracts its kind of fair share of the total investment in the United Kingdom. Do you think that this is a helpful way of looking at things, and in your view on what basis should a country or region's fair share, as it were, of investment be calculated? Should it be on population, economic need or some other indicator?
  (Sir David Wright) I think there are a variety of issues which we have to take into account. I have to say that sitting where I sit my principal priority is the national share of the inward investment cake, in a global sense. That is where I start from, because that is the target which we have to seek to achieve, particularly in relation to different parts of the globe—the United States, Japan and Western Europe—to ensure that the United Kingdom remains the prime and chosen target for investment from those countries. Therefore, the question of how that relates to the particular interests of particular regions takes us into this difficult area of what I described, in response to an earlier question, as "drivers", that is what are the particular needs and the particular priorities of the companies seeking to invest in the United Kingdom. What are the sort of business and working environments in which they seek to operate? We are, for instance, discovering that companies proposing to invest in the ICT sector are now extremely small companies and are looking to be along what one might describe as the M4 corridor, to some extent, in England. That said, I am quite clear that the work which has been done in order to promote Wales in this area has kept Wales very much at the existing level of investment successes. There were 47, I think, new investments in Wales recorded last year. That compares with 48 the year before and just over 50 the year before that. It seems to be maintaining its position as a region in the United Kingdom, given its particular needs.

  77. I am just wondering: do you have a kind of informal basis of, as it were, working out whether the fair share has been accorded? If not, the answer is no.
  (Sir David Wright) No, we do not.

Mr Caton

  78. The WDA suggests that the Invest UK bureau should be moved out of London to remedy what they believe is a London bias in its work. Would you agree with that?
  (Sir David Wright) What we have to try to ensure is that the Invest UK office is located in the place where it is most able to meet and service the needs of potential clients. I do again mean clients for the United Kingdom. I do not think there can be an guarantee that if we chose a location outside London, even if Ministers allowed us to do so (and, in a sense, in answering your question, Mr Caton, I am putting on one side the fact that, of course, we have to be close to Ministers), I am not sure that would be necessarily any better for Wales or the WDA. I believe Rhodri Morgan said to your Committee, Chairman, at some stage earlier this year, "I do not think it would be in Wales' interest if Invest UK were relocated to Liverpool or to Newcastle". So I think that the fact that so many of our clients are coming here, as I said earlier, to look at prospective sites in terms of what are their business drivers and they then want to assess their position with officials and ministers of the central Government, they like to do that in London. There is quite a common structured tour which starts in London, goes out to the regions, comes back to London and then people leave out of Heathrow. I think this meets the needs of the clients. I do not think moving the office outside London would necessarily benefit any other part of the United Kingdom in any greater sense.

Mr Edwards

  79. Can you give us some examples of the Welsh products which you help to promote overseas?
  (Sir David Wright) Yes, I certainly can. We have had, I believe, a good deal of success with a number of products from Wales. I mentioned a moment ago the work that I was doing last week with the Cardiff-based Orion technology group. I have looked into this before this appearance before the Committee. I am particularly impressed by a really good story about Linde heavy trucks in Merthyr Tydfil. This is part of the Linde group that produces heavy lifting equipment and which has secured some important contracts for this lifting equipment in the Brazilian market and also in South Africa. That has been a direct result of the work which they have done as part of the British Trade International's ports sector group. We have a number of sectorial groups, in which we try to promote specific industrial expertise. Linde have got business out of their activity there in Brazil and South Africa. A company called Camseat Ltd produces camera equipment for use in large stadiums. That has been done as a result of accessing the services of Trade Partners UK. They have also made good use of a product which we think works called New Products From Britain, which is a way we promote information about products in markets. That was all done through British Trade International, through Trade Partners UK. Another company called Kay Premium Marking Film Limited, from Newport, manufactures self-adhesive film used in the automotive and aircraft industries. They have been involved with our services and have exploited useful markets in the Middle East and in Latin America.

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