Select Committee on Welsh Affairs Minutes of Evidence

Examination of witnesses (Questions 80 - 95)



  80. Do you think there may be many firms out there in Wales who are not aware of the services you can provide? Do you have any suggestions as to how we could inform them of your existence?
  (Sir David Wright) Could I say, Mr Edwards, out there in the United Kingdom as a whole? I think one of the objectives of the Wilson review was to try to deal with what I call the identity and recognition factor in all this; the need to ensure that a larger number of British companies are aware—to coin a phrase—that we are from the Government and we are here to help them; that there is a set of services accessible by British companies—some are charged for but a large number are not—which provide them with the opportunity either to increase their market share in overseas markets or start exporting for the first time. Indeed, one of our objectives in Trade Partners UK is to enhance that work. That is why we have tried to achieve a distinctive branding and a distinctive image for the new organisation. We are doing that—and this is where we come back to the interests of our structured dialogue with Wales Trade International—with our colleagues in the National Assembly for Wales, particularly in relation to a new package of support for new exporters, what we call a new "Passport to Export" package, which we have just launched on a pilot basis. We are talking to our colleagues in Wales about making that available to Welsh companies too.

Mr Caton

  81. In contrast to the WDA's criticism of Invest UK, witnesses from the National Assembly told us they got excellent support from Trade Partners UK. What is Trade Partners UK doing differently from Invest UK?
  (Sir David Wright) Nothing that I am aware of. I do not suspect the Committee would welcome that as the end of my answer. I think, if I might say so, some of the conversations that I have had with Mr Livsey and Mr Llwyd today have reflected the, perhaps, fairly high tension level of relations which can emerge over some inward investment projects. However, as I say, we are very keen to ensure that those do not arise, and we are very keen to give every opportunity for inward investors to see the opportunities in Wales. I think when we set up Trade Partners UK in May last year we did so virtually contemporaneously with the establishment of the three devolved administrations. One of the main functions which was devolved to me in setting up the new organisation was to enhance its regional delivery arm, which in the past had either been disparate or non-existent. I was very conscious too that when I was engaging in this activity in relation to the English regions I needed to make absolutely certain that we were like that, in lock-step with the three devolved administrations. So I made it a particular priority early in my time when I was setting up Trade Partners UK to establish a close working relationship with Wales Trade International. I think, also, the fact that there is a representative of the National Assembly for Wales on the board of British Trade International and scrutinising the work of the organisation every month had, if I might put it this way, a considerable comforting effect upon what was being done by this UK institution. I think the first board meeting which was attended by Invest UK was in July this year.
  (Mr Morgan) Either the end of June or the beginning of July.
  (Sir David Wright) That was the first occasion on which a representative of Invest UK attended the board at which there were the three representatives of the devolved administrations. I would very much hope that one of the effects of having Invest UK as part of the organisation and attending the board is that the representative of the National Assembly feels that that is an opportunity to press me and my colleagues on inward investment issues if they arise.

  82. Would it follow from what you said that there could and, perhaps, should be some organisational change in Invest UK so that there is a Welsh representative actually there all the time, in the same way that you suggest you have with Trade Partners UK?
  (Sir David Wright) I am sorry, I may have misled the Committee. If I did, I apologise. I am saying that British Trade International has a board which meets every month. It is a board which is composed in the majority of private sector representatives. It has six government representatives on the board. They are from the Foreign Office, the DTI, from ECGD and from the three devolved administrations. There is nobody in Trade Partners UK who is actually from Wales.

  83. I think it was my misunderstanding.
  (Sir David Wright) I misled you, I apologise. The person who I am talking of is the representative on the board and henceforth that representative will be scrutinising the work of Invest UK in the way that they have in the past scrutinised the work of Trade Partners UK.

  84. You are hoping that is going to solve the problem?
  (Sir David Wright) If there is a problem.

  85. There seems to be a difference of perception in the two arms, if nothing else, in Wales. I think what we need to get on to is, is there a problem of substance rather than perception?
  (Sir David Wright) I am not aware of there being a problem of substance. As I said, the purpose of my visit to Cardiff in July was to follow up the bringing of Invest UK into our organisation and, therefore, to spend some time with the WDA, with whom I had not previously had any professional relationship in this job. So I was seeking to demonstrate to the WDA that at the highest level in British Trade International we were applying ourselves to their interests. I have had, and continue to have—and I did so with the Chairman of the WDA only six weeks ago—continuous dialogue with them about particular issues. So I am not aware that there is a problem of substance. I do not know whether Mr Morgan wants to add something.
  (Mr Morgan) I do not think there is a problem of substance, though I do agree with your comment about the tensions that can arise in inward investment cases. I, of course, have a relationship with 12 development agencies, all of whom at some time or other tell me that I am not doing enough for them and am doing too much for someone else. I think that is going to be part of the nature of representing the whole of the United Kingdom. In Invest UK and, also, in the WDA, we have put a lot of effort over the last couple of years into improving relations, and I have worked very closely with the WDA's International Services Director. I hope the WDA feel that they have a channel where if there is any problem they can raise it with us and we will address it. Could I just pick up one earlier point about systematic approaches? One thing we have done is set up an international training manager to try and make more systematic our visits back by our overseas teams. One consequence of this is that another devolved administration—not Wales—has actually already decided to say to us that they are now getting too many visits. We have not reached that point in Wales, I am very pleased to say, and I hope we never do, because I think it is vital that our teams are able to get back and see Wales, Scotland, Northern Ireland and the regions.

  86. Just from someone who has no expertise in this field, I cannot see why there should be more tensions in trying to attract investment in between different regions of the United Kingdom than there is in promoting trade. Presumably, there are the same competitions between different parts of the country.
  (Sir David Wright) I would like to ask Ian Jones to comment on whether there are particular trading competitions between regions. I think there is a history to this. I think that the history is now being played out in the way in which foreign direct investment is developed in the United Kingdom. When I was first dealing with these matters—again, in relation to some of the large investments in South Wales in Japan in the 1980s—we were talking then of very considerable job creation projects; we were talking of thousands if not several thousands of jobs. There is no doubt at all that the nature of inward investment promotion has significantly shifted in the last 15 years. So that the scale of projects and the nature of the projects—often add-ons, often small R&D projects, often small corporate strategy groups, European headquarters and the like—has tended to mean that the overall impact on the local economy of a new investment is now probably less than it was 15 years ago. Not that that, in any way, diminishes the value of those investments, but we are no longer talking of investments which would transform the employment prospects of a particular area in a region. So I think, to some extent, we are living with that as the history, and we are progressively moving to a situation in which the large number of projects now coming on stream are much smaller and, therefore, perhaps, less inclined to give rise to some of the tensions which we certainly saw in the 1980s. To take up your point, I do not know whether Ian would like to add whether this is true or not of trade promotion.
  (Mr Jones) I think I would just observe that many of the companies that both we and Wales Trade International who sit on the trade promotion side see are quite small companies, and they perhaps do not seem to see themselves as being in competition one with another in quite the same way, because they are fishing in an extremely large pool of international trade. So it is not a question of a perhaps more limited number of inbound projects. I do not have a perception within, for example, the English regions of competition in a very headline sense. Obviously there is a certain amount of competition between people, but I think there is quite a lot of a sense of people having some common interests in operating overseas and trying to help small businesses to understand how they are getting into overseas markets. So a lot of the issues are common ones. That may have something to do with why there is less of a sense of any tension, if that tension needs to exist.

Ms Morgan

  87. How do you see the working relationship between Trade Partners UK and Wales Trade International developing in future?
  (Sir David Wright) I could identify a number of areas. I will list some and see if Ian can add to them. I mentioned a moment ago the trade development schemes which we are building up. There has already been Welsh company participation in the precursor of what I described, called Export Explorer, and I believe something like 25 companies have taken part in two Export Explorer missions from Wales over the last year. This is an interesting example of an area where nationally, as the United Kingdom, we provide schemes which can be accessed on an independent basis, in a sense, and on a separate basis, by companies within Wales, Scotland or Northern Ireland. That is one example. I think we are going to see much more of that in the trade development area, because I am very conscious, too, that particularly in central and northern Wales there is a real challenge for Wales Trade International to develop some of the small companies that exist there and to enhance their export potential as a way of building their business. A second area where I believe we want to see more activity is over interchange between the two organisations—interchange of personnel. We are already doing a certain amount of this. We have a short-term attachment scheme to embassies overseas—Overseas Attachment Scheme—into which two officials from Wales Trade International have taken part recently. This gives them an experience of a foreign market, it gives them an experience of how a commercial section overseas works, and they have then gone back to WTI. We are also doing some joint training courses with Wales Trade International. There was a course last month to introduce new WTI personnel to the management and structures of what the Government does on this. I think, in building on that, I would also like to see some Wales Trade International people working in the head office of British Trade International here in London. Ian may have some other suggestions.
  (Mr Jones) I would briefly add to that. As you said, the Trade Development Programme, I think, has been a very good example of working together where colleagues from Wales Trade International have been engaged in that process, and we have worked with both them and colleagues from Scottish Trade International and the Northern Ireland equivalent in developing the programme. That programme is available for companies in Wales to come and have a look at. There is an option there for Wales Trade International to take that programme forward if they would like to do so. One of the other examples I might give of colleagues working together in a way that suggests there is good confidence, if you like, is one of my colleagues having recently assisted in the recruitment of Wales Trade International's new Director. So there, again, you have an example of where there is sufficient mutual confidence in the process and a recognition that we are both working very much in the same area for us to be working very closely together. That kind of thing helps encourage relationships for the future.

Mr Llwyd

  88. How important is your working relationship with overseas diplomatic representation in the process of attracting or promoting foreign trade and inward investment?
  (Sir David Wright) It is absolutely crucial. The structure which we are putting together has, effectively, three parts to it. It has a centre, which is where the Trade Partners UK and Invest UK have their main strategy units and their main operational units; it has the regions, with our regional trade directors and our relationships with the three devolved administrations, and then, crucially, the overseas delivery network, which is the 217 FCO posts overseas in 140 markets, where there are Foreign Office and, also, DTI staff based, who are the frontline troops in all this. So we attach great importance to our relationship with them. Let me tell you three ways in which I think that is particularly effective. We set their objectives for a particular market, they agree their objectives for that market in terms of both trade and investment promotion. We have a hand in their appointment. A member of the staff of British Trade International sits on the Foreign Office's appointment boards before staff are sent overseas to do commercial work, from ambassadors downwards. Of course, the delivery of services such as charged services, tailored market reports, which companies might need to have in order to penetrate a foreign market, is all done by our overseas posts.

  89. You might have misunderstood my question. It is my fault. I take on board what you said, but with regard to foreign diplomatic representation in the United Kingdom.
  (Sir David Wright) I apologise.

  90. No, no, what you said, I am sure, is perfectly helpful anyway, but the point I was getting at is how important is it to establish good relations with foreign diplomats in the United Kingdom in this process?
  (Sir David Wright) We have a set of relationships of a differing nature, depending upon, I think, the market and our position in it. I have fairly regular exchanges with my counterparts, particularly in Western Europe, who run their trade and investment promotion organisations. I often find myself in touch with their embassies here in London to explain the nature of our own activities and the nature of our own priorities. We also have some fairly constructive relationships with certain embassies where we are trying to work together with those countries to promote their interests in the United Kingdom. An example which comes to mind is, again, I am afraid, Japanese, but the Action Japan Campaign is run bilaterally, really, between the British and Japanese Governments and, therefore, the Jetro Office in London is an important collaborator of Trade Partners UK that deals with the Japanese market. We have a similar relationship, for instance, with the Canadian High Commission, who have been very heavily involved in our Export Canada campaign over the last year, and indeed I think a couple of months ago there was an Export Canada promotion in Wales to promote the Canadian market for Welsh companies. The same, I think, is now true of our attempts to attract more trade and investment with China, and we have a good relationship with the Chinese trade promotion here in London. I could list a variety of others.

  91. What I was driving at was this really, a simple question: Do you believe that the lack of overseas diplomatic representation in Wales compared with other parts of the United Kingdom, there are only two diplomatic representations in Cardiff, do you not think that does, in fact, place Wales at a disadvantage in comparison with the other countries in the United Kingdom?
  (Sir David Wright) The short answer is, no, I do not. I have seen no evidence to suggest that it does. I come back to what I said almost at the outset; I believe that the distinctiveness of Wales and the capacity of the success which Wales has had in promoting itself in other markets, where it has a particular interest to promote, has been successful enough to obviate any particular effect which you might refer to.

Mr Edwards

  92. You mentioned some of the attachments, can you tell us if there has been a programme of staff secondment within the BTI, National Assembly, WDA and the Welsh Trade International, and would you consider setting up such a secondment?
  (Sir David Wright) There has not been a programme as such. The examples I gave a moment ago were individual cases where we have used the relationship to have exchanges. We are now talking with the National Assembly for Wales on a structured basis to try and set up a programme.

  93. When you say "National Assembly" does that officials or Members of the Assembly?
  (Sir David Wright) It means officials, insofar as they are the people who are delivering services.

  94. Do you think that there is any scope for Parliamentary links between elected members? You may remember, Sir David, that we last met on a rugby field in Tokyo. I gave you the hospital pass that might have ended your rugby career, but I think that, by all accounts, it was a successful visit by a group of Parliamentarians to establish sporting as well as other links with Japan.
  (Sir David Wright) I apologise for failing to recall that painful event recorded on video. I happen to believe that the role which Parliamentarians can play in their relations with other Parliamentarians internationally can never be over-estimated. There is a huge opportunity for Parliamentarians to promote both visibility, to build on existing reserves of affection and to pin-point particular areas which may need attention at any time. I think that visits overseas by either Westminster Members or the members of the devolved assemblies can only be to the good. I believe that when they take place they are occasions on which the support of the United Kingdom representation overseas for that particular section of interest of the United Kingdom—whether it be Wales or whether it be the North-East—can be enhanced.


  95. On that happy note, Sir David, we will draw this session to a close. Thank you very much for coming.
  (Sir David Wright) Chairman, thank you very much.

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