What is the UK going to make and sell to the world?

The UK, like Germany and France, has some great brands which it can sell worldwide. It needs more of them, with more marketing success, to drive growth and eliminate the balance of payments deficit.

People tend to think of the traditional manufactured products. Rolls Royce engines represent a successful brand, based on pioneering technology and reminding people that the UK did so much of the early work on the jet engine. Land Rover is currently in a sweet spot, with ballooning sales of its cars across the catalogue, from the basic rough terrain Land Rover to the luxurious large Range Rovers.

The UK now exports lot of cars. They are mainly made by foreign companies who bring their capital here because they like the workforce, access to the UK market, and the UK engineering and design traditions. They often design here. In the case of BMW they have produced an updated and enlarged version of the iconic 1960s Mini. Bentley and Rolls Royce cars are also UK based with continental inputs, drawing on great UK engineering traditions and brands.

Less well known are the many pharmaceutical products which UK scientists have brought to fruition. UK defence contractors have a good export record.

The UK’s greatest success lies in its export of services. The UK has a strong balance of payments surplus in services, driven by substantial earnings from banking, insurance, investment management, legal services, and management consultancy. These are the areas the UK loves to hate, with frequent attacks on those engaged in such work. Some still believe these earnings are not “real”, or cannot create wealth. Some object to the fees, charges and incomes they generate.

It is one of paradoxes of the modern world. Germany earns a good living by exporting cars. She does not get herself into a moral knot by arguing that cars are anti greeen, damaging the planet and should be stopped. Nor does she worry that most of the cars she sells can only be bought by rich people because they are expensive. The UK earns a good living by exporting services, only to spend her time condemning some of the leading companies and people involved.

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67 Comments

  1. Kevin R. Lohse
    Posted June 3, 2013 at 5:36 am | Permalink

    Dear John. You overlooked the contribution that the Jaguar division of Land Rover/Jaguar is making to our balance of payments now that inward foreign investment has revitalised the brand. All the British successes you have listed are making an increasing contribution to UK Plc by selling into the growing global markets outside the contracting market of the EU. A determined effort by government and business could greatly reduce our dependence on this great social and political failed experiment and strengthen our hand in negotiations to reclaim much of our sovereignty. I wonder why the Coalition refuses to put pragmatism ahead of ideology?

    • Peter van Leeuwen
      Posted June 3, 2013 at 6:29 am | Permalink

      @Kevin R. Lohse: “Pragmatism” would lead you to realise that Germany exports 4 x as much to China than the UK, so the EU cannot be the problem for growing your exports.

      • Kevin R. Lohse
        Posted June 3, 2013 at 7:19 am | Permalink

        Thanks Peter, you’ve made my point. Germany is concentrating on selling outside the EU. Germany is practically the only EU country with positive growth. Therefore it makes sense for the UK to follow Germany’s example and increase trade outside the EU.

        • Electro-Kevin
          Posted June 3, 2013 at 4:00 pm | Permalink

          I don’t suppose we’ll ever know how many BMWs we could buy if we weren’t in the EU.

    • oldtimer
      Posted June 3, 2013 at 7:19 am | Permalink

      It is true that Jaguar is making a contribution, but I think the point JR is drawing attention to is the more significant contribution made by the Land Rover/Range Rover brands. At retail, in JLR`s fiscal year ending march 2013, LR brands sold 316k units (up 65k year on year) compared with 58k by Jaguar (up 4k year on year). Sales of the Evoque and sales to China were the main drivers of LR/RR sales growth.

      • Bob
        Posted June 3, 2013 at 8:07 am | Permalink

        @oldtimer
        “Evoque and sales to China were the main drivers of LR/RR sales growth”

        Didn’t the government have to give a massive bung to Land Rover to keep the production here?

        • oldtimer
          Posted June 3, 2013 at 2:46 pm | Permalink

          You tell me!

          I do know that the last Labour government wanted a (controlling?) say in JLR strategy into return for a government loan. The new owner, Tata, turned that down – rightly in my view.

          They also supported the JLR application to build a new engine factory near Wolverhampton. Was there a cheap loan towards funding this?

        • lifelogic
          Posted June 3, 2013 at 3:50 pm | Permalink

          I see the Nissan Leaf is not selling much. Despite the money the government takes of people to subsidise them. Why on earth do they do this? How many real jobs does this government destroy with this absurd government driven misallocation of investment?

          Banks still sucking back loans to real SMEs, I see from the lending figures out today. Mind you the BBC reporting it are hardly on the ball first they pick someone with a business who does not want to put her house on the line. Well if she lacks confidence in it why on earth should the banks or anyone else lend? Then the reporter seemed to think the banks lend at about 1-1.5%. Clearly he, like the BBC in general, has not got a clue. They start now with margins at about 2.5%+libor plus high fees, for even the best borrowers with very good security. For typical SMEs it is many times higher still.

    • Tad Davison
      Posted June 3, 2013 at 9:05 am | Permalink

      Kevin, you’re right to regard the EU as a failed experiment, but we have the Bilderberg conference in Watford from the 6th to the 9th of June, and from what I read, they want more of it. And its attendees are the real influencers and power brokers. Our views are secondary, regardless of the strength of our arguments.

      I wonder how many broadcasters or national newspapers cover it, and give us an accurate insight into the groups aims?

      Tad

  2. Mark W
    Posted June 3, 2013 at 5:48 am | Permalink

    I have to agree. I can’t understand why leading politicians seek popularity by attacking our international revenue earners.

    That we don’t manufacture is myth. We are a world leader in Diesel engines.

    As for bashing, our press ought to recognise that with games like grand theft auto we have a big slice of the games market too.

    Err. Bowie, iron maiden, Rolling Stones, oasis. Not bad on this department either.

  3. Jerry
    Posted June 3, 2013 at 6:03 am | Permalink

    They often design here. In the case of BMW they have produced an updated and enlarged version of the iconic 1960s Mini.

    Unless I’m very much out of date, in so much as BMW did a total re-design, the new ‘Mini’ was actually designed by Rover Group.

    But surely the real question is not what the UK is going to make and sell but what will be owned by British based companies, so much is now owned by non UK based companies that it doesn’t really matter is we make widgets, cars or satellites (the latter we do very well) if the profit is going off-shore. The problem with service industries is that price is everything these days and with the BRIC countries offering similar services we might have some very hard choices to make, working for half the current wage/salary will not be to every ones taste…

    • Peter van Leeuwen
      Posted June 3, 2013 at 6:32 am | Permalink

      @Jerry: As from 2014, Minis will be produced (by BMW) in the Netherlands. Some profit may go elsewehere, but some will stay here and these activities do provide employment.

  4. lifelogic
    Posted June 3, 2013 at 6:15 am | Permalink

    I suppose that a few Legal Services are an export but, in general, I suspect the legal profession and the expensive and inefficient legal system of the UK is a net drag on the economy. With all the absurd employment laws, no win no fee, daft divorce settlements, absurdly complex tax system and similar it must be.

    We cannot get richer by suing each, other quite the reverse. We do not have many solid companies left you mention a few above we need to have a competitive advantage which we have in some drink brands, clothing, cars, defence, aerospace, pharmaceuticals, but not much else.

    It is very hard to have a competitive advantage with such a bloated, incompetent and nearly 50% state sector, daft employment laws, high taxes, tight planning restrictions, over priced energy and an anti business government. Also politician who are often far more interested in their paid “consultancies” and vested interest than what is actually in the interest of the voters. The UK businesses that are doing well sensibly do so much of it overseas not in the UK.

    Reply Lawyers charging fees for foreigners to use their servcies and our courts does add to our national output and income.

    • lifelogic
      Posted June 3, 2013 at 8:12 am | Permalink

      To reply: I agree some legal service are a net export and increase national output but, nevertheless most of our expensive, illogical, complex and often arbitrary, multi leve legal system is a net drag. It is in the main just another overhead on industry (and government) this on top of the 50% state sector that is preventing it compete.

      On a rational analysis the UK probably has about twice as many lawyers as are needed and at least two times the numbers needed “working” in the state sector. Look at Cameron’s favourite “Greater Switzerland” as an example they export more to China than the much larger UK and have far fewer lawyer per head.

      All of this largely pointless activity kill productivity, competitivity and productive real jobs. It also diverts many talented people to often parasitic activities.

    • Mark
      Posted June 3, 2013 at 9:27 am | Permalink

      English Law and the use of English Courts has a long tradition in international commerce, because the rules are well understood, and the courts apply them if called upon to do so. Drawing up agreements under English Law therefore provides a call for lawyers with that expertise – the main object of which is to avoid the need to have recourse to the courts as much as possible. It has nothing to do with the changes to our legal system domestically towards a system of secret courts and presumption of guilt.

    • uanime5
      Posted June 3, 2013 at 1:01 pm | Permalink

      Given that every country has its own laws you can’t really export a legal service. A lawyer specialising in UK laws would be useless in France or Germany due to the differing laws and legal systems.

      • Lifelogic
        Posted June 3, 2013 at 3:22 pm | Permalink

        Often rather useless in the UK too alas.

        • Bazman
          Posted June 3, 2013 at 5:10 pm | Permalink

          Russian Oligarchs coming here to sue for libel, divorce their wives and sue their business partners are a splendid and sensible example of the legal profession selling their talents to the highest bidder and gaining revenue and trickle down for the rest of the country is it not? It not? Oh really?!

    • Bazman
      Posted June 3, 2013 at 5:07 pm | Permalink

      There you go with your ‘daft employment laws’ again. Which are daft specifically? Again no answer. So we will presume it to be propoganda think and mindless ranting. Again.

      • lifelogic
        Posted June 4, 2013 at 6:38 am | Permalink

        Nearly all of them, they simply interfere in a free agreement between employee and employer pointlessly.

        • uanime5
          Posted June 4, 2013 at 2:42 pm | Permalink

          Given that the employer has nearly all the power in a free agreement it’s clear why you support it. Fortunately we live in a civilised society where employers are prohibited from abusing their employees in order to make a greater profit.

        • Bazman
          Posted June 4, 2013 at 5:54 pm | Permalink

          Like it or lump it? They can both lump it. Unfortunately not all are in this position. A point lost on you in many other areas too. Is that ‘sensible’.

  5. Andyvan
    Posted June 3, 2013 at 6:44 am | Permalink

    A couple of subtle differences between making cars and selling financial services, Mr Redwood. Cars don’t generally bring the world to the brink of financial catastrophe. Neither BMW nor Mercedes have arranged extremely dubious finance for incompetent and corrupt governments allowing their amoral leaders to max the national credit card out and thereby ruin not only it’s finances but also it’s civil rights. Volkswagen is not involved in a incestuous relationship with the UK government enabling the blatant and criminal manipulation of interest rates and massive money printing that undermines the country and ruins savers. Porche has not issued liars mortgages that have caused enormous house price inflation thereby excluding large part of the population from house ownership and sentencing the rest to debt slavery just to pay of the gigantic loan for the tiny shoe box they are forced to live in.
    In short car manufacture does not inflict ruin upon a large part of the developed world’s population.

    Reply: Car manufacturers do sell luxury cars to very poor countries, where the state buying them has to tax poor people to pay. According to the global warming theory the EU belileves in the sale of large motor cars is very damaging to the environment, leading to particular pressures on poor countries.

    • Denis Cooper
      Posted June 3, 2013 at 10:15 am | Permalink

      I have to agree with this fluently written comment; even if 99% of the financial services activities are useful, or at least harmless, the remaining 1% have proved extremely destructive.

    • zorro
      Posted June 3, 2013 at 6:08 pm | Permalink

      Good comment Andyvan….although financial services can be useful, the chaos which they have wreaked throughout the financial and economic world has led people, quite rightly, to handle them carefully or at least with great caution.

      John, as you know, the EU argument is mainly a load of old baloney….

      zorro

    • APL
      Posted June 4, 2013 at 6:45 am | Permalink

      JR: ” where the state buying them has to tax poor people to pay. ”

      Yes, very often the poor people that get taxed to pay for these state fripperies happen to live in this country via the medium of UK state aid.

  6. Lesley
    Posted June 3, 2013 at 6:51 am | Permalink

    It’s a pity that we in the EU cannot buy the insurances that are available in the UK.
    Lots of things are unavailable to non UK residents.

  7. Alan
    Posted June 3, 2013 at 7:07 am | Permalink

    I agree with almost everything that Mr Redwood has written in this article (which is unusual for me) but I would like to expand a bit on his reference to the benefits of the financial services industries – banks, insurance, etc.

    We have seen in recent years how the valuable services that banks provide to society were undermined and almost destroyed by careless investments. We have also seen the damage done to pensions, annuities, and incomes from savings by the measures taken to restore the banks to profitability. We have seen, but in my opinion not paid enough attention to, large profits being taken from investors and people saving for pensions by the companies that run these investments on their behalf. In my opinion financial services are not always being run to get the best returns for the savers and future pensioners, but I think are often run with an eye on increasing the fees that can be extracted from managing these large sums of money.

    Capitalism works, I think, by ensuring that as people seek to maximise their own income they are forced to provide a useful service to others, and I believe Parliament should enact laws and the Treasury should regulate industries to ensure that this is what happens. I don’t think that happened in the banks’ investment branches, where the benefits apparently went mainly to the senior managers, and I don’t think it is happening now in the savings and investment industries as a whole, where I think excessive fees are making ordinary peoples’ investments unprofitable. Too much money is being removed from the savers and too much is going into the industry’s profits. It’s an area that I think Parliament should pay more attention to, otherwise people will stop saving for their futures, because it will not be worth while. And the consequence of that is that the taxpayers will have to support more and more people.

  8. Javelin
    Posted June 3, 2013 at 7:21 am | Permalink

    Countries only put up with foreign money for so long. Foreign companies eventually get taken over.

    I think there are very poor long term political judgements going in in the UK. I think politicians think it will be different this time. Politicians can allow immigration and foreign money into the UK as a quick fix for investment or skills.

    Politicians believe they have legislation in the form of anti racism and language in the form of political correctness. They believe it will be different this time. All nations in history have turned against outsiders once their economy is threatened. Once foreign money takes profits or foreign workers take jobs. Once the language barrier of political correctness has been over come then it will only be a matter of time before short term solutions like foreign money and workers become unwanted.

    The converse is true of cheap exports from China. I bought a decent rake for £10 on Saturday from a garden centre in Weybridge. How can you even make a rake for £10. Just the raw materials! That does include the shipping and logistics and sales costs. That take would cost £40 to make in the UK. My point isn’t that the UK is bad its that the exchange rate is 4 times too low. Eventually the Chinese workers will want pay rises and all those cheap goods will become more expensive. Only then can the UK compete. If we believe in free trade we will have to see our exchange rate fall by at least half and Chinas raise by half. We can resist that but it will happen because money is flowing from the UK to china eventually whether we like it or not exchange rates will normalise.

  9. Mike Stallard
    Posted June 3, 2013 at 7:34 am | Permalink

    I have four children – all grown ups: an architect, someone who runs an oil well, an advertising executive and a vet.
    All are in service industries. Their partners (how modern!) are all in service industries too.
    Three of the four live abroad and make a jolly good living too. Where they pay tax, I do not know, but I do not think it is in UK. The one in England is finding it very hard to make ends meet.
    I write this to explain what it means to be in a service industry and how the world is still crying out for Brits who have the skills.

    • lifelogic
      Posted June 3, 2013 at 8:21 am | Permalink

      A perfect illustration, if you are hard working, British and want to keep some of your earning rather than give 50%+ to Osborne to waste on HS2, quack energy and the likes. Then it is often best to leave (or employ lots of expensive tax lawyers and planners). 3 out of 4 in your case.

      Unless you are a rich nondom then Chelsea is the place to be.

    • Mike Wilson
      Posted June 3, 2013 at 11:13 am | Permalink

      I don’t suppose the one who lives in England finds it hard to make ends meet because of:

      1) the price of housing (high house prices government supported)
      2) the price of energy (high energy prices government created)
      3) the amount of tax paid (unaffordable state)

      • Lifelogic
        Posted June 3, 2013 at 3:24 pm | Permalink

        Indeed and often poor schools too so you often have to pay twice to educate your children.

        • Bazman
          Posted June 3, 2013 at 7:04 pm | Permalink

          Often has little to do with the quality of the education, but a desire to have exclusive education that the masses are excluded from. A building of a financial aristocracy removed from the real world and creating a society that without massive amounts of money no average person can enter. Eventually leading to a Plutocracy which you are very much in favour of by your beliefs. The wealth of which will then trickle down and provide for the rest of us. A absolute crock and you know it,

          • Mike Wilson
            Posted June 4, 2013 at 12:51 pm | Permalink

            @Bazman – disagree with every word. I took my son out of a local comprehensive school when he was 12. He was being bullied and I was appalled at how little he was learning and how low standards were.

            So, I paid a small fortune for him to go to a private school for 5 years. Nothing to do with desiring an ‘exclusive education’. Everything to do with acknowledging that a better education means improved career prospects and an easier life (well, easier than labouring all your days because you are uneducated). And nothing to do with a plutocracy. Just didn’t want him leaving school poorly educated and facing an uphill struggle all his life. It is what all the other parents (that I met) wanted too.

          • Bazman
            Posted June 4, 2013 at 5:57 pm | Permalink

            The private schools are part of the problem. If you banned private schools their would be a massive rise in standards in state schools. They could always send their children abroad. See if they did. Not a realistic idea, but true none the less.

    • stred
      Posted June 4, 2013 at 7:41 am | Permalink

      My only son has just finished his business/economics degree at a highly rated university, with a top grade. His housemates ditto. The friends from India have the opportunity to go home to take a job with firms run by relations. The British graduates have received few or no replies to job applications and are planning to book their tickets to go to Australia.

      The exceptions are the ones who took maths or accountancy. In the UK we have as many accountants as the rest of the EU. There is a growing market in paperwork and tax planning.

      The Irish are saddened to findso many of their children leaving to lead lives far away. In the UK it is not so different.

      • Mike Wilson
        Posted June 4, 2013 at 12:53 pm | Permalink

        Would you, I wonder, be willing to accept your house price halving – so that the next generation could afford to leave home, buy their own home and start families – without being forced to rent from BTL landlords and pay their mortgages for them.

        • stred
          Posted June 6, 2013 at 11:30 am | Permalink

          Housing is not the problem. No well paid jobs are the problem. In Ireland, house prices have dropped but their bright young peole are leaving.

  10. oldtimer
    Posted June 3, 2013 at 7:39 am | Permalink

    There is, in the UK, a long standing and deep rooted hostility to business and the capitalist system on which it depends. It has contributed in part, I believe, to the decline and disappearance of many businesses, both large and small, in the UK. It has been most obvious in taxation policies since WW2.

    The UK has nothing like the number of Mittelstand businesses that are to be found in Germany. Many of the bigger UK businesses have been sold to foreign interests – often for the perceived brand values they offer. The government now tries to keep them here by offering a more favourable tax regime than elsewhere. As Mr Osborne keeps repeating “Britain is now open for business”. He may yet be sunk in this endeavour by the UK`s misguided energy policies. A sustainable UK recovery will depend on the creation of a new generation of SME businesses that have the ability and capacity to seek new markets outside the UK. And that can only follow if the tax, energy and financing environment is right for them to flourish. Otherwise, they will migrate to the USA or closer to their markets.

  11. Javelin
    Posted June 3, 2013 at 8:16 am | Permalink

    John. It’s fantastic you are focusing on the real issue of the economy.

    The papers have been speaking about a scandal at number ten. I think I know who it is and the reality is nobody cares outside the Westminster bubble and the spin machine inside it. If anybody thinks two people having an affair is more important than the long term health of the economy and society they should not be a politician.

    • matthu
      Posted June 3, 2013 at 2:55 pm | Permalink

      So the Profumo Affair was a storm in a tea-cup, then?

  12. D Hope
    Posted June 3, 2013 at 8:16 am | Permalink

    With regards the types of services you mention I don’t believe anyone can object to their bring in money to the UK where foreign businesses pay for those services.

    But there are legitimate concerns that part of the strength of these industries comes from government not the free market. I am thinking of the astoundingly complex tax code and our ever more laws and ever more complex legal system. In finance many companies have benefited from BoE policy both in the boom and then when protected in the crash and since.

    Also many of the big city firms benefit hugely from heavy regulation keeping out competition.

    So by all means let’s not complain when they attract money abroad but let us also be aware that the size of these industries does perhaps reflect a weight that many areas of government put on the population as a whole.

  13. margaret brandreth-j
    Posted June 3, 2013 at 8:19 am | Permalink

    It is all well and good for large luxury cars to be sold and as far as I am concerned there is not an issue morally with selling to the richer countries and not the poorer countries. I myself have workedat Rolls Royce and have seen the rather old fashioned expertise which goes into making jet engines.There is a different market for all products. New ranges of cars are continually coming on to the market . I switched the box on yesterday to find a new very dashing model advertised which to all intents looks like a far more expensive brand. I had an old slop wagon Daimler myself which didn’t ever use the complete six ‘thingies’ in it’s V6 engine and was useless in the snow. We have to re invent . Yhis is the way forward . We have great designers in all fields from architecture , to clothes , to gardens etc . Let us look for this innovation and sell talent . the rest follows.

  14. English Pensioner
    Posted June 3, 2013 at 9:24 am | Permalink

    I think that the EU made many company’s sales departments lazy. They were told that the EU was going to be the great opportunity, the great future, etc., and so put all their effort into making sales within the EU and forgot the rest of the world. The best thing that this government could do is to try to find some incentives for companies selling outside the EU and ensuring that our embassies are geared up towards sales and assisting British companies.

  15. Mark
    Posted June 3, 2013 at 9:34 am | Permalink

    One thing is for sure: if Parliament continues this week with the present Energy Bill that will set in stone massive subsidies and market distortion (if attempted privately it would be considered gross manipulation and abuse), we are condemning the country to being uncompetitive internationally. Even service businesses have to pay for power for their lights and computers.

    MPs should vote it down, and act in the interests of voters, taxpayers, consumers and the wider economy by promoting competitive sources of energy.

  16. Denis Cooper
    Posted June 3, 2013 at 10:21 am | Permalink

    One thing is for sure: with the present government’s insane energy policies it’s unlikely that we’ll be increasing our exports of anything that needs significant quantities of now deliberately over-priced energy for its production.

  17. Terry
    Posted June 3, 2013 at 10:28 am | Permalink

    And the problem we have has been caused by the unchecked rise of extreme liberalism within the UK.
    In short, all our modern hang ups have evolved/mutated into the new, ‘British disease’. Put Britain and the British first and join the rest of the world in raising their game.

  18. Mike Wilson
    Posted June 3, 2013 at 11:11 am | Permalink

    And, let us not forget, we are good at services. Germans may make good cars, but I bet it is British creative agencies that create the brochures, web sites, adverts etc.

    It is fashionable to sneer at people who study ‘media studies’ – yet a million people work in ‘the media’. That is a lot of jobs.

  19. Mark W
    Posted June 3, 2013 at 11:24 am | Permalink

    I don’t expect you to post this John as its off topic and a second post, but I hope the Tories highlight Labour have just announced that millionaires will keep the winter fuel allowance people with possibly much lower personal wealth but a 40% tax threshold on income will lose it.

  20. uanime5
    Posted June 3, 2013 at 12:32 pm | Permalink

    I’d have to say that the difference in attitude between the UK and Germany is that people value goods and services different. For example you can easily find out the quality of a car before you buy it but it’s more difficult to determine which banking service will be the most beneficial. Also the bankers had a reputation for being grossly overpaid and caused the 2008 recession, while car makers did not.

    Another thing is that any company making luxury goods needs to ensure that only the wealthy can buy them or their brand’s identity will be harmed. So this is probably why Germany doesn’t worry about making cars only the wealthy can buy.

  21. Peter Davies
    Posted June 3, 2013 at 1:07 pm | Permalink

    The UK does need more strong brands, it also needs a good balance of types of industry so if one goes pear shaped it doesn’t take the rest of us down with it. In order to do that the UK needs in my opinion the flexibility to go out and find new markets and sign free trade agreements without social strings where appropriate whilst retaining a free trade relationship with the EU.

    I think we need far more emphasis on science in education, and to get these brains into developing new industries – R&D in graphene in an example which the likes of the Far East are stealing a march on us which if successful should change the way we manufacture everything.

  22. matthu
    Posted June 3, 2013 at 1:41 pm | Permalink

    One thing we won’t be marketing and selling to the rest of the world will be our concept of a free press, unless senior people in the government speak about against Ed Davey’s concept and put him in his place.

    Imagine if George Osborne suggested that opponents of his economic policy should not be given media space to criticise it.

    Imagine if David Cameron or William Hague suggested that opponents of the EU should be denied a platform to debate the issues. (oh, no hang on … that’s a bad example).

    This (coalition) government has gone completely potty.

  23. oldtimer
    Posted June 3, 2013 at 4:10 pm | Permalink

    A supplementary note on why UK exporters have to be very creful in choosing what they will sell, and where and for how much. Car exports have been mentioned. In 2012 China exported 1 million vehicles for the first time. That number will only grow. Life is going to get much tougher for all car makers.

  24. David Blackie
    Posted June 3, 2013 at 4:20 pm | Permalink

    One area where Britain has leading expertise, excellent infrastructure and even a tradition of considerable post-war success is international education. Which is also highly lucrative and makes a substantial contribution to the balance of payments. Britain is the education destination of choice for thousands of middle class Koreans, Russians, Brazilians, Kuwaitis etc. who are actively discouraged by negative messages put out by government, and a visa regime managed by an agency that is generally recognised as not fit for purpose. Keep the illegals out, but don’t imagine that by claiming to favour “the brightest and best” (Damian Green ad nauseam) you are sorting things out. Institutions are there to provide education and training to students of all abilities which we should do because they provide business and income to multiple groups in our society. And in any case if you put out negative messages the “brightest and best” will just go somewhere else. International education something Britain does well and should be fostered by government in our best interests.

  25. Denis Cooper
    Posted June 3, 2013 at 4:30 pm | Permalink

    Off topic, JR:

    http://www.telegraph.co.uk/finance/financialcrisis/10095186/Merkel-curbs-plan-to-hand-powers-to-Brussels.html#

    “Merkel curbs plan to hand powers to Brussels”

    “I see no need in the next few years to give up more powers to the Commission in Brussels”

    But that doesn’t mean that national parliaments wouldn’t lose more powers, it just means that any powers they did lose wouldn’t go the Commission; and that itself would only hold for “the next few years”.

  26. outsider
    Posted June 3, 2013 at 4:41 pm | Permalink

    Dear Mr Redwood,
    You say that the UK has great brands that can drive export growth but I am not sure that the “UK” really has that many great manufacturing brands now. Yes, UK companies have developed a vast number of great brands but to my mind that is not much use unless they are still British owned and/or their manufacture is for other reasons essentially centred in the UK (eg Rolls-Royce cars or whisky brands).
    Symbolically, Pears Soap, the first registered UK brand, is now made in India.
    Business leaders and investors in other countries, such as France, Switzerland and Ireland, generally have a greater appreciation of marketing, brand values and the need to maintain brand integrity.
    Most successful global brands are also built on strong home-market sales and market shares that build up the resources necessary to invest in export overheads, such as distribution and advertising. That is why Whitehall complains that most smaller firms do not consistently export.
    The UK has a small home market relative to the USA, Japan, China, India or even Germany (the EU is not a single market in this sense). Yet we habitually attack and try to curb any UK manufacturer/bank/ retailer/utility that has a really strong share of the domestic market. As you say, we reap what we have sown.

  27. Electro-Kevin
    Posted June 3, 2013 at 4:56 pm | Permalink

    Of course a country can never have too many brands to export – but if this country were run better we could get by with fewer than we actually need.

    (My eternal gratitude to our exporters.)

  28. behindthefrogs
    Posted June 3, 2013 at 5:00 pm | Permalink

    We also need to stop taxing our exports and thus make them more competitive. Reducing the level of employers NI would be a start

  29. Jon
    Posted June 3, 2013 at 5:23 pm | Permalink

    There are many in this country who will run down industries that provide the jobs and tax revenues that pay for public services.

    In the 1970s as a kid I remember watching Question Time with Robin Day. A lot of the time the panel and the audience would express their dislike of engineering, manufacturing and factories. Thinking that that was out of date and should go. They also didn’t like the idea of having strategic industries and wouldn’t it be good to let them go. As a kid back then I found it madness. Nothing has changed, there is still a large group of people wanting to bring down industries. Labour see the rebalance of this country away from frinancial services by reducing that industry rather than looking to increase the contribution of others.

  30. They work for Us
    Posted June 3, 2013 at 5:52 pm | Permalink

    We should do what a lot of countries do:

    It should be unthinkable to spend public money on foreign items, trains, lorries whatever where there is anything like a suitable product produced here. Competitive tendering in the EU can be skewed (and is) towards the home grown.
    Do the French buy non french army lorries, trains etc never! The French public usually buy French cars even though some of them are of questionable reliability.

    Do other countries allow the takeover by foreign companies of so many of our core companies? They don’t. etc

  31. matthu
    Posted June 3, 2013 at 7:21 pm | Permalink

    Not content with trying to stifle debate on the EU,
    not content with trying to stifle debate on climate change,
    it now seems the government is also trying to stifle debate on same sex marriage.

    The Bishop of Lichfield, the Rt Rev Jonathan Gledhill, apparently posted a message on his website explaining that he would be staying away from the debate in the House of Lords “as he had been advised it would be seen as an ‘abuse of privilege’ for all of the bishops in the Lords to attend“.

    Shame on both your houses!

  32. Max Dunbar
    Posted June 3, 2013 at 7:59 pm | Permalink

    You mention that ‘UK defence contractors have a good export record’. Why use an obvious euphemism when we all know that you are talking about arms manufacturers? There is nothing shameful about producing weapons and related products for export with an offensive as well as a defensive capability in mind.

    • Bazman
      Posted June 4, 2013 at 6:01 pm | Permalink

      Depends what and where they export too does it not Max? Maybe it does not to you? Suppression of riots for democracy OK? Torture equipment? Lets face it. In the real world they will get it anyway is your argument?

  33. Javelin
    Posted June 7, 2013 at 6:43 am | Permalink

    Just thought I needed to point out that china is replacing workers with robots

    Typically at a ratio of 1 robot replacing 5 workers.

    Investing in this technology reduces the need for immigration and allows the UK to compete with China.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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