Examination of Witnesses (Questions 20-39)
LORD JONES
OF BIRMINGHAM
AND MR
GARETH THOMAS
MP
8 JANUARY 2008
Q20 Mr Binley: Digby, I can think
of few better men.
Lord Jones of Birmingham: You
are very kind.
Q21 Mr Binley: Having said that,
I would hate to think you were illegal.
Lord Jones of Birmingham: I am
sorry?
Q22 Mr Binley: I would hate to think
you were illegal, because you talked about values and legality
is an important matter. The Observer did suggest that you
had failed to comply with regulations which required you to declare
outside earnings. I think that was in December. Have you now complied?
Lord Jones of Birmingham: Yes.
Q23 Mr Binley: You are now legal,
are you?
Lord Jones of Birmingham: Not
only that, but actually I gave up absolutely everything I do money-earning-wise
(not some of my charity stuff but money-earning-wise) on the day
I became minister. I filled in the form to the House of Lords,
which is that to which you refer, a week later; so I was a tad
surprised in early December when I got a letter saying: "Why
have we not had your form?" Of course, I take responsibility
for it personally, it is my signature on the bottom of it, but
I did do it.
Q24 Mr Binley: So you are legal.
Lord Jones of Birmingham: I was
legal from July. It is just that somebody somewhere did not file
it, but I will take responsibility for that because that is what
ministers do.
Q25 Mr Binley: That is really good
news. Can I stay with the newspapers; they are part of the light
world we live in, and you found that out in an even bigger way
that perhaps you might have thought. In September The Financial
Times suggested that you were still struggling to persuade
some departmental officials to adopt new ways of thinking. In
other words, you were as frustrated about the slowness of government,
as most businessmen who come into this place are, quite frankly,
and I identify with that. Can I ask what sort of new ways of thinking
you had in mind and can I supplement that by saying: what changes
do you think you have made in that respect?
Lord Jones of Birmingham: The
Prime Minister made a decision in late June, upon his appointment,
(a) to split our jobs and (b) to say, for the first time, let
us do trade and investment to the exclusion of other responsibilities.
The easy bit is for him to say it and for me to say I would love
to do it. The second easy bit is for me to get going. For instance,
I am the first minister in charge of UKTI physically to go and
sit with them every day in their office; I am the first one to
try and brand UKTI as a minister, not in with the whole of the
Foreign Office and everything else, because it is being done differently.
The easy bit is to say sit here and say that. The difficult bit
is to then, not in UKTIthey not only buy it, they are fabulous
and they support it all the way down the linebut in other
parts of government it is new, it is different, it is change.
It means that if there is a choice between cancel a delegation
to Russia or do something else that a previous minister in this
job would have done, I will go to Russia because Russia is a huge
investor in Britain, because British companies trading with Russia
is important. It offends them when you cancel at the last minute,
although for very valid reasons if you are an MP or if you have
other responsibilities. For the organ of government, the engine
of Whitehall and Westminster to get used to that change is (a)
difficult, (b) frustrating for both sides and we are learning
from each other, and (c) yes, it is difficult when I am used to,
"When do you want it"? Yesterday", finding that
things take a little longer sometimes. Have I learnt that over
six months? Yes. Are they learning to do it a little more perhaps
with a sense of urgency? Yes. Somewhere in the middle it is getting
on quite fine. In fact, I have to say I am thoroughly enjoying
it.
Q26 Mr Binley: I am delighted. As
a salesman all my life, I understand what you mean about offending
because the last thing you want to do is offend a potential customer.
I am not sure government fully understands that and I am at one
with you. Can I finally go on to talk about your travels? You
have told us of your travels. Give us some idea of where you have
been and how you have raised those policy matters, how they have
related to the actual job of promoting Britain around the world,
and, finally, can I ask in that respect, it would be helpful to
keep us informed if we had a bulletin perhaps, I do not know,
every four months or something of that kind, just to give us a
handle on what I think is very important work.
Lord Jones of Birmingham: The
latter point first. I would love to do that. If every quarter
I dropped the Chairman a line and I copied it out to the members
and I basically said, "This is where I have been"long-haul,
short-haul, regional"these are the companies I saw,
this is what I was doing, these were the issues I have raised",
that is a relevant point. I would love to do that actually; so
the answer to that is, yes. The first point, one of the things
that is very important is to not get carried away with one of
the fashions of the time, or one of the important markets at the
time, to the exclusion of others. An example would be: was it
important I went to India and to China in my first six months?
You bet it was. But, for instance, when Bo Xilai was trade minister
in China (and I knew him in my CBI days) he congratulated me on
this appointment and he said, "Do yourself a favour. Of course,
come to Beijing and Shanghai but please do not concentrate on
that. Loads of people from all over the world, ministers, come
to Beijing and Shanghai. Go to the cities that do not often see
people. That is where Britain can maximise its time." It
was excellent advice. Not only did we please the Trade Minister
of China, an enormous partner in the twenty-first century, but
we can get more bang for the buck from the taxpayer of my time.
For instance, on my visit to China I went to Wuhan, a small city,
only eight million people, and Hubei Province, 60 million people,
the size of the UK. You have got British companies, environmental
engineering companies, cleaning up the lake, dealing with pollution,
stuff that is added value and quality innovation, Britain is doing
its best now. To get there was a good use of my time. Loads of
ministers, rightly, will go to your Beijings and your Shanghais.
Secondly, it is important to understand that last year roughly
1,500 different items of inward investment into Britain, second
in the world, after America, number one in Europe by a mile. Of
those 1,500, about 600 came from one country: America. If we,
therefore, ignore America on the basis that everyone is going
east (and, by the way, lots of important things are going east),
we are very foolish. So I have been to Arizona on one visit and
I went to New York and Philadelphia on another visit to basically
say thank you. I went to Johnson & Johnson in Philadelphia,
a huge pharmaceutical company.
Q27 Chairman: I do not want to cut
you off, but we have a full itinerary.
Lord Jones of Birmingham: For
instance, on a short-haul we actually export more to Germany than
we export to India, China, Russia and Japan put together. So if
we ignore Germany, if we take it for grantedit is in the
European Union, we understand them, do we notthen I think
we are being very foolish, we are being very complacent and we
are very wrong. If you were a minister who had lots of other things
on and a constituency here and other obligations there, you would
ignore Germany because you have not got time. I have the time,
so I went to Düsseldorf, met some inward investors and said,
"Thanks very much for coming and risking your dosh in Britain."
Q28 Mr Binley: A very quick question.
The last time you were here the Chairman asked if you would consider
doing the same job, bearing in mind you are not involved with
policy, with a future Conservative Government. Has six months
in government changed your mind: because you intimated you might
not?
Lord Jones of Birmingham: I actually
did not say yes or no. The words I replied, if you look at the
record, were "no comment". Six months on, I hope I am
doing my bit for my country. I am certainly, I hope, adding some
value. The answer to you is: no comment.
Mr Thomas: Mr Binley, if it helps,
I certainly would not do my job.
Q29 Mr Binley: Gareth, I was never
in any doubt about that particular point!
Mr Thomas: I do not think there
is an early prospect of that.
Chairman: The partisan note that
has been introduced into these proceedings unnerves me slightly.
I will let Julie Kirkbride in briefly before bringing in Tony
Wright.
Q30 Miss Kirkbride: We will part
with the question of whether or not you would do the same job
under a Conservative Government, the question is whether you could
afford to continue doing the job under any government?
Lord Jones of Birmingham: I do
think it is very, very important that ministers (and, may I say,
it is not my bag but members of Parliament) do set an example
if we are saying to policemen
Q31 Chairman: No, we will end that
there. We are getting off the subject.
Lord Jones of Birmingham: We can
afford to do it. The answer is it is not about whether you earn
the money, it is about whether you want to make a difference to
your country, but what you have got to do when you are looking
at the money (and I have learnt this in six months) is stop bleating
about it, because, frankly, an extra 2% or 3% is not the issue.
The issue is you are either doing it for your country or you are
not.
Chairman: I think you have deliberately
misread Julie's question.
Miss Kirkbride: It is not my question.
Chairman: It is not your question,
you know that, but we will move on to Tony Wright.
Q32 Mr Wright: Another question of
value for money. In a written answer recently there was an evaluation
of UKTI trade services which found £65 million expenditure
generated £1.13 billion benefits or £17 benefit for
each £1 of spend. With those huge returns that we see, why
do you think that the UKTI's budget has been kept level under
the 2007 Comprehensive Spending Review?
Lord Jones of Birmingham: Every
department had to, and rightly, make cuts, and we have to, all
of us in every department in government, try and maximise the
money we get from the taxpayer. I think the CSR settlement for
UKTI was fair, I am pleased actually to see that it was a settlement
that does enable me to do the job differently. I got involved
in it personally to make sure we could get some resource behind
it and if we can deliver those figures, which I am proud of (and
nothing down to me, down to the fabulous people who work in my
department), if we can do that with the money, I do not think
we need a bigger settlement to deliver more. As with most departments,
I hope, it is not the amount you get, it is how you use it, and
if we can be efficient and productive in how we do itprioritise,
choose, maximisethen I think we can not only deliver that
again but deliver better. Could I do with more money? We all could,
could we not, but it is not on the table. The nation's finances
are not going to say to departments: have loads more. My job is
to make sure that Andrew Cahn and his people actually deliver
even better things than that with the dosh we have got.
Q33 Mr Wright: Surely if we were
getting that return, £17 for every £1 of investment,
although it is not a cut per se, it would be pure folly
to look at it on that basis. Surely we would be investing more
to get more value for the investment. Sixty-five million pounds
is not really an awful lot of money for the size of the department
that we run in UKTI.
Lord Jones of Birmingham: It is
not an awful lot of money for what we do, and one of the jobs,
I hope, is that UKTI will be seen in government, seen by the media,
seen by people as important to this nation as Treasury, or Foreign
Office, DFID, MoD and everywhere else, and it is time it came
out from under its bush and really did get up in the headlines
for the fabulous contribution it makes to the coffers of the nation.
If we were given more would we deliver more? You get we would.
Do I work in the realms of reality and do I understand that that
is not on? Of course I do, and therefore the job is to deliver
more with what we have got by better application of resource,
although you are right, if we did have more, of course we would
deliver more.
Q34 Mr Wright: So are you confident
then, even with the CSR settlement, that you are going to be able
to deliver more through UKTI in the coming 12 months?
Lord Jones of Birmingham: Yes.
Q35 Mr Wright: One of the other aspects
of this is the question of the UK embassies abroad. There is going
to be a cut in those areas, and there has been some suggestion
that perhaps we could share some friendly embassies in that situation.
How do you consider that is going to affect the trade support?
Lord Jones of Birmingham: The
final decision in any event is (a) not there yet and (b) is not
for me. I can have an influence, I can make an input, and I have,
but it is not my decision; so I will not actually second-guess
the Foreign Secretary. What I would say is that the British business
community, one of the first ports of call, especially in emerging
markets, one of the friends at court you have is UKTI, especially
if you are a small business in emerging industries, emerging sectors,
such as creative industries or environmental engineering where
a lot of fabulous ideas come out of small business. UKTI on the
ground linked into an embassy that has the infrastructure and
the heritage (and, let us get proud about this, the Union Jack,
we are Brits and we should be proud of it), that presence round
the world is key. Also key is the way that presence is emblematically
transmitted into that community: a quality-looking embassy, a
residence in which you are proud to entertain to make sure that
on the ground you are seen as having influence. Sadly, perception
is reality in a lot of this and, therefore, to ensure that do
we need embassies round the world? Yes. Do we need them virtually
everywhere? Yes. We are Britain. We are the fifth biggest economy
on earth with a fabulous set of values.
Mr Thomas: If I may, there is
one other thing I would add to Tony's question. Digby has quite
rightly talked about UKTI and the role of embassies. In a sense
the trade policy which focuses on the long-term policy questions
is also engaged (and I apologise for confusing the House in the
first discussion) in the long-term promotion of opportunities
for British business by trying to open up markets through the
Doha Round and discussions through regional trade agreements,
through all sorts of other discussions that take place around
competition policy within the European Union. So there are approximately
70 staff who work on trade policy issues who are, in a sense,
seeking to open up opportunities for British business which UKTI
and the FCO posts can then exploit at a later date.
Lord Jones of Birmingham: Let
me just add, if you take an example, Graham Fry in Tokyo, or William
Irvine in Beijing, you will find they are spending and their staff
are spending, not UKTI, at ambassador level up to 40% of their
time regularly, a third of their time, on what David Miliband
would call commercial diplomacy, on the whole presence of Britain
from a commercial point of view. Is that essential? That is so
essential to this nation it is not true. Do we need that presence
around the world? Yes, I personally want to see it everywhere.
Q36 Mr Wright: You did mention briefly
that you had been putting your view forward in terms of the various
embassies that are coming forward for possible closure. Is that
taken on board generally by the Secretary of State?
Lord Jones of Birmingham: Well,
I can miss sixpeneth, and I do, very much in private, and I can
put forward, and so would my people, on a case by case basis the
merits and the not merits, but I do sympathise with the decisions
or, rather, the judgments that have to be made. For instance,
as we apply our resource there are some countries in the world
which, although they are important, are not as important as others,
and so you have to make some judgments. By the way, it is not
a British issue; the French have to do this and the Germans and
the Americans.
Chairman: I think we need to move
on from this subject.
Q37 Mr Wright: Very briefly, I think
you did mention your new responsibilities for DESO. Gareth, in
terms of the changes that have been effected with the transfer
of DESO to UKTI, is that going to make any difference to your
particular role?
Mr Thomas: I do not think it is
going to make a direct and immediate difference. I think it will
impact on Digby, as he alluded to in an earlier answer.
Lord Jones of Birmingham: I just
see it as a fabulous opportunity. Defence manufacturing is so
important. We are good at it, hundreds of thousands of jobs depend
on it, huge amounts of corporation tax, and if this nation does
not get behind its defence manufacturing sector, we will rue the
day. If I have got the chance to champion that by DESO or some
DESO coming into UKTI, I relish the opportunity.
Chairman: I think the general
view in the defence world is it was not broken; it did not require
fixing, though it is something we might look at again in the future
because it has caused a lot of concern to defence contractors,
the changes they did not ask for, and happened out of the blue,
but never mind. Let us move to more questions that Gareth Thomas
will want to address with Mike Weir.
Q38 Mr Weir: It seems the end of
this year is now the informal target date for concluding Doha.
That is some four years behind schedule. Is there any reason to
believe it will happen this time?
Mr Thomas: I was in Geneva just
before Christmas at the end of November and it was clear that
there has been some movement in the agriculture negotiations which
are absolutely key to getting some momentum into the Doha process.
We are expecting to see revised texts that form the basis for
negotiations from the agriculture group and from the NAMA group
in either late January or early February. If those texts are accepted
as a basis for continuing negotiation by all the key players,
then there is no reason why there could not then be a ministerial
meeting at Hong Kong or Cancun to try to close down agreement
on the headlines of a Doha deal. So, whilst the delays and the
length of time it has taken are frustrating, there does appear
to be movement. The chair of the negotiating group is very clear
on that, as were a number of other key players, and I think we
have to allow those and support those discussions continuing.
You may be aware, Mr Weir, that our own Prime Minister has been
heavily involved in talking to key players, both within the US
and within Brazil and India and other players within the European
Union to try to encourage the flexibility that is needed to close
down a deal. We are not that far away. The difference in the positions
of key players is not huge, but it is going to require people
on all sides to show that additional bit of flexibility.
Q39 Mr Weir: You mentioned the United
States, but, as I understand it a US presidential trade promotion
authority is needed to avoid Congress unpicking a final deal.
There has been a lot of concern about this portion of it. In fact,
Brazil and India have called for a "road map" towards
TPA. Do you think greater clarity on this is needed before any
deal can be finalised and is the current election process in America
likely to delay the others?
Mr Thomas: Trade promotion authority
is not stopping the Americans continuing to take part in discussions,
and TPA can be renewed or extended at any point by Congress. I
suppose my own sense is that the American presidential elections,
as, I suppose, any elections do, do not provide the most conducive
backdrop for negotiations to take place, but, as I say, the Americans
are continuing to take part in those discussions. They are very
active participants in Geneva and we will have to see how things
pan out. There are a number of different scenarios in which TPA
could be achieved and a number of different scenarios in which
the negotiations could be included, albeit, perhaps, that a new
president may have to take the deal through Congress. I do not
think TPA as such is a critical issue; it is going to be flexibility
from the different countries' capitals which are going to be key.
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