Examination of Witnesses (Questions 100-119)|
23 FEBRUARY 2009
Q100 Mr Clapham: That is an interesting
point, working with the RDAs. As you say, it has become much more
focused. In terms of UKTI's target markets, they identified in
their strategy ten target markets. Do you feel that they need
adjusting or are you satisfied that those are the markets which
we should be concerned with?
Lord Jones of Birmingham: They
chose ten, did they not, but then about a year or so ago they
went to 16 of the emerging markets? Do you remember?
Q101 Mr Clapham: I am just looking
at the brief. I have got my brief here.
Lord Jones of Birmingham: They
had ten, which would include America. For all the accent we put
on everywhere else, America is still our biggest trading partner
and still our biggest inward investor, so you ignore America at
your peril. Of the ten, you are right: they were everything, but
we also chose 16 emerging markets we could focus stuff on.
Q102 Chairman: Given the list of
the ten emerging markets we have got here, it would be interesting
to have your view on the value of the tenChina, India,
Russia, Brazil, Indonesia, Mexico, Ukraine, Saudi Arabia, Turkey,
Lord Jones of Birmingham: And
your question is?
Q103 Chairman: Are those the right
Lord Jones of Birmingham: If you
are having ten, that is the right ten. The question should be,
is ten enough? One thing I would like to see, and I am not going
to second-guess Sir Andrew; he might well have done it, is that
you should keep that under constant review and see where you need
to be putting more or less of your money. Also, is ten enough?
A very good example of this would be that Indonesia, for instance,
is a market that is not really on our radar screen as a country.
If you said to small businesses in Manchester, "Tell me some
exporting markets you think you could go at", a country with
160 million Muslims is not somewhere where they think of and yet
it is teeming with people who are getting richer every day and
who would love to buy our goods and services. If you said, "How
about Mexico?", they would go, "Oh, yes, we know about
that. It's below America and I know where it is". You have
got a big job to do to get certain markets with huge potential
onto the radar screen of the British business population.
Q104 Mr Clapham: Are we doing enough
to do that, to get across to British business the kinds of markets
that we ought to be having a crack at?
Lord Jones of Birmingham: One
of my jobs at HSBC is to make sure that smaller businesses in
Britain get an understanding of that. I have got to get round
Britain doing that and I would hope that some of my rival bankers
do the same. This should be something that we should all be doing.
Are we doing enough as a country? No; we should be doing more.
UKTI, I would say, are doing as much as they possibly can with
the resource they have got, but what I would like to see is them
having more resource.
Q105 Chairman: As a link into Lindsay's
question, one other UKTI question struck us as very important:
the degree of controversy around the merger of the defence export
sales organisations in UKTI. Some people said that this was a
marvellous opportunity to upskill our defence export operation;
others said it was a symptom of embarrassment, the fact that we
sold armaments at all as a nation and it was time to shut them
off. What was the reason for the merger and has it worked?
Lord Jones of Birmingham: First,
it is against a background where I believe defence manufacturing
is one of the great strategic and hugely important sectors of
this country. We are one of those nations that has a reputation
for standing up and being counted in the name of freedom. I do
not want to argue about was Iraq right? What about Afghanistan?
I do not mean that. I just mean that we are a nation that does
stand up and get counted in many areas. To do it and do it well
you need an indigenous defence manufacturing base. Secondly, if
you develop it and do it well you can sell that expertise around
the world. If anybody who is against us making weapons in this
country thinks that this world is going to be safer by Britain
not doing it, they are mad. All that will happen is that countries
that you really wish were not doing it will start doing it. Therefore,
if you follow the premise that we have a huge employer, a big
taxpayer, a sector which supports democratic freedom and a sector
which hopefully crowds out some rather nasty countries that would
do it if we did not, then it follows that you need to give it
government support. Our democratically-elected politicians may
find it unpopular and embarrassing to say so, but the Government
of the day has to get behind it and it needs an organisation to
promote it. That organisation, especially in the field of arms
sales, should be over-transparent. It should super-please in the
areas of transparency and accountability, and it is a field where
other countries are not transparent and accountable. I think we
should be an exemplar in how to do that, and I am not passing
judgment over whether we have in the past or not. I am merely
saying that is what we should be doing. On that basis you need
an organisation. It probably makes sense that you put that organisation
in amongst the organisation that is there to promote the rest
of your sales and promotion and marketing of what we have in goods
and services rather than something that is over there, and so
to bring it inside the UKTI tent I think was the right thing to
do. It has peculiarities which we have to be sensitive to. One
is that your best salesmen and saleswomen for that are not you
and I; your best salesmen and saleswomen are the men and women
in uniform. They are the best and the people who buy this stuff
in other countries listen to the men and women in uniform more
than they will listen to me, so you will need to be sensitive
to the fact that it is slightly different in that respect. Secondly,
it is probably the only sector, with the possible exclusion of
higher education, where government sells to government and where
the private sector are agents of government as opposed to principals.
Therefore, when government sells to government you have all the
issues, good and bad, that come with that. Is it different? Yes.
Do I think those differences mean that you would not put it within
UKTI? No. I would have it within UKTI. I think that was a right
decision, but it was done too quickly, it was done without notice
and it was done in a way that was not sensitive enough to the
men and women in uniform and those who make the stuff upon which
we depend as a nation not only for our security but also our wealth
and our taxes and our schools and hospitals. However, is the end
result where I would like it to be? Yes.
Q106 Chairman: That means big problems
in the process. Industry was completely unaware of the potential.
It just happened out of the blue. You are saying that has caused
interim difficulties but they are being overcome and the idea
is basically a sound one?
Lord Jones of Birmingham: I was
amazed, given the lack of notice and the lack of consultation
and the immediacy of the implementation of the decision, at how
well those who were affected by it got on with it, probably not
happily at the time but they got on with it, and I think the end
result is probably where a lot of people would have liked it to
be, but on the way through there were a fair few sensitivities
Q107 Mr Hoyle: I represent a region
that is very depend on defence manufacture.
Lord Jones of Birmingham: Sure.
You make the Typhoon, do you not?
Q108 Mr Hoyle: Absolutely; we make
the Typhoon, and we have got missile technology as well, but,
of course, with that goes a lot of government investment of taxpayers'
money. Do you think we do enough in technology transfer for the
investment that we place in defence?
Lord Jones of Birmingham: Do you
mean transfer to?
Q109 Mr Hoyle: Into other sectors,
Lord Jones of Birmingham: Factually
do we do enough? No. I think we could do a lot more. I think there
is one huge impediment, which is that, of course, our biggest
partner in all respects of defence manufacturing is the Americans.
The problem you have got
Q110 Mr Hoyle: Except on Eurofighter.
They are not even involved.
Lord Jones of Birmingham: Well,
Q111 Mr Hoyle: And the missile technology
is not American either?
Lord Jones of Birmingham: But
America is our biggest partner in defence technology and the issue
you have there is that they so often have huge impediments on
technology transfer of any sort. It is easy for you and I to sit
in a room like this and say there ought to be more.
Q112 Mr Hoyle: But we could do more.
The big question is, which car plant is going to close in the
Lord Jones of Birmingham: You
are asking me?
Q113 Mr Hoyle: We have heard statements
from the unions that a car plant is about to close.
Lord Jones of Birmingham: You
had better ask the unions then, Chairman.
Q114 Mr Hoyle: So you have no intimation?
Lord Jones of Birmingham: I have
none. I am not hiding from you. I genuinely do not know. My fervent
wish is that none does.
Q115 Mr Hoyle: So you think it could
Lord Jones of Birmingham: I would
think there is an element of it. I would not have thought it was
all of it, to be fair. I do not think Tony Woodley is irresponsible
in that respect. He might be playing to his audience a little
bit but I think he is probably speaking his mind in his true and
genuine belief, to be honest. As you may imagine, Mr Woodley does
not ring me up and consult with me very often.
Q116 Mr Hoyle: I am surprised at
Lord Jones of Birmingham: In fact,
delete "very often"; insert "ever".
Q117 Mr Hoyle: I do not think he
plays golf either, so you are all right.
Lord Jones of Birmingham: We might
meet on the non-golf course then.
Q118 Mr Hoyle: In the case of the
UK should we be doing more to promote its manufacturing industries,
what sectors should be sustained through intervention through
the recession, and how should the Government intervene without
"picking winners"? That is a big question for you.
Lord Jones of Birmingham: I am
a critic of this Government not subsidising skilled people to
stay in and connected with the skilled manufacturing jobs.
Q119 Mr Hoyle: There is some of that
going on. I think you are being a little bit disingenuous on that
because there are cases where the Government, through the RDAs,
has been investing skills in companies to help support them during
Lord Jones of Birmingham: I do
not doubt you. What I am saying is that if that is accurate then
I really would love to hear that.