Trade and Investment — Statement

– in the House of Lords at 9:48 pm on 9th February 2011.

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Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills 9:48 pm, 9th February 2011

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Business, Innovation and Skills.

"Today, I turn to one of the main building blocks of economic recovery: achieving growth through international trade and by attracting inward investment. Britain makes up just 4 per cent of the global economy. Without aligning ourselves to faster growth elsewhere, we cannot hope to prosper, but to do this we have to do better than in the past. In the last few decades, we have consumed too much and exported too little. While our competitors were sending manufactures across the globe, we were building a property bubble. Now, with Germany exporting over three times as much as Britain, it is vital to turn this around.

We have also done better in attracting inward investment. We are one of the top three recipients of foreign investment in the world and are home to more European headquarters of overseas companies than all the other European countries put together. Inward investors do not just provide jobs, they also provide 30 per cent of our R&D. However, there is no room for complacency in an environment that is increasingly competitive. This White Paper therefore sets out a strategy for creating opportunities, for providing the conditions for private sector growth through trade and investment that will help to rebalance our economy, and for securing the benefits of greater trade and investment openness for the world's poorest people.

The Government want to focus on SMEs, which are much less engaged in trade than bigger companies. They have told us that they want to take advantage of the opportunities, especially in emerging markets, but cannot always access the trade credit insurance or finance to take the risk. Since the economic crisis, they feel that it has become much harder to get cover from private credit insurers at reasonable rates, so we will create several new government schemes and extend one existing scheme. These will be launched in the coming months.

First, BIS will launch an export enterprise finance guarantee scheme that offers export finance valued up to £1 million to SMEs. Secondly, the Government's Export Credits Guarantee Department will launch an export working capital scheme for those not eligible for the export enterprise finance guarantee scheme, which will offer export finance in amounts of over £1 million. Thirdly, the ECGD will launch a bond support scheme under which the Government will share risk with lending banks on the issue of contract bonds and, fourthly, it will launch a foreign exchange credit support scheme that will support banks offering foreign exchange hedging contracts to SMEs by sharing the credit risk. Fifthly, the ECGD will extend its short-term credit insurance scheme to cover a broader range of exports, including those of SMEs. In addition, UK Trade & Investment, or UKTI, will increase its focus on emerging markets and on helping SMEs. It will launch a new online service offering access to sales leads around the world.

All Ministers have been asked to support our trade diplomacy. I have led or supported the Prime Minister in high-level trade delegations to Brazil, India, China and Russia with business representatives promoting exports and seeking inward investment. We will do more of the same this year and beyond.

However, half our exports are to the EU, and consequently we have a strong interest in ensuring that the EU grows. That makes the completion of the EU single market even more vital. Some recent analysis suggests that trade between the UK and other EU member states could be as much as 45 per cent below potential. This is largely because of significant non-tariff trade barriers. Completion of the single market could translate into 7 per cent additional income per capita per UK household. We therefore strongly support efforts to remove barriers to trade-particularly for SMEs in fields such as e-commerce and low-carbon products and in professional and business services, where there are currently an estimated 3,000 regulatory requirements-as well as pressing for energy and agriculture liberalisation.

At the international level, completing the Doha round is one of our top-level objectives. Finishing these trade negotiations could deliver a £110 billion boost per year to the global economy. We have spent 10 years negotiating and need urgent action now to agree the key elements of the Doha deal this year, so I am glad that momentum towards a deal seems to be building again. Britain will do its utmost to get the WTO past the finishing line this year. Doha is the top priority, but we will also pursue an ambitious programme of EU free-trade agreements with our main trading partners, including India, Canada, Singapore, the South American Mercosur countries and, we hope, Japan, following the recent agreement with South Korea.

Finally, the UK is committed to assisting poor countries to take advantage of the opportunities presented by an open global trading system. International trade is one of the most important tools in the fight against poverty, and research evidence shows that countries without trade barriers have growth in per capita incomes three times faster than in other developing countries. We will therefore ensure that trade is a central theme across our bilateral aid programme and promote regional integration, notably in Africa through our Africa free-trade initiative. Helping the developing world in this way is the right thing to do, both on moral grounds and in Britain's economic national interest.

This White Paper sets out an ambitious direction for the UK and will guide the Government's work on trade and investment. We will implement it vigorously and actively, and I urge British business to seize the opportunities it will present. That way, we will all benefit from the vision it sets out: an open trading system and a competitive British economy, driving growth and jobs. I commend this White Paper to the House".

My Lords, this concludes the Statement.

Photo of Lord Young of Norwood Green Lord Young of Norwood Green Shadow Spokesperson (Business, Innovation and Skills) 9:55 pm, 9th February 2011

My Lords, I thank the Minister for sending me a copy of the White Paper earlier today and for notice of the Statement. I welcome the broad thrust of the Statement, so far as it goes. However, may I remind him that exports alone will not deliver without a credible plan for growth across our economy? Putting new tyres on the car will not make it perform better if the engine has not been fixed. We welcome the importance given to exports and export support, and support the increased focus on the major emerging markets such as Brazil, China and India without neglecting our longer established markets. We also welcome the commitment to opposing protectionism and promoting free trade. Subject to the detail, we will support the particular measures that the Secretary of State proposes to develop export support for SMEs, although I hope the Minister can give us a timetable for their implementation. I hope he acknowledges that all those measures build on work done by the previous Labour Government.

Like the previous Government, this Government are committed to the completion of the Doha round of global free trade talks. Given the difficulties that those talks have had in the past, can the Minister tell the House what specific new initiatives he will take in the coming year to ensure that talks are completed successfully? His predecessor and my right honourable friend the former Prime Minister played an active and engaged role in trying to move the WTO towards agreement. What personal role has the Secretary of State played and what commitments has he gained from the Prime Minister about his personal involvement in securing agreement this year? Does the Minister accept that the Doha round must foster development, and will he respect and build on the work of his department and the Department for International Development under the previous Government to ensure that trade agreements support poorer developing countries? The White Paper recognises the potential benefits of completing European free trade agreements. What specific new initiatives will the Secretary of State take within the Council of Ministers to get things moving forward? Finally on Europe, what specific measures will he take to broaden and deepen the single market, as the White Paper puts it?

There appear to be some significant problems underlying the White Paper. Can the Minister assure me that the cap of £25 million does not create a gap in export support for mid-range companies? Will he confirm that the UKTI budget will be cut by 19.5 per cent in real terms? Given the expansion of activities in the White Paper, where and how will cuts be made without damaging support for exporters? What role will the Science and Innovation Network play in supporting the export strategy? Does the Minister recognise that a successful export drive depends fundamentally on having goods and services to sell and on having the companies that can provide and sell those goods and services? Does he therefore also recognise that the Government's reckless approach to deficit reduction is damaging the prospects for growth and jobs? Can he tell the House why the strategy for growth has still not been published when he promised it in October? Does he acknowledge that the new director-general of the CBI has now joined the previous director-general in criticising the Government for having no plan for growth? Without a clear vision for the economy and a plan for growth, we will not have enough companies to export all the products to sell.

Will the Minister confirm that pharmaceuticals and the life sciences are some of the knowledge-based industries by which we can hope to earn our way in the world? Last week, Pfizer announced the closure of its Sandwich plant. Is that not a chilling message that one of the world's leading pharmaceutical companies looked at its global activities and decided that it no longer needed to be in the UK and that it could afford to leave the UK outside its global research strategy? How much more investment will we lose before this complacent Government produce a credible plan for growth?

The White Paper says that the Government will invest in UK infrastructure. Will the Minister confirm that the introduction of universal broadband has been delayed by three years and that there is no credible plan for fast broadband? Does he accept that those failings make the UK a less attractive place for investment by companies that support the digital economy? Does the Minister recognise that a recent report by Experian and the National Endowment for Science, Technology and the Arts concluded that there are companies with the potential to grow and export in every region of the country and in many different sectors of the economy? Does he recognise that regional development agencies often work with UKTI to support exporters? The Secretary of State has abolished RDAs, but can the Minister explain why the White Paper contains only one passing mention of regional support for exporters and support for exporters in the regions? How will he ensure that potential exporters get the right support in every part of the country?

The White Paper praises higher education as a gross export earner of £5.3 billion, so why is the Secretary of State supporting changes to student visa policies which will do real harm to the country's seventh biggest export earner and undermine our long-term trade and development interests? The White Paper speaks of investing in science but does the Secretary of State recognise that, with science investment cut in real terms and other countries increasing their science investment, we are in danger of losing world leadership in this area?

We welcome the recent performance of manufacturing exports which have taken advantage of the competitive pound. Will the Minister confirm that the strength of the manufacturing sector has been supported by the previous Government's support for science research and development tax credits and capital allowances and that, in the worst of a global recession, the scrappage scheme, Time to Pay and flexible tax credits all helped manufacturers to retain more of their workforce? Does he recognise that we now have a unique opportunity to use manufacturing exports to strengthen the supply chain companies and to develop the next generation of world-beating export products? What is he doing to ensure that we take advantage of that opportunity? There is much common sense and continuity in the White Paper and no need for artificial arguments about it, but the Minister must recognise that its impact will be severely limited without a credible plan for growth.

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills 10:01 pm, 9th February 2011

I thank the noble Lord, Lord Young of Norwood Green, for those comments and for his recognition that there is a great deal of common ground on what it takes to enhance British trade performance and to ensure that we remain an attractive place for inward investment. We all recognise that British trade performance has been inadequate for a very long time. That goes back many years, if not decades. As we look for ways to achieve stable growth going forward-we are coming out of a crisis which itself followed a period of clearly unbalanced growth-we all recognise that we need to rebalance the UK's growth model. It is clear that trade and investment will have to play a key role. It is no longer possible to grow the economy by consumer demand fuelled by excessive borrowing. It is plain that government spending will not drive growth for all the reasons of which we are well aware. Therefore, it is inevitable that those sectors of the economy which contribute the rest of the demand-for example, investment and the external sector-will have to drive growth.

I absolutely agree with the noble Lord that manufacturing will play an important role in this. Although the trade statistics at the moment are not good and show that we have plenty of work to do, there are some encouraging signs about manufacturing's contribution to exports. There is much work to be done. I say as someone who is relatively new in the job but who has spent some time going round the country meeting exporters-large and small, big companies and SMEs-that I am confident that there is a great deal of talent and energy raring to go. The measures that we have announced in today's White Paper, in particular the measures concerning the ECGD on the one hand and the UKTI on the other, will provide very useful support to those companies as they seek to achieve their aspirations.

The noble Lord raised a number of other questions about pharmaceuticals. There is no question that the news about Pfizer is very sad for Sandwich. All the indications are that it is not a reflection on Britain but is part of Pfizer's global strategy and dealing with its specific issues. I assure him that Ministers and the Government are taking this issue very seriously and that my colleague-one of the Ministers in the department for business-has been down to Sandwich and is in discussion with a number of entities that are making contributions to getting the site partly used and possibly saving some jobs. It is early days yet on that but we are working hard on it.

It is clear that the Government have credible plans for growth. It is interesting to note that Sir Richard Lambert's speech referred to a couple of things that he considered to be very important in terms of growth. One was providing better finance for SMEs, which we have done, and one was ensuring that UKTI focused more on SMEs and we have done that. Indeed, the warm welcome for today's White Paper from the present director-general of the CBI reflects the way in which we have responded to an obvious gap in the support for SMEs.

I believe that we are making progress. As we say in the White Paper, this is absolutely a marathon and not a sprint. A weak trade performance is something that this country has lived with for a long time and it will not be cured by waving magic wands. If there were any magic wands to be waved, they would have been waved by now. However, what we have set in place now will, over time, make a serious contribution to enabling more businesses to get involved in international trade.

Photo of Lord Razzall Lord Razzall Liberal Democrat 10:05 pm, 9th February 2011

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.

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

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.

Photo of Lord Lang of Monkton Lord Lang of Monkton Conservative

My Lords, I warmly welcome the well focused nature of my noble friend's announcement. I suggest that the key to growth in the long run is surely increased productivity, as the example that he gave of Germany indicates, though rather to the detriment of Germany's unfortunate partners within the eurozone. Against the background of the sad decline in productivity growth during the period of the previous Government, will he indicate the extent to which he believes the announcements that he has made this evening will stimulate further productivity growth and thus lead to the creation of more jobs and prosperity?

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I thank my noble friend Lord Lang for that question because it is an important one. Productivity is indeed something of an Achilles' heel, at least in parts of the British economy, and we need to work at that. It is a complex matter that involves the whole question of the skills base. There is one very interesting fact about exports that is extremely important to this question. Research shows that as small companies get engaged in the international markets, they not only tend to be the more efficient ones, they tend to get more efficient as they do so. In other words, an enhanced trade performance engaging more SMEs in the international markets has the effect of strengthening the backbone of the whole economy. That is an extremely important consideration that leads me to underscore again the very centrality of this trade agenda to the growth strategy for this economy for the next few years.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Home Affairs), Shadow Deputy Leader of the House of Lords, Shadow Spokesperson (Cabinet Office)

My Lords, perhaps I may follow up the question raised by my noble friend about the pharmaceutical industry, particularly the decision of Pfizer. Is the Minister aware of a Department of Health consultation on value-based pricing, which essentially changes the way in which the health service will compensate the pharmaceutical industry for the cost of drugs?

Under the current system, the PPRS, companies have great flexibility in setting a price within an overall profits cap. The advantage of that is that price sets a benchmark for at least 25 other countries and probably many more than that. That is one of the attractions for the industry of investing in the UK. When I was responsible for the pharmaceutical industry at the Department of Health, the UK had 4 per cent of global turnover in pharmaceuticals and 10 per cent of global R&D investment.

The Department of Health's concern is to control the cost of pharmaceuticals to the NHS but, frankly, there is a much greater issue: the strength of our pharmaceutical R&D investment. I therefore urge the Minister to make sure that we are looking at pharmaceutical prices from the point of view of UK plc. I should say to the House that I have a number of health interests which are declared in the register.

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I thank the noble Lord, Lord Hunt of Kings Heath, for that suggestion. I have to say that, as somebody relatively new to my role, this is not an area with which I am very familiar. However, his idea is very interesting and I am happy to undertake at least to inform myself more about the issues.

I am aware that Britain has been a very attractive site for R&D in the pharmaceutical industry. I think that we are all aware of the way in which the pharmaceutical industry is changing, with an increased tendency for the major companies to look at whether primary R&D is better contracted out to smaller operations. There is a need to think through the implications of that for the strategy of attracting and retaining inward investment in that sector.

Photo of Lord Burnett Lord Burnett Liberal Democrat

I welcome the Statement and my noble friend's appointment. Some of our major banks execute transfers of money rather more swiftly than others. It would be of great help to small and medium-sized businesses if money transfers took at the most, let us say, 24 hours rather than three or perhaps even more days. Will my noble friend encourage dilatory banks to speed up the system? Will he also take steps to encourage large companies to pay their suppliers without delay?

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I thank my noble friend Lord Burnett for those suggestions, which are both important. I am happy to undertake that the Government will ensure in their dialogue with the banks that money transfers, particularly for small businesses-but, frankly, for anybody-are done as rapidly as is reasonable. I also agree that we should encourage large companies to ensure that they settle bills with their smaller suppliers as promptly as possible.

Photo of Lord Northbrook Lord Northbrook Conservative

My Lords, I congratulate the Minister on the White Paper. I applaud the strengthening of the ECGD scheme and the focus on improving important emerging markets such as India, China and Latin America as well as on existing trading partners. I also agree with him on the importance of the Doha round. However, I have a problem with the coalition's measures for restricting capital allowances for manufacturing companies. If we are to try to refocus the UK economy on manufacturing, surely we need to encourage our manufacturing companies to reinvest and thus not restrict these capital allowances.

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I welcome my noble friend Lord Northbrook's support for what is proposed in respect of the ECGD and the commitment that the Government have given on Doha. The Government are clear that they want the most competitive corporate tax environment of any of our major competitor countries. As the noble Lord is aware, the headline rate of corporation tax is coming down by one percentage point between now and 2014. When it reaches its final level in 2014, it will be the most competitive rate among the G7 economies. From the many comments received from many companies, we have also recently announced the introduction of what I know is important to them; namely, a patent box to enable them to benefit from the fruits of research and intellectual property.

Overall, the sense is that we have got the balance about right. In recent weeks, as I have visited small and larger companies in the regions of this country, I have found that tax does not register as one of the regular issues where they are looking for enhanced government support. I think that they recognise the intent and the substance of what policies have already been announced.

Photo of Baroness Hooper Baroness Hooper Deputy Chairman of Committees, Deputy Speaker (Lords)

I also welcome the Statement and the White Paper. Because of my interest in Latin America, I note in particular and with pleasure the references to promoting trade and investment with that continent-in particular, Brazil and Mexico with their large and vibrant economies. I note also that the White Paper states:

"Our Embassies and High Commissions overseas are uniquely placed to advise on the complex political, economic and cultural factors that affect trade and investment opportunities in other countries. They can help facilitate access for UK business, help overcome barriers to market entry, secure a better in-country operating environment".

Will my noble friend therefore assure us that the previous policy of closing, down-sizing and placing severe budgetary constraints on our embassies and overseas missions will be reversed?

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I thank my noble friend Lady Hooper for drawing attention to a very important region, Latin America. Brazil is one of the most exciting countries in the world and I think that we all recognise that British business has not paid that part of the world as much attention as we probably should have in recent years and decades. That is now beginning to change. The Deputy Prime Minister is visiting Latin America next week, which follows a visit by the Secretary of State for Business, and I will be going later in the year. We are paying Latin America a great deal more attention.

With regard to embassies, I make two points. Embassies play a crucial role in this trade and investment strategy. The Government have defined the key priorities of the Foreign Office as being, first, commercial diplomacy and the prosperity agenda; secondly, security; and, thirdly, the consular function. The priority attached to commercial diplomacy is extremely important.

In terms of the deployment of resources, there is an intention to gradually shift resources in diplomatic terms to the faster growing countries, the emerging markets. Without being precise about the plans at this stage, I think that noble Lords can expect to see the sorts of countries that are of concern to them being beneficiaries of this process.

Photo of Lord Risby Lord Risby Conservative

I warmly congratulate my noble friend on his White Paper. Does he agree that the desire to learn English and to be educated in the English language produces a huge and lucrative opportunity for us, and that the work of the British Council and the arms of our universities abroad can play a critical role in trade development policy?

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I thank my noble friend Lord Risby for that intervention, because I agree completely. The role of British educational institutions as export earners in their own right and, importantly, as in some sense ambassadors for what Britain is around the world cannot be prized highly enough. All indications are that those who come into contact with the British educational experience end up taking with them a warm experience of Britain for the rest of their working lives. They are all the more keen therefore to engage with us, whether as investors or as traders later in life. I think that this is extremely important.

Photo of The Archbishop of York The Archbishop of York Bishop

My Lords, I too am very thankful for the White Paper. I am particularly grateful at how this Government are committed to assisting poor countries to take advantage of the opportunities presented by an open global trading system. I am also grateful that when the Secretary of State for International Development addressed the General Synod of the Church of England he reaffirmed what the Prime Minister has said; namely, that deficit reduction will not be achieved on the backs of the poor and that the 0.7 per cent will be retained to be given to those poor countries.

To have more joined-up thinking between that department and the Minister's department, will the Minister ensure that they do not simply support poorer countries? As some people have said, it is one thing to give a poor man a fish, but it would be better to teach the poor man how to fish.

Photo of Lord Green of Hurstpierpoint Lord Green of Hurstpierpoint The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

Trade is at the heart of what it takes to achieve successful and social development. Yes, the Government are committed to their plans to move towards the 0.7 per cent target for official development assistance. As my right honourable friend the Secretary of State said in the other place earlier today, we will commit to ensuring that our support for trade facilitation as part of our official development programmes remains at least at the current level. There is ample evidence that helping countries to improve border controls, regulatory environments and communications of all kinds has an enormous effect on trade, which in turn has an effect on people's ability to earn their own livelihoods and find their way into the economic and social mainstream. So we are completely in agreement with the instinct that the most reverend Primate calls for.