My hon. Friend the Member for South Thanet is absolutely right about SMEs, particularly with regard to her micro argument. In an age when a start-up
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business on a laptop in a back bedroom has the capability of being a global business from day one—which was certainly not the case when I started my business, like my hon. Friend the Member for Enfield North, in 1989—we need to think about where Government intervention needs to sit in terms of quality, and, frankly, there are a lot of very good commercial services that the Government do not need to duplicate. That thinking is important and that is a good point, which I will flag up with Lord Green myself.
I have said that UKTI is making changes. What are they in practice? First, it is bringing in private sector expertise—this alludes particularly to the point made by my hon. Friend the Member for Skipton and Ripon (Julian Smith)—into the senior leadership of UKTI. As we have already heard, it has already outsourced the inward investment services, creating, through PA Consulting, a coherent investment service right across the English regions outside of London. Those teams have incentives built in to their contracts to bring new projects to our shores. In other words, it is moving towards being outcome based—if not as ideally as we would always have in the private sector, then much closer to that—rather than, necessarily, what I would describe as the conventional salaried model.
I would like to pick up on a couple of points that have been raised on the regional development agencies, UKTI and LEPs. One of my problems with the RDAs was that, when I went to Shanghai, I discovered that UKTI had its own operations running very positively, but there were eight separate independent trade organisations—all fully funded, all competing with each other, and all in Shanghai—from the eight RDAs outside London. To my mind, that was bonkers. There needs to be a clear, co-ordinated UK presence, while making sure that, within the UK, communication is strong. Removing the RDA layer—for many other reasons beyond this one—helps us to co-ordinate or focus the effort on UKTI—a single, clear UK message. Then what is needed is to ensure that there are proper links to the grass roots. That means working with the devolved Administrations and having a proper understanding with the LEPs in England. That is where we are. We have memorandums of understanding in place, which are crucial because they allow a strong UK voice. If Kent or Essex wish to do their own thing, that is fine, but let us co-ordinate and work together. That is an important shift.
Mr Bailey: I accept the Minister’s point about the duplication of effort of RDAs—an issue highlighted in previous BIS reports—but I am not totally convinced that the best way of dealing with that was to scrap the RDAs before having an alternative.
Mr Prisk: We have wound them down, although they still operate in technical terms, as the hon. Gentleman knows, until 1 April. We have tried to wind the RDAs down while building the LEPs up. The key point is that, in trade terms, we have made sure that UKTI is in the saddle, rather than having nine horses running consecutively, if I can say that during Cheltenham week. That was the important point, because there was a danger.
A German business in Shanghai told me, “Look, I’m confused. Two agencies have come to me. One says they do wonderful things in Coventry, the other says they do
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wonderful things in Leicester. Frankly, I can’t spot the difference between the two. Why am I being sold competing bids?” That is a good point. Co-ordination is crucial.
The second change that Mr Baird and the noble Lord Green have made is that, from April, there will be incentivised contracts for the private sector to deliver trade support in the English regions. On the sales culture, which several hon. Members mentioned, those two things—getting private sector into the business and moving towards incentivised contracts —will make a significant difference.
Hon. Members raised a couple of broader issues about how we deal with trade as a Government. That is a good point. Right from the start, the Prime Minister made it clear that there would be a trade Minister, and we have an excellent trade Minister in Stephen Green. All of us must regard our role as part of the trade and investment portfolio. That is why more than 400 separate ministerial engagements have been undertaken by Ministers from all Departments—I have a feeling that that even extends to the Department for Work and Pensions—because it is important that, when we go abroad, we are part of a trade mission. That is my background and, I am happy to say, that of most of my ministerial colleagues.
That is why today, for example, the Prime Minister is in New York, having had his business dinner at the White House yesterday with UK and American businesses, building on those contacts—if that answers the hon. Gentleman’s question. That is why the Foreign Secretary said, right at the beginning of this Government, that we want to put commerce right at the heart of what the Foreign and Commonwealth Office does, in collaboration with BIS and others, including UKTI, because we need to change the culture that says that the diplomatic role does not sully its hands with the process of commerce. That is fundamental. We are, as I said at the beginning, a trading nation. It is in our blood. Therefore, getting that change is important.
On the calibre, selection and recruitment of individuals—I am married to a classicist, so I need to be careful about what I say next—we need to ensure that there is the broadest recruitment possible, which is why the private sector infusion is important. I am a great believer in a greater interplay between private and public, which is why, when I started in my role, I said to the team dealing with small businesses, for example, “Let us spend a working week in a small business.” Obviously, I had done it before professionally, but it was crucial for the civil servants to understand what it was to be in a commercial environment, especially in a small business, which does not only have to get the business, but has to do the business and fill in the VAT form on a Sunday afternoon, as I recall.
Hon. Members mentioned being more French. I put it that way because, as hon. Members have correctly put it, it is about moving away from Ministers only attending events to cut ribbons once the deal is done. If we do that, it is too late. I tried to get the point across during my few months covering this role at the beginning of the Government, before Stephen Green was able to join us—it was worth the wait to get the right calibre of individual—that it is no good Ministers rolling up when the deal is done; we have to be there building the relationship. That is what Business Buddies is all about. Part of my role is ensuring that I have an ongoing
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strong relationship with many major automotive businesses. That is fundamental. Such relationships are crucial because, as the French have learned and known for many years, the deal comes at the end of building such a relationship, not at the beginning. That is why the process, of which UKTI is a fundamental part, reaches across the whole of Government, ensuring that Ministers, from the Prime Minister downwards, are involved.
Let me wrap up, because the hon. Member for South Thanet needs to respond to the debate; that is the courtesy of this House. The noble Lord Green rightly said at the start—he is wise and right about this—that changing the way our trade balance operates is not a sprint but a marathon. That means, not that we want to ensure that we are going at a good pace but that, if we are to change the industrial strategy and the way we deliver inward investment and the operation and communication of exports, and so on, we must ensure that we get this right. It is true that, although there are strengths in the current system, we have inherited a number of weaknesses and we are trying to iron those out. Personally—this is also the view of my ministerial colleagues—I welcome constructive criticism and ideas and want to ensure that those will be fed through, both to the organisation and to the Minister responsible in the next few days.
5.26 pm
Laura Sandys: I thank the Minister for a comprehensive response to many of the points that were made.
Along with my friend the hon. Member for Brent North, I feel that this has been a positive debate, contributing ideas and experience and setting the tone, hopefully, for a closer relationship between Members of Parliament and UKTI into the future. Hon. Members have made many varied points. A big issue mentioned by a lot of Conservative Members is the sales and marketing culture and engaging with UKTI and MPs, with our support. We must also be clear that UKTI cannot deliver economic growth itself: it is a facilitator. It is incumbent on all hon. Members to go back to our constituencies and talk about the opportunities, ensuring that we are making those connections work.
I should like to throw a couple of opportunities—not challenges—to the Minister and to UKTI. Can we make this the start of a dialogue and debate? It would be useful to have a round table that was a little bit more informal, talking about ideas and experiences and, perhaps, identifying certain key people who have had a previous history in certain markets. For me, it would be central Asia and the Caucasus, which does not appear on any list. It might be useful to have an all-party group considering such issues, advancing ideas and doing some comparison with Malaysia, Singapore, France, Germany and others, pulling together data and interrogating where other people are making successes—and celebrating our successes, too.
I hope that hon. Members feel that they have had the opportunity to put ideas on engaging with UKTI to the Minister. We must ensure that this is not the end but merely the start of building a longer-term relationship between this place and our external marketing and trade and inward investment.