UK Edition
Stop moaning and back 'global Britain', urge City heavyweights
British businesses should stop hiding and instead travel the world promoting “Brand Britain” as “cheerleaders of open markets”, according to former Sainsbury’s boss Justin King.
The self-confessed "remoaner" - a nickname reflecting his vote to remain in the EU and his subsequent grumbling - said the economy was performing well, but that should not be taken for granted.
In the financial crisis, he found that consumers continued spending enthusiastically until early 2010, indicating sentiment can change “almost overnight”.
He was joined by Sir Michael Rake, the chairman of BT and Worldpay, who said that the global reaction to the Brexit vote is one of shock, and so British firms should take the lead in restoring the country’s image.
The pair were speaking as sterling rose strongly in the morning, bouncing back from record lows against the US dollar, though it declined again slowly later in the day to just below $1.22.
The pound also fell to a new low against a basket of currencies weighted to Britain’s main trade flows, indicating sustained worries that the country is a less attractive investment destination in the wake of the referendum.
At such a low level, economists expect import costs to rise, squeezing households’ finances, though the country should also get a boost as British exports become more competitive.
The City leaders said that companies should play a bigger role telling the world about Britain’s strength, restoring the country’s brand.
Mr King, who is now vice chairman at private equity group Terra Firma, said he is “a proud Brit” who wants others like him “to fight the fight to tell the story of the brand that was Britain four years ago, that for me is the real Great Britain.”
“We will need to be braver… self-help has to be the order of the day. If our politicians are going to damage our relationships with our trading partners, we as businesses have to strengthen those relationships, to make sure they are stronger than they ever have been across borders,” he said, speaking at the Lloyds Bank Sterling Conference.
“We as businesses must be the cheerleaders of open markets and a liberal approach towards legislation – we must not allow ourselves to get dragged into a tit-for-tat [negotiation] where if they’re going to protect themselves, we should protect ourselves. It is in our naked self-interest to be the most open, liberated trading nation. We must resist calls to act in a protectionism manner.”
Sir Michael said that his customers and business partners around the world need reassurance from the UK.
“I travel a lot and during this last six months, everyone I meet there is a mix of anger, amazement, empathy, and surprise at what has happened to this country,” said Sir Michael.
“Particularly since the 2012 Olympics when we were at our peak – we were the global financial centre, we had Brand Britain in our hands, and there is absolutely no doubt that people are very distressed at the damage that they feel we have unnecessarily done to ourselves and to Europe.
"They have been shocked at the arguments. They see the UK as the home of democracy, free speech, liberalism and an open attitude to the world.”
He said Britain needs to show off its flexible workforce as one economic advantage, and suggested that once the EU’s state aid rules no longer apply, the government can build up a bigger industrial strategy.
The battle over the reputation of Britain and its businesses also needs to be fought at home, Mr King said, arguing that the financial crisis and the slow recovery which followed it has led to a perception of inequality between the elite and the masses.
“That is why we’re seeing, I believe, the most profound reassessment of the relationship between society and business since the mid-Victorian era,” he said.
“If you doubt that, look at what is happening with the vilification of Sports Direct, what has happened to BHS. Every business crisis is played out in a way where the narrative is fundamentally different to what would have been the case.”