Select Committee on Business and Enterprise Minutes of Evidence


Examination of Witnesses (Questions 1-19)

LORD JONES OF BIRMINGHAM AND MR GARETH THOMAS MP

8 JANUARY 2008

  Q1 Chairman: Gentlemen, welcome to this first evidence session of the Committee of the New Year. It is actually a game of two halves—not a rugby or football game but an evidence session of two halves—starting with some general questions about trade issues in general, machinery of government questions, Doha Round, those kinds of issues, WTO, and then moving to a second session, after about an hour, on trade relations with India following up the Committee's report of last year; so we will change gear roughly halfway through the evidence session. When I ask witnesses to introduce themselves for the purpose of the record, I normally am doing it literally for the purpose of the record—I already know—but as I ask you two gentlemen to introduce yourselves I would like you to explain exactly what it is you do, because I think I understand it but I am just still a wee bit confused. Exactly what do you both do?

  Lord Jones of Birmingham: Good morning. Thank you very much for giving us some time. When the Chancellor became the Prime Minister he asked me to become Minister of State for Trade and Investment and concentrate solely on the promotion of trade for the United Kingdom around the world—that, by the way, includes companies which people might think are headquartered in other countries but have significant bases in Britain and how they use Britain as a platform to trade round the world; so it is not just what my mum would call a British company, it is also companies that create a lot of wealth and employment in Britain although their headquarters are somewhere else—and to also get round the world and get into the world's media about how Britain is the location of choice for inward investment and to chair the government department called UK Trade and Investment, which has two sponsoring departments: one is the Department for Business Enterprise and Regulatory Reform and the other is the Foreign and Commonwealth Office; and I have a desk in the Foreign and Commonwealth Office and I moved my desk out of BERR and into Kingsgate House where UKTI is. Unlike other former trade ministers, who did damn good jobs but could not concentrate on it completely because they had other briefs as well, or, indeed, had a constituency to nourish or whatever, my job is solely and exclusively in government to drive forward this great trading nation and this great place to do business and to separate out from the trade policy of the country all of the issues that come out of that which for the first time was split, and Gareth on my left will no doubt talk about that and his role. Could I just end by saying that I also am on the Government front bench in the House of Lords, I take my responsibilities in the House of Lords very seriously, and when I am in London, like I did yesterday—I led the debate on the second reading of the Employment Bill—if I am here and I am a minister in one of those two departments and can do my bit on the Government front bench, I will.

  Q2  Chairman: But since Lord Drayson's departure you must lead for all government policy issues in the Lords relating to BERR.

  Lord Jones of Birmingham: Yes, because there is not another peer minister there.

  Q3  Chairman: But not for the Foreign Office.

  Lord Jones of Birmingham: But not for the Foreign Office. My colleague Lord Malloch-Brown will do that, and did so yesterday, but the difference to how it has been done before my appointment is (1) getting two people to specialise in two different aspects of trade and (2) from my point of view, actually to ensure that I set myself a target of one long-haul visit a month, one short-haul visit a month and one regional visit round the UK a month. Six months in at the end of the last year I have done six of each, and you cannot do that if you have other responsibilities, but when I am in London I also do, and take it very, very seriously, the House of Lords—

  Q4  Chairman: So your job is in two departments, BERR and FCO. Gareth, you have got a foot in two—

  Lord Jones of Birmingham: Could I just add one thing, Chairman, because this is brand new? I also have a link into Ministry of Defence, because from April DESO is coming across, the deal has been done, the negotiation has been completed and I have a responsibility for DESO as well (the new DESO, if you like), and whilst MoD is not a sponsoring department for me and whilst I do not have a desk there, I do have a working relationship with Baroness Taylor and also with the Secretary of State for Defence and especially with some of the guys and girls in uniform, who are the best salesmen we have got for this fabulous sector called defence manufacturing.

  Q5  Chairman: That is helpful and that is a whole subject we could explore at some length as well. Gareth, could you explain to me: you said you have a foot in both departments and a job of blending the policy together. I think that is your role.

  Mr Thomas: Again, just to supplement what Digby set out, the Prime Minister has created two Ministers for Trade, one, as Digby explained, doing the promotion side and the other concentrating on the trade policy side, which is effectively the negotiations that Britain has an interest in, be it the world trade talks, the Doha Round that is underway at the moment, be it the Economic Partnership Agreement discussions that have been going on for some time and reached a particular climax just before Christmas and also the suggested changes to the trade defence instruments that the Commission has available to it. I think the other perhaps structural point to make is that I do not think, until now, there has been any sort of specific Cabinet Committee looking at trade issues. So Gordon has set that up, which Douglas Alexander chairs and which both Digby and I can attend, along with colleagues from a range of other government departments, and that is designed to set the broad framework for government policy on trade issues.

  Q6  Chairman: So the lead minister in government for trade policy questions is you?

  Mr Thomas: Yes.

  Q7  Chairman: But you get authority for your position from that Cabinet sub-committee, as it were?

  Mr Thomas: Sure, and through the work with both secretaries of state.

  Q8  Chairman: So what is the precise role of the Secretary of State? You say both secretaries of state. Presumably the Foreign Secretary also has a view, quite often, in these matters, but Douglas Alexander and John Hutton are the two key characters here. What is the division of responsibility between you and them, because it looks quite messy from the outside, that is all?

  Mr Thomas: Sure. I can understand that concern. I should just say, it is not just the FCO that has an interest, it will be the Treasury that has an interest, of course it will be Defra that has an interest, and that is one of the reasons why I think the Cabinet Sub-committee, is so important, in that it brings all those interests together. Essentially the sort of day-to-day divide at secretary of state level is with Douglas chairing the Cabinet Committee and, therefore, having that role to make sure all our trade policy concerns are properly discussed. He will concentrate specifically on those trade policy issues that have a strong development dimension, and John Hutton will concentrate on those trade policy issues that have less of a direct development dimension. There have always been discussions on trade that have involved many different departments. Before this set up, along with the Secretary of State for Industry, the Secretary of State for International Development still had an interest in trade issues and there is a lot of liaison across government as to who is talking to who and at what time and a sharing of agendas, and in a sense I should say that also happens with the two of us. On occasion I have raised issues in meetings that I have had that are directly to do with trade promotion aspects, and Digby, similarly, has raised issues around trade policy questions again.

  Lord Jones of Birmingham: None of this is in isolation, is it? Members of the Committee, you know this, but a lot of people take it for granted: we are a very open market; we are a very open, commercial society; but not all countries are. I could be in front of a trade minister of another country, I could be in front of a central bank governor, I could be in front of a television camera in another country banging the drum for Britain. Of course, I am wanting our financial services community, for instance, to invest more, say—India is a very good example—and they will turn round and say, "That is fine, but why will not the European Union deal with agricultural protection?"

  Q9  Chairman: Exactly. I do not see how we can have a minister for trade promotion because policy questions are always, particularly trade substation questions, are very important. In the Indian market it is always about policy questions and the key to better promotion.

  Lord Jones of Birmingham: Actually, it does not happen like that in practice. In practice the job is very much about really driving and banging the initiative and giving it time and energy round the would. You know, policy is a last refuge of a protectionist, and when it comes up we can work together on it, but, as you know from my CBI days and also because I am a passionate free trader, I got intimately involved in the Doha Development Agenda, for instance, when I was at the CBI. I actually understand trade protectionism and I understand the countries and why they do it and sometimes why they should not; so I never approach it in isolation; I actually understand it. What I would not do is cut across the specialist minister who is paid by the taxpayer to do it—I am not adding value if I do that; he is—but what I would do is not suddenly go in a meeting with, say, Kamal Nath in India, I would not go, "Oh, sorry, that is not my bag." It would be a bit of mix into that.

  Q10  Chairman: Why is the Cabinet Committee being chaired by the Secretary of State for International Development rather than the Secretary of State for Trade and Industry? What is the reason for that decision?

  Mr Thomas: I think the Prime Minister wanted to set up a Cabinet committee. As I say, it is a committee that we have not had, certainly not in my time in government, and he wanted to bring all the interests around the table. I think he recognised the importance of trade to development, the particular fact that we have got the Doha Development Round under way at the moment, that Economic Partnership Agreement discussions are key, but that does not mean that the Secretary of State for Business and Enterprise does not have an absolutely fundamental and pivotal role, he does, and he has been very active in all sorts of areas, including on trade defence, including in terms of discussions around the Doha Round.

  Q11  Chairman: Before we conclude the Doha Round, when that happy day dawns, would you expect the Secretary of State for Business and Enterprise to take the chairmanship of that committee?

  Mr Thomas: What the Prime Minister decides to do in the long-term is, in a way, above my grade. I think the set-up works well. I do not think there have been any problems with the way the Committee is operated today. I think most government departments that I have had contact with appreciate the fact that they are sat around the table and appreciate the way the Secretary of State for International Development chairs those meetings.

  Lord Jones of Birmingham: Can I just add something. I have found in the six months I have been doing this that we are seen in the world as this free-trading nation that is a force for good by using trade as a way of raising living standards and sustainability in many countries, and I know this is unfashionable in newspapers, but business round the world is a fabulous agent for getting better education, better healthcare, better transport. A kid of 16 who has got those three things on his side is probably a little more likely to be able to solve his problems. That gives an intimate link between these two initiatives actually.

  Q12  Chairman: I agree with that.

  Mr Thomas: Mr Luff, I think the one obvious other point to perhaps draw your attention to, or draw the Committee's attention to is the background of the Secretary of State for International Development. He was a previous Minister for Trade and so in that sense has considerable background in both the development dimension of trade negotiations and, indeed, the British business dimension too.

  Q13  Chairman: It seems to me you work very hard, you in your job, because you have got a lot of your old DFID responsibilities, you have got trade policy responsibilities, which are hugely important, and you have got a whole stack of the old DTI responsibilities—consumer affairs, competition policy and so on—very big questions—while Digby just goes round the world banging the drum. It seems a bit of an unfair share of responsibilities, does it not?

  Lord Jones of Birmingham: Want to swap?

  Mr Thomas: I think that is a slightly unfair characterisation of the situation. Many of the specific country responsibilities that I had before the change in my role in July are being done by other ministers in the Department for International Development. The competition responsibilities that I have, as you rightly point out, within the Department for Business and Enterprise, complement, I think, the trade policy questions quite strongly. So, whilst I appreciate your description of me having to work extremely hard, and I do, and I relish the challenges that each day brings, I think actually it is a set-up that works very well. What I do not have to do, which previous trade ministers had to do, is the trade promotion side, because Digby is able to.

  Q14  Chairman: As you know from a committee report we produced recently to which you responded but I have not had your response yet, we were in favour of ministers travelling more to promote; so there is a lot of sympathy there.

  Lord Jones of Birmingham: Also, I understand now why the business community and, indeed, those who work in the business community, those employed in the business community, were always frustrated by ministers who were trying to do both jobs, who were cancelling at the last minute, who did not go, who went home early, all because they were trying to do all the other things that you have talked about.

  Q15  Chairman: Our recent European report put this in it, you have responded to it; I have not had your response yet.

  Lord Jones of Birmingham: You in 2006 said: "How about sorting this out?", not only to the Government, but, more importantly, I have got the privilege of actually trying to make it work.

  Q16  Chairman: But what does concern me is as you go round the world you will find a lot of things out that the rest of the ministerial teams need to know about.

  Lord Jones of Birmingham: Spot on.

  Q17  Chairman: You have only attended the Cabinet Committee once, I think, so far. I would like to see you there more regularly.

  Lord Jones of Birmingham: Two answers to that. Yes, you are right. I should make an effort to get to them, you are right, but if you look at why I did not, it is usually because I am sitting banging the drum for Britain in another country; I have not been sitting at my desk in Whitehall. The other thing is, just because I do not actually physically go to an hour's meeting because I am in Dubai, or Mumbai, or Washington does not mean that I or my officials are not on the phone to him or his officials or, indeed, to the Prime Minister, or the Chancellor, or any of the other secretaries of state where the issue I have learnt in another country has a direct relevance. Behind the scenes, just because you do not read it in the newspaper these days does not mean I am not doing it.

  Q18  Chairman: I am being rather self-indulgent. I must hand on to my colleagues. Just one last factual question from me to either of you really, probably more to you, Gareth. How often does the committee meet? What decisions has it made? What sort of things does it do?

  Mr Thomas: I think the committee has met three times since July, when it was established. There is another meeting shortly. We have discussed progress in the Doha Round, we have discussed progress in term of the Economic Partnership Agreement discussions and we have also discussed very briefly the Commission's Green Paper on Trade Defence Instruments and what our response to that should be and, as a result of those discussions, our lobbying strategy has been amended, changed, reactivated, et cetera, nuanced to reflect those discussions.

  Chairman: Thank you. I will move on. Brian Binley.

  Q19  Mr Binley: Thank you very much. My Lord, promotion of the UK round the world sounds like "super salesman Digby". Is that a fair description? Would are revel in that, or would you think that was slightly insulting?

  Lord Jones of Birmingham: Someone as shy, quiet and backward in coming forward like me would fight shy of the description of which you speak—not! People are kind enough to say that that is part of the job and people are kind enough to say it seems to be being done. Do I revel in it? I hope that is an arrogance I have not got. Do I identify with it and work on it and make sure that I can sell brand Britain around the world and use business as its wider value? It is not just about putting profits into shareholders, it is about Britain's values. Our values that, I can tell you, notwithstanding all the problems we have, we are still seen round the world as good partners with good values and a sense of fairness. We still are. When a British company or a British based company that happens to have an overseas headquarters is into a country, from America to Bangladesh, the Union Jack is there, and it means that the enhancement of the brand of everything that we stand for can come through the conduit of an inward investment or an overseas trade in either direction. If by concentrating and giving it time and using the skill you very kindly said I might have we can enhance brand Britain, I not only revel in it, actually that is a job I am privileged to do, frankly.


 
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