Examination of Witnesses (Questions 220
- 225)
TUESDAY 16 JANUARY 2007
AMICUS
Q220 Mr Hoyle: That is very interesting
because it is very small indigenous industries where we cannot.
I think you touched on something which I will just move you on
to and that is SMEs. I wonder what suggestions have you got for
the Government as to how they could help SMEs tender and win public
procurement contracts? The problem is that given the recent announcement,
for example, in the Gershon Report on economies of scale for procurement,
will SMEs find it harder to obtain contracts because what they
said is that it is about size, they should be bigger, yet we are
always saying that SMEs are the backbone of UK manufacturing?
Mr Jeary: It is indeed difficult.
I mentioned the mentoring system which I think is something that
the Government could take on board. They have provided some additional
help through the small business sector and they have adopted some
simplification of processes in terms of internal procurement.
I think the other thing which needs to be looked at—and
I am not sure to what extent the Government has done this already—is
e-procurement and the procurement process through technology because
when you look at the forms and the requirements of a bid process
you can understand why some smaller employers without the resources
available to them shy away from that whole process, the cost involved
in making the bid is disproportionate to what they might gain
from securing that bid at the end of the day. I do think that
the simplification process in terms of the procurement process
of bidding and certainly the greater use of technology in that
process, which I think has been successfully introduced in Germany,
is something that the UK Government should be looking at.
Q221 Mr Hoyle: On a final point,
should we be buying Peugeot cars now and should the Government
rule them out from procurement?
Mr Simpson: We, as you probably
know, are campaigning to try and persuade the British public not
to buy Peugeots for that reason because we want to encourage Peugeot
to build cars in the UK, so my answer to that would be no, but
people make their own choice.
Q222 Mr Hoyle: Have you any concerns
about India and Brazil bidding for UK steel or European steel
companies for us?
Mr Simpson: No, no more than the
concern that I have got with what is happening generally.
Chairman: It is getting a bit broad for
public procurement.
Q223 Mr Hoyle: We know that if you
do not have steel manufacturing in the UK you have no manufacturing
base so, therefore, you cannot have public procurement, it is
all linked. What do you think?
Mr Simpson: I would like to see
British Steel remain British Steel, quite frankly, because all
that will happen is that rationalisation will reduce our ability
to supply and steel is one of the core businesses and you know
our view on energy.
Q224 Chairman: You have answered
Lindsay's questions. I have one more question on procurement if
I may, just before you finish, unless there is anything else you
want to say. You heard my last question to CBI about social policy
achieving objectives in Government through public procurement.
Their objection particularly in their written evidence to us,
was that makes it more difficult and more bureaucratic, for small
and medium-sized businesses. What is your view on the Government
using public procurement to achieve wider policy objectives?
Mr Simpson: I think I would be
in favour of it to be honest. I think whatever Government does
somebody will criticise it because not everybody is happy all
the time, but I do generally think that if a Government is working
proactively to achieve a better society in the UK and it is using
all its resources to do it, its policy legislation and its procurement,
then I do not have a concern on that. There may be an odd instance
when something happens and I say I do not agree with that but
in general terms I would agree with it, not disagree, if it is
an appropriate measure. I do also believe that to judge procurement
simply by price is not the right way to do it unless you take
the full social costs and if you take the social conditions as
part of that then I think it is an appropriate thing to do.
Mr Jeary: I think one of the positive
things which has come out, which is not necessarily directly linked
to manufacturing, about procurement is the comments currently
being made by the Olympic Delivery Authority where they have totally
taken on board this concept and have said in their own document
that they will apply weighting to evidence of environmental and
sustainable management systems and socio-economic commitments
as appropriate to the procurement taking place and it is absolutely
right and if it is right that will impact on manufacturing, it
will impact on new construction obviously and that is exactly
the right thing. I do not think that we can accept that you automatically
assume additional bureaucracy arises simply because government
takes certain views in terms of where it places its procurement
contracts.
Mr Simpson: It strikes me on procurement,
amongst the other tasks that I have, I sit on the IMF Executive
Committee. (That, by the way, is the International Metal Workers
Federation, in case there is any possible lingering doubt. It
may occur to people I mean the other one, I have to say all sorts
of strange people get on that.) I was sitting behind the Indian
executive member who stood up and in very impassioned tones complained
bitterly about how the Indian textile and clothing industry was
being undermined by China and how outrageous this was and what
we should do about it. It prompted me to lean forward and say,
"Well, comrade, do you realise how you got it and where from?"
The concern I have got is that unless you have some strategy for
dealing with that, it is not even the case, I have to tell you,
what happens here is that globalisation is seeing the world develop
and other countries are developing within Europe, why should we
argue, because I watched a programme on this exact issue, I think
it was about Bangladesh, and there was a lady from War on Want
who had studied this exercise and had established that the influx
of work in Bangladesh had seen wage levels halve. In other words,
it was not a question that work is going from the advanced countries
now to the cheaper source of labour and that is seen as social
development, it has seen a drop in development. If you study the
North American free trade area of Mexico, Canada and North America
and look at the strategies that they have applied economically
which have been dressed up in all sorts of things, they have actually
seen productivity rise but wages in all three countries, not just
the richest, also the poorest, almost in decline. You need to
understand what is happening in this process and it is not about
this is going to be a greater world because people have got greater
opportunities and so we are losing out and they are getting better,
that is not happening either.
Q225 Chairman: This is very interesting
stuff but given that you are talking on procurement I want to
make sure you have covered your issues on procurement. I think
coupled with the written evidence we have, and the very good written
evidence, and the very colourful and engaging oral evidence that
we have had today, probably you have covered your issues.
Mr Simpson: Well, if we have achieved
the objective that you get brainwashed by Cameron and Blair and
Companies House, but now we have given you a bit of our stuff
you might have a broader view of life.
Chairman: Thank you very much, indeed.
I am very grateful.
| 
