Firms urged to go global to help cure the trade deficit

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BUSINESSES that focus on exporting can strengthen the backbone of the UK’s economy, according to Trade Minister Lord Green,

Lord Green also warned that the UK must travel a “long road” in order to rebalance its economy.

He made the comments during a trip to Yorkshire to encourage more local firms to think globally.

He stressed that Britain needed to make a long-term commitment to improving its trading performance.

In a speech yesterday, he said: “This is going to take some time. It is a marathon not a sprint, but a marathon we can complete. We do have that fundamental creativity and flair around this country. We will create the jobs we need for the next generation.”

He highlighted the success of Saras, a £1m turnover Leeds firm which specialises in radio frequency (RF) and microwave technology.

Saras, which is based at Mabgate Mills close to Leeds city centre, will soon move to a bigger site in Tong Road, Leeds as its workforce grows from 10 to 14.

“It (Saras) is taking on the world in a particular niche,” Lord Green said. “People who do well in the export market are those who have carefully thought about how they are going to develop their business.”

Lord Green, the former group chairman of HSBC Holdings, made the comments during a speech at a lunchtime event organised by the Institute of Directors, which was held at Headingley Carnegie Stadium in Leeds.

During his speech to around 100 business leaders, Lord Green highlighted the fact that Britain had suffered from a weak trade performance for 40 to 50 years.

In an interview with the Yorkshire Post after delivering the speech, he stressed that people overseas had a positive view of the UK, and wanted to do more business with us.

He added: “We certainly do have a challenge of getting more and more companies into the export market and we are behind the European curve.

“We have some ground to make up, which is why the Prime Minister set the target of 100,000 more companies entering the export market over the next few years. If we could do that, we would go a long way to curing our trade deficit. You also strengthen the backbone of the economy, because the evidence is clear. The companies that export become more efficient, grow faster and create more jobs.”

He added: “The banks have a number of things to answer for, looking backwards, but looking forwards, you’ve got a leadership of the banks that’s determined to put this right. They’ve got a substantial task in making sure they’re own balance sheets are strengthened. There have been some major casualties in the banking world. We need a robust, profitable banking system, as part of a healthy economy that’s able to extend the flow of credit and we need to make sure the appropriate skills are there at the relationship manager level. There’s a deficit to make up there.”

He said, in the past, business banking “had been a bit of a Cinderella”.

“The good news is they (the banks) are determined to change that now. Having competition like Aldermore and Handelsbanken is clearly helpful in this.”

He said that, in the longer term, the London Olympics will provide a substantial boost for the UK economy. Lord Green added: “What we need to be doing is seeing the longer term impact of the Olympics, on that particular part of London... and also the connectivity it’s brought around the world, and what it’s done for ‘Brand Britain’.”

On the general economic climate, he said: “My colleagues understand that this is a rebalancing task that isn’t going to be completed in a year. This is going to take a consistent effort. In the case of trade in particular, we’ve lived for decades with a weak trade position. This is something we’ve got to stick at collectively for 20 to 30 years.”