Exporting out of recession - Business and Enterprise Committee Contents

Examination of Witnesses (Questions 160-171)


23 FEBRUARY 2009

  Q160  Chairman: We do not want to get too bogged down with this but I think it is the beginning of a slippery slope. President Sarkozy uses exactly the same argument to justify subsidies to French car makers with French taxpayers' money, to justify explicitly protectionist measures in his subsidy package. The French and German governments use scrappage allowances because they know they will go for German cars; the Germans buy German cars. These are all protectionist measures and you are beginning on the slippery slope. You are giving them permission by saying British ministers, which I would agree with you about, should drive British cars. That is the trouble. The battle to protect free trade is difficult because we all make little compromises to suit domestic audiences.

  Lord Jones of Birmingham: I think it is a valid point.

  Q161  Miss Kirkbride: Are we compromising on that one then?

  Lord Jones of Birmingham: I think he has made a valid point.

  Q162  Miss Kirkbride: So Obama is very naughty but we will still buy British from the British Government as long as it is not put in legislation? Is that a rough summary of what it is all about?

  Lord Jones of Birmingham: By the way, the President of the United States of America, from, I think, the middle of this year—when you see him wave as he gets on to his helicopter on the White House lawn, that helicopter will be made in Somerset.

  Q163  Chairman: They may rescind the contract, actually. They are not so sure. They are looking at it again because they are unhappy about it.

  Lord Jones of Birmingham: There you are: protectionist again. Do not upset me on this Monday afternoon, Chairman.

  Q164  Miss Kirkbride: So if we have a bit of difficulty when it comes to goods and services and free trade—

  Lord Jones of Birmingham: You do.

  Q165  Miss Kirkbride: Between us, I would say.

  Lord Jones of Birmingham: Do not "we" us.

  Miss Kirkbride: "We" in terms of reconciling how—

  Mark Oaten: You are both Bromsgrove.

  Q166  Miss Kirkbride: Yes, exactly, but I mean "we" in terms of reconciling what emotionally we might like to do with a policy that would be fair and reasonable with regard to free trade. What about when it comes to British jobs for British workers?

  Lord Jones of Birmingham: I should think the Prime Minister—and I have not spoken to him about it so this is just a personal view—regrets the day he said it. One of the things that this country has excelled at over hundreds of years, not the last five or ten but hundreds of years, is getting quality people, skilled people, from all over the world to, yes, okay, enrich us socially and culturally but really to add to the GDP of the country. We have done it for hundreds of years incredibly well. We have even got a royal family that every time we run out of people we have gone off to Europe and got another lot. We have done it for hundreds of years, so I think, rightly, that if there are unemployed construction workers in Britain who think, "Two years down in the Gulf, two years in eastern Europe is what I'll do because I can't get a job here", the Auf Wiedersehen Pet argument, I think that is a good thing, but it hardly becomes us to turn round and say to others, "You can't come here and do the same thing". What I would say is welcome to competition because some of you might remember in 2006, just after I finished at the CBI, I took the Dispatches cameras on a tour and made a programme about Polish workers in Britain. This was at a time when you could not get a plumber for love nor money. I remember there finding out so often that people were saying, "Oh, these Poles have nicked our jobs", and with the camera there I used to challenge them. I would say, "You do the job then". "I'm not doing that job". "Why not?". One guy said, "I've got to get up early". Another guy said, "They don't pay enough". I do not blame the Polish workers for coming here, and I know the argument is that in the refineries and all that it was not Poles but the concept is the same. Please do not tell me that if we can get a more productive nature from people who are prepared to come here and work for a wage—and I hope there is no abuse; I do not want breaching of minimum wage; I do not want breaching of any health and safety or employment regulations; that is despicable, I do not want that, but if it is purely competition—then at the end of the day we have a history of welcoming people here to work hard, bring their skills and deliver for this country. It will be one of the elements by which we get ourselves out of this. I would love to take this opportunity in public to say this, Chairman. If we allow protectionism, and we have agreed a compromise on one or two areas, to get hold of the major nations of this world you will find nationalism follows very quickly behind it, and the moment you get nationalism you get extreme parties playing to populism and it will be the easiest thing in the world to get people who are worried about their jobs, worried about their future, to turn on certain ethnic minorities in this country, and indeed sometimes not even minorities. I would just say to us all that we have to kill that at birth, strangle it at birth, because I do not think it is too emotive to say look what happened when the 1930s went that way.

  Q167  Miss Kirkbride: Okay, so we are clear about workers.

  Lord Jones of Birmingham: But not buying a British motor car.

  Q168  Miss Kirkbride: What about your general view of the protectionist sentiment that is rising around the world, whether it is coming from America or whether it is the French up to their usual tricks? Are you concerned that in the present political climate we are going to have some difficulties on this front?

  Lord Jones of Birmingham: We have always had difficulties as a nation preaching the free trade gospel around the world. On balance, if you look at it over a cycle, our free trade stance, I agree, is bent at the edges but it has made this country richer. It is very difficult to sell that story to someone who has just lost their job and your democratically elected politician has to explain that he or she has just voted for them to lose their job. That is a pretty difficult call in a democracy, I fully understand that, but over a cycle you tend to make more money as a country if you are free trade. At this moment we are seeing a challenge to democratic capitalism, are we not, and when that happens the different voices that come to challenge that do not all come from people who are inherently nasty or anything else. A lot of them come from people who are just very worried, very insecure. It is a very difficult path to walk to keep the free trade mantra going but if this nation does not have a world that by and large is free trading we will never pay our way in the world and we certainly will not trade our way out of this.

  Q169  Chairman: This has been how I knew it would be, a wide-ranging session, perhaps a little more wide-ranging even than I had expected, but nevertheless a helpful one. The principal purpose of it was to draw on your time as a minister and to understand what changes, if any, you think need to be made to the public policy environment that surrounds our export promotion effort. That was the principal purpose: to make sure we can trade out of a recession and make use of a weakened sterling, for example. Is there anything—and this is a dangerous question to ask Digby Jones—you have not had an opportunity to say in that specific context that you would like to put on the record before we draw the session to a conclusion?

  Lord Jones of Birmingham: I would hope that as the Government of the nation—and this is not about a Labour Government or a Tory Government or a Liberal Government; it is nothing like that at all—faces the next 15 years of pulling in one's horns and raising taxation, and both of those two things are going to have to happen whoever is in charge because of the nature of the national debt, I just hope that they do not say, "We have got to cut things so that means less on trade promotion, fewer nurses, fewer teachers, fewer policemen". By all means start looking at the back office, all those sorts of things of which I spoke in a former committee. By all means look at streamlining systems, look at changing the way that you produce public services for sure, but please do not cut at the coalface. That goes for a teacher, it goes for a policeman and it goes for a nurse. I want to see in the same breath as those important people in our society those who work in the trade promotion and investment promotion side of this nation. We have to see them, whether they are working on the ground in an emerging market or whether they are working in a regional country of the UK getting businesses to do it. They are as important to this country as a nurse and a teacher and a policeman because if they do not do the job and businesses do not earn the money they will not pay the taxes and you will not get any nurses and teachers and policemen. More than anything else, therefore, I would ask,—and I have got representatives of all three parties here—when the call comes (and it will) to cut services and raise taxation, please put the work of UKTI up there with the work of a teacher.

  Q170  Chairman: And you would say that broadly the UKTI structure and model is working quite well? It could be improved, everything needs to be improved, but you would not change the basic model?

  Lord Jones of Birmingham: I would not. I would put more resource into it, especially on the ground in overseas markets, especially into other sectors than they are allowed to do because of the money at their disposal. I would not change it. The ability to get people to follow an understood vision and be led forward happened before I or Andrew Cahn. It happened with me there. I understand, although it is second-hand, that Lord Davies is doing exactly the same. What we should do is not chop and change and have people going forward. There will be some places in the world where they could do with a few more people. By the way, if that means that you are going to say, "Those people can come but they have to come off a head count in London", change the system. There is nothing wrong with that, but do not just cut people at the coalface.

  Q171  Chairman: Thank you very much indeed. We are very grateful for your time.

  Lord Jones of Birmingham: My pleasure.

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