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15 Oct 2008 : Column 274WH—continued
China has had five golden years of economic prosperity, but as the hon. Member for Wirral, South mentioned, there are fears that the Chinese economy is slowing. Inevitably, with the worldwide financial problems that we face, China’s economy will slow from a growth rate of 10 per cent. perhaps to 8 per cent. or less. The real worry for the world at the moment—or perhaps the benefit; I am not sure—is that Chinese factories are beginning to slow down. They are using less commodities, which is why we are seeing a drop in commodity prices
and particularly in oil prices, from a high of $140 a barrel to the current price of about $90. That may help the world to recover.
We need to consider carefully what China is doing in respect of its trade with the rest of the world. We have heard about the sovereign wealth funds—huge funds. The figure given was $1.8 trillion; mine is $1.5 trillion. Nevertheless, those are enormous funds, built up from currency reserves. If they are used benignly, as seems to be happening at the moment—for example, a 9 per cent. stake has been taken in Morgan Stanley and a 3.1 per cent. stake in Barclays—that can be a very positive thing for the world.
What we do not want is China using its might through sovereign wealth funds or, indeed, its trade with Africa for unfair trade advantage. We want to watch carefully what the Chinese are doing in Africa, because we want to see fair treatment of African countries. Basically, what China is doing in Africa is providing infrastructure in return for mining rights. Those deals need to be scrutinised very carefully to ensure that China is not mortgaging the future of some of those countries.
I congratulate the chamber of trade in the area represented by my hon. Friend the Member for Southend, West (Mr. Amess) on the Essex-Jiangsu partnership. That is a fantastic effort. It is a pity that the Government cannot follow that effort by promoting the same proportion of trade leads as Essex county council manages to do. Essex chamber of trade may well have something to teach UKTI and the Government on how to do business with China, because it is clear that we are not doing the amount of business that we should, and fears have been expressed about the effectiveness of the China-Britain Business Council. I do not want to knock the council; it has done a great deal of good over many years, but that does not mean that it cannot improve its performance from now on.
The other important factor that my hon. Friend mentioned was the need to teach Mandarin in schools. He may be interested to know that a school in my constituency is a Chinese academy and teaches Mandarin. I got the Chinese ambassador to go to the school, and the delight of the children—not so much the delight of the ambassador, because their Mandarin was not up to his expected standard—in being able to converse with the ambassador in Mandarin was fantastic. We perhaps need to stop the over-preponderance of teaching French in this country and start to teach Mandarin and Spanish, which are two of the most widely spoken languages in the world.
The market that we are discussing is huge. China has 1.3 billion people. It has moved 200 million people out of poverty in the past 10 years. They have moved from rural to urban areas. There is still a huge disparity of wealth between the rural and the urban areas. I have been into the hinterland in China. I have seen some of that disparity of wealth, but I have also been to Urumchi, which is one of the cities in the far west, and it is similar to a modern western city, so whereas everyone talks about the eastern seaboard with regard to doing trade with China, there is plenty of trade to be done within China.
I have a lasting memory of China—I almost lost my life there. I fell 20 ft down a concrete shaft in China, but I survived and I am going back, because I want to
discover more about that exciting country. It was when I was in Urumchi, talking to the Speaker of that Parliament, that I coined the phrase that the 19th century belonged to Britain, the 20th century belonged to America and the 21st century will belong to China.
We must make friends with China. We must do more trade with it; we must have more cultural links with it; we must have more exchange with it; and we must have more educational exchange with it. Every time I have visited China, I have been to a school: to see those young people’s enthusiasm for learning English is fantastic. We should capitalise on the fact.
10.50 am
The Minister of State, Department for Business, Enterprise and Regulatory Reform (Mr. Pat McFadden): Thank you, Mr. Illsley, for guiding us this morning. I thank my hon. Friend the Member for Nuneaton (Mr. Olner) for hosting our debate.
As we heard, the genesis for this debate was the Industry and Parliament Trust’s visit to Shanghai and Suzhou in May. We heard many contributions from hon. Members who were on that trip. The visit obviously had a profound effect on those who went. We also heard praise for the IPT. I read with pleasure the blogs, diaries and various accounts written by hon. Members during and after their trip. What struck me was the scale and speed of the changes in China, which had an impact on everyone on the trip.
The group visited China shortly after the earthquake. I therefore record the Government’s support for the recovery effort in Sichuan province, noting that the former Secretary of State for Business, Enterprise and Regulatory Reform, the right hon. Member for Barrow and Furness (Mr. Hutton), now the Secretary of State for Defence, visited China a few weeks ago. During his visit, he met the Government to discuss how United Kingdom companies could contribute to the huge reconstruction effort that will be required. Construction firms, architects and many others will be needed; if we can, contributing to that as a country is something that we would want to do.
The underlying question today is whether the Government and the country get it. I believe that we do. Among world leaders, my right hon. Friend the Prime Minister is uniquely focused on the opportunities presented by globalisation. The changes in the world order that we heard about today—the rising importance of China, India and other countries—is a constant thread running through my right hon. Friend’s speeches and policies, and the stance that he wants Britain to take. That is not surprising because the economic world order is changing in a big and fast way.
The assumptions of the 20th century will not hold in the 21st century. All countries, including the UK, must reassess their priorities in trading and business. Although any discussion of globalisation must take as its backdrop the events of recent months and weeks, I do not want to go into detail; the Chancellor has made many statements to the House in recent weeks outlining the Government’s response. However, Britain must not allow the recent financial storms to alter our stance as a globalisation optimist—as a county that believes in looking outward and making the most of trading opportunities around
the world. We will not allow that to happen; we will continue to be champions of openness and flexibility, and not retreat into protectionism or economic nationalism.
On one point, I gently disagree with my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt). He said that we were becoming more isolationist. I believe that the events of recent weeks have proven profoundly that that is not the case. We are not becoming more isolationist; we will continue to champion openness and flexibility, always being outward-looking.
In the time available, I shall respond to some of the points raised during the debate, in particular about British business opportunities with China. The first, on a political level, is how seriously we take engagement with China. There are regular high-level political meetings with China. There is an annual prime ministerial summit; this year, it took place in January between the Prime Minister and Premier Wen. As a result, a range of new trade and economic collaboration activities was announced. That includes a bilateral trade target for trade in goods and services that will reach $60 billion by 2010, which represents a 50 per cent. increase over 2007.
There was agreement also on a high-level annual economic and financial dialogue between the Chancellor and Chinese Vice-Premier Wang Qishan; we will be the first European Union country to match similar existing arrangements between China and the EU and China and the United States. There is also an agreement to maximise trade and investment in the environmental sector. We are pursuing that in many ways, including through the sustainable cities initiative, which also featured during the Secretary of State’s recent visit. Obviously, a host of ministerial visits took place at the time of the Beijing Olympics. However, over the past year the Secretary of State visited China three times; the Trade Minister, Lord Jones of Birmingham, visited twice; and the Lord Mayor of London visited once. Those high-level visits are an important part of our strategy.
I turn to the backing for our business presence in China. UK Trade and Investment has been a key element on those visits. It includes not only politicians; often there are high-level business delegations. UKTI works to support British business in China, with the aim of delivering a measurable improvement in the business performance of UKTI’s trade customers, improving two-way trade with China, dealing with the question of market access and beating the drum for British business in China.
Reference was made to the numbers involved in the UKTI operation. It is the biggest such operation in the world. As my hon. Friend the Member for Wirral, South (Ben Chapman) said, its numbers have increased by 25 per cent. over recent years. Hon. Members say that they want more. Of course people want more, but that is evidence that we take the matter extremely seriously. We are putting more resources into it.
Mr. Clifton-Brown: I say this in a constructive way. When I talk to people in China and elsewhere, they say, “Yes, we get plenty of high-level visits, and plenty of interest for business in the first flurry, but somehow that interest is not translated into actual business.” I ask the Minister, with UKTI, to see whether we can improve on that aspect.
Mr. McFadden: I thank the hon. Gentleman for that most important intervention. I am glad that he made it. Of course, it is important that visits are backed up by results. Our exports to China have increased significantly in recent months.
Reference has been made to the new Secretary of State, Lord Mandelson. He will be an important addition to our armoury when increasing business and trade opportunities. Few people in the world have his experience of China, and many countries would like someone with experience as a Trade Commissioner to join their Government in order to champion that policy.
The question was raised of whether our representation in China is right. We have the embassy; and we have three consulates that operate each in their own area. The point has been made that we have too many offices—and that we have too few. The point has been made that local offices for the regions clutter the process—and that local offices are valuable in providing links to the local area. We must make up our minds on whether we want more or less and whether we want local or national.
We are right to seek value for money. A review by Arthur D. Little and others made certain recommendations, which we shall put into practice, to ensure that the taxpayer gets the best value for money from our important trade representations in China.
I would like to say more, but time does not permit me to do so. The issue is hugely important, and as a Government we do get it.
Rugby League
11 am
Derek Twigg (Halton) (Lab): I raised this debate to put the spotlight on the Rugby Football League’s decision of 22 July 2008 to reject the application made by Widnes Vikings for a licence to secure entry to super league for the 2009 to 2011 seasons. It might surprise some supporters in Widnes that I have not spoken on the matter before, but having recently ceased to be a Minister, I now have the opportunity for such a debate, which I welcome. It was my decision, made on my initiative, to introduce this debate—it had nothing to do with Widnes rugby league football club.
I should make it clear that although I see some merit in the super league licence system, I am unconvinced that it is the right way to go for the game in this country. I have always been and I remain firmly of the view that there should be a system of promotion and relegation. I am in favour of super league expansion, but that should not happen at the expense of heartland clubs such as Widnes.
This has been a sad episode in the club’s long and illustrious history. Widnes rugby union club was established in 1873 and was a founding member of rugby league’s northern union in 1895. Since 1920, the club has boasted numerous Lancashire cup and Challenge cup titles, three championship titles and the coveted world club championship. A super league member from 2002, the club was relegated in 2005. In the following two years, it narrowly missed out on promotion to super league; however, the club was beset by financial problems and went into temporary administration. Salvation came in the form of local business man Mr. Steve O’Connor. He purchased the club in November 2007, injecting £1.3 million of investment to reinvigorate the Vikings with new facilities, logo and management structure—he became chairman—in preparation for the super league licence bid. That unfortunately came to an end when the RFL announced the 14 successful applicant teams, which did not include the Widnes Vikings.
In Widnes, there is a widely held view that the RFL has an inherent dislike of the Widnes club because of something that went on in the past that no one can quite fathom. To back that up, Widnes supporters point to the club’s inexplicable exclusion from the inaugural super league in 1996 and the fact that the club was relegated in 2005 to allow the Catalan Dragons into super league. The treatment of the club in relation to the super league licence further reinforced the view that the RFL has it in for Widnes.
As a long-standing Widnes Vikings supporter, I have been impressed by the new energy and enthusiasm surrounding the club, and its dynamic and professional approach. The club’s board, staff and players have been commended for the way in which they have taken full advantage of the O’Connor-Stobart investment and the successful partnership with Halton borough council to modernise the club. I have seen the excellent facilities and the hard work that they have produced, ranging from the new players’ gym and treatment rooms and a new media club room, to better seating in the stadium and impressive innovations in electronic ticketing, marketing
and community activities. Further achievements include the new website, fans forum and updated merchandising and season ticket sales.
I firmly believe that the RFL shifted the goalposts when assessing Widnes Vikings’s application, rejecting it on the basis not of its specified criteria but on a predetermined bias against the club’s recent financial past. In doing so, I believe that it brought the entire franchise system into disrepute. I am sure that the Minister will appreciate that that has led to massive disappointment, frustration and anger within the local community in Widnes and in my Halton constituency, and I will welcome his comments on that.
Despite the club’s highly successful record and its state-of-the-art modern facilities, which are further enhanced by new investment, the RFL rejected Widnes Vikings’s super league licence application, mainly because of its recent financial past, despite previous reassurances to the contrary. That is a key point. The application was rejected even though the club felt that it had complied fully with the application criteria for a super league licence, and was led to believe that its recent liquidation status would not impinge on its application.
In post-22 July discussions with the Rugby Football League, chairman Steve O’Connor was told that his turnaround of the Widnes Vikings was not of sufficient duration for the RFL to be confident of the club’s long-term viability. That was despite Steve O’Connor’s personal cash bond offer of £500,000—that is important—to ensure the solvency of Widnes Vikings over the three years of the super league licence period. I am not aware that any other club offered such a guarantee.
Appearing on the Sky Sports rugby league “Boots ‘n’ All” programme on 23 July, the RFL executive chairman Richard Lewis denied giving any prior assurance to Steve O’Connor regarding the administration situation in response to a fan’s e-mail question. When questioned by interviewer Eddie Hemmings, he said:
“The insolvency issue played a significant part”.
In a reply to a letter that I sent on 29 July, Mr. Lewis stated on 5 August:
“Their financial background was a major factor and this was always going to be the case”.
However, in the very next sentence, Mr. Lewis wrote,
“it was perfectly possible for Widnes to be awarded a licence and without revealing any confidentialities, they did finish well ahead of several other clubs”.
I am not 100 per cent. sure what that means, but it raises a concern. That prompts the question: if the granting or otherwise of a super league licence was determined by the club’s recent insolvency, why was it allowed to bid on the basis of other criteria, which the club, in my view, more than fulfilled? That is a key point.
At the time of the proposed O’Connor takeover of the club, I rang Richard Lewis with three aims in mind: first, to tell him my views on the O’Connor proposal and the current local situation; secondly, to ask the RFL not to impose too harsh a penalty on Widnes; and thirdly, to clarify whether Widnes would be allowed to bid for a super league licence. I was assured that the club would be allowed to do so and that any application would be judged solely on its merits. To this day, the RFL has provided no substantive evidence to explain why, against its own criteria, Widnes Vikings was refused a super league licence, other than its past financial
situation. However, if that was always going to be a problem, why was the club allowed to bid?
Mr. Lindsay Hoyle (Chorley) (Lab): I thank my hon. Friend for introducing this debate—it is important that we get such things on the record. However, I think that he ought to spell out the true merits of Widnes. It not only has a great history—we should not rely on that—and is a great club, but the club’s ground was used in this season’s play-offs. Wigan had to borrow Widnes’s ground, because its standards are higher than most other grounds in super league. It is one of the best grounds outside super league, and would be one of the best in super league. We should spell out how great a ground it is, and how it meets all the standards when other grounds do not.
Derek Twigg: I thank my hon. Friend—he is a stalwart supporter of rugby league and does a lot of work in support of the game. I do not think that I need to say more—he said it for me—but I will talk about the ground later.
One must also ask whether, if the RFL had been clear from the outset that Widnes’s recent financial past was a hurdle that they could not get over, Steve O’Connor would have opted to invest a substantial amount of money immediately and gone hell for leather to secure super league status, or whether he would have consolidated and built the club’s financial capacity gradually in a concerted effort to secure entry to super league in the next round.
I do not have a problem with Wakefield Trinity Wildcats. I see that a great supporter of that club is in the Chamber, my hon. Friend the Member for Wakefield (Mary Creagh). It is a great club and I have been to the ground, but I wish to highlight one issue. Before I do so, I should like to offer my condolences to the family of the 31-year old Wakefield player, Adam Watene, who suddenly passed away this week. I am sure that the thoughts of the entire rugby league community are with his family at this difficult time.
My hon. Friend the Member for Weaver Vale (Mr. Hall) and I wrote to the RFL last month to ask it to consider Widnes Vikings’s super league application afresh, given that Wakefield’s new stadium plans collapsed within weeks of the licence announcement. In response to the comments on the Wakefield situation made by Widnes Vikings supporters club chairman Alan Rae, the RFL said that it will seek to learn more about the club’s plans to move the situation forward, but remain fully committed to the principles of the licensing process, which require all super league clubs to stage matches in venues of appropriate size and quality.
Appendix 1, page 14, of the super league minimum standards summary in the 2008 super league criteria assessment checklist clearly states that the minimum capacity must be 8,000, and that the minimum number of permanent seats should be 1,500. Through Halton council, I checked the current situation based on information held by the building control officer at Wakefield council. He said that the seated area holds 1,382, which does not meet the 1,500 minimum capacity. We are also not completely sure that the stadium fulfils the 2,500 minimum capacity covered area criterion. We will be following that up further with the RFL, but it is important.
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