Liam Fox, the pro-Brexit international trade secretary, has created uproar among Britain’s bosses by claiming they have grown “too fat and too lazy”, and would rather play golf on Friday afternoons than seek out fresh export markets.
It is scarcely a good start for a man whose new job is to promote links with fast-growing economies, representing exactly the people he dismissed so casually at a Westminster drinks party (which just happened to be recorded and leaked to The Times). Britain, says Fox, is “no longer the free-trading nation it once was”, and people have to stop thinking about exporting “as an opportunity and start thinking about it as a duty”.
Mr Fox was an odd choice for the role Theresa May gave him in her new cabinet in July, and over the summer he has done nothing to persuade his many critics he is the man for the job – or any job in government for that matter. He is already squabbling with the foreign secretary, Boris Johnson, and David Davies, responsible for negotiating Brexit terms with the EU, over who should be in charge of what. The Foreign Office, according to Fox, should be focusing on diplomacy rather than business, and his department is now in charge of “trading elements” of foreign policy – an assertion vigorously contested by the Foreign Office.
The trouble is that no one knows who is responsible for negotiating what and the government has struggled to articulate a clear vision of Britain’s place in the global economy after Brexit. Mr Fox’s remarks and the turf war between the three key ministers have spread dismay across the City and business world.
“Business and government need to work together if we’re to make a success of the transition ahead,” says Francis Martin, president of the British Chamber of Commerce. “Business people don’t mind a robust conversation, but they will insist on a constructive one.”
Mr Fox, a former medical doctor, has never worked in business in his life and his profound ignorance of how international trade actually works is now being starkly exposed. For instance, he has warned that in any negotiation he will oppose import tariffs, arguing that protectionism always ends in tears: “We must be unreconstructed, unapologetic free traders,” he asserts firmly. That’s all very fine, but unfortunately the world does not work like that.
We’re all for free trade until it hurts us, and Mr Fox’s critics immediately pointed to the implications for industries such as steel where producers are battling against cheap imports from China and have demanded tougher EU tariffs.
The trade secretary had obviously not thought of that. He does have a point though, even if he expressed it in his bumbling, gauche fashion. Britain is not good at exporting and even if it were, there is not a lot left to export.
There was a time, only 50 years ago, when its textile mills employed nearly a million people and accounted for half world textile exports; its massive shipyards launched the world’s biggest passenger liners that were owned by British shipping companies; it had a major aerospace industry producing Comets, Viscounts and other great aircraft; and it had the biggest car industry after the US, accounting for half of all motor exports in the world.
Mr Fox’s depiction of the business world belongs to another age, when most of this was lost to a renascent Germany and to the Far East, which destroyed whole swathes of British industry, which was indeed fat and complacent in the 1960s and 1970s.
Today, British manufacturing industry employs 8 per cent of the country’s workforce and accounts for 12 per cent of national output. The trade deficit in goods is running at about £10.5 billion (Dh51.1bn) a month and the total trade deficit, including services, is over £3bn a month. No amount of insults is going to change that.
Mr Fox’s hopes must rest on the service industries, which Britain is rather good at, but that hardly needs any further urging – it is doing its level best already.
Sir Martin Sorrell, the chief executive of the FTSE 100 marketing giant WPP, admits that Britain had not been as successful as Germany in building an export-led economy but he fiercely rejects the charge that UK companies are run by lazy fat cats. “I don’t play golf on Fridays, but I must admit I’m trying to play cricket today [Sunday], weather permitting.” By Monday he was on a plane “exporting myself” to the US, Argentina, Germany and Singapore.
“People work unbelievably hard in business and with a level of integrity that politicians could learn from,” said one FTSE 100 chairman. But then the life expectancy of a FTSE-100 chief executive is between 30 and 40 months – and their average pay is £4.3m a year.
Ivan Fallon is a former business editor of The Sunday Times.
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