Post date: Friday, 11th January 2013

Cameron continues high-growth drive as Heseltine looks to Europe

Michael Heseltine: Cautious about high-growth promise.

Michael Heseltine: Cautious about high-growth promise.

BRICs, it would appear, aren’t seen as the answer to rebuilding the nation’s economy by everyone in the UK corridors of power.

While prime minister David Cameron has revealed plans to visit India – one of the BRIC group of countries along with Brazil, Russia and China – next month, Tory grandee Michael Heseltine has struck a note of caution about concentrating too much on the high-growth markets.

The BRIC nations, together with other burgeoning economies such as South Korea, Turkey, Indonesia and South Africa, are at the core of the government’s and UK Trade & Investment’s export for growth strategy.

But Heseltine, speaking at the headquarters of the Trades Union Congress, said British manufacturers were deluded if they thought Brazilians were crying out to buy British goods.

The Europhile politician said: “We hear all about these new growth markets of the world, in which if Britain could simply divert its attention, it will solve all our problems. But if you go there, what will you find? You’ll find Germans, French, Italians selling the very products that they designed and exploited in the European markets.

“It’s a delusion to think that there’s a Brazilian out there saying, ‘Well, if only the British were here’. If you’re not going to beat them at home, you’re not going to beat the overseas.”

Such sentiments are at complete odds with Cameron and William Hague and their partners in the coalition, Nick Clegg and Vince Cable, who see the high-growth markets as essential to the British recovery.

Cameron has visited Brazil, Russia and China once each in the two and a half years he has been in office, while India will become the first of the group to receive a second prime ministerial visit.

When he visited India two years ago, Cameron and Manmohan Singh, his Indian counterpart, agreed to double two-way trade by 2015, something they say they are still on track to achieve.

The February trip will attempt, among a broader range of commercial initiatives, to boost British defence exports following the country’s choice of France’s Dassault as its preferred bidder for a 126-aircraft contract over the UK-German-Italian-Spanish Eurofighter Typhoon.

The deal has yet to be finalised and European officials say India may in any case delay the purchase on cost grounds.

Cameron will promote sales of other defence and civil equipment such as helicopters and to encourage Indian groups such as Tata to reinforce their investments in the UK, reported the Financial Times.

Typhoon will not be high on the agenda, defence industry executives said. BAE and its Eurofighter partners, pan-European EADS and Italy’s Finmeccanica, are loath to market the fighter jet too aggressively for fear of insulting Indian officials.

The $20bn contract is expected to take years to complete and Eurofighter executives believe their best chance is to gently remind India that they stand ready to drop their price and sell them Typhoon if negotiations with Dassault fail.

Howard Wheeldon, head of policy at ADS, the UK aerospace and defence industry group, said: “I suspect that the emphasis this time will not necessarily be on defence. There is for now, and until or if the French fail to come up with the goods on Rafale, not much that Cameron can do on India fast jet competition.”

Cameron’s trip will also address claims that tougher British visa restrictions are stopping Indian students from coming to the UK after a new report showed a sharp drop in the number of Indians studying at British universities.

Jo Beall, director of education at the British Council, said the figures, suggested that "changes to UK visa regulations may have dissuaded many students from applying".

The coalition has repeatedly insisted there is no cap on foreign student numbers and that it does not wish to see them decline. Restrictions on foreign students’ right to work in the UK after finishing their degrees were only introduced in 2012.

Cameron is expected to reassure Indian students that they are welcome in Britain; according to James Bevan, UK high commissioner in New Delhi, the UK processes 400,000 visas a year in India and almost 90% of those who apply receive one.

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