Bill Midgley column

Mar 22 2006 By Bill Midgley, The Journal

Perhaps one of the less onerous duties I have as president of British Chambers of Commerce is the opportunity to visit other countries, and particularly to meet government ministers and leaders of their industries.

Inevitably this leads on to a comparison with just what we are trying to achieve in the UK, and shows depressingly how far behind many other countries we seem to be falling. In the past month I have visited Mauritius and the Czech Republic, two comparatively small economies which are having to live in a rapidly changing world.

The Czech Republic, with its strong and growing manufacturing base, will have the advantage of European investment to bring its standard of living up to that of Western Europe. Mauritius has had its sugar-based economy destroyed by the European Union - no doubt to keep French farmers wealthy and as unproductive as ever - but it is diversifying into a whole range of new areas such as fish processing and textiles.

The common theme with both is their wish to improve their trading relations with the UK. I accept that they look upon us as an export market, but they are also seeking investment from us.

Return on investment from UK institutions has enabled us to bridge our balance of payments gap substantially in recent years, and yet we are now falling behind other countries as a source of investment. This is by no means helped by the attitude of UK Trade and Investment which has withdrawn its support for overseas trade missions. That organisation is seeking inward investment. There is no harm in that, but nevertheless there needs to be a balance. And lack of investment now will mean a reducing return so far as UK overseas earnings are concerned.

We should never under-estimate the drive and ambition of other emerging economies around the world. The British are long past the stage where the world looks to us as a role model.

At a time where unemployment is increasing in the UK there are some alarm bells ringing so far as the economy is concerned, the innovation and entrepreneurship for which Britain was once famous need to be demonstrated. Strong company performances over the past year and an increase in Stock Market prices should not disguise the fact that all that that reflects is historical. It is the future that should concern us, and industry and Government need to work in tandem in understanding the challenges and finding the solutions.