UKTI (UK Trade and Investment) will, as usual, be much in evidence during Offshore Europe, a biannual opportunity to showcase Britain’s oil and gas wares to the world.
The trade promotion arm of the government is very good at bringing the world to Aberdeen. It has invited guests from 15 important markets for the UK industry, from Vietnam to Iraq, India to Angola. There will be a seminar on Asia-Pacific opportunities and a chance to meet Brazilian decision-makers at a networking reception.
The service, which UKTI provides to the oil and gas sector, is knowledgeable, practical and vastly experienced. What concerns me now is that the organisation is being whittled away to the point where its usefulness is bound to be limited – not just by tightening budgets but, perhaps more importantly, by swingeing staff reductions.
Officially, the line is “doing more on less”. But while I am all in favour of value for money, the idea that you can provide a better service, while continually cutting experienced staff and raising increasing proportions of diminishing budgets by charging customers challenges credulity.
Leveraging money from the private sector, which UKTI has become very good at, is one thing. There are a lot of big players in the industry who have long benefited from government support and a little payback is no bad thing. But SMEs (small to medium-sized enterprises) are a different question, and it is they who really need all the encouragement they can get to enter overseas markets. I must admit to a certain affinity with UKTI, since I have been with it since its birth. The shake-up in Britain’s trade promotion effort came in 1998 when I was trade minister. UKTI replaced the old British Overseas Trade Board, to provide a more focused service, which it was successful in doing.
In my subsequent roles, I had close contact with UKTI, particularly through the Glasgow office, located on that mysterious bridge to nowhere above Charing Cross. The Glasgow office started life as the Offshore Supplies Office, but had latterly become the main centre for UKTI’s global efforts on behalf of North Sea companies and their supply chain.
The Glasgow office, which was identified solely with oil and gas – surely a British industry worthy of its own international trade effort – is now shared with nuclear, renewables and other forms of power generation.
When I stopped being energy minister in 2003, there were 40 people in UKTI working solely on oil and gas worldwide.
Now there are fewer than 20 with the much wider portfolio.
There has always been ambivalence within Whitehall towards trade promotion, with a school of thought that the private sector should be left pretty much to its own devices. Certainly, there are large companies which are able to look after themselves in overseas markets but even they tend to come looking for help from the embassy when operating in difficult environments.
It is through the meticulous work of identifying global opportunities and then fitting British companies into the supply chain that hundreds of smaller firms become involved in exporting, and this is where the role of a government trade body is essential. It is an approach which has served us particularly well in the oil and gas sector.
I remember when UKTI was being set up, I visited its headquarters at Kingsgate House in Victoria, London. I was horrified by the conditions people were working in and also the shabby conditions in which visitors were received. So much so that I suggested we should seek new headquarters, as a statement of trade being at the centre of government policy.
At that time, the old ICI building just a few hundred yards from Westminster was available and I wanted the shiny new UKTI to go there. The mandarins were appalled since this would have elevated the status of “trade”. I lost the argument and was greatly irritated when, a while later, the utterly unproductive power watchdog Ofgem moved into these prestigious premises instead.
We should not allow such attitudes to prevail and I hope that close attention will be paid to the recent report by the Commons select committee on business, innovation and skills, which concluded that not enough thought had been given to where cuts will fall.
It also expressed concern that UKTI had appointed a Foreign Office diplomat with no business experience as chief executive because of the way the budget was heading.
There is another current issue that is worth watching. The only reference to UKTI’s existence in the coalition policy document was to insist that it should promote renewables “instead of fossil fuel production”.
In other words, there is a school of thought which believes that it is somehow wrong for government to promote the UK oil and gas industry worldwide.
I would suggest that the best way to counter that nonsense would be a rousing speech from the trade minister at Offshore Europe, endorsing UKTI’s role on behalf of the oil and gas industry and promising more staff and resources to do more, not less, in the future.
Closely connected to the industry, Brian Wilson is a former energy minister
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