LORD JONES OF BIRMINGHAM AND MR ANDREW CAHN

16 JULY 2007

  Q80  Mr Wright: Are they targets that have been set of you or are they targets you have set yourselves?

  Lord Jones of Birmingham: They are targets I have set myself.

  Q81  Mr Wright: Basically you have got a free rein?

  Lord Jones of Birmingham: Yes.

  Q82  Mr Wright: In terms of the UK, one of the concerns that we have had is over the RDAs. I do not want to delve too deep into those but when you do your regional tour through the UK and you talk through the regions, will you be going through the RDAs or will you be going through some more local contacts in terms of the needs?

  Lord Jones of Birmingham: The primary route in will be the RDA. Actually, I would like to kill another canard. I am one of the people who in 2000 said, "It is in no-one's interest that RDAs fail". All through the CBI I was one of the great supporters of RDA and I read in some newspaper the other day that I am against RDAs. That is an absolute load of rubbish, I am completely in favour of them. I think what they were confused with was I was saying always be careful if you give fiscal incentives to companies to come and invest in a region, make sure they are there for sustainable proper reasons and not just because they received a tax bill because if all they get is a tax bill when the next one is out they will go. You have got to do it for proper sustainable reasons, that is what I actually said, but it came out as I am anti RDA, which I am certainly not. UKTI and RDA are working together both at home and then abroad and it is definitely my first route in. Another route in, of course, is chambers of commerce, especially in the big cities—Manchester, Leeds, Birmingham, Newcastle—they do some fabulous trade delegations overseas, especially for small businesses. They tend to do a lot of small business delegations and I would very much like to give them some support and help and a bit of ministerial clout to make that happen. One other thing, another route in, is that our academic institutions around the country are some of the greatest and unspoken and unknown exporters we have got. They are huge owners of overseas currency, they have got fabulous names around the world, and that will be another route in. If you go and learn the issues for overseas students, if you go and learn the issues for universities selling the services overseas, when you get overseas, when you start promoting it, you have a value added innovative equation that many countries do not even possess.

  Q83  Mr Wright: On the question of the RDAs, one of the criticisms has been that there has been a plethora of RDA overseas offices, there is duplication, whether or not it is to stop the CBI going out there or whether it is to put chambers of commerce out there and UKTI, there seems to be duplication. Would you think that one of your roles would be to probably pull the RDAs together to suggest that perhaps instead of competing with each other there should be a competition in terms of UK plc rather than on a regional base and who happens to have more strength than the other one where they have an office in a particular country?

  Lord Jones of Birmingham: I read your report on UKTI and I have to say I really did obviously agree with all of it and I thought it was very, very good. One of the things where you did make that point was you said what about this perceived, if not real, duplication and is that maximising the effort. I think it is very, very difficult—I will say this as a Brummie for a moment—if Advantage West Midlands has got a stand at the Detroit Motor Show and is saying, "If you are thinking of automotive supply manufacture, just in time, come and put it next to Jaguar in Castle Bromwich because I believe in British cars". At the end of the day I would rather like to think that if I was a supplier to Nissan in Sunderland, I would like to think that One NorthEast, my RDA, is sitting in Detroit saying, "Don't go to Brum, come to Sunderland". Therefore, they have a very difficult game to play where they have to satisfy, communicate with and be there for their own constituencies in the wider issues.

  Q84  Mr Wright: Can I stop you there because there is a difference between attending an exhibition or a conference and having a full-time office.

  Lord Jones of Birmingham: Sure.

  Q85  Mr Wright: This is the difference. My own constituency, their marketing would attend the offshore Europe and the offshore exhibition. Nothing wrong with that, marketing your own area. In RDAs, attending a conference is one thing but having an office there when you have probably got eight RDA offices—

  Lord Jones of Birmingham: It is a similar argument because if you then go in and you are a prospective investor in Britain, and you see Scottish Enterprise, Advantage West Midlands, One NorthEast and UKTI, you think, make up your mind. In perception of market terms, it is very important they are there, ever so important they are there. They are great allies of UKTI. They work tremendously together. We want them there but we have to be careful that the message is not confused and that the message does not spend a lot of money for something you could have got another way. If you go to offices, and I know because I opened the CBI office in Beijing so I do understand this because I did the market research on this, what I have just said to you is exactly the same only more expensive.

  Q86  Mr Wright: Can you not suggest then that probably one of your other jobs, a fourth job in the next 12 months, is probably to look at that in detail.

  Lord Jones of Birmingham: I completely agree.

  Q87  Chairman: We are all waiting for the Government's response—it is not overdue, there is no problem there—to our report and it is an issue I think we will return to. This Committee takes a close interest in this. We went to Hungary recently. We saw a model way for UKTI to deliver services while giving full attention to the regional dimension which I certainly commend to you very heartily.

  Lord Jones of Birmingham: By the way, just so you know factually, we have two reviews going on both of which are going to report in September, early October on exactly this point, independent reviews, paid for by us but done independently. I think it is an enormous issue both ways. The important thing, which is really why I am here, is it is what is best for the country actually and that has to be kept at the forefront but it is very difficult.

  Q88  Mr Hoyle: If we can take Lord Jones back a little bit because he was saying how important it is that he gets around the countries of the world whether it is long haul or short haul, he is going to be there flying the flag for UK. That is very important. What are your views on the situation with BAe Systems on the Saudi Arabian Typhoon contract? Whichever way you look at it, it is a 20th century problem now affecting the 21st century workforce where we want that further contract on Typhoon. What do you think you can do to help? What can you bring to the table to ensure we get that contract and stop the Americans interfering because of the jealousy of them failing to win the new contract?

  Lord Jones of Birmingham: Two specific issues you raised there. The answer to your first point is the SFO took the decision, they did it in the interests of national security and I have nothing more to say. If I move on to the 21st century and BAe Systems, a quality British manufacturer going around the world selling value added innovation, I will do everything in my power to make sure they succeed within the bounds, properly and rightly, of legality and in a non-corrupted environment.

  Q89  Mr Hoyle: Just to take you on, yes the SFO dropped it, no problem, I am not going to press you on that, it is now the Americans who are considering subpoenaing Baroness Thatcher, Lord Heseltine and others about a 1980s problem but it is now affecting a 21st century contract. It is that which I am wondering about, what role can you do to broker?

  Lord Jones of Birmingham: As far as do I intend to help manufacturers of all sorts take on any other competitive manufacturing country, yes, that is the job. Do I intend to stray into the area of another department or stray into an area where I have no expertise and, frankly, I do more harm than good, I intend to keep my mouth shut.

  Q90  Mr Hoyle: What role do you think you can play in delivering the Typhoon contract from Saudi Arabia?

  Lord Jones of Birmingham: I sincerely hope I can ensure they realise that value for money is going to come out of a British manufacturer.

  Q91  Chairman: I said earlier that Lindsay Hoyle was not a man to bear a grudge but sometimes I do. When you were the CBI Director General, having encouraged this Committee to do a report into trade and investment relations with India, why did you rubbish its conclusions?

  Lord Jones of Birmingham: When I was at the CBI?

  Q92  Chairman: Yes.

  Lord Jones of Birmingham: That was then, this is now.

  Q93  Chairman: It is a report I am rather proud of. I am glad to say the Government has acted on it and, for example, given a significantly enhanced grant to the Indo-British partnership to make it become a more effective trade communication. You rubbished it. This is one change of heart I am likely to welcome.

  Lord Jones of Birmingham: Can I make sure you do not get another sleepless night out of this! I got a call when this job was announced. I was very lucky, and because of what I had done for a living before, I do know quite a few of the trade ministers around the world because I did internationalise the CBI quite a lot. The first call I got was from Kamal Nath, trade minister for India, and he said, "When are you coming to see us?" I said, "You will be my first long haul flight" and it is going to be. India is going to be my first long haul visit. It is a hugely important market. Interestingly, which I did not know until I saw the stats on the presentation of the inward investment results in my first week--- My first official job was to present some fabulous results which this man had delivered, not me. As I said, America is 590 out of 1,471, France is second with 90, there are then about four or five, Germany, Canada, Japan, a mix of between 75 and 85, one of them is India. When we all—all of us including me—say, "Ah, some more jobs gone to India", actually these guys getting wealthier invest the money back here which is a fabulous story. When I go over there, it is not just to be saying, "Come and buy our value added goods and services ...", it is also going to be saying, "... and spend the dosh you make back in my home town, home country and home environment".

  Q94  Chairman: Do you agree with this theory: China is a very important market for the UK, it is an important place for us to invest, trade with, have a strong partnership with, but we do not enjoy a comparative advantage with China, we do enjoy a comparative advantage with India and therefore it is a country we need to put a great deal of effort into? Do you agree with that analysis?

  Lord Jones of Birmingham: We enjoy a comparative advantage with India, we enjoy a comparative advantage with many other countries actually, but if we ignore China we would be mad.

  Chairman: Absolutely.

  Q95  Mr Hoyle: A quick question. Obviously India is very important, there is a contract going that Typhoon will be competing against the French and Americans, will you make sure that you give your help and support in order to keep North West jobs in employment as well?

  Lord Jones of Birmingham: Yes.

  Q96  Mr Hoyle: And the fact that we will not sell to China but we can sell to India?

  Lord Jones of Birmingham: Yes is the answer but I have something to add to that. Do you remember the Hawk trainer and all of that, because that is in your part of the world as well—

  Q97  Mr Hoyle: Absolutely.

  Lord Jones of Birmingham: I got very involved in that when I was at the CBI. I learnt about the whole issue of this. Not for this Committee but if you and I would like a cup of tea together and talk about how I can help your constituents in there, I would love to.

  Q98  Chairman: As long as Lindsay declares the cup of tea no-one has any objection. He has just offered to pay for it actually!

  Lord Jones of Birmingham: No, I will pay for the cup of tea, as long as it is made in Britain!

  Q99  Mr Weir: Previously the entire trade and industry portfolio rested under Ian McCartney, it now does appear that it is split between two ministers over three departments. Do you think that is a sensible and stable arrangement?

  Lord Jones of Birmingham: Factually, do you mean by that, I have an opposite number in the House of Commons?