Examination of Witnesses (Questions 109-119)
UK TRADE & INVESTMENT
14 FEBRUARY 2006
Q109 Chairman: Gentlemen, welcome. Thank
you very much for giving evidence to this Committee. Can I begin,
as always, by asking you to introduce yourselves and tell us what
you do, for the record?
Mr Ahmad: Thank you very much.
Good morning. My name is Asif Ahmad, I am a Director Asia Pacific,
looking after the trade development side of UK Trade & Investment,
covering our operations between Afghanistan and Fiji.
Q110 Chairman: That is quite a portfolio.
Mr Whiteway: Good morning, everybody.
My name is Paul Whiteway. I am the Director International in the
Inward Investment Group of UK Trade & Investment. The Inward
Investment Group is the UK's national inward investment promotion
agency and my responsibility is to cover all the priority inward
investment markets across the world.
Q111 Chairman: It is best to be honest
with you: I think we are rather confused. There are an awful lot
of organisations with initials out there doing an awful lot of
different things: JETCO, IBPN, UK Task Force, UKTI, RDAs. What
is this structure like? Is it actually delivering the goods?
Mr Ahmad: If I may start by explaining
the difference between what is an architecture and creation of
government and what belongs to the private sector, UK Trade &
Investment was formerly known as British Trade International and
has been in existence in one form or another ever since we have
had diplomatic posts overseas. Essentially, it is the commercial
arm of what the Government does in terms of promotion of trade
and investment. The head office of UK Trade & Investment is
based in London and is composed of two departments, both the DTI
and the Foreign & Commonwealth Office, acting as parent departments
with UK Trade & Investment being composed of staff from both.
The London HQ and our offices in the regions are, by and large
but not exclusively, staffed by DTI colleagues, and the overseas
network, again, by and large, staffed by Foreign Office people.
The Regional Development Authorities, essentially, are our partners
in delivering what I would describe as our retail arm throughout
the UK on the trade and development side, where they, as our partners,
essentially, engage with the local business community and deliver
the services that we have on offer. We have teams of business
advisers and regionally based directors who act on our behalf.
Overseas, every post is headed by an ambassador who carries anything
up to 60% of their workload devoted to commercial matters.
Q112 Chairman: Six zero?
Mr Ahmad: Up to. The range is
between 5 and 60%. In the case of India it is nearer 40%. Our
role in the UKTI, from my side of the house, is to ensure that
these overseas offices deliver the goods for UK businesses of
all sizes. Underneath that we have a number of initiatives that
the Government has launched. The Joint Economic and Trade Committee
is a bilateral arrangement between the United Kingdom and India,
where we interact with the Ministry of Commerce under the leadership
of the Secretary of State for the DTI, and that is a platform
for intergovernmental exchanges. We have added an extra dimension
to that by asking businesses to contribute both on the Indian
side and the UK.
Q113 Chairman: Is it right to charactertise
JETCO as a formalisation of the kind of relationships that often
exist between countries?
Mr Ahmad: Very much so but we
are very careful as to who we engage with on that basis. In my
patch, in Asia Pacific, we only have an arrangement like this
with India and with China. The Asia Task Force was launched by
the Chancellor of the Exchequer a year ago, compelled by his belief
that we were not doing enough in a region which was otherwise
growing exponentially and it was a way of addressing whether the
Government, whether business and other interlocutors were doing
enough to address what were the issues in trade and investment
in the region, and that met for the first time last October. There
is a programme of work that UKTI is undertaking on behalf of the
Chancellor, as we have the secretariat-ship for that. The IBPN
is a completely different animal that we are seed-corn funding
what is essentially a business-to-business organisation. Its antecedents
go back to 1993 when the Indo-British Partnership was formed where
on the Indian side and on the UK side businesses got together
to act as a focal point for raising issues that they wanted to
raise and promote on bilateral trade and investment. The IBP,
as it was, probably fell into some state of disrepair until it
was re-launched and, under the leadership of Karan Bilimoria of
Cobra Beer, who represents the UK side of the partnership, he
formed the IBP Network which is still in its infancy but only
launched formally at the tail end of last year, which is essentially
a UK networking organisation and, very recently, the Indian side,
also rejuvenated their side of the house by appointing Mr Sunil
Mittal to set that up as well. The linkage between the IBPN, the
IBP and JETCO is that when we asked the private sector to engage
with JETCO to come up with the issues that we ought to be dealing
with on an intergovernmental basis, it was through the IBPN that
we, by and large, trawled what those issues are—but not
exclusively so; the CBI and also individual companies made representations
to JETCO.
Q114 Chairman: It is quite complicated,
is it not? Is it necessary all this?
Mr Ahmad: It is in a sense, that
it is a big agenda and we are dealing with a very large economy.
We are also dealing with the need to differentiate between what
the Government can do quite rightly and what businesses can get
on with, and throughout the history of what UK Trade & Investment
has had to do is to bring together various industry groups, associations,
individual companies and government agencies to the table. So
it is a role of co-ordination. I do not think one could even hope
for some sort of unified organisation that would capture what
is already a very complex agenda.
Q115 Chairman: So if an SME wants
help to trade then it should come to you, but the rest is high
level stuff they should not trouble with?
Mr Ahmad: On a practical level
all they need to do is find their local contact for UK Trade &
Investment and the rest is for us to signpost all the way through,
depending on customer needs.
Q116 Chairman: When I was in India
last year I did hear some complaints from the Indian side that
they did have quite a bewildering range of British organisations
on trade. Have you heard those complaints?
Mr Ahmad: Not to the extent that
I would be concerned about it. There are, both on the Indian side
and ours, various organisations who are not exclusively bilaterally
focused. There is the Federation of Indian Chamber of Commerce,
the CII—their equivalent of the CBI; there are local chambers,
there are trade associations, and these have their own purpose
and their own linkages. What we have done is at least embrace
them all and brought them to the table.
Q117 Chairman: I was in Maharashtra
in Mumbai and I was told there they had representations from all
the RDAs on the case for inward investment, but if they had only
realised that the United Kingdom is smaller than the state of
Maharashtra. There is this plethora of representations we find
rather confusing and overwhelming. Have you heard that complaint?
Mr Whiteway: I have heard that
sort of complaint in a general sense; not specifically in relation
to India. In the case of India, three of the RDAs actually have
representation in the market, that is to say SDI, the WDA and
the British Midlands representing both East Midlands and Advantage
West Midlands. Our job, as the national inward investment promotion
agency, is to lead and guide that network, to try and ensure that
there is no overlap and to try and ensure that we maximise the
opportunities for investment in the United Kingdom, and to make
sure that as far as possible there is transparency between the
RDAs and ourselves.
Q118 Chairman: Mr Bone will come
in with some questions on this, so I must not steal his line of
attack. Let us move on to something a little more specific. You
have said to us that you are concentrating, in relation to India,
on 16 international sector groups. Concentrating on 16 different
groups is quite a challenge it is not?
Mr Ahmad: Let me set that into
some sort of context. When UK Trade & Investment decided how
it should approach trade development globally it had a choice:
whether it would do it geographically or whether it would do it
by industry sectors. What we decided was that it was necessary
to do both. Some two years ago, we came to the conclusion that
we were covering far too many sectors and, as a process of prioritisation
we came down from about 30-odd to the 16. What that actually means
is that particularly for SMEs we provide subsidised assistance
to businesses in those sectors for which there is an active programme,
but the truth of the matter is we actually serve businesses of
all sectors. It is simply a neat way of saying that, on a global
basis, these are the ones for which programme money is available
for specific government designed activities. So it is not a question
of narrowing the focus even further so that we have greater impact;
it is to say, on a matrix basis, for country X, which are the
sectors of greatest relevance. We find for India, of course, that
almost all 16 score well.
Q119 Chairman: UKTI has not had a
tremendously good deal in terms of resources recently. Can you
really cope with this very wide range?
Mr Ahmad: Well, it is true that
as a result of the last spending review we had to make cuts in
a number of areas. We had to find £20 million worth of savings
in the overseas network which we then passed back to the Foreign
Office to use and our programme budgets have been reduced by some
12%. There has been a shift in resources from trade development
to inward investment, to a certain extent. Having said that, this
has not been a blunt instrument. In the case of India and China
we chose not to reduce resources at all—quite the opposite,
in fact; we have increased our resources very slightly. What we
have had to do is prioritise, and in that we have had to look
at markets where we might not have as active a programme as in
some other places, and some of the programmes that our colleagues
in international sectors would run have become a little bit more
focused. However, I do not think that for markets which are important
to our customers the impact will be as great as one might think
based on those changes.
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