LORD JONES OF BIRMINGHAM AND MR ANDREW CAHN

16 JULY 2007

  Q60  Chairman: You were very good at the beginning. Your answers were commendably brief. They are getting longer.

  Lord Jones of Birmingham: I said I have a lot to learn.

  Q61  Miss Kirkbride: One thing we do know is that the Government intends to increase the school leaving age to 18. Is that the right way forward?

  Lord Jones of Birmingham: Actually, that is not true. That is factually inaccurate. What Alan Johnson said when he was at Education was that he wants people to stay in some form of education or training until they are 18, which is different to leaving school. Why that is an important distinction is I think we are actually moving the other way. I think there is a very good case for having the world of work—it could be public or private sector—linked into the world of education and training earlier than 16. There are loads of kids who are disruptive, who go straight over the top, it makes the teacher's life a nightmare, and to have a young person linking getting a skill to earning more money, this is not rocket science, but to get the two together at an earlier age, I think we stand a damn good chance. If that means the Government has to say you are going to be in some form of education or training or something until you are 18 by law, I am up for that.

  Chairman: You have made your point.

  Q62  Miss Kirkbride: We have heard your views on education and we will not go back over what you think the faults of the education system have been over all these years but the other competitiveness factor in the UK economy is of course pensions, and you have already briefly raised those as we have been talking today. What is your view on the public sector pension deal that was done by Mr Johnson, who you just mentioned, who you have previously described as craven surrender and self-serving cowardice that the unions got so much more favourable pension deals. Is that sustainable in the future?

  Lord Jones of Birmingham: I have just been rightly told by the Chairman that I am becoming a stranger to brevity again so this will be a very brief answer. That was then, this is now, and I have a job to do, which is trade and investment.

  Q63  Miss Kirkbride: Looking to the future then on pensions, it is my understanding, again, that the Government want to make compulsory pension contributions for SMEs. Is that going to be a problem for business or is it the right way forward?

  Lord Jones of Birmingham: I think it depends. The policy has now been agreed. It hugely depends on its implementation. What would be excellent actually would be that there was no need for regulation at all. That is at one end, is it not?

  Q64  Miss Kirkbride: That is not going to happen. It will either be compulsory or it will not.

  Lord Jones of Birmingham: I agree with you it is not going to happen but what you actually need to do is get to a point where it is easily implementable and understandable. Complication is one of the problems. For instance, one of the changes is to shift the burden from tick the box to join one to tick the box not to join one. To me that is a very sensible regulation because you actually shift the concentration and the idea to somewhere else, which is, "Why shouldn't I be saving for my future?" That to me is very good. What you have to make sure is that regulation as it is implemented does not harm the competitiveness, especially of an SME.

  Q65  Miss Kirkbride: But it will be a compulsory contribution by business and therefore it is going to be an additional financial burden.

  Lord Jones of Birmingham: As I understand it, only if the employee signs up for it too.

  Q66  Miss Kirkbride: It is hard to turn down free money though, is it not?

  Lord Jones of Birmingham: Many do, you know.

  Q67  Chairman: If I was to ask you if it was still your view that in your six and a half years in the job at the CBI you never saw such an act of craven surrender as the Government's cave in, first with gunshot of a public sector pension reform, you would say that was then this is now?

  Lord Jones of Birmingham: I probably would.

  Q68  Mr Weir: That probably answers my question as well, Chairman. If we are going to use titles perhaps we should follow the Secretary of State and refer to you from now on as Comrade Digby. You will have noticed that we have all been reading a very interesting and entertaining speech you made on 13 September at the inaugural lecture of the Institute of Directors. We are discussing education and I was very taken—

  Lord Jones of Birmingham: For the record, that was after I left the CBI, was it not?

  Q69  Chairman: Yes.

  Lord Jones of Birmingham: It was. I left the CBI in the June.

  Q70  Chairman: You are speaking freely as Digby Jones, a citizen of the United Kingdom--

  Lord Jones of Birmingham: Not as Director-General of the CBI.

  Chairman: --- unfettered, unrestricted, your genuine deeply held views.

  Q71  Mr Weir: I did not suggest you were Director-General of the CBI. A passage on education struck me very closely. You were talking about fairness and Scottish MPs and you said: "Where is the fairness in those MPs having a vote on education policy in England when firstly they have no vote on education policy in the Scottish constituency that elected them and secondly no English MP has similar rights north of the border?" I just wonder how that sits with taking a position in an unelected legislature in a ministerial position in a government run by a Scots MP?

  Lord Jones of Birmingham: My job, as far as it relates to Scotland, is to make sure that about 5.2 million people, which is about the same size of the West Midlands, probably less than the North West, about the same as Yorkshire, have the very best chance of having a safe, secure, prosperous life in the 21st century. It is to link with Scottish Enterprise. It is to make sure that what Scotland does well gets seriously well promoted around the world and the advantage of investing in Scotland. A very good example, I gave the annual Chamber of Commerce lecture at Inverness just a few weeks ago in May and to see some of the real serious innovative high-value stuff they are doing in Inverness is fabulous. My job in this job is to get the very best that Scotland can do and ensure that the world understands it so that they will come and create wealth in Scotland and then in turn export it out. If I am going to be diverted from that by what I said before I took on this job, I have to say, Scotland, I, the Prime Minister, everybody will be the loser. The job is to get on with promoting Scotland as part of the UK and not looking backwards but looking forwards.

  Q72  Mr Weir: Very commendable.

  Lord Jones of Birmingham: Thank you.

  Q73  Mr Weir: Given this whole issue of the West Lothian question is likely to be a very hot political issue, you are a member of the Government, are you going to be campaigning on this issue for the re-election of a Labour government? Earlier you said you were a representative of—

  Lord Jones of Birmingham: Do you know, if a minister of state in another department started answering questions to a select committee about stuff that was my patch I would be pretty cross. I think that a minister of state in another department might be pretty cross if I did the same to him right now.

  Q74  Mr Weir: Can I ask one question. You mentioned pensions earlier, and I was very interested in what you were saying about that. Do you feel that the current position then, when you were referring to the employers' contribution to pensions, is workable without an increase in the basic state pension?

  Lord Jones of Birmingham: I am sorry, I did not catch the middle part of your question.

  Q75  Mr Weir: Do you consider that the position with the new pension provision is going to be workable without restoring confidence in the basic state pension?

  Lord Jones of Birmingham: I actually believe that if we are going to succeed in a world where we are all thankfully living longer, people are not saving enough, and at the same time expectations during that living longer mean we are all going to want to work longer anyway, simply because we are healthier and we want to be active—I am talking now over the next 50 years, not the next five—then every single aspect of pension provision has got to be looked at, analysed and dealt with, and one of them will be the basic state pension, I am sure of it. It is for another department, not me, but I have to say it is part of the mix. I was talking earlier in my answer to Miss Kirkbride about how we tap into all these different reservoirs of talent or potential talent and skill to be competitive in a business environment. Another is if we carry on the way we are, all this fabulous talent at 65 is going to go off into retirement for something like 30 years. It is ridiculous. Some might want to, that is fine; some might want to do something different, that is fine, but we would be very foolish as a society if we just said to everybody at 65, "That's it, pal, we don't want you around any more adding to the wealth of the nation". It might be the delivery of public services, it is not a business issue. It is about ensuring we have enough skilled people. Part of that mix is where does the state pension work into that, what do you do about it, how do you save for it and what do people do when they have to carry on as opposed to want to carry on. It is another potential reservoir of talent.

  Q76  Chairman: At least this famous speech that we have been referring to so much made on 30 September is still available on websites, you will be pleased to hear. At least you have put right one of your own criticisms, "... I wish there were as many Brummie MPs running Britain as there are Scottish ones running England!" You have helped redress the balance, albeit from the senior House.

  Lord Jones of Birmingham: I have done my bit for Brum.

  Q77  Chairman: Absolutely. By the way, I do not think you are doing your bit for Britain, I think the Honda Civic Hybrid is built in Japan. I think the Honda Civics are generally built in Swindon, where mine was built, I fancy yours is imported but we will check.

  Lord Jones of Birmingham: We might both check. It might be the engine is in Japan and the body is in Swindon.

  Chairman: We will find out.

  Mr Hoyle: I think you will find it has been shipped.

  Chairman: We will find out.

  Mr Hoyle: They did tell us it was a British built car.

  Q78  Chairman: We will move on.

  Lord Jones of Birmingham: All right. I will amend it for the purposes of the record. I understand it is a British built car.

  Chairman: Lindsay is never one to bear a grudge, don't worry!

  Q79  Mr Wright: Turn the clock back three quarters of an hour to when we were talking about what you would expect to deliver within eight to 12 months, coupled with your discussions with your two secretaries of state and also the Prime Minister. Have there been targets you have been set or you have put forward that you want to deliver within the next 12 months to two years?

  Lord Jones of Birmingham: I am very lucky in one way, very lucky in many ways, hugely privileged in many ways but one way is there has been a five year strategic plan set for UKTI. Andrew Cahn, sitting on my left, chief executive, came in and implemented that strategic plan. It is about a year to 18 months in and it is really delivering. It is absolutely on track. My job is not to get hold of something that is going the wrong way and turn it around, my job is to enhance and build and add value to what is already going in the right direction. Fortunately we have also got a nation that is globally engaged and we have got a domestic economic scene which is attractive to inward investors, so it is not all one thing, there are lots of things together. In the first year I want to do three things which are aims, they are not targets in as much as I cannot quantify them. One is I want to make a long haul visit every month; I want to make a short haul visit every month and I want to make a visit to an English region or a Celtic nation every month. That is something that no trade minister of any party at any time has done. One of the reasons I can do that is because I will be focused on it and I will not have all the other, understandable and proper but, nevertheless, diversionary things that happen to other sorts of politicians. Because I am free to focus on this—that is what the Prime Minister asked me to do, that is what I am going to do—then I will be able to focus on fulfilling that objective. Where do I want to go? I want to go to the primary markets where the UK really does need to say thank you so we do not get complacent, and America is a very good example. The obvious markets, if we do not go to India and China, frankly we are not in the game. Thirdly, those very important markets which have tended not to get their time in the sun with ministerial visits or understanding how important they are to us. I have in mind there, maybe Malaysia, Indonesia, Vietnam, Mexico, very important markets for us but have not been those big headline ones. As far as the short haul are concerned, North Africa, very important with Libya, Algeria, Egypt and also, of course, Eastern Europe for so many obvious reasons. Then the regions of England and the Celtic nations because if I am not listening there and using the UKTI network that already exists there, which is fabulous, really does a great job, I knew that in a previous life, I know they do a good job there, if I do not go and understand those issues I will not be able to do the stuff I said to the Chairman I would be doing, which is in private going back to ministers and saying, "Hey, this is what business is saying, just listen to it". The second of the three is to make sure that UKTI is the best in the world. At the moment, it is certainly one of the best in the world. In fact, the taxpayer gets stunning value for money out of UKTI. It is nothing to do with me, I have only been in the job two weeks. It gets absolutely stunning value for money. When you look at what they do with the money they do not get, compare it with France, Germany, Ireland, America, and Japan, it is just amazing what they do. What I have got to do is make sure that we can give value for money all the time and get those resources and put the ball in those places so you make it the very best in the world, not just one of them. The third thing to do is, I am a minister in two departments, I have a responsibility in the Foreign Office as well as DBERR, I want to go and physically be amongst the people at UKTI. I do not want to go to work every day, if you like, when I am not on the road, and walk in to either the Foreign Office or DBERR, I want to walk in amongst the people, for whom I am responsible, for whom I am accountable, and who I am going to ask to believe in me. That means I shall go in every day to UKTI in their bespoke office and then have offices in the other two departments, Foreign Office and DBERR, where I can be amongst them, drop in and say "Hi" and everything else. I intend, obviously, when I am in London to fulfil my responsibilities as a front bench minister in the House of Lords and I intend to give my ministerial colleagues in the House of Lords full support in that regard. That is after I have been completely and absolutely focused on the job in hand, which is UKTI. Those three things together are the targets for the next 12 months, aims, ambitions, whatever you call them.