There is much doom and gloom about the state of the country’s economy and the long-term prospects for economic recovery.
Cutting of Government expenditure and increases in such things as VAT inevitably mean a lowering of demand for goods and services, as businesses and families trim their budgets according to what they can afford.
In turn, this means that firms lay off staff because there isn’t the demand to produce the goods or provide the services required.
This can be a vicious cycle, because higher unemployment results in further lowering of demand, as people who have been made redundant don’t have as much money to spend and therefore cut back on spending.
One of the ways in which this can be addressed is by British firms selling goods and services across the world. By tapping into demand elsewhere, Britain can obtain contracts that can help create jobs and wealth for this country and raise our standard of living.
This week, there was a Parliamentary debate on British exports and trade performance. We’ve always been a trading nation, right from Roman times.
Much of the wealth of this nation was made on the back of trade in Victorian times, and West Hartlepool and its docks were created during the Industrial Revolution precisely to trade.
By the end of the nineteenth century, Hartlepool was the fourth busiest dock in the country, at a time when Britain was the “workshop of the world”.
We in the North-East still export. Our firms have that culture and tradition of trading which many other parts of the country have lost. The North-East’s economic plight, which is already incredibly serious, would be a lot worse if we didn’t have firms and businesses that traded all over the world.
The fact remains, however, that we have not fulfilled our potential as a trading nation for the best part of 50-60 years. Other countries like Germany have stolen a march on us in markets like China, India or Brazil, which means that the UK has to play catch up.
Last week’s announcement that the Indian Government is likely to buy fighter jets from a French company rather than from a consortium with BAE Systems, a major British company, is a bitter blow to British industry.
The world economy is expected to double in size in the next 35 years, with nations like Mexico, Nigeria, Singapore and Pakistan leading much of that growth alongside the likes of China and India.
The Government should be doing all that it can to encourage firms to think about exports.
It can be a major cultural and financial barrier for a Hartlepool firm to think about exporting – if your business has a good idea, and you think you’d like to sell it in, say Mexico, how on earth do you go about it? Where do you find the potential customers? Where you find the help in language skills if nobody from your firm speaks Spanish?
When you do succeed in orders, how do you ensure you get paid and how can the Government help to ensure against this risk?
There is much against British businesses exporting to unfamiliar customers. The lack of relevant airline routes is one substantial factor that was mentioned in the Parliamentary debate.
Once Emirates started operating a service from Newcastle to Dubai, trade between the North-East and the United Arab Emirates went up by 300 per cent in just four years.
However, the number of routes out of Durham Tees Valley does not assist with greater trade links. Further afield, I find it astonishing that there is no direct flight from the UK to Chengdu, a major industrial city in China with 14 million people. How can businesses expect to trade with these emerging nations if they can’t get there easily? This is where the Government needs to be supporting businesses, as other nations are.
Expansion of trade to fast growing nations is the best way in which this country can pull out of the economic doldrums. The Government needs to grasp this by the horns and ensure British businesses don’t miss out.