Examination of Witnesses (Questions 193-199)
BERR AND UKTI
28 APRIL 2008
Q193 Chairman: Welcome once again. I
apologise but we always seem to get this big room. However, you
fill up any room you are in, metaphorically speaking, so that
is all right!
Lord Jones of Birmingham: Flatterer!
Q194 Chairman: As I always do, can
I begin by asking you to introduce yourself and your colleagues
for the record.
Lord Jones of Birmingham: I am
Digby, Lord Jones of Birmingham, Minister of State for Trade and
Investment.
Mr McInnes: Nick McInnes, I am
Director within the International Group of UK Trade and Investment.
Mr Dodd: Peter Dodd, I am the
Director of International Economics in the Department for Business.
Q195 Chairman: All three of you are
familiar to this Committee for various reasons. I begin by putting
on the record publicly our gratitude to UKTI staff at the Embassy
and Consulate General in Istanbul and Ankara for the excellent
way in which we were looked after during our visit to Turkey which
was an extremely productive and engaging visit of which we were
very appreciative. I begin with a public apology to you, my Lord,
not only for beating your team in the Premiership a few weeks
ago and also for the rather gloating text I sent you from the
ground, but also for not being able to be with you when you come
to the ground for a charity fund-raising visit in a few weeks'
time. The Committee will be abroad then again (we are almost doing
as much globe-trotting as you) but I hope you raise a lot of money
for your chosen charitable cause.
Lord Jones of Birmingham: Thank
you. It will be ten years to the day since I finished John O'Groats
to Lands' End on a bike, so I thought we would do your club to
mine for a day, rather than 14 days, to raise a few bob.
Q196 Chairman: That is the mutual
self-congratulation over and done with but thank you very much.
We will begin by asking a few general questions. The focus of
this Committee's inquiry is of course the economic consequences,
particularly for the UK, of Turkish membership of the EU, and
that is the context, but obviously this rears across into politics
from time to time as well. This question, though, is perhaps more
economic than political (but has political consequences) and it
is to ask you what your judgment is of the extent to which Turkey
itself needs the EU accession process to maintain the progress
in its own domestic reform programme now that the IMF programme
is drawing to a conclusion?
Lord Jones of Birmingham: The
whole British drive for Turkish membership is multifarious from
an economic and trade point of view. Of course Brits enjoy wider
markets full of people who are getting richer every day to whom
we can sell our goods and services and from whom we can attract
inward investment, so the economic rationale for why Britain wants
Turkey in Europe is very similar to the other way round which
is that, be it from Germany or France or Italy or Britain or anywhere
else, Turkey would clearly benefit enormously economically from
a trade and investment point of view, creating employment and
increasing the rate of growth of their economy. Also they would
benefit enormously because of the current problems and situation
with their infrastructure in their public realm from the money
that would be invested in the country by the European Union Structural
Funds, so that drive has for many years now sustained the drive
of economic reform in Turkey. Over the last couple of years we
have noticed this, and actually I am quite pleased, because I
visited Turkey twice when I was Director-General of the CBI and
the second time I went they were mentioning this to me, which
there was a shift in emphasis from, "We have got to do this
if we want to be in the European Union" more to, "We
have got to do this because it is a very good thing because economic
reform is going to make for a more stable and wealthy Turkey,
period." I have seen that shift so I think that that is good
to see as well and I think that is the biggest change of all.
Q197 Chairman: But all is not going
terribly smoothly just at present in Turkey. We will turn in a
few minutes to the economic problems facing Turkey, which my colleague
Brian Binley will ask you about, but can I look a little bit more
specifically at the politics. There has been quite a lot of concern
expressed about the constitutional court case with the AKP, the
ruling party. People describe it as Turkey "shooting itself
in the foot" once again. People have said that that case
could actually freeze a lot of political progress that is needed
in the country over the next months and perhaps longer. How much
impact do you think the case is going to have on Turkey's economic
development and reform process?
Lord Jones of Birmingham: In a
formal process of trying to meet with the Acquis and trying to
get membership moving along, it does nothing to help, and indeed
it feeds the prejudices and the views of the opponents to Turkey
joining the European Union. In terms of economic reform, I do
not think it has any effect. In terms of British businesses' attitude
towards Turkey on trade and investment I have heard not one company
say to me that it would make a difference.
Q198 Chairman: But the Government's
view of the court action is that it is unsatisfactory and illustrates
a problem in Turkey's constitutional arrangements and is contrary
to the kind of provisions that we have in the Council of Europe
and the European Union itself.
Lord Jones of Birmingham: Yes
it is a distraction, is it not, it takes the eye off the ball,
and it means that people in Turkey are not concentrating on the
things that members of the European Union wish they were, but
I do not see it in any way as fatal, I do not see it as anything
other than delaying, and I do repeat I think it certainly feeds
into the prejudices of some members of the European Union who
do not want Turkey inside.
Chairman: Looking at economic questions,
Brian Binley?
Mr Binley: I hope you will give me just
a little leeway. I am delighted to see Lord Jones with us again
because his background is very solidly a background of great record
in terms of British business, and that is my sector and it is
the area that we are both very proud of, quite frankly, and we
have met on a number of occasions and made that point in our different
ways. You will have seen the report published in the Telegraph
of the British Chambers of Commerce survey which really underlined
the fact that there is very little confidence in the Government
in terms of acting on behalf of the business sector, and from
my perspective hardly any more with regard to the Opposition,
and that concerns me enormously. Part of your role was not only
to promote British business abroad but to promote it within the
Government, in truth, Digby. I just wonder whether you feel it
has been such hard work hitting your head against a brick wall
on the basis of having so little effect (and I have been here
longer and had much less effect, I might tell you!)
Q199 Chairman: I am giving leeway
on subject but not length of questions. That was far too long
a question. I want you to get away by 4 o'clock for your train
so we must all be more economical with our questions and our answers.
Lord Jones of Birmingham: Can
I just ask you was that a question to which you are expecting
a reply in relation to the United Kingdom or Turkey?
Mr Binley: Yes, from both of our perspectives
in view of the fact we are massive supporters of business and
business seems to have little regard for government, quite frankly.
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