Examination of Witnesses (Questions 40-59)
26 OCTOBER 2004
SIR ROBIN
YOUNG KCB, DR
DAVID EVANS
AND MR
IAN JONES
Q40 Chairman: We are going to look at
Gershon in a little while. Just one last point before we leave
this area. UKTI is also overseen by the Foreign and Commonwealth
Office.
Sir Robin Young: Yes, it is.
Q41 Chairman: To what extent are they
going to take a hit? It is no secret that when BTI was set up,
or when Trade Partners UK was set up, there was a fair amount
of grudging on the part of the Foreign Office as to what resource
they were going to make available for this. We got the vibrations
here and it is probably recorded in our minutes that there was
a problem, that the FCO did not really want to know at the beginning.
Do you think they will be sharpening old knives to try and re-fight
old battles here and say, "We can get rid of them but we
cannot possibly get rid of the second defence attaché because
he is our major spy in that part of the world" or something
like that? They usually are.
Sir Robin Young: That would have
been a risk five years ago but, as I was saying, one of the successes
of BTI, now UKTI, and the joint ownership has been to get rid
of some of that. All of that interdepartmental rivalry has disappeared.
We now have in many embassies a fixed sum of money which is UKTI's
spend within each embassy under a pilot scheme which Ian Jones,
I think, started, so in 60/70 embassies there is now a fixed sum
of money which is known to be the UKTI budget there.
Q42 Chairman: Would you envisage at any
time someone from the DTI who did not have a classical education
or read ancient history and did not go to one of the ancient universities,
and it might not just be Oxbridge, but did not do any of these
things and was not actually a diplomat but had shone so brightly
as a trade specialist that they could become our ambassador to
one of the countries that we would want to seriously do business
with? Is there someone like that at the moment?
Sir Robin Young: The example I
have got in my mind is the new consul in Shanghai who is a DTI
senior civil servant, who is excellent. I do not know what university
she went to but she comes to mind. Ian might have other examples.
Mr Jones: One of the examples
I would quote to you is the chap who has just recently gone out
to Beijing to head up the commercial operation in China who came
in to us from the private sector and spent two or three years
operating as the international trade director down in the South
West. If you were going down to the South West Neil Blakeman will
be well known down there. He has moved from there having come
in from the DTI side of the house, if you like, and is now serving
overseas in China for us. You are seeing that kind of thing happen.
Funnily enough, the guy who is his deputy down there, Paul Williams,
came from the Foreign Office who was previously in Houston and
is now operating in the South West as the number two in the South
West.
Q43 Chairman: One could draw the conclusion
from that, but I will not, that it is as much a foreign country
to some, but anyway.
Sir Robin Young: Behind your question,
I think there is room for more exchange between DTI and the FCO
and it is on the agenda.
Q44 Chairman: If we are going to see
that weight being placed, as you said you still want a smart political
commentator, somebody who can deliver for UK plc rather than UK
strategic objectives.
Sir Robin Young: That was why
we were so pleased to get the Shanghai post which is one of the
major trading posts. This person has got it and we are delighted.
Chairman: We will await with bated breath
someone who will take over from the mandarins in Beijing. That
would be the ultimate.
Q45 Sir Robert Smith: The Department
has a lot of great aims that a lot of people might sign up to,
but how are we meant to measure this because you have set criteria
to be judged by and one example is that the growth rates in the
different regions of England should all come together. You can
achieve that the hard way by ensuring that the lower growth rate
parts of the English regions come up, but equally you could tick
the box and say "We have achieved our target" by destroying
the growth rate in the most successful parts of England. Is targets
the way to measure your performance?
Sir Robin Young: To be fair, the
whole PSA—I have not got it in front of me—is to maximise
the economic development in all regions, but over a period to
try and tackle the traditional disparity between the regions,
as it were. It is a two-pronged target. The first leg is improving
the economy of all regions and the second leg is tackling the
regional disparity.
Q46 Sir Robert Smith: So if you got rid
of the disparity but it was at a lower base, that would be a failure,
would it?
Sir Robin Young: We would then
fail to make sustainable improvements in the economic performance
of all English regions, which is the first part.
Q47 Sir Robert Smith: You have to do
that as well?
Sir Robin Young: Yes. To bring
the best down to the lowest would not hit that target.
Q48 Sir Robert Smith: I thought not.
Sir Robin Young: I felt I needed
to correct that impression.
Q49 Sir Robert Smith: Do you think that
in many ways targets are the way we have to judge all aspects?
Sir Robin Young: No, but they
are very, very important. For example, with our productivity target,
if the effect of government economic policy is not to improve
UK's productivity that would be a serious failing but I have a
joint target with the Treasury on improving the UK's productivity
relative to our major competitors. Similarly, on the regions it
is absolutely right that we should track the economy of the regions,
we should try and make sure they all increase quickly and we should
indeed look at disparity and you can only do that by targets.
Q50 Sir Robert Smith: But on some of
those targets, like the overall productivity, how do you measure
it was the DTI that played its part or whether it was dynamism
within the private sector?
Sir Robin Young: That is why it
is a joint one with the Treasury. The macro and micro economic
government policies will have an effect on the dynamism of the
economy. I agree you can never exactly point the finger but that
is not something for us to apologise for. By having a joint target
with the Treasury that is rightly established and, indeed, we
would like to join in perhaps the Department for Education and
Science because the skills base is part of the productivity agenda
and the work we are doing with DfES—another example of joined-up
working—is to work much more closely on the skills strategy.
That is what business talks to us about which is holding up their
advance, particularly in the regions.
Q51 Richard Burden: Can I take you to
a different area of how you measure your performance. In 2003
on the issue of competition and consumer protection your PSA target
was number seven and in 2004 it had gone up to number three and
had got rather ambitious. You want to: "Place empowered consumers
at the heart of an effective competition regime, bringing UK levels
of competition, consumer empowerment and protection up to the
level of the best by 2006, measuring the effectiveness of the
regime by peer review and other evidence, to ensure a fair deal
for consumers and business working in collaboration with the relevant
regulatory agencies." How are you going to measure how far
you achieve that?
Sir Robin Young: We do it by survey
and by level of complaints. We do the normal casework studies
but we also survey and we survey our own competition regime and
what people say about it against others. You will know that the
OECD thinks that we have got the best competition regime in the
EU.
Q52 Richard Burden: I was thinking more
of the area of consumer protection. Obviously competition is part
of it but you want to empower consumers.
Sir Robin Young: Yes.
Q53 Richard Burden: You say that part
of the way you are going to be measuring how far you are able
to do that is by things like surveys and casework studies, but
you are also chopping back on your staffing. How much do you expect
your consumer protection activities to be shrunk?
Sir Robin Young: In managing the
Department I will ensure that we hit our targets with these staff
cuts. I think it is wrong for me to say that if we have got 25%
fewer staff we will have 25% less performance, it is not like
that. We will deliver the cuts in ways that allow us to hit our
targets. We will be a smaller but, I hope, more effective department.
I do not see any necessary connection between the cuts which will
have to happen in the consumer and competition area and the delivery
of those targets.
Q54 Richard Burden: That is consistent
because that is exactly the same answer you gave in relation to
UKTI and the foreign posts but you are not saying how this is
translated into practice. It is quite a difficult area to get
hold of, empowering consumers is not an exact science, and if
you are going to be trying to work out how you empower consumers,
it is more to do with how much you talk to them, how much casework
you do, presumably what links you have with things like CABs,
and they are funded to a large measure by DTI. How does slimming
back on the funding actually contribute to that? You say "we
will do the same with less staff", and that is a good hope,
it is a good aspiration, but it does not give me any confidence
that it is going to be achieved.
Sir Robin Young: Time will tell.
It is indeed my aspiration to deliver the efficiencies that we
have been asked to deliver and up our performance but, I agree
with you, time will tell. Headcount is not the only thing. Consumer
Direct, for example, which you will know about, which is the new
web approach to consumer advice, is a huge increase in our budget
and that is the future way in which consumers will be empowered.
A recent survey by the OFT, I have just been reminded, said that
57% of consumers say they feel informed about their rights now
and that figure has been going up and up from previous surveys.
Consumer Direct is a new and increased budget separate from our
headcount reduction. There are other ways in which we can hit
this consumer empowerment and my task is to deliver the targets
I have been given with 25% fewer staff.
Q55 Richard Burden: In relation to RDAs,
you said part of the way you are going to cope with shrinkage
in UKTI and posts is to expand the work of RDAs and to some extent
the budget.
Sir Robin Young: Yes.
Q56 Richard Burden: What do you say on
the area of consumer protection, that there is possible shrinkage
centrally inside the Department to be coped with by expanding
support of external agencies like CABs or other bodies that provide
support?
Sir Robin Young: It could be,
or by a new web approach to it. We have got the National Consumer
Councils, we have got energywatch, Postwatch and other consumer
bodies also coming under our budget. There are lots and lots of
ways in which consumers can be empowered.
Q57 Richard Burden: I know you are not
making promises but if they are concerned when they hear about
25% cuts they could say, "As far as we are concerned this
could be a problem but this will be an opportunity for us to expand
and get extra support" or they might say, "Oh my God,
they are going to go for us too". What you are saying is
that they should take confidence from the former rather than the
latter?
Sir Robin Young: I am saying that
between us we will talk to all the consumer bodies we have got
and we will look at the size of our own headcount in the Competition
Consumer Directorate and we will deliver the targets which are
for increased consumer satisfaction. That is my task and I will
do it.
Q58 Mr Hoyle: Could I move you on to
R&D and DTI strategy on research and development. Obviously
the Government has been very committed to science and technology,
we have seen money going in like we have never seen before. There
are a couple of questions I would like you to think about. Obviously
the private sector has not come up with the funding that we would
expect yet we have introduced tax credits. The first question
is do you think the tax credits go far enough because what we
do find is UK companies are not investing as much as our foreign
competitors are? I was wondering if you would look at that. Also,
do you believe that if we split R&D, is there too much going
into the development side and not enough into research or do you
think more Government money should go into research and let the
private sector do the development? I am just wondering what your
feelings are.
Q59 Sir Robin Young: Those are absolutely
central questions to our whole 10 year science strategy and there
is no clear answer yet but let me make some comments. The targets
set in the 10 year Science and Innovation Investment Framework
that came out with the Spending Round set a specific target for
R&D spending to increase by 0.6% to 2.5% of GDP by 2014. As
you say, the main people who have to do that will be the private
sector who are investing less in R&D in some cases than their
main competitors. Yesterday you would have noticed that we issued
our annual R&D scoreboard in which we list all the main companies
and say who is doing more R&D and in truth parts of our economy
are doing very well. In pharmaceuticals, biotech, aerospace and
defence we have the highest proportion of R&D in any European
country. It is a very mixed picture, you cannot generalise that
there is not enough R&D.
| 
