To Get India on Tap

 

It is an anomaly that, all over the world, beer accounts for over 65 per cent of alcohol sales, yet in India it is still under 10 per cent. India has one of the smallest per capita beer consumption rates in the world, at just two litres per person per year. In comparison, people in the Czech Republic, which has the highest rate of beer consumption in the world, drink approximately 145 litres per person per year. Now consider a country like Kenya—beer is consumed there at six times the rate of India, at 12 litres per person per year.

India has the potential to be a beer market second only in size to China, which is the biggest beer market in the world today by a long shot. However, China has a rate of beer consumption of around 40 litres per person per year.  In order to catch up with China, India’s beer consumption rate would have to grow over 20 times—and China is not standing still.

In Britain, on those magical hot British summer days, beer sales go through the roof. India, with its constant warm climate, is the perfect country for beer. It should be the nation’s refreshment of choice. Instead, we have a country with a culture that sees people in rural areas drink country liquor, which is cheap and potent—causing huge health and social problems which have led it to be outlawed in a number of states.

Following the liberalisation of the Indian economy 24 years ago, beer drinking has increased in popularity with growth rates hitting double digits year on year. India’s younger population is more in tune with their global counterparts in drinking hab­its and prefers the refreshment of beer to the potency of spirits.

However, while there has been an increase in beer production, beer is still hampered by high taxes. This inflates the price with a 650ml bottle of beer in India costing, on average, 100 rupees —prohibitively costly for many. The cause of hefty beer taxes is that beer is lumped in with spirits for tax purposes and given the same restrictions, despite the fact that strong beer consists of seven per cent alcohol by volume, while Indian-made foreign liquor and country liquor have an alcohol content of 40 per cent and up to 60 per cent respectively!

As a result, advertising beer is prohibited and the number of licensed outlets—wine shops, bars and restaurants—is very small when compared to other cou­ntries with established beer markets. In China, there is one outlet for every 395 people; in India, there is one outlet for every 17,000!

As the two beverages are combined under the same legislation and the tolls fall equally heavily on both, consumers are given no incentive to choose beer over Indian-made foreign liquor, which delivers three times the alcohol for the same price.

Limiting the availability of spirits would also change alcohol consumpt­ion patterns in the country. Indian spirits are currently available in small volumes like 180 ml and 90 ml, volumes designated for individual consumption which would never be sold in the western market. If only beer in India could be more affordable and more available, the popularity of drinking strong spirits would fall, creating enormous health and social benefits.

I started manufacturing Cobra in Bangalore 25 years ago as an export-only product and within seven years Cobra became the biggest ever export beer out of India. Cobra is now by far the biggest Indian beer brand outside India. It is a matter of great pride to me that we have won 83 Monde Gold Medals, making Cobra beer one of the most awarded beers in the world, showing that a beer of Indian origin can be amongst the best on earth!

 The Full article is available here

The Chef Initiative campaign was announced by Cobra in response to the challenges faced by many in the curry industry, which have been exacerbated by a sharp decline in the number of highly-skilled chefs entering into the industry from abroad, as a way to give back to the ethnic restaurant community.  The campaign was unveiled at an event in London’s Cinnamon Kitchen, and was co-hosted by award-winning chef Vivek Singh – one of the six chefs leading the training sessions over the coming months.

The initiative will see workshops taking place across the country, which will be led by Alfred Prasad, former chef at Tamarind, Vivek Singh, The Cinnamon Club & Cinnamon Kitchen, Cyrus Todiwala OBE DL, Café Spice Namaste, Mehernosh Mody La Porte des Indes, Vineet Bhatia, Vineet Rosi, and Atul Kochhar, Benares.

 

Speaking at the launch, Lord Bilimoria said: ‘We know from speaking with many ethnic restaurants that there is a real shortage of skilled chefs in Britain, due in part to our rigid immigration laws, which is why we decided to co-ordinate a national skills-sharing initiative. With the support of some of Britain’s most distinguished restaurateurs, we hope to equip chefs up and down the country with vital knowledge and confidence to produce the highest quality, delicious food that the British people love.’

Vivek Singh, restauranteur and chef of The Cinnamon Club & Cinnamon Kitchen, said, ‘The Cobra Beer skills-sharing initiative is a fantastic programme to boost the ethnic restaurant community in Britain and I look forward to sharing my experiences with the participating chefs over the coming months.’

In the article, he put forward the case for implementing a coherent immigration policy that encouraged bright students to remain in the UK and explained the reasons why he is optimistic about Britain’s future.

Cobra beer founder Lord Bilimoria on Tories trying to be “nastier” than Ukip, and “economically illiterate” Theresa May

The crossbench peer and lager tycoon Karan Bilimoria lashes out at the government’s immigration rhetoric, calls our levels of defence spending “dangerous”, and questions Ed Miliband’s knowledge of business.

Considering most household name beers are centuries old, it comes as a surprise to me that it’s only the 25th anniversary of Cobra beer this year. That’s 26 years since Karan Bilimoria, then a 26-year-old graduate, became fed up with drinking gassy lagers when out for a curry, and decided to create something new.

“I came up with the idea at university,” he tells me. “It was very simple; I hated fizzy lagers and I loved English ale, real ale, and so I came up with the idea of a beer that would have the refreshment of a lager and the smoothness of an ale combined.”

After persuading the best brewmaster in India to create his new beer, and ditching the initial brand name “Panther” (it’s not pronounced the same throughout the world, and just wasn’t as “short, sharp and memorable” as“Cobra”), Bilimoria and his friend began delivering Cobra beer from the back of their “battered old Citroën deux chevaux called Albert”.

Now a crossbench peer and the owner of what has become one of the most globally popular beers, Bilimoria is concerned that students who wish to study in the UK are being deterred by anti-immigration rhetoric. He came to Britain in 1981 from India to study, and built a successful company. He fears that foreign talent is now being put off coming to Britain due to the government’s approach to immigration.

“I’ve found it really worrying, I’ve found it hugely damaging,” he tells me, shaking his head. “It has unfortunately been completely fuelled by Nigel Farage and Ukip, and it surprises me and worries me the following that they have in the polls…

“Unfortunately the Conservative party has jumped on this bandwagon, Theresa May the Home Secretary in particular, and instead of having a sensible approach to immigration, almost trying to compete with Ukip on immigration as to who can be the nastier one.

“It’s created a very negative approach to immigration, which is wrong, and I believe we should have a more balanced view on immigration, looking at all its aspects.”

He adds: “There is no way Britain would be where it is today without the contribution of the ethnic minority and religious communities going back over the decades. And here is this picture being painted that immigration is bad, immigration is damaging Britain.”

Bilimoria despairs of the Home Secretary Theresa May’s attitude towards migrants. It was her department that trialled the loathed “Go Home” vans, fiddled around with visa rules, and mooted that international students should be sent home immediately after finishing their university courses in Britain.

“In countries like India, you hear ‘does Britain want us?’ The number of Indian students has plummeted… the rhetoric has been very damaging; it’s created this damaging impression abroad.

“And Theresa May, I believe is economically illiterate when it comes to immigration. When it comes to business. Look at the City of London, we would not be the Number 1 global financial centre if it were not for the international expertise that works in the City of London.

“Yet you hear of firms that have visa issues bringing in staff. The Indian restaurant industry has trouble bringing in chefs, because of the changes in the visa rules… Here’s an industry that employs hundreds of thousands of people, billions of pounds to the economy, contributes to the taxes, produces food that this country loves – we’re a nation of curryholics – and yet we thank the industry by not allowing them to bring in the skilled staff that they need.”

“And they [the government] are really out of tune with what the public wants on this matter. Foreign students should be encouraged to stay on and start their businesses over here. You poll the public, and they will say of course they should be allowed to start their businesses here. Look at me.

“It’s very damaging, it’s very short-sighted.”

Yet Bilimoria also has strong words for the Labour party. “I don’t believe Ed Miliband understands business,” he says. “I don’t believe business has been a priority for him, that’s been demonstrated through the lack of mentioning it in major speeches, and through the way he’s tried now to demonstrate he’s pro-business by completely showing again a lack of understanding of business.”

The peer is particularly scathing about Miliband’s focus on zero-hours contracts. “Yes, zero-hours contracts is an issue, but making it the major plank of the major political debate that they had? It’s important to create jobs. Yes, you never want zero-hour contracts to be abused. But you never hear him talk about job creation, wealth creation, which is the most important thing.

“I’m also very critical of the current government,” he continues. “With defence, I really think they should commit to the 2 per cent NATO commitment. It’s negligent to have an army now that is so small; it’s dangerous in today’s world. Whether it’s the Russian situation, Isil, Middle Eastern situation, and who knows what’s going to come next? I [also] criticise this government for under-investing in higher education. We underfund our universities by half what the United States does, below the EU average, and below the OECD average. We should be investing more in R&D and innovation.”

As founding chairman of the UK-India Business Council, Bilimoria has joined various prime ministers’ trade delegations to India. He has accompanied Tony Blair, Gordon Brown and David Cameron on such visits. He reveals that in a meeting ahead of his trip with Cameron, he warned him to be more positive about what Britain has to offer:

“I said to David Cameron in the last briefing meeting before we went out: ‘Come on, shout from the rooftops about all our amazing capabilities that we don’t appreciate in our own country, and this message has to be communicated within the country to give us the confidence of what we’re doing and never taking it for granted, but also for the outside world’.

“I never want anyone to think of Britain, as they did in India when I was a teenager, as a loser country and the Sick Man of Europe and a has-been. We are a country that always should be at the top table of the world, and always should be at the forefront, the cutting-edge of innovation and creativity.”

So in spite of such negativity from our politicians, does Bilimoria remain optimistic about Britain’s role in the world?

“Very optimistic,” he replies. “But I hate it when it’s damaged by this immigration rhetoric of the Nigel Farages and Theresa Mays of the world, it’s so unnecessary, it’s so damaging – it undermines all this.”

I’m sure a number of voters would drink to that.

 The article is available at the New Statesman website here

As former international student himself, Lord Bilimoria remains a vocal support of the rights of people to study in at British universities, as well as being allowed to remain and work in the country after graduation.

The world’s brightest will shun the UK if isolationist rhetoric doesn’t stop now

We all have our own image of UK entrepreneurship. Sir Richard Branson is a common first choice, and Sir James Dyson is another. For me, it is the Indian Restaurateur.

When I first founded Cobra Beer 25 years ago, it was these tireless, unsung heroes of UK entrepreneurship who placed their trust and belief in my business. It is thanks to them that, today, I can see my Indian beer fill patrons’ glasses – both in the curry house and in that most British of all institutions, the pub.

That is what makes our economy one of the greatest in the world. It gives migrants the chance not only to build a business, but to see it become a part of the UK’s national identity – what, after all, could be more British than going out for a chicken tikka?

But as my own company has grown, so too has Britain’s antipathy towards migrants like myself. When I started Cobra in 1989, a little over 10 per cent of people considered immigration to be the most pressing issue facing the country; today it is nearly 40 per cent.

A report published this week by London First (and commissioned by Boris Johnson) highlights just how real the dangers of Britain taking the wrong path are. Calling openness to immigration one of the “critical underpinnings” of London’s success, it warns that turning away talented people could hamper Britain’s ability to remain competitive.

For a nation that still exports more to Switzerland than it does to India, this is sound advice. The long-term prospects of our economy depend upon Britain’s ability to successfully pivot its focus towards emerging Asian markets such as India and China.

Yet, in 2013, UK universities experienced a 25 per cent drop in the number of Indian-born students enrolling. Feeling spurned by Britain’s isolationist rhetoric, the world’s brightest and best are voting with their feet.

When politicians, like home secretary Theresa May, speak of moving towards “zero net student migration”, by sending foreign graduates home after they finish their studies – as she did last month, before having her proposals quashed by George Osborne – they are exhibiting a startling degree of economic illiteracy. While I’m glad that these specific plans look unlikely to happen, the broader shift in Britain’s immigration debate has not gone unnoticed abroad.

I recall being at a lecture in London where the Australian education minister Christopher Pyne thanked the UK government for its immigration policies because of the boost they provided to Australia’s higher education sector. Between May and Nigel Farage, we can hardly be surprised that Indian students are choosing to study in Brisbane and Canberra rather than Birmingham and Cambridge.

Today, 42 per cent of current international students profess an intention to set up their own business following graduation, but only 14 per cent wish to do this in the UK. If the government, and May in particular, persist with their vendetta, it will only be a matter of time before we turn away the next Steve Jobs or Sir James Dyson.

This year, Britain faces a fork in the road. On the one path lies openness and prosperity – on the other, isolation and decline. Let us hope we have the wisdom to choose the former.

The full piece is available online on City AM’s website.

My Lords, last month, I accompanied my university contemporary, Greg Clark, the Universities Minister, on a delegation to India. I spoke at an Indian higher education conference. Sitting next to me, sharing the platform, was the first ever permanent secretary-equivalent of a department newly created in India by Prime Minister Narendra Modi: the department for skills and entrepreneurship.

I declare my various interests to do with this debate and the Bill. Last Monday, I spoke at the opening of Global Entrepreneurship Week alongside Vince Cable, where it was revealed that London is one of the top two cities for entrepreneurship in Europe. Last week, I became a founding member of the Guild of Entrepreneurs, which will soon become a livery company in the City of London. We are currently on the 687th Lord Mayor of London, so it has taken us a long time to establish a Guild of Entrepreneurs.

Yesterday, I was at my old university, Cambridge, speaking at the 10th anniversary of the Centre for Entrepreneurial Learning at the Judge Business School. I have been proud to have been appointed one of the first two visiting entrepreneurs at Cambridge, and have been involved with the CfEL since its inception, spreading the spirit of entrepreneurship throughout the university—not just the business school but the whole Cambridge University community. More than 300 students from around the university attend projects such as Enterprise Tuesday. Look at the culture shift that has taken place. When I was at Cambridge in the 1980s, there was no business school. Today, there is not only a flourishing business school but a centre for entrepreneurial learning.

However, there is not one mention of the word “entrepreneurship” in the entire text of the Bill. Can the Minister explain that omission? I am of course delighted, as the Federation of Small Businesses noted, that the Bill even exists in the first place. There is a lot that is music to my ears. There is so much of what the Minister said that is fantastic, such as helping businesses start from home, and childcare help for businesses. She herself noted that small businesses make a huge contribution to the UK economy. Between them, SMEs comprise 96% of all UK businesses, accounting for about half of UK jobs and one-third of private sector turnover—the engine of our economy.

Speaking as someone who started a business with just two people that has grown over the years, I have seen first-hand entrepreneurial businesses. My business has dealt a lot with the curry restaurant industry. More than 10,000 of them are represented by the Bangladesh Caterers Association: pioneering entrepreneurs who have made curry the favourite cuisine of this country. I know the sacrifices that those individuals have made; I know how difficult it is to start, to grow and to survive in business. One of the first cases I ever sold of my product was to a local corner shop. Of course, those corner shops have survived and grown thanks to the Asian community. So I have been a micro-business, an “s”, an “m” and now I have a joint venture with a global giant.

There is a problem with the terminology used in the Bill. Grant Thornton—I declare an interest as I have dealt with the firm for many years as a client—has noticed that there is an unnecessarily restrictive definition of SMEs in the Bill. The current definition of SMEs used by the Government largely excludes mid-sized businesses from many of the provisions of the legislation, such as on access to finance, late payment and credit information. However, these same businesses will still have to abide by a number of additional burdens, such as the duty to publish a report on payment practices.

Grant Thornton estimates that approximately 34,000 mid-sized businesses will be left behind by the Bill, as they lack the resources of the large corporates that are needed to cope with additional regulatory reporting but are not granted the same exemptions granted to SMES within the Bill. Will the Minister acknowledge and, I hope, deal with this omission by widening the positive provisions to a larger section of the business population and altering the definition of an SME used in the Bill, which is based on the Companies Act and restricts an SME to a turnover of just £25 million.

On access to finance, the United Kingdom lags way behind our major competitors. Just look at Germany, where SMEs can draw upon close personal and financial links with a multitude of local lenders, many of which are state owned or operated as mutual firms. Germany’s small and medium-sized businesses, the Mittelstand, are exemplary and have been the centre of the economic success of that economy. The United States has always been brilliant in the way that it has helped to fund its small businesses, but I believe that we could go even further. In fact, the Institute of Chartered Accountants in England and Wales, of which I am proud to be a fellow, recommends that in order to help businesses with the wider issue of finance and cash flow the Government should foster new business growth by introducing critical growth loans, where a percentage of the loan is guaranteed for SMEs trading for between two and five years.

I have benefited personally from the Government’s small firms loan guarantee scheme, which is brilliant at enabling businesses that do not have the collateral to get the Government to back the security with the bank that lends to the business. We could and should increase that lending far more than we are. Does the Minister agree that we should be doing this? Business is going global. The Bill talks about export finance and there is so much good work going on. UK Trade & Investment has sponsored a programme called Sirius, where we attract the brightest young graduates from around the world to come and open their businesses here in the UK. This is the sort of initiative that we should be encouraging and growing.

With regard to the moral aspects of the Bill, the fact that we are addressing the minimum wage is excellent. If the Bill is clamping down on those rogue businesses which exploit their workforce, that is great news. I cannot think of any ethical business that would pay less than the minimum wage, let alone the living wage. However, the Guardian reported last week that despite the Business Secretary’s rhetoric last year that the coalition Government would crack down on firms that underpay their employees, there have been no successful prosecutions of such illegality since February 2013. Can the Minister confirm that? The annual survey of hours and earnings for the Office for National Statistics recently reported that around 287,000 workers were paid at less than the minimum wage in 2012. Are the Government aware of that and why are they not doing more about it? I hope that the Bill will be able to address this. Can the Government assure us about it?

With regard to the pub industry, I said that I declared my interest and I cannot spend the whole of my time declaring my interest in this area. The sad thing is that more than 10,000 pubs have closed down in the United Kingdom in just the last decade. We need to do everything we can to save the British pub, which is at the heart of British communities. The beer tie itself is somewhat of a double-edged sword. Of course, it allows big brewing or pub groups to invest in the pubs. To actually start a pub, you have to put down perhaps £250,000. However, if you are with a big pubco you do not have to do that and can actually run a pub. That is the advantage of being part of a big pub group.

However, if by doing that you also have to pay 70% to 80% above the market price for your beer, and pay higher rents, that does not feel fair at all. Given the recent defeat on this issue in the other place, I am delighted to hear the Minister say that the Government have listened and are going to try to achieve what I hope will be a middle way, where we can have the benefits that the big pub groups bring while enabling our pubs to be competitive and flexible, and to flourish, thrive and grow.

With regard to insolvency, Britain’s insolvency environment ranks pretty highly. In fact, we rank seventh in the world. The Bill talks about reforming insolvency in this country. I do not believe it is doing it in bold enough terms. For example, we are not going as far as having the famous American Chapter 11 or the Canadian Division 1 principles—and, surprise, surprise, countries number 1 and 2 in the insolvency environment are Canada and the United States of America. Those two measures, Chapter 11 in particular, provide a company trying to restructure with protection from creditors to give it time to do so. I have gone through this. I tried to institute a company voluntary arrangement. We got 90% of our creditors to agree, but we could not go through because there was no protection and one of the creditors scuppered the whole arrangement.

The Bill talks about pre-pack administrations. This is meant to be the least worst alternative. I have had to go through this procedure. It is awfully painful, but it is there to save brands and businesses if companies go through the procedure above board, as we did. I am proud to say that today we have a brand and a company that are flourishing. The worst thing about it is that when I went through that procedure I realised how badly misused it is in this country. It is misused to the extent that shareholders, creditors and, worst of all, employees suffer. That is not on. I do not think that the measures in the Bill go anywhere near far enough to improve the pre-pack administration regime. Bringing in Chapter 11 would be the best way of taking things forward. Do the Government agree?

Most importantly, this Bill is not just about businesses remaining as they are. As the Minister said, around one-fifth of small businesses say that they want to grow significantly and are determined to do so. The overall thrust of this legislation is aimed at making it easier for SMEs to operate and grow within the economy, which is something we should celebrate. Why are the Government not going further? One of the things that SMEs need is education. I attended the business growth programme at Cranfield. Cambridge has the diploma in entrepreneurship. These are fantastic courses, but they cost up to £10,000 a year. The Government should have a competition for 100 businesses a year to attend these courses to improve their competitiveness and help them to grow. Will the Government accept this suggestion?

I do not want to look a gift horse in the mouth. The fact that the Bill exists in the first place is wonderful, but I despair that it does not emphasise entrepreneurship. I worry that Britain today is number 2 in the world in inward investment. That is something we should be proud of because we are an open economy. However, I hear stories of Indian businesses having huge problems opening bank accounts and setting up companies over here. We are trying to address money laundering, but we are hampering our competitiveness and inward investment capabilities. We are one of the top 10 economies in the world. We have to encourage entrepreneurship, growth and employment.

He was joined by the Bulgarian Ambassador to the United Kingdom. Konstantin Dimitrov, and Labour MP Barbara Roche, the former Immigration Minister.

The following transcript was kindly provided by Sky News.

DERMOT MURNAGHAN: Well immigration is one of the most divisive issues in politics at the moment but does our opinion of immigrants change depending on what country people come from to the UK?  Well a poll for this programme suggests that of course it does.  In the exclusive YouGov poll carried out for this programme people were asked ‘Do you think that immigrants from each of the following countries make a positive or negative contribution to life in Britain today?’  Well Australia, the United States and Germany came out top, at least 50% of people think they do make a positive contribution, immigrants from India and Poland also did pretty well coming out at 44% but the figure was much lower for immigrants from Bulgaria and Romania, just 18% of people think they make a positive contribution to life in Britain and in fact more people think they actually have a negative impact.  So why is that?  Well I am joined now by Bulgaria’s Ambassador to the UK, Konstatin Dimitrov, by the Labour MP Barbara Roche who is a former immigration minister and chair of the campaign group, the Migration Matters Trust and by Lord Bilimoria, an Indian born British businessman of course who is chairman amongst other things of Cobra Beer, a very good morning to you all.  Well Ambassador I want to start with you, first of all your reaction to that poll in that your countrymen and women when they come to the UK, they aren’t really rated very highly?

KONSTANTIN DIMITROV: Yes, I’m not surprised, it’s a combination of the brutal anti-Bulgarian propaganda for years now by certain politicians and media whose name I will not mention for obvious reason and the second point, a simple lack of personal knowledge of Bulgarians by many Brits.  Why?  Because there are only about 60,000 Bulgarians working in the UK in a population of 64 million so there is a very low chance for anyone to have met a Bulgarian or worked with a Bulgarian person and moreover, one other thing, it is exactly in places where there are no Bulgarians that people are very much prejudiced against Bulgarians unlike centres of mixed communities where Bulgarians are seen as very …

DM: You just tell us, I know you’ve told me before, that the majority of Bulgarians who come to the UK come here to get jobs and when the jobs disappear or when they have worked long enough, they go back to Bulgaria.

KONSTANTIN DIMITROV: Exactly, just 1080 people have been registered to receive substantial work benefits in the UK last year, imagine, 1080 people, that’s absolutely negligible.  Our compatriots are primarily between 18 and 35 years of age, single and they come here to work primarily as a result of an a priori agreed upon contract.

DM: Barbara, you come in to this, clearly there are different perceptions of different nationalities here, do you think we need some cool heads when it comes to discussing this issue, in particularly migration from within the European Union?

BARBARA ROCHE: Oh absolutely, I absolutely agree with what the Ambassador has had to say and indeed when I was a Member of Parliament and now in my role as Chair of Migration Matters, that’s what we actually try and argue.  We just need to look at the facts and I also think it’s time that all political parties know and say what’s in their heart of hearts, that actually legal migration can be a very positive good for this country both in our public services and for our economy so the more we know the facts, the better.

DM: Do you think there is any point trying or should we not even try at all to limit migration from within the European Union and in particular underlying these figures, these findings we’ve got in particular to restrict Bulgarians, Romanians and a lot of East Europeans?

BARBARA ROCHE: I think the difficulty is that when we talk about this, and I am somebody who actually does believe in freedom of movement within the European Union, I think it is one of the fundamental tenets.  I remember one of my very first votes as a young woman was to vote for Britain to actually stay in the Union and not only is freedom of movement a good thing but we actually don’t often discuss the fact that there are very many British people who are working elsewhere in the European Union, particularly young people, and they value their freedom of movement and we would lose that.

DM: Lord Bilimoria, you come in, are you heartened by the fact – and this then begs the question, is it just a matter of time of the indigenous population so to speak getting to know the immigrant population – India is pretty popular, it features up there along with the Poles coming in at 44% approval?

 LORD BILIMORIA: Well that doesn’t surprise me at all and I am relieved to hear that the Indian community is being appreciated for the contribution that it has made for decades to this economy and I would think this immigration debate has become so dangerous now particularly driven by UKIP, where everyone is being tarred with the same brush and you don’t look at the good immigration that has helped this country become great.  I mean look at Bulgaria, I know a very, very impressive young Bulgarian banker who works for the Queen’s bank who is highly impressive, you’d want somebody like that in this country.  We look at countries on this league table that you have just put up, you’ve missed out Bangladesh.  This evening I am going to be speaking at the Bangladesh Caterers Association annual awards dinner, over 1000 Bangladeshi restaurateurs from around the country, they are the ones – over two-thirds of restaurants are owned by Bangladeshis – they are the ones who actually brought curry to our homes, we love that food and yet they can’t bring in the skilled chefs that they need.  Look at Tata who own Jaguar Land Rover, a company six years ago nobody wanted to buy, now it is so successful.  Who is the Chief Executive of Tata Jaguar Land Rover in this country?  A German, Ralf Speth.

 DM: Just to stay with this, Lord Bilimoria, do you think it is some of the perceptions and misperceptions if I can coin that phrase, that go around especially this idea that the vast majority of immigrants some people think come here to claim benefits, to sponge off society.  When people get to know for instance the South Asian community, let’s lump them all together, they are very hard working, there is a lot of productivity going on there.

LORD BILIMORIA: Hard work, family values, education.  Look at foreign students, we still include international students in our immigration figures and the government has got this ridiculous target and one of the biggest mistakes that David Cameron has made is to put up this target of reducing immigration to the tens of thousands.  They are more than double that figure, they are never going to hit that figure.  I think that was a huge mistake to make and they are paying the price for that right now.

DM: Ambassador, what do Bulgarians, your nationals who come along to you, what do they tell you about the way they are treated by the UK population because there is that classic case where you might answer a survey like ours and say I am not very keen on Bulgarians and Romanians and others but when you actually have met someone or worked alongside one of them as you mentioned, you think they are okay.

KONSTANTIN DIMITROV: I would revert back to the last point I made, those who have worked with Bulgarians are very open and many Brits, 400,000 Brits a year go to Bulgaria to spend their time there, to have their holidays there, to even buy properties there.  If there is some inborn antipathy no one would do that.  The problem is those who are objects of propaganda and indeed those who haven’t met any Bulgarians at all, statistically these are quite convincing parameters as only 60,000 people in your country out of a country of 64 million, how could you possibly have an idea as to the contribution of such a small batch of people to your economy or to the texture of your society?

LORD BILIMORIA: And if you look at it, the other point is if you ask Theresa May, tell me the number of illegal immigrants in this country she wouldn’t have a clue, her department wouldn’t have a clue.  They don’t know whether it’s half a million, a million, a million and a half because we have lost control of immigration in that sense.  We still don’t have exit checks at our borders.  We would have a queue of Indian IT companies ready to do that job so that we can scan everyone’s passport when they come from wherever in the world, scan everyone’s passport when they have gone and then we would know who shouldn’t be here who are still here.  We should be attracting the best and the brightest people to this country.

DM: Barbara Roche, there is an absolute numbers argument going on here as well.  If you get net migration of 250,000, just do the maths, over 20 years you end up with millions more people here and whatever nation they come from it just means that particularly public services are put under enormous strain.

BARBARA ROCHE: You have to look at it two ways, first of all it is absolutely right that countries, and we need to control our borders and certainly when I was the Immigration Minister that was a tenet.

DM: But how would you stop it?

BARBARA ROCHE: Well what you have to do first of all is also to acknowledge that people come and people go, we live in a global world and …

DM: But you just said that you don’t support stopping Europeans coming in and they are the vast majority of migrants so how do you control your borders?

BARBARA ROCHE: I actually think, I want to go back to the question that you asked about public services, you were talking about the strain on public services.  What the figures show and what the OECD says is that actually migrants contribute more to public services than they take out.  I think it is estimated that nearly 40% of our doctors, nearly 40% are migrants so the question is, are we asking the right questions about the effects on our public services?  If we stopped migration tomorrow our public services would be worse and our debt would be worse and I also would say if you stopped migration here, what is going to happen to all those people who want their holidays [inaudible] … the European Union?

DM: Okay, quick thoughts on that Ambassador, I know you want to come in on that.

KONSTANTIN DIMITROV: That is right and also let us face a truth, outsiders, foreigners, come to work here because there are niches that the Brits wouldn’t like to take up, they wouldn’t like to go to the agricultural sector because there is no interest in such positions so of course legally our working citizens of the European Union will continue to come here to fill in the niches which are not wanted for other reasons by the Brits.  If the Brits started filling those niches in, there would be no need for such immigration as we talk about.

DM: So market forces can deal with it.  Last point to you Lord Bilimoria.

LORD BILIMORIA: Well I think it’s across the board. It’s what the Ambassador has just spoken about but also I mentioned the Chief Executive of Jaguar Land Rover, my joint venture partners at Cobra Molson Coors, we had a worldwide search for our UK chief executive, who is he?  A Belgian.  We want the brightest and the best across the board, from the Commonwealth, from the European Union and the biggest advantage of this country is that we are an open economy and that’s why we are still number two, number two inward investment country in the world today is this tiny country.

DM: Oh well pointed out, I didn’t know that.  Listen, I must end it there, thank you very much to you Lord Bilimoria, good to see you, Konstantin Dimitrov, Ambassador and Barbara Roche, thank you very much indeed.

My Lords, when the United States was formed in 1776, it took 19 people on a farm to produce enough food for 20 people, so most people had to spend their time and effort in growing food. Today, it is down to 1% or 2% to produce the food. So let us consider the vast amount of supposed unemployment produced by that. There was not really any unemployment produced; what happened was that people who had formerly been tied up working in agriculture were freed up by technological developments and improvements to do something else, which enabled us to have a better standard of living and a more extensive range of products. That is Friedman—arguing against the race to the bottom. The noble Lord, Lord Giddens, talked about robots, but I have gone back to 1776. Nothing has changed in that sense.

I thank the noble Lord, Lord Freud, for initiating this debate. I have just a few points to make. First, the rise in the overall employment rate is real and is at record levels and, correspondingly, there has been a fall in unemployment. With the economic dominance of the south-east, there is a need to rebalance the economy by supporting manufacturing, particularly in the regions. Continued tax reform is also needed. The Office of Tax Simplification is an oxymoron; our tax system is getting more and more complicated.

UK unemployment has fallen by 63,000 to 2.33 million. The unemployment rate now stands at 7.2% of the population. As the noble Lord, Lord Holmes of Richmond, said in his excellent speech, employment has risen to a record of more than 30 million. The bad news is that the NEETS are still close to the 1 million mark; although the figure is falling, it is still above 900,000. The number of people claiming jobseeker’s allowance has fallen to 1.175 million. Over the year that number has dropped by 363,200, which is terrific. That is all really good news.

The new Governor of the Bank of England, Mark Carney—I say new, but he has been in post for almost a year—made a fundamental mistake in saying that he was going to give us forward guidance and that when unemployment fell to 7% the Bank would think of raising interest rates. That figure has been reached more quickly than thought, and he has had to back-track on the forward guidance almost straightaway. Interest rates are still at a record low of 0.5%. Just think: what got us into this financial crisis was what was then perceived as being the longest period of low interest rates for a long time—and they were then at 5%. Interest rates are 10 times lower than that, but still we cannot increase them, although the unemployment figures are near, or at, what the Governor of the Bank of England wanted them to be. They have been kept unchanged at 0.5%.

The real issue is public expenditure. Public expenditure used to be around the 40% mark. It was 42% of GDP in the early 1970s. Then under the previous Government it went up to almost 50% of GDP. By the late 1980s it was below 40%. We need to get that public expenditure down to 40%, because our tax-collecting ability historically has been around 38% to 39%. If we can get our public expenditure down to 40% we will have a balanced economy and will eliminate the deficit.

UK manufacturing is not dead, by any means. We are excelling in manufacturing. Our aerospace industry is the second largest in the world. Our automotive industry, of which I speak regularly, is flying. When Tata Motors bought Jaguar Land Rover in 2008 I spent a whole day at the Land Rover factory. Wow—it was impressive. I am due another visit, because my last one is already outdated. The company is now making more in profits than it paid for a business that nobody was interested in buying in 2008: that is how well it is doing. It is also exporting and creating employment.

We have heard the great news that Bentley is moving its 12-cylinder engine manufacturing from Volkswagen in Germany to Crewe in the UK. How wonderful is that? Rolls-Royce is manufacturing at Goodwood. Therefore, we have the best of the best quality—the best cars in the world—being manufactured here in Britain.

Our chemical industry is huge; our defence industry is huge; our electronics industry is huge; and so is our food and drink industry. I speak from my own experience. I mentioned yesterday that we were manufacturing a great deal in Europe. In fact, the majority of our production was in Europe some years ago and we decided to reshore to the UK because here we can produce world-class beer. We now produce in Burton upon Trent; we are winning award after award and exporting around the world. I am proud of that.

We have a plastics industry and a steel industry; we also have a textile industry, which we thought was dead but which is not dead at all. There are still almost 80,000 businesses employing 340,000 people and generating £11.5 billion of turnover.

What about the regions and the whole focus on London? We have a country where one big city is the capital and the financial capital and is much bigger than the second biggest city, Birmingham—let alone Manchester or anywhere else. If we look at a large country such as the United States, New York is big but you have Los Angeles, Chicago and lots of other big cities. If we look at another large country, India, there is Mumbai but also Chennai, Bangalore, Hyderabad, Calcutta and Delhi, which are huge cities in their own right. We have this one big city. I am very proud of London; it is the greatest of the world’s great cities. But how can we encourage business and employment in the regions? The answer is simple: we must encourage manufacturing. We cannot manufacture in London; we have to manufacture in the regions. That can create the jobs.

The Financial Times analysis tells a story in which the percentage of people on jobseeker’s allowance benefits dropped by more than 30% last year in places as varied as Oldham in the north, Stafford in the Midlands and the Suffolk coastal region. This is great news. If we can carry on in that vein, we will have growth and employment outside London.

Again, worries about lopsided economic growth are not new. The noble Lord, Lord Giddens, talked about developments 50 years ago, at a time when the economy was also recovering after a period of stagnation.

The then Labour leader, Harold Wilson, complained in Parliament of a two-nations economy and said that,

“the Chancellor has to try to restrain the overheating which he sees in the South at a time when large areas in the North are still in the chill grip of his predecessor’s freeze”.

—[Official Report, Commons, 14/04/1964; col. 285.]

Those were the comments of Harold Wilson on Reginald Maudling’s 1964 Budget speech.

We should look at the great signs of success. We have already heard that Hitachi is to move its rail business headquarters from Japan to the UK, and that Bentley is to move from Germany to the UK. Companies from Japan and Germany, the pinnacles of high-tech manufacturing, are moving to the UK. This is fantastic. Hitachi says its move will expand the number of rail jobs to 4,000, which is excellent. I have already mentioned Jaguar Land Rover and Bentley. The Chancellor has promised to cut the costs of manufacturing to boost growth, and he has done it. He predicts that energy costs will go down by £7 billion. Again, that is excellent.

Immigration is one area where I fundamentally disagree with the Government. Their immigration policy has sent out the wrong signals around the world to foreign students and academics. That affects not just universities such as Oxford and Cambridge, where 30% of the academics are foreign. For example, more than 30% of the academics at Birmingham University are foreign. As I say, bad signals have been sent out, and the number of Indian foreign students is now plummeting, but we should look at the contribution Indians make to our economy. On Friday, I went to the celebrations for the principal of West Nottinghamshire College, who has been made a dame. She is the first Indian-born dame in 83 years. She came to this country as a young bride unable to speak English but today heads the most successful further education college in the UK, and probably one of the most successful in the world. That is the power of immigration.

The statistics show that Indians make a huge contribution to our economy. In 2013, Indian men topped the ethnicity employment table in the UK and Indian women came second. Indian men had the second lowest rate of unemployment—and so it goes on. One in seven companies is founded by a migrant entrepreneur. Migrants make a huge contribution to our economy and create jobs. Migrant entrepreneurs have been a benefit to this country.

In looking at overall business performance, we must not neglect SMEs. The Minister talked about all the Government’s initiatives. I was on the National Employment Panel for eight years and on the New Deal task force before that. SMEs account for 59% of private sector employment and 48% of private sector turnover. Within SMEs, small businesses account for 79% of employment and 69% of turnover. We need to encourage these small businesses to grow, because the argument about big companies not paying corporation tax misses the point. Yes, we would like them to pay more corporation tax, but that tax makes up only 8% of our tax take. Most of our tax take comes from the tax that is generated by employment—more than 50% comes from PAYE and NI-paying employees and NI-paying employers. The more jobs we create, the more tax we will generate, therefore we should encourage SMEs to grow.

I have suggested to the noble Lord, Lord Young, that we should have a competition in this country to sponsor staff from 100 companies to attend the Cranfield School of Management business growth programme or the University of Cambridge Postgraduate Diploma in Entrepreneurship. It costs £10,000 to attend these programmes. The businesses that send people to attend those programmes will grow faster than other businesses because we will be training our entrepreneurs to perform better and grow their businesses.

We need to go further on national insurance breaks. Ralf Speth, the chief executive of Jaguar Land Rover, said that the secret of his company’s success was innovation. UK Trade and Investment was mentioned by the noble Lord, Lord Shipley. Exports are crucial. The further we go down the route that I am suggesting of training our entrepreneurs, encouraging manufacturing in the regions and generating jobs, the more exports will follow. I have mentioned my own experience as an example of that.

To conclude, what is the purpose of business? I think that, yes, you want to create a product that people love, but you also want to create employment for the well-being of the people whom you employ. In every survey that asks people what is most important to them, they say family. What else is important to them? They say health. What else is important to them? They say their working life. If people do not work, they are not going to be happy. A happy country is a country with, ideally, full employment. We will never get to full employment, but at least let us try.

My Lords, the leading Cambridge historian, Dr Clare Jackson, says that politicians on both sides of the Scottish independence debate could learn from King James VI of Scotland, who also became King James I of England. He dedicated his life to creating a truly united kingdom that would see Scotland, England—including the Principality of Wales—and Ireland share more than just a crown. The main thing is that he engaged in a huge public relations exercise using emotive rhetoric, and he knew how to compromise. He made the first attempt at creating a new flag. Dr Jackson said:

“It shrinks the tendency to assume that everything happening now has never been thought of before”— a point made by the noble Lord, Lord Forsyth. She added:

“Now exactly 300 years after Queen Anne’s death, the 2014 referendum will decide if the settlement she made will last or if Scotland will once again become an independent country sharing a monarch with England, just as it did throughout the Stuart century”.

I thank the noble Lord, Lord Lang, for his excellent speech in leading this debate. We have heard all the arguments so far and we will continue to hear them. We have heard about Alex Salmond and his SNP’s wish list and the serious consequences. As the noble Lord, Lord Robertson, said, Scotland is tiny. It has 8.4% of the population of Britain and contributes 8.1% of the GDP. From the noble Lord, Lord Forsyth, we heard about the famous Scots in every field imaginable, not just today but historically, always doing brilliantly. Scotland has so much that we need and it has so many hidden gems. Wearing my Cobra Beer hat, Heriot-Watt University very kindly gave me an honorary doctorate. The university has the International Centre for Brewing and Distilling, one of the three finest in the world, and it must remain not just Scottish but British.

Alistair Darling clearly pointed out that Mark Carney, the Governor of the Bank of England, had said that,

“the failings of the Eurozone show that to have a successful monetary union you require fiscal and political union”.

I have said that time and time again. Mr Darling said that,

“the Governor’s judgement on currency unions is devastating for Alex Salmond’s currency plans. Why? Because the whole point of independence is to break the fiscal and political union that makes monetary union possible”.

Of course, Scotland has always had its own bank-notes—and long may they keep them.

Let us remind Alex Salmond about 2008. I have just returned from my annual week at the Harvard Business School. In March 2008, Alex Salmond made a speech at Harvard University and spoke about the “arc of prosperity” through Ireland, Iceland and Norway. He referred to,

“the lesson we draw from our neighbours in Ireland—the Celtic Tiger economy”.

He went on:

“With RBS and HBOS—two of the world’s biggest banks—Scotland has global leaders today, tomorrow and for the long-term”.

We are discovering the strength of that Scottish financial sector—but look at what London has done.

Let us keep this in perspective. In a currency union, Scotland has 10% of GDP and Britain has 90%. If it ever breaks up, we know who will call the shots. Losing the strength and security of the UK pound would have a profound impact on the Scots. The noble and learned Lord, Lord Wallace, as Advocate-General for Scotland, sent us a letter which clearly stated:

“The UK Government’s position is clear—Scotland benefits from being part of the UK, and the UK benefits from having Scotland within it”.

The letter gave a list of the “Top 20 Benefits of the UK”. He very clearly spelled out the Government’s stance on the matter.

One prediction following the assumption made by the House of Lords Select Committee on Economic Affairs was that it would result in Scotland accruing around 90% of oil revenues. Its report described this as the,

“economic bridge over which Scotland would pass to independence”,

and expected it to make up for all the loss of finances allocated by our Treasury under the Barnett formula. However, as has been said, the impact of prices in the oil market could just throw this, as could the length of time that oil will last. It would be a very unpredictable source of revenue.

Looking ahead, the university sector in Scotland is strong and we are proud of it. The Scottish Government are maintaining free access to higher education for Scots and people from the EU—except for people from England and Wales. In research funding, to this day, 15% of research for Scottish universities comes from UK charities. If Scotland breaks away, that will not last.

The Prime Minister has assured Mr Salmond that the reform of the Barnett formula, which gives Scots £1,364 per head more spending than the UK average, was “not on the horizon”. He did not say that it will never happen but Scotland has the assurance that that is not on the horizon. On 27 November 2013, YouGov published a poll which asked British citizens how they would vote—if they were able to—on whether Scotland should be an independent country. The response, by political party, was: Conservative, 65% no; Labour, 60% no; Liberal Democrat, 62% no; and even UKIP respondents voted 55% no. The response by gender was: males 57% no and females 54% no. It is overwhelming that the people of Britain, let alone the people of Scotland, do not want this.

Let us look back at history. Adam Smith, the great economic theorist and moral philosopher, never saw himself as Scottish. He was north British. Edinburgh, the Athens of the north, was a great centre of learning and at the heart of the Scottish Enlightenment. The wonderful Balmoral Hotel, where I have stayed, was known as the North British Hotel until the 1980s.

I will draw on my experience in India. The partition of India into India and Pakistan was a huge mistake. It did not last. My father fought for the liberation of Bangladesh. The united India of 1947—despite many attempts by parts of India to break away—has stayed united, and it is stronger united. Scotland today has the best of both worlds, being an independent country but being part of the United Kingdom.

Any Government will have many priorities, but the top four are: first, the security of citizens, both external and internal. If Scotland breaks away, we have heard that defence will go for a six. The second and third priorities are health and education, which the Scots have anyway. The fourth is the economy, and Scotland would be far weaker by being outside the UK.

The key issues are not just practical but the emotional. King James played on the emotional to get unity, and the noble Baroness, Lady Goldie, in her excellent maiden speech, said that she was equally proud to be both Scottish and British. My father’s regiment, the 5th Gurkhas shared battle honours with the Cameron and Gordon Highlanders. As a colonel, he made a pilgrimage to Inverness to visit the regiment because it meant so much. These are emotional identities.

In conclusion, my friend Amartya Sen, the Nobel laureate, speaks of identity. We have multiple identities. I am proud to be a Zoroastrian Parsi; I am proud to be an Asian in Britain; I am proud to be Indian; and I am really proud to be British. In the same way, I think that the Scottish are proud to be Scots and proud to be British. David Torrance published a book entitled The Battle for Britain: Scotland and the Independence Referendum. This is not about Scottish independence; this is a battle for Britain and a battle for the United Kingdom, which must stay united.

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