Britain needs to wean itself off its trade dependence on Europe and exploit emerging markets to the full according to the president of the Confederation of British Industry.
Sir Roger Carr said the fact 60 per cent of the UK’s trade is with Europe means growth and recovery can be better achieved by focusing elsewhere.
Sir Roger, who was in Birmingham to speak at CBI West Midlands annual dinner said the ongoing eurozone crisis would continue to hamper growth and recovery in the UK.
“We have a very large shadow over the UK economy which clearly comes from Europe,” he said. “One of the worst things in the world is to have a problem you can’t fix. All we can do is encourage those that have the power to fix it as a matter of urgency.
“The most important thing we can do is to put our own efforts into making us less dependent on the eurozone by building our sales activity much more with new growth markets.
“It’s a long term agenda but the only real solution to avoid being dependent on anybody.”
Sir Roger also called for an industrial policy that provided business with the right climate for companies to fulfil their potential and also believes profits need to be recycled and reinvested. He added: “A whole raft of sectors and businesses within those sectors are prospering and balance sheets of many in the UK are strong. What we need is to liberate cash from those balance sheets to see it recycled in investment and to do that we need a greater sense of confidence.”
Paying tribute to the region Sir Roger also said it was doing better than some parts of the country.
“In the West Midlands there are still some first class examples of good businesses that have prospered in the bad times,” he said. “Obviously names like JLR, JCB and GKN all spring to mind.
“The common denominator is they have kept addressing their costs, have continued to invest in innovation and new products and most importantly have put considerable investment into selling those products into growth parts of the global economy.
“But it shows that if you have got the right plan and you execute it properly you can still do well when things are quite challenging.
“By doing well they create great employment prospects, offer opportunity for the long term by having full order books and promote the reputation of British business by doing well all over the world.
“If you invest in your company, develop new product, ensure it is something the customer wants and you take it to markets where the customer has money to spend a commercial alchemy tends to work.
“The more companies we can see doing that the more growth there will be in the economy, albeit in challenging times.”
The revival of the Midland automotive industry was hailed as “remarkable” by the chairman of Centrica and former chairman of Cadbury.
He said: “The renaissance of the British motor industry in the West Midlands is one of the most remarkable stories of my business life. To see what was the collapse of the industry in the seventies and eighties and to see the rebirth and regrowth at the turn of the century is a remarkable achievement.
“It is testament to the brands and the management that have turned the business around.
“JLR is the big example of a company, particularly Jaguar, which had appeared to have lost its way. There were problems with reliability and some German brands became dominant.
“By reinvigorating its range and high quality marketing of its products it has effectively become one of the great success stories of recent times. It is a huge achievement.”
While commending the Government for its “pro-business” stance Sir Roger said he also felt it could be doing more to accelerate the pace of its policy direction.
“The Government’s job is to set the climate in which growth can flourish – that is through taxation and regulation. It is business’s job to deliver the goods.
“But has not necessarily been implemented with the vigour that is necessary. That is why we have to encourage them to do it with much more enthusiasm and commitment than they have done in recent times.”
Reflecting on his role as Cadbury chairman at the time of the Kraft takeover Sir Roger said he had no regrets about the path the company had taken.
“I fought very hard until the price that was offered was greater than the value that could be achieved by independence,” he said. “At that stage you have the fiduciary duty to see the shareholders are rewarded – which I did. I did something as a duty rather than a personal preference.
“I think Kraft did not endear themselves to the community either politically or industrially when they first took control but I think in the two years which have now elapsed they have continued to invest in the business and the feedback from those that remain has become more positive about their future in what will ironically become a focussed confectionary business .
“Kraft changed strategy, they have demerged it from the wider business they own which will strengthen the prospects of Cadbury within the confectionary business. Hopefully shareholders will have had what they wanted – a handsome return – and people who work there will continue to have a secure future.
“My recommendation from a distance is when they have demerged to use the name Cadbury and harvest the goodwill that name has got all over the world.
“Cadbury will continue to be successful, it’s a great brand and some excellent people work in the business.”