Manufacturing

Debate between Lord Green of Hurstpierpoint and Lord Razzall

Thursday 8th March 2012 Lords Chamber

[Lord Green of Hurstpierpoint]

The noble Lord makes two very important points, one of which is about “brand Britain”, if I may use that phrase. I have travelled to over 30 countries in the past 12 months and, wherever I go, I find that brand Britain is extraordinarily well appreciated. In the next breath, people will often say, “Where are the British businesses? We would like to see more of them”. I absolutely agree that we should be proud of the “Made in Britain” brand.

We have a continuing task of upgrading productivity. This is about a number of things, including the new Catapult centres and apprenticeship schemes. We need to continue to invest because we are behind the curve in productivity in a number of sectors.

[Lord Razzall]

My Lords, in this burst of Sunderland euphoria it would perhaps be unkind to ask the Minister whether he agrees with the recently leaked letter from Vince Cable to the Prime Minister on the subject of growth. However, perhaps I may ask whether the Minister believes that the Government are seriously considering the possibility of breaking up the Royal Bank of Scotland, which would, of course, lead to increased lending to the manufacturing industrial sector?

[Lord Green of Hurstpierpoint]

On my noble friend’s first question, I believe that my right honourable friend the Secretary of State made an important point about a strategy that looks at the various sectors of this economy and identifies the appropriate measures that government can take to support them. It is of course true that while deficit reduction and fiscal consolidation is the most urgent challenge, we need to find a path of growth for this country that is more balanced and stable. On the question of the Royal Bank of Scotland, the answer is clear: we do not believe that breaking up the RBS is the right answer to addressing the financial issues in this country.

Arms Trade: Libya and North Africa

Debate between Lord Green of Hurstpierpoint and Lord Razzall

Wednesday 9th March 2011 Lords Chamber

[Lord Green of Hurstpierpoint]

I thank the noble Lord, Lord Judd, for that question. It is important to keep a balance. Every country has a right to self-defence. We live in an imperfect world; if it were a perfect world we would have no need of defence industries, needless to say. It is clearly extremely important that sales of defence and security equipment are conducted to the highest possible standards, and that we work with recipient Governments to ensure the proper use of such equipment and services. We must also make sure that we learn from experience. We would all acknowledge that we have some things to learn from the terrible events in Libya.

[Lord Razzall]

My Lords, does the Minister agree that the question goes slightly beyond the sale of military equipment and arms referred to in the Question asked by the noble Lord, Lord Alton? Will he confirm that the sale of such items as Taser guns, tear gas and other material, which are clearly being used in north Africa and the Middle East to suppress legitimate democratic uprisings, will be banned by this Government?

[Lord Green of Hurstpierpoint]

I thank my noble friend but, as I said earlier, we believe that the right approach to defence goods is a case-by-case one. There are legitimate uses of many defence products and services. Some we do not market or manufacture in compliance with international restrictions, but in general the right thing to do is to follow a case-by-case approach.

Trade and Investment

Debate between Lord Green of Hurstpierpoint and Lord Razzall

Wednesday 9th February 2011 Lords Chamber

[Lord Razzall]

My Lords, I thank the Minister for repeating the Statement made in another place and congratulate him on what I suspect is his first Statement in your Lordships' House. I count eight Ministers who are present. I do not think that they are here to monitor the noble Lord’s performance; I suspect that they are here for other reasons.

I wish to ask the Minister two questions. First, having listened to the banking Statement by the noble Lord, Lord Sassoon, and this Statement—both of which I welcome—I am concerned about the practicalities of what is being suggested. This Statement indicated that there would be a significant increase in grant to the SME sector and the banking Statement indicated that the Project Merlin agreement would produce an increase in lending to SMEs of £66 billion to £76 billion. However, given the present culture of the banks, I worry that they will not be able to deliver that increase in lending, however much the Government aspire to that in the agreement. Those of us who have dealt with the clearing banks as SMEs know what actually happens. You go to your relationship manager—it does not matter whether it is Barclays, RBS or who owns the bank—and he or she says, “Yes, that is fine. I think we’ll recommend that loan”. Then the matter is passed to a credit committee, the members of which you have never met, and they often turn it down or come back and say, “It’s got to be 7 per cent over LIBOR”. How will the Government deal with the change in culture that will be necessary on the part of all the clearers if they are to deliver the loans and the business for the SMEs that are necessary to achieve the growth that the Minister, and indeed all of us, wish for?

My second point relates to UKTI, which is definitely within the Government’s control. In practical terms, if an SME wants to use UKTI to generate sales overseas, it gets in touch with it and someone at UKTI says, “Fine, I’ll let you know what sales expertise we can provide you with and what possibilities there are so long as you pay us £3,000”. Will the Government ensure that UKTI does not charge people for that element of expertise? That is an important point as that matter is under the Government’s control.

[Lord Green of Hurstpierpoint]

I thank my noble friend Lord Razzall for his comments. I absolutely agree with his first point about the practicalities. As I said, this is a marathon, not a sprint. One of the reasons why that is true is that the production of a White Paper is not the culmination of a process but the beginning. The next step is to translate the White Paper into a large number of action steps, assign responsibilities, time lines and all the rest of it, and drive it through. One of the most important aspects of what we have announced today in the White Paper—this may seem a rather bureaucratic point but I absolutely underscore its importance—is the creation of a new interministerial committee. It is, in fact, a sub-committee of the Cabinet Economic Affairs Committee and the Prime Minister has asked me to chair it. The committee will bring the Ministers in different departments involved in this whole project together on a monthly basis to drive these actions forward. It is in that context that we will review how well it is all going and make any adjustments as we go along.

My noble friend raised some particular issues about banks. For reasons that the House will understand, I am slightly nervous about commenting on banks, but I think there will be considerable recognition in the banking community engaged in commercial banking in this country of the force of a good deal of what my noble friend said. For example, he spoke of the need to ensure that in the context of businesses where there are credit committees and so forth—and rightfully so—nevertheless there is a real relationship that we need to keep alive with individual firms, even small ones, so that there can be a real understanding of the needs of the business.

I do not think anyone in this House would want to go back to some of the culture of lending prevalent in the go-go years in the early part of the previous decade, when lending was carried on as if it was going out of style. There is a need to introduce some prudence and credit control into banks’ business if we want to ensure that banks themselves are stable and profitable. But that must be balanced with an appropriate understanding of the real needs of businesses. We need to monitor that. The Merlin agreement that was announced by the Chancellor of the Exchequer in another place this afternoon includes agreements by the banks on this front, and the Government will hold the banks to account on it.

I have had the opportunity in recent weeks of meeting a number of UKTI people both here and overseas and my experience is that on the whole it is a good institution. There is always scope for improvement, certainly, and in any institution employing some 2,500 people you will find those who are average in quality and those who are very good. But coming at this from the outside, I am impressed by the dedication, hard work, commitment and enthusiasm of UKTI people in the many offices that I have had the opportunity of visiting.

On the specific question of whether to charge for its services, the Government believe that it is appropriate to charge for some UKTI services, but there are plenty of services that are not charged for. OMIS—I am afraid that I cannot remember what that stands for—is a service that is charged for, but generally the feedback is that it is widely welcomed.