Examination of Witnesses (Questions 180-192)
TBBC AND MEA
1 APRIL 2008
Q180 Anne Moffat: Have you made a
case for more funding anywhere?
Sir Julian Horn-Smith: Not yet,
no. We are going to, though, believe me.
Q181 Mr Hoyle: I think we have got
that message as well. We understand the £5,000, including
VAT.
Sir Julian Horn-Smith: The VAT
is important.
Mr Hoyle: Of course.
Q182 Mr Wright: To move on to the
EU accession, in your opinion what is the chance of Turkey's accession
to the European Union?
Sir Julian Horn-Smith: It is a
very big question. If it were up to us, they would be pretty high,
90% plus, but it is not entirely up to us. We would have to second-guess
what the attitude of the Germans would be and some of those who
have reservations. Interestingly enough, those who appear not
to have a reservation are, for example, the Greeks, as you will
know, where the relationship is particularly close. Even the Cypriots
now seem to be easing their objections. France and Germany are
the two who will need to feel more comfortable before it happens,
but I think in time it is better than 50% and it would be a great
opportunity lost if it slipped through our fingers.
Q183 Mr Wright: You mentioned the
Cyprus issue, and obviously Greek, which is quite a significant
barrier to their accession. Do you see that a number of the issues—that
we looked at ourselves when we were in Turkey—are really
in the hands of Turkey? They have moved a long way. I think people
would accept that they have moved a long way and are moving very
slowly in the right direction. Would you accept that it is really
in their hands rather than anybody else's to move in that direction?
Sir Julian Horn-Smith: If one
could wind the clock back, one would have perhaps preferred to
have dealt with the Turkish accession before the Cypriot accession.
However, that is not where we are. Of course it is in the Turkish
hands primarily—but not exclusively—but I think the
situation there is improving quite significantly. Certainly the
Turks I know tell me they are very much focused on trying to find
a way through this.
Q184 Mr Hoyle: This Committee went
out eight years ago and everybody wanted to be part of the EU,
the population out there was absolutely convinced. That has waned.
That has gone away. It is not top of the agenda any more. What
do you think we can do to try to move it up the agenda for them?
Sir Julian Horn-Smith: Do you
mean public opinion in Turkey?
Q185 Mr Hoyle: Public opinion and
also in business, because they think it is never going to happen.
Sir Julian Horn-Smith: That is
really a question of leadership in Turkey. The Turkish Government
will need to show leadership and show direction to encourage people.
What can we do about it? We can be sensitive in our handling in
our relations with Turkey but, particularly, both at UK and EU
level. We have already talked about the fact that they are a proud
people with a rich history who have put their hand up and said,
"We would like to join," and so therefore obviously
rejection or objection and negotiation need to be handled very
delicately and in a sensitive manner. Public opinion is of course
fickle. They have other issues, of course, that we have all read
about in the press but are well-known in the east of Turkey, but
to be patient, to be sensitive but focused, and strong committed
leadership by Mr Erdogan and his team are what is required.
Mr Hoyle: Thank you.
Q186 Mr Weir: I think you have answered
most of this question. I take it from your previous answers that
both wings of the Council Turkish and British are very strongly
in favour of Turkey's accession to the EU.
Sir Julian Horn-Smith: Yes.
Q187 Mr Weir: What are the key economic
issues in accession?
Mr Innes-Hopkins: Clearly the
economic reform agenda. I think the Turkish side as well sees
a very strong link with their experience of operating in Turkey:
the sooner they can meet the EU Acquis, the better the business
environment, which will benefit both UK and Turkish companies.
There is very much a common cause there. I think there is an open
door for UK plc to contribute to the process. It is very much
a win-win situation. There is obviously still a body in Turkey
that resists change and that probably will continue, but up until
now they have found a way to move forward and to get the momentum
necessary. But, as we all know, implementing the EU Acquis is
a major challenge, thousands of pages, and it is going to take
years. I think the political will is there.
Sir Julian Horn-Smith: And the
prize is worth it.
Q188 Mr Weir: What about the migration?
Obviously that has been quite controversial, with the new East
European states that have joined the EU. We see a report in the
House of Lords this morning which seems to cast some doubt on
all this. Do you see that as a serious issue as far as the UK
is concerned?
Sir Julian Horn-Smith: We are
obviously going beyond the remit of TBBC but, nevertheless, relations
with Turkey are very important to us and that is part of it. The
answer of course is, yes: it is bound to be an issue, given that
half the population of Turkey are under the age of 25, so the
demographics are very different from ours. Although we often hear
about the issues that Germany has, the fact is that even if Turkey
has economic growth at a level significantly higher than our level
of economic growth it probably will not be sufficient to fulfil
the aspirations of all young Turks certainly. I think we will
need to address that, and probably have to take into account the
concerns, particularly in Germany, and maybe France to a lesser
extent, when we negotiate the terms with Turkey. However, notwithstanding
that, we must be careful not to shoot ourselves in the foot in
that process, first, by irritating the Turks unnecessarily and,
secondly, by putting in controls that are heavy-handed and harm
economic relations between us and Turkey. It would not be realistic
to have a completely open door on day one. It would just, I am
afraid, create another problem.
Anne Moffat: And you say you are not
political!
Q189 Mr Hoyle: I will just get into
a couple of other issues. We did touch on the balance of payments.
Do you think we are not getting the true picture; that it is not
as bad as we think; that British business is doing better because
of the way that accountancy takes place? We are a major part of
Airbus, which is a major export to Turkey—wings, engines
and everything—and yet the accounting figures will go to
France rather than to the UK, and it is the same with the petroleum
industry, where some of that accounting is being done in the Netherlands.
Do you think that is distorting the true picture, where actually
we are in a much better position?
Sir Julian Horn-Smith: That would
distort the picture of course everywhere and not just in Turkey.
But there is another element to the picture which may distort
it and that is of course the service industry and inward investments
there. Looking simply at trade often under-sells the UK position
The UK has become a very successful source of service industry
companies, such as Tesco, such as Vodafone, such as some of the
banks, which of course do not export items but export services.
Of course these are not shown in the numbers. Notwithstanding
that, however, there is no excuse in my view—well, there
are reasons but not real excuses, why trade with Turkey is less
than a global average. It should be higher than our global average.
Therefore, even despite the distortions I think we are still under-hitting,
frankly.
Q190 Mr Hoyle: We have touched on
Turkish workers coming to the UK but we have also heard about
UK companies that wanted to get people in to work for them in
Turkey, and they were having great difficulty because it is about
protecting Turkish nationals.
Sir Julian Horn-Smith: I have
heard about that in the last couple of days but I do not know
of specific examples.
Mr Innes-Hopkins: We probably
would not be the right body to get involved in the fine detail
of that but we have heard that there are problems.
Q191 Mr Hoyle: It is an issue we
have got to look at.
Sir Julian Horn-Smith: Yes. We
are not really the group for that one.
Mr Hoyle: My final question is: if you
could have one recommendation included in our report, what would
it be?
Q192 Anne Moffat: Funding.
Sir Julian Horn-Smith: Give us
the money! No, it is not that. I really would recommend that we
seek to dramatically increase our trade position with Turkey.
In that regard, both in outward investment and trade exports with
Turkey, by having a more structured approach from the British
side to do that. If we were to do that and to achieve that objective,
then many of the other things we would like to do in the world
of education, in the world of culture, and in the world of diplomacy
and so on would be far, far easier for us because we would have
a lot more credibility.
Mr Hoyle: Thank you for that, Sir Julian
and thank you to your team as well. Thank you very much for your
time.
Anne Moffat: That was really interesting.
Thank you very much.
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