Foreign AffairsWritten evidence from the Rt Hon The Lord Mayor Alderman Roger Gifford

Building on the evidence provided to the Committee by my predecessor, Sir David Wootton, this letter sets out a brief overview of my recent visit to the Gulf region.

By way of background, a visit to the Gulf has been part of the mayoral overseas programme for at least the last 11 years. Indeed, until the last Government was elected in 2010, the Lord Mayor was the only person at Ministerial level who visited the Gulf on a regular basis. Since then the number of Ministerial visits has grown and, whilst this has challenged Posts, it has been appreciated greatly by the rulers and governments of the Gulf States.

On the latest visit (16–28 February), we noted huge goodwill towards the UK throughout the region; much is historic and still well supported by a love of the UK with many people spending their summers in London. There is also a genuine wish amongst the ruling families and senior government officials for more UK engagement in all the countries we visited. Some still expect to see the UK leading in the ‘old fashioned’ manufacturing rather than at the cutting edge of innovation and technology. They have also warned us of complacency—noting the rise of China, Turkey, South Korea and India alongside aggressive European competition. Posts recognise this and it adds to their frustration when there is a lack of response from the UK Business community.

UKTI are doing an outstanding job; I sensed a very different work ethic to ten years ago and the teams are increasingly sector focussed; they are assertive and hungry for business with strong follow-up. My impression to date is that there is not yet enough take up amongst the small and medium-sized British companies and this is a pity—but perhaps understandable with business in the UK flat-lining at worst and, at best, picking up slowly.

The Gulf is a hugely vibrant and active region, with estimates of some $1.7 trillion to be invested in infrastructure over the next ten years. Some projects are cross-regional—railways, ports, airports, alternative energy, and alternative income generators. Qatar, for instance, has developed a range of downstream energy subsidiary products.

There are huge possibilities for the UK’s creative industries, be it in the form of design, architecture, project management, facilities management, theatres or museums. Each culture ministry we visited spoke highly of British products, holding them in high regard. Within the City alone there are opportunities for the Barbican Centre, Guildhall School of Music and Drama and the Museum of London amongst others.

Clearly, the situation in Iran, Iraq, and Syria gives a geo-political edge to discussions which prompted conversations with one major sovereign wealth fund about locating a disaster recovery site outside of the Gulf in the UK.

All centres are keen to build-up financial and professional services. There will have to be some rationalisation of this over time and all of their ambitions reflect the hugely positive cash flow generated by the region. International/English law is highly regarded as are the UK’s financial governance systems and there was much interest in the new Bank of England/FSA set-up.

Remarkably there were almost no questions about London’s role in the financial crisis of the last five years or about any impairment of London’s reputation as a global financial centre. There is recognition across the board that despite the maverick actions of a few, London remains the safest capital in which to do business and from which to launch further business in Europe and elsewhere. Nonetheless, the ‘Europe Question’ will be followed closely.

Individual countries naturally showed variations. Dubai is thriving again; Abu Dhabi booming with huge building projects in the centre of town. Bahrain is recovering and finding its feet with ambitious plans and in Kuwait we were treated to “state visit status”; we were able to build on the great success of the November 2012 State Visit of The Amir of Kuwait to the United Kingdom. In Qatar the emphasis was on British involvement in all aspects of culture and design, with Qatar 2022 firmly in their sight and the current UK/Qatar year of culture engagement.

The obvious exception is Egypt which remains in a very delicate state. We met a number of representatives of the business side of the Muslim Brotherhood and Ministers of Finance and Trade and the Governor of the Central Bank. They all made a positive impression, which supported the British Embassy’s stance of giving the Muslim Brotherhood the benefit of the doubt. Much depends on the implementation of the IMF $4.8 billion loan—the conditions attached and the timing of the loan—before or after the next round of elections.

Issues concerning the United Kingdom remain; property taxes, visas, non-dom status were all mentioned at one time or another in varying degrees of concern (and irritation in the case of business visas) but, in context, these reflect the positive will to do more with Britain rather than less.

25 March 2013

Prepared 21st November 2013