YORKSHIRE firms can strengthen the UK’s economic backbone by exporting more of their goods, Lord Green, the former group chairman of HSBC, told a Yorkshire audience yesterday.
Lord Green, who became a Minister for Trade and Investment last year, also acknowledged that the European single market could operate more efficiently.
He toured Yorkshire to encourage more firms to do business abroad, at a time when many commentators are promoting the possibility of an export-led recovery.
Lord Green told the audience at Aspire in Leeds: “Britain has suffered from a relatively weak trade performance for a long time ... Getting into export markets is something that toughens a company up.”
Lord Green also admitted that “the banks did not cover themselves in glory” in the run-up to the financial crisis.
He told the Yorkshire Post: “The origins of the crisis are more complex than just blaming the banks.
“We have to move on and ensure that we have a financial system that is robust and stable and provides the appropriate services to the British economy, as well as being profitable and internationally competitive because it is a major part of Britain’s international competitive strength.”
During his trip, Lord Green toured Independent Forgings and Alloys, (IFA) in Sheffield, which exports half its goods and has a turnover of nearly £20m. IFA has recently been supported by UK Trade and Investment to help develop business in China, India, the United Arab Emirates and Singapore.
Lord Green said: “The world tectonic plates are shifting.”
He said the global economy was witnessing the re-emergence of India and China; countries that had dominated trade until the mid-19th century.
He said: “In 1820 the largest economy was China and the second largest was almost certainly India. What we are seeing is a reversion to something that is historically more normal.”
Lord Green said this “shift in the centre of gravity” had been accelerated, rather than derailed by the financial crisis.
He added: “We have to find a more balanced form of global growth. This is going to take a while. The demand for consumer goods in places like China seems to be enormous. If you go round the shopping malls of Asia you see every Western brand you can imagine.
“There’s ample evidence we have world-leading competences in every sector.’’ he said. “The job of Government is to encourage them (businesses) to get engaged in international markets. There’s a real determination from Government that we get a cohesive and continuous approach to this.”
Many small businesses have claimed that red tape makes it harder for them to start exporting.
Lord Green said: “Market access around the world is often complicated by local regulations, and tariff barriers. There aren’t magic wands that you can wave.”
He said UKTI could work with firms to try to help companies to tackle regulations in different regions.
Some of the delegates attending the event claimed that British companies were still finding it hard to export to other European Union countries.
“There’s plenty of evidence the single market is not being properly implemented across a series of countries in the European Union,’’ said Lord Green. “We have to work at that. The response to that is not to introduce the same sorts of barriers in this country. That’s not in anybody’s interest.”
During his visit to Yorkshire Lord Green also met Andy Tuscher, the regional director of EEF, the manufacturers’ organisation, Sheffield Master Cutler Bill Speirs and Graham Honeyman, the chief executive of Sheffield Forgemasters.
Last year, the Coalition Government’s decided to axe the £80m loan to Sheffield Forgemasters which had been set up by Labour before the General Election. The Government said the loan was unaffordable.
Lord Green said all the businesses he met had been optimistic.
He said: “Their message is a very upbeat one. They are able to sell into some of the most sophisticated industries in the world. Many people will have had difficult times during the crisis of-course, but things are looking up now.
“There are four million businesses in this country, many of then can’t meaningfully think about exporting.
“There are only a subset of the four million for whom the export question is a relevant one.
“But where it is relevant, we want people to look at it because there are opportunities out there.”