Thursday, 13 February 2014

Accrington Observer Column

With New Year now firmly upon us I thought I’d write a piece about the future - the long term future of this area.

I have been visiting businesses in the constituency finding out what they do, what issues they have and how I can help both in Parliament and here in Hyndburn - from policy to planning. It is surprising just how many innovatitive as well as highly competitive SME’s we have.

The big issue I raise with them is the export support available to them for through the governments UK Trade and Investment department which has offices around the world.

The message to businesses unaware of UKTI and worried about operating overseas is that UKTI is there to help. Rather than taking the risk of flying out to China, India or South America, UKTI will do much of the work for UK businesses on the ground. They will meet business people when they do travel and support them in foreign countries when trying to secure exports. They will do everything possible to help British companies win orders. Many SME’s are unaware of the scale and scope of help available. In my time in office, I want to Hyndburn companies to export a lot more, to grow and create more jobs here.

The reality is the UK and East Lancashire has not looked outwards as much as companies from other countries such as France and Germany who have a much larger export footprint because of their governments willingness to help. They are generating far more exports in overseas markets than equivalent UK businesses. That means less jobs in the UK, more jobs in Germany, France and the like. It also means competitors as nations gain that important advantage of a toe hold in foreign markets and are able to network and grow faster.

Business and employment, education and better transport are the three key economic priorities for Hyndburn Labour and myself. I tell children at local schools the area can only be as rich as the talents we have and crucially, the talents we employ. If we are to win the global race it is vital we get as many people into employment as possible. It is vital we dramatically improve transport links. I wrote last week about how it looks likely I may have secured a direct rail link - starting 2019 - to Manchester Airport.

There has been great economic change over the last 30 years and this has created a fear about the future in Hyndburn and elsewhere. A world changing so fast, that generates fear of the future and a new form of political populism. One that wants to close its eyes to the next 30 years (60 working years for our children!). No matter how difficult the next 30 years may be we cannot afford to do that. We must generate ideas and skills, we must seek full employment, we must help each other weather the global trade winds. The next 30 years may well be harder than the last 30 years and we must brace ourselves for this fast changing world.

Where hundreds of millions of new aspirational new middle classes emerge across the globe with spending power putting pressure on global food and energy prices. Prices which are already rising fast. The UK must face outward. The rich fertile soils of places like Ghana for example must change from low intensity feudal agriculture to sustainable and productive commercial crop production. Britain and the west must help to make this happen. This isn’t bong bongo land but our own food security and downward pressure on prices in local supermarkets.

We cannot afford an cock eyed view of immigration either and pull up the drawbridge on the brightest foreign students because we simply don’t like foreigners. Students make up 50% of immigration applications. We need a sensible debate. 1 in 4 computer programmers in Silicon Valley in the USA comes from India. 1 in 4 of those comes from one city, Hyderabad. Shanghai, according to PISA exam scores, has the brightest students in the world and by some margin. Imagine that talent here alongside our own talented people. Frighteningly, imagine that wealth generating talent in someone else’s country. With the pointless, punitive new visa restrictions brought in by a scared Tory government, bright students are now choosing to go elsewhere, primarily the United States. The fall off in bright Indian students is over 25%.

The global race will show no mercy. A Baxenden friend made good and employing hundreds of people, part sold his business to the Chinese. They have spent the last 4 years moving R&D and innovation back to China as they have done with every other western company they have bought. With an internal economy of 2 billion people Chinese companies and Chinese money dwarfs UK companies. I met a Mr Ding in Shanghai. He brought in the Trafford Centre architects to build one identical but twice the size and the same brand names including M&S. It has twice the footfall,180,000. Mr Ding told us he had at a click of his fingers, ordered 6 more in the area.

The emerging economies have worked out that the way forward is as predators. Seeking not UK jobs, but UK innovation – the part of our economy that drives and maintains our current living standards. I met with several UK chief executives of well known UK companies on the 90th floor of a Shanghai skyscraper. Monuments more than half a kilometre into the sky, statements of Chinese power. The UK CEO’s message was clear; ‘be frightened, be very frightened’.

The Chinese own half of US government debt of $16 trillion. While Twitter with 120 million users floated for $35billion, Weibo the more popular Chinese version has almost 500 million users. Think of all those jobs in Chinese IT and the scale of the Chinese IT economy. The list of well known and hi-tech UK (and other nations) companies bought by Chinese and Indians (and others) is growing. Even BAe export contracts involve knowledge transfer.

And if they can’t buy UK innovation, then they just simply reverse engineer it. With knowledge transfer from the UK to emerging countries they are seeking to out-innovate the west with better factories, better engineers, cheaper products. Add the sheer market size of places like China and they could and may out-muscle UK companies across the globe. The Chinese are currently spending £billions building a better passenger aircraft to Boeing and Airbus at a cheaper price. They know such advanced engineering ambition will put them ahead of the west. They are building our nuclear power stations as well. All supported by the most business friendly government you will encounter. Ironically the Chinese Communist Party.

It’s important that Hyndburn backs it businesses, gets the best out of its children and invests in better transport links that drive our local economy. It’s important we stay one step in front. That we seek out export markets and Hyndburn firms are amongst those UK companies winning those orders, whether in the open market of the EU or elsewhere. The next 30 years is about ‘In Place of Fear’.