UK BUSINESSES are losing international contracts because of a lack of language skills, recent research has shown.

Companies are missing out on contracts, worth nearly £750million every year, in countries where English is not the main language, through not being fully conversant with the indigenous language.

Research, by International Customer Loyalty Programmes (ICLP) questioned 950 companies in mainland Europe, including Spain, France, Denmark, Italy, Germany, Portugal, Poland, Austria and Switzerland.

It found that, in the last 18 months, more than three quarters (76 per cent) of the companies had decided not to employ a UK company for a pan-European account because of an inability to speak their language fluently.

Those UK companies that employed translators at meetings fared only slightly better, dropping rejection down to 68 per cent, while those companies who had alliances with national companies - i.e. a company in a similar sector but located within the specific European country - were likely to be rejected nearly half the time, specifically because of the language barrier.

However, if a UK company employed professionals who were also either linguists or foreign nationals, then it was viewed as a total level playing field. In fact, in 29 per cent of the cases, it was viewed as a positive.

Ian Hutchieson, general manager of ICLP, said: "British companies have a reputation for being international, with a high degree of creativity.

"Many European countries have their headquarters in London, where transport links to the rest of the world are very good. They are perceived as being very talented, creative and cost effective. However, the most influential negative is their inability to speak languages."

The five main reasons cited by the European directors for not using UK companies, based on their inability to converse succinctly and knowledgeably in their language, were:

1. Slows business decision-making down too much (61 per cent)

2. Loss of innuendo and subtleties of language (43 per cent)

3. Reduction in cultural appreciation and understanding of their market and customers (39 per cent)

4. Lack of respect (nine per cent)

5. Humour disparity (two per cent)

ICLP also questioned a further 500 UK managers and directors on their level of competence in the three core European languages - French, German and Spanish.

Eighty-nine per cent knew both the French for "yes" and "no", compared with 96 per cent of the French knowing the English equivalent.

Meanwhile, 52 per cent knew both the German for "yes" and "no", compared with 98 per cent of the Germans knowing the English equivalent.

And 22 per cent knew the Spanish for "yes" and "no", compared with 77 per cent of the Spanish knowing the English equivalent.