Examination of witnesses (Questions 59
TUESDAY 12 DECEMBER 2000
and MR ALASTAIR
59. Good morning, Sir David. Welcome to the
Committee. Would you start by introducing your colleagues and
perhaps you could describe the BTI's two branches of Invest UK
and Trade Partners International?
(Sir David Wright) Thank you, Chairman. Can I introduce,
on my left, Ian Jones, who is the Director for Regional Business
in Trade Partners UK, and on my right, Alastair Morgan, who is
the Director of Operations in Invest UK. As you and the Committee
will recall, the Government decided in 1999 to set up a single
body to bring together all the various components of trade promotion
for the United Kingdom. So, on 4 May last year, I began work implementing
the results of a report which was written on the instruction of
the Prime Minister by the Cabinet Secretary, Sir Richard Wilsonwhich
is, as you know, referred to as the Wilson review. We began the
implementation of that report in May last year. At the time we
were dealing solely with trade promotion. However, for those who
examine the report they will find that it was inconclusive on
the question of what should be done about investment promotion.
Indeed, the report suggested that it thought it would be preferable
if investment promotion and trade promotion were brought alongside
each other in this new organisation, but it made no recommendation
to that effect. However, in the course of the last 12 months Ministers
have reflected further upon this matter and in May this year they
announced that they would move what was then described as the
Invest in Britain Bureau alongside Trade Partners UK under the
umbrella of British Trade International. So what we have now,
I believeand so, I think, do the private sectoris
a well-balanced structure, which is what I choose to call a holding
company, British Trade International, which has two brands, or
two products; one product is Trade Partners UK, which looks after
export promotion and investment promotion, and the other is Invest
UK, which has been re-branded from the Invest in Britain Bureau
to have a sort of parity with Trade Partners UK. Invest UK deals
with the promotion of inward investment. We are, and this is my
concluding remark in answer to your first question, now pretty
well at the end of the implementation of the recommendations of
Sir Richard Wilson's review. The review gave us a two-year implementation
timetable, we are now 19 months into that timetable and we have
one matter on which we need to conclude arrangements, and we are,
I believe, very close to that now. Since Ministers decided, in
the course of that 19 months, that they wanted to bring Invest
UK alongside Trade Partners UK, we have had an added agenda to
our business. So we are now working hard at the process of integrating
Invest UK into the entire organisation and, in particular, looking
at areas where we can find commonality for the work that we do.
That is particularly and obviously so, I suggest, in terms of
common service issues like resources, staffing and training. However,
we are also looking at ways in which the promotion of trade and
investment has potential synergies. Of course, by bringing Invest
UK alongside Trade Partners UK, their work, as part of British
Trade International, is reviewed on a monthly basis by the board
of British Trade International, on which, of course, sits a representative
of the National Assembly of Wales.
60. Thank you very much. Obviously from the
title of our inquiry we are concerned with the promotion of Wales
abroad. We have had evidence from a number of organisations, including
the National Assembly, who suggest to us that Wales does not enjoy
a high profile abroad, and certainly one lower than Scotland and
Ireland, for example. We often, I think, get portrayed in a very
stereo-typed and old-fashioned way, if we are portrayed at all.
Do you think this is the case? Does your organisation think that
is the case? If so, do you think it has a negative impact on trade
(Sir David Wright) I do not think that the image is
any more or less stereotypical than that of England or Scotland.
My experience of working abroad for more than half of my professional
life has shown me that we, as the United Kingdom, have a stereotypical
problem, but it is a stereotype which can be turned to the advantage
of the United Kingdom. In particular, in relation to Wales, I
have been very familiar in both Japan and Korea with the considerable
and, I believe, successful efforts made by the representatives
of Wales to developif I might put itthis stereo-typical
image to their advantage. There is no doubt at all that the strong
body of sentiment and affection for Wales which exists among those,
for instance, Japanese company employees who have worked there,
has been fostered whilst they have been working in Wales, and
continuesand I believe successfully soto be fostered
on their return to Japan. There is a club which exists in Japan
which brings these people together. They use this as an occasion
for engaging in a Japanese version of choral singing. This is
all part, I believe, of the fabric which exists in various parts
of the United Kingdom, and can, if it is developed whilst the
company representatives are here in the United Kingdom, be turned
to the advantage of, in this particular case, Wales on their return
to their homeland.
61. This is very interesting to hear, Sir David.
Something we had not considered is people who had been working
in Wales and being suitably impressed by our culture. That is
interesting. Can you tell us what your role is in promoting and
improving the image of Wales? Obviously your main concern is trade
and investment, and on a United Kingdom basis, but do you see
yourself as having a role in promoting Wales specifically?
(Sir David Wright) I see myself as having a role in
both the work I do here in the United Kingdom and the work which
I do on my frequent visits overseas as promoting all parts of
the United Kingdom. I am always keen when I am overseas to be
associated with particular events which might relate to those
promotional interests. I was, for instance, in India last week
when, I hope, I took forward a little a project which is now being
developed by Professor David Owens of the Diabetics Special Unit
in Cardiff University to promote a process of diagnosing diabetes
in India in particular (where it is a specially critical problem)
using the base of activity which exists in South Wales and using
the technology of a company called Orion, which is a small software
house. This would be developed as a relationship between the university
and between two hospitals in Chennai and Mumbai (which are the
new names I have had to learn for Madras and Bombay) which would
not only be useful for the medical needs of the area but would
also lead to increased business for this company called Orion.
That, I think, is the sort of examplethough it is a fairly
micro oneof the sort of activity which I can become involved
in in promoting the interests of any part of the United Kingdom
62. Sir David, to what extent does British Trade
International direct its overseas clients towards particular parts
of the United Kingdom?
(Sir David Wright) The approach which we adopt, Mr
Livsey, to the client base which we have in promoting investment
in Britain essentially reflects what are the business drivers
of those particular clients. Invest UK is very much a client driven
body; it is responsive to the needs and the questions which are
put to us by those clients. On the basis of what they say are
their needs in business terms we, in Invest UK, will suggest to
them what parts of the United Kingdom may seem most closely to
meet the needs of those companies. The client then, effectively,
makes his choice. At the same time, of course, we normally find
that because those clients have also had links, very often, with
WDA representatives or, in other cases, Locate in Scotland representatives,
in their countries, they will have built up a relationship with
them and will want to visit particular parts of the United Kingdom.
What we have to do is try to pursue as dispassionate an approach
as we can to the express needs of the client as far as their business
is concerned, then put them in the way of the parts of the United
Kingdom where we think their needs can best be met and where that
particular part of the United Kingdom can make an offering to
63. From what you have said, you have got to
have more than one suggestion to put to them; perhaps two or three
different regions where activities are taking place that they
are interested in?
(Sir David Wright) It is not at all unusual to find
that such a client will be looking at three or four parts of the
United Kingdom. Our interest is to ensure that in examining the
needs of the company there is an appropriate degree of communication
of their respective needs. However, in the end, it is down to
the client to make the decision as to where he wants to go, and,
indeed, as to the area in questionwhether a devolved administration
or an RDA in Englandto make an offering which is the best.
64. As you know, these things are pretty cut-throat
and very often very competitive. You do not get involved in that
kind of hurly-burly at all, do you? You just leave it to the agencies
(Sir David Wright) I think it would be wrong to suggest
that we are not unaware of that hurly-burlyas you described
it. However, since Invest UK has to stand as the United Kingdom's
single investment promotion operation, we have to stand in a position
where we can offer the dispassionate advice which is available
to those companies. Indeed, we maintain a process of furnishing
each development agency (the WDA in this case) with a list of
the companies that are coming into the country every quarter,
with their particular interests, with their particular priorities,
and we try to maintain a dialogue with the development agencies
about those individual cases.
65. Could you tell me, finally, what impact
has the creation of the RDAs in England had on your work, in particular
as it relates to Wales? Do you find it much more difficult? Are
you lobbied a lot from the English RDAs? What is going on?
(Sir David Wright) It has certainly added a new dimension
to our work. We now have nine clear focuses in England for both
trade development and promotion. We have recently appointed nine
international trade directors to those regions. We are, therefore,
establishing an enhanced relationship with each region for both
trade and investment promotion. That was a recommendation of the
Wilson review. It is an added feature of what we are now seeking
to achieve. I do not think the lobbyingas you describe
itis any less or any greater than it was before. There
have been, as you know, regional development organisations in
England before the establishment of the RDAs. They lobbied actively
before the RDAs were set up.
66. What steps do you take to ensure that your
staff overseas understand what has happened in Wales with devolution,
understand the implications of devolution and the benefits of
investing in Wales, and information about Welsh companies?
(Sir David Wright) If I may say so, I think that is
an absolutely crucial question, and it is something which preoccupies
me a good deal. As Mr Jones knows, during the process of setting
up British Trade International we have been devoting a good deal
of time to seeking to get a better understanding on the part of
our posts overseas of what is going on in this rapidly changing
and rapidly evolving map in the United Kingdom. We have a pretty
well structured programme of exchanges for staff overseas with
Wales. I can give you a list including the new ambassador in Korea
who was in Wales in July and those representatives of our offices
in the United States who were in Wales in November, and in March
this year we brought home all the science and technology promotion
teams from our United Kingdom and Asia posts to meet all the regional
representatives. So there is a process whereby we bring staff
from overseas back, and when they are backparticularly
when they are back from countries where investment promotion is
a major part of their agendait would be unthinkable for
them not to go to Wales. I, of course, have to try to spread myself
around the entire United Kingdom, all nine RDAs and all three
devolved administrations, as well as being overseas. So I try
to get to Wales as frequently as I can, and I was in Wales about
four months ago for a full day session with the WDA, Brian Willett,
and, also, with Wales Trade International to bring myself up to
speed on their priorities. Mr Jones and his staff are now developing
a frequent trade promotion and trade development dialogue with
Wales Trade International. As I said earlier, they of course sit
on our board, so they have an opportunity to express their views
to us then, and I know that Alastair Morgan took a group of his
people from Invest UK16 peopleinto Wales for a session
in Cardiff in May this year.
67. Would you say this was a structured programme?
(Sir David Wright) Yes, I would.
68. So it is built in that your people will
go to Wales and find out about Wales.
(Sir David Wright) I would say that I would like to
believe that we are not complacent about it, particularly since
the establishment of British Trade International with this clear
responsibility of bringing together the foreign promotion of British
trade and investment with what happens in the United Kingdom,
and making a single whole of this; I would like to believe that
we are trying to make it more structured than it has been in the
past. Of course, the change in the Welsh constitutional arrangements
makes it possible for it to be more structured. I think, also,
that the National Assembly missions overseasof which I
think there have been eight in the last yearprovide another
opportunity for our posts overseas to become aware of some of
the issues which they need to know in order to represent the interests
of Wales adequately.
69. Sir David, when you say that you would hope
that the system would be a little more structured than it has
been in the past, do we take it from that that there is room for
some criticism about the current way in which the WDA is represented
in all this?
(Sir David Wright) No. I think my wish to make it
better than in the past is a reflection of my wish that British
Trade International should do a better job overall than government
services have done in the past in the promotion of trade and investment.
We have had a good working relationship with the WDA. I have had
a personal relationship with the WDA since, I think, 1983 when
it was first established and I was then dealing with the promotion
of inward investment in Japan. We have worked at it; we have daily
if not hourly contact on the Invest UK side with those who work
there. I think we have got a good working relationship and I think
that the opportunities which the WDA have to express their views
to us and Wales Trade International come up through the meetings
of the Committee on Overseas Promotion, which meets three times
a year and which concerns itself with investment promotion, and
the meetings of the board of BTI every month.
70. I am afraid I do not think the WDA agree
with you that the partnership seems to be working as well as that.
In their memorandum the Government says that Invest UK works closely
with the WDA and others but that, unfortunately, the development
agency says it has been poorly supported by Invest UK, and that
a number of high profile investment missions from Japan and Korea
have left Wales off their itineraries. That is particularly disturbing
when you referred earlier to the way in which the Welsh, apparently,
successfully used the stereotyped image in Korea and Japan. They
further suggest that "Investment opportunities in Wales are
not properly understood by key Foreign Office or DTI staff."
I am afraid the rather happy and good working relationship you
refer to is not actually a view shared by the WDA.
(Sir David Wright) I would certainly be very keen
to deal with any specific issues and complaints which the WDA
have about the work of our posts overseas in relations to investment
promotion, if either they or the Committee could give them to
us. I have to say I look back, for instance, at the visit which
Rhodri Morgan made to Japan in September of this year, which was
a hugely successful visit, on trade investment and, I might say,
image promotion. It was an event which took place with the support
and active participation of the embassy and it was a good example
there of the co-operation between the WDA office in Tokyo and
the embassy. We have had a number of Invest UK missions from Japan
which have visited Wales. There was a mobile telecoms missions
this year, an auto-components mission, flat panel display, and
there have been several manufacturing missions which have been
to Wales from foreign countries at the instigation of Invest UK
and with co-operation between them and the WDA.
71. Nevertheless, what they sayand I
repeat it (and you ask for specific examples)is that there
have been a number of high profile investment missions from Japan
and Korea where Wales was left off the itinerary altogether.
(Sir David Wright) As I say, I would be pleased to
take notice of which those missions were, and if necessary examine
with the officials in Invest UK why Wales was left off. All I
can say is there are a large number of cases where we go out of
our wayas we do with all the regions of the United Kingdomto
arrange for investment missions to visit parts of the United Kingdom
where there is a particular appropriate need. Flat panel display
is a very good example. Auto components is another good example.
Could I, Chairman, enquire whether my colleague Mr Morgan wants
to add to that?
(Mr Morgan) It is correct that not every incoming
mission has gone to Wales, though a very large number have. I
know of two missions (and there may be others) where the Welsh
have expressed concern to us and we have looked at that. One was
a recent mission of component suppliers to Mazda, which I believe
was the first automotive mission not to go to Wales. That mission
was led by the procurement director from Mazda and they were particularly
interested in visiting automotive assembly operations. We originally
planned a mission that would have taken them over to the south
west and west but we were not able to get access to Honda, so
the mission went to the north east instead. Another mission I
am aware of, and I do not have the full details
72. Before you proceed with the second example,
why on earth was it not considered right for the mission to go
to Wales? We are not exactly unable to put components together
in Wales, you know.
(Mr Morgan) Of course that is correct, but the time
for the mission was limited and they were not able to visit all
regions of the United Kingdom. We took them to the north east
and the time did not allow them to go to Wales on that basis.
Had we been able to take them to the south west we would have
tried to take them to South Wales as well.
(Sir David Wright) Could I answer on that, Mr Llwyd?
The fact is we are not just dealing with Japan in this; we are
bringing over a successive and successful number of missions to
the United Kingdom from prospective investorsKorea, Malaysia,
Singapore and China being cases in point. I can give you a list
of those missions which have all visited Wales.
73. With respect, that is not the question.
I am asking you about why those missions from Japan and Korea
were left off?
(Sir David Wright) I think there is always, as Alastair
Morgan has explained, a problem over fitting into the limited
time available for missions all the possible places where they
74. Mr Morgan was going to refer to a second
(Mr Morgan) A second mission, where I have not got
the details so freshly in my mind, was an R&D mission where
we asked all 12 regions of the United Kingdom to put together
their proposals for what they would show the missioners, which
we then sent out to Post and which were discussed with the missioners.
The missioners elected where they would visit, and elected not
to visit Wales. I know that caused some discomfort in the WDA
at the time.
75. We are talking with the WDA, of course,
and it may be that we will get some examples from them and pass
them on to you for your specific answer.
(Sir David Wright) These are, as was implied by your
colleague, Mr Livsey, difficult matters and very sensitive. All
I can say is that our wish is to be as aware of the sensitivities
and as aware of the interests of Wales and other individual parts
of the United Kingdom as we can when planning these missions.
76. Nevertheless, it has to be said that the
relationship between Wales and Japan is exceptionally good. For
example, at least two Japanese universities have fully booked
courses for the teaching of the Welsh language. I would have thought
that Wales would be a priority area to put before any potential
Japanese investor. I understand the point you are making. Much
of the evidence we have received addresses the question of whether
or not Walesand this is really a tangential pointattracts
its kind of fair share of the total investment in the United Kingdom.
Do you think that this is a helpful way of looking at things,
and in your view on what basis should a country or region's fair
share, as it were, of investment be calculated? Should it be on
population, economic need or some other indicator?
(Sir David Wright) I think there are a variety of
issues which we have to take into account. I have to say that
sitting where I sit my principal priority is the national share
of the inward investment cake, in a global sense. That is where
I start from, because that is the target which we have to seek
to achieve, particularly in relation to different parts of the
globethe United States, Japan and Western Europeto
ensure that the United Kingdom remains the prime and chosen target
for investment from those countries. Therefore, the question of
how that relates to the particular interests of particular regions
takes us into this difficult area of what I described, in response
to an earlier question, as "drivers", that is what are
the particular needs and the particular priorities of the companies
seeking to invest in the United Kingdom. What are the sort of
business and working environments in which they seek to operate?
We are, for instance, discovering that companies proposing to
invest in the ICT sector are now extremely small companies and
are looking to be along what one might describe as the M4 corridor,
to some extent, in England. That said, I am quite clear that the
work which has been done in order to promote Wales in this area
has kept Wales very much at the existing level of investment successes.
There were 47, I think, new investments in Wales recorded last
year. That compares with 48 the year before and just over 50 the
year before that. It seems to be maintaining its position as a
region in the United Kingdom, given its particular needs.
77. I am just wondering: do you have a kind
of informal basis of, as it were, working out whether the fair
share has been accorded? If not, the answer is no.
(Sir David Wright) No, we do not.
78. The WDA suggests that the Invest UK bureau
should be moved out of London to remedy what they believe is a
London bias in its work. Would you agree with that?
(Sir David Wright) What we have to try to ensure is
that the Invest UK office is located in the place where it is
most able to meet and service the needs of potential clients.
I do again mean clients for the United Kingdom. I do not think
there can be an guarantee that if we chose a location outside
London, even if Ministers allowed us to do so (and, in a sense,
in answering your question, Mr Caton, I am putting on one side
the fact that, of course, we have to be close to Ministers), I
am not sure that would be necessarily any better for Wales or
the WDA. I believe Rhodri Morgan said to your Committee, Chairman,
at some stage earlier this year, "I do not think it would
be in Wales' interest if Invest UK were relocated to Liverpool
or to Newcastle". So I think that the fact that so many of
our clients are coming here, as I said earlier, to look at prospective
sites in terms of what are their business drivers and they then
want to assess their position with officials and ministers of
the central Government, they like to do that in London. There
is quite a common structured tour which starts in London, goes
out to the regions, comes back to London and then people leave
out of Heathrow. I think this meets the needs of the clients.
I do not think moving the office outside London would necessarily
benefit any other part of the United Kingdom in any greater sense.
79. Can you give us some examples of the Welsh
products which you help to promote overseas?
(Sir David Wright) Yes, I certainly can. We have had,
I believe, a good deal of success with a number of products from
Wales. I mentioned a moment ago the work that I was doing last
week with the Cardiff-based Orion technology group. I have looked
into this before this appearance before the Committee. I am particularly
impressed by a really good story about Linde heavy trucks in Merthyr
Tydfil. This is part of the Linde group that produces heavy lifting
equipment and which has secured some important contracts for this
lifting equipment in the Brazilian market and also in South Africa.
That has been a direct result of the work which they have done
as part of the British Trade International's ports sector group.
We have a number of sectorial groups, in which we try to promote
specific industrial expertise. Linde have got business out of
their activity there in Brazil and South Africa. A company called
Camseat Ltd produces camera equipment for use in large stadiums.
That has been done as a result of accessing the services of Trade
Partners UK. They have also made good use of a product which we
think works called New Products From Britain, which is a way we
promote information about products in markets. That was all done
through British Trade International, through Trade Partners UK.
Another company called Kay Premium Marking Film Limited, from
Newport, manufactures self-adhesive film used in the automotive
and aircraft industries. They have been involved with our services
and have exploited useful markets in the Middle East and in Latin