Give Lord Price a megaphone
Lord Price, previously CEO of Waitrose, was appointed Trade Minister at UKTI, now the Department for Trade and Investment, in April 2016. Finally the government had appointed someone to lead our exports who really knew something about business. For the preceding 20 years, UKTI had seen a near-annual churn of ministers and ill-judged policies. The churn was stirred essentially by mandarins who thought they knew more about exporting than exporters did. Yet just eighteen months later Lord Price was gone too.
This week he gave an interview to the Daily Telegraph calling for government to hand export promotion to "a German-style network of chambers of commerce". He is right because exporting successfully as a start-up is not a matter of mathematics, digital analysis or micro-economics but of personal human contact. Exporters and importers need to meet and know each other. The best people to show the way are those who have already 'been there and done that' - not civil servants in Whitehall and embassies.
The idea is not new: the British Chambers of Commerce (BCC) have been pushing it for some time. In 1991, Michael Heseltine, then President of the Board of Trade, proposed something similar also based on the German network of chambers of commerce. It was called “Business Link”. BCC not only failed to grasp the opportunity but opposed the whole idea.
Reviewing the matter 20 years later, Heseltine stated that the BCC: “should have gone to Government and said, look you've got all these services, work with us and create the one stop shop. That's what they should have done. We did it for them. I think they regarded Business Link as an intrusion into their fiefdom. But the reason we created Business Link was because the Chambers weren't doing a good enough job."* In the event, Whitehall mandarins appointed themselves to the key Business Link positions so that was a disaster too.
Lord Price’s argument is cogent and no-one is better placed to outline the way forward. Remarkably, instead of welcoming what could be regarded as their own proposal, the BCC's response was to grumble about who should pay for it. Lord Price suggested businesses pay “a small levy – say £100 to £1,000”. Adam Marshall, the Director General responded that such a levy would be seen ‘as a “tax on business” and turn the chambers into quasi-governmental organizations that would be less free to argue fearlessly for business interests.’** Even by BCC standards, this is a miracle of contrariness: he is claiming that members paying dues to a private club, or trade union, for representation, and the provision of services, would thereby inhibit that club from so doing.
It is unfortunate that funding is muddying the water at this stage. The government export department costs around £400 million p.a. but there is little reason why it shouldn't focus solely on things only government can do (treaties and such like) with a majority of that £400 million, i.e. £1,600 or so per exporter, released to fund BCC’s export services and those of its overseas partners. No new levies or taxes would be needed.
While Heseltine’s issue that chambers aren’t yet doing a good enough job, we could always suggest the possibility that government should pay chambers by results. A scorecard would need to be agreed and a scorekeeper (perhaps a business school with strong international marketing expertise, to collect and publish the scorecard) but this is not an insurmountable obstacle. Some chambers are excellent and are already helping the members to export in significant ways. Inevitably some chambers are better than others and, overall, they are not up to the standards strongly exporting countries like Germany. It is no criticism to say that they could do better: every organisation in the country could do better. Suggesting complacency, or that helpful opportunities are being opposed, is not a criticism I would make.
We can be sure that the mandarins will oppose Lord Price’s suggestion and ministers will claim to be pre-occupied by Brexit, forgetting that a key rationale for Brexit is the very freedom to export to which Lord Price is opening the door. We know this because Lord Price must have outlined his thinking before leaving office after a mere eighteen months.
To take his proposals forward he needs to set up his own working party with the BCC, other business groups, experienced exporters and academics. The House of Commons International Trade Committee should discuss the proposal. It needs to be refined until business speaks on it with one voice. Then give Lord Price a megaphone and government will have to listen.
* Forte, Elliot (2011). Intervention: The Battle for Better Business. Lulul. pp. 252–264. ISBN 978-1447863236.
** Daily Telegraph, ibid.