The UK Government’s Public Accounts Committee (PAC) have announced that the UK is unlikely to meet George Osborne’s target set in 2012 to increase exports by 100% to £1 trillion by 2020 and that the UK is “not performing as well as Germany, France & Italy”.
Efforts to boost UK exports are being hampered by strict visa controls and a lack of co-operation between government departments, MPs have warned.
Chairwoman of the Public Accounts Committee, the Rt. Hon Margaret Hodge MP, today said:
“Despite some progress by the Foreign & Commonwealth Office (FCO) and UK Trade & Industry (UKTI) in supporting UK exporters overseas, the UK is not performing as well as Germany, France and Italy.
“In 2012-13, UKTI and FCO spent £420 million to promote exports but we are currently not on track to achieve the Chancellor’s target of doubling the value of our exports to an annual £1 trillion by 2020. For the last two years, the annual value of UK global exports has been flat.
“If the UK is to hit this target, then we will not only have to maintain our current market share in advanced markets such as the US and Europe, but also secure new exports to the new, faster growing emerging markets”.
Ms Hodge believes that small and medium sized enterprises have a vital contribution to make towards helping the Government achieve its ambitions. At present UK SMEs do not perform as well in terms of exporting as their French and German counterparts and that UKTI needs to be a more effective source of intelligence on new opportunities in overseas markets. It needs to get better at helping SMEs export more by supporting them in overcoming the barriers they face.
In Stockport, the South Manchester International Trade Forum works to help businesses to expand into the export market; it is a collaborative partnership of representatives from The Royal Bank of Scotland, UKTI North West and Baker Tilly. Businesses who are interested in exploring overseas opportunities are invited to contact Helen Walters, helen.walters@stockport.gov.uk
It is suggested that one barrier to developing more export opportunities is the Home Office’s measures to secure the UK’s borders which can discourage foreign business travellers from visiting the UK; overcoming difficulties experienced by business travellers in obtaining UK visas could have a positive impact.
Margaret Hodge was speaking as the Committee published its 37th Report of this Session which, on the basis of evidence from the Foreign and Commonwealth Office and United Kingdom Trade and Investment, examined their work to support UK exporters overseas.
In March 2011, the government published its Plan for Growth. This set out its strategy to encourage economic growth and included a focus on increasing investment and exports. In 2012, the Chancellor set a very challenging ambition of doubling UK exports to £1 trillion a year by 2020. Achieving this ambition will depend on, at least, maintaining the current market share in advanced markets and securing greater exports to new, faster-growing emerging markets.
In 2012-13, the UKTI and FCO spent £420 million on promoting UK economic growth through supporting UK businesses overseas. In general terms, the FCO tries to create the conditions overseas for growth.
UKTI is a non-ministerial department of both the Department for Business, Innovation & Skills (BIS) and the FCO; it has 1,000 UKTI staff in 160 international locations and works directly with UK businesses to help them make the most of overseas opportunities.
From 2000 to 2012, the annual value of UK exports nearly doubled. During the same period, the annual value of exports globally nearly trebled. UKTI told us that while the share of UK total exports to key emerging markets remains low (compared to the share of UK exports to advanced markets such as the United States) they are growing faster than exports from Germany, France and Italy to emerging markets. These latter three countries have a faster overall export growth rate than the UK.
To have a better chance of achieving the target of £1 trillion by 2020, the Public Accounts Committee made the following recommendations:
- UKTI and FCO need to understand the reasons behind these stronger overall export growth rates of other countries and use this research to inform their future planning to close the gap.
- UKTI and FCO need a defined joint ‘roadmap’ to support the £1 trillion annual exports by 2020, particularly focusing on what FCO and UKTI need to do to help UK businesses maximise export opportunities to emerging markets, as well as maintaining, at least, export levels to advanced markets.
- The proposed joint strategy between UKTI, FCO and BIS on exports, and the new joint country plans will need to be clear on roles and responsibilities, set out how the organisations will work together, and provide a single action plan for promoting UK exports centrally and at overseas locations.
- UKTI needs to be a more effective source of intelligence on new opportunities in order to support small and medium-sized enterprises (SMEs). UKTI stated that increasing the exports from mid-sized businesses and SMEs in the UK is critical to achieving the £1 trillion exports ambition, but UK SMEs do not perform as well as their French and German counterparts. Surveys by business bodies such as the Confederation of British Industry and Federation of Small Businesses indicate that many SMEs are unaware of, or do not use, UKTI’s export services.
- UKTI needs to be a more effective source of intelligence on new opportunities in order to help make it less difficult for SMEs to export. It should actively market to SMEs the export opportunities available in different overseas markets, as well as the support it can provide to help overcome barriers to exporting.
- The FCO would benefit from a ready means to evaluate the impact of its work to promote exports. UKTI has several metrics which help it measure the impact of its services, including the new trade growth value measure. However, the FCO does not have equivalent measures to assess the impact of its work. In particular, FCO lacks information on outcomes which it could use to judge which of its activities are most effective at promoting exports in different circumstances. This makes it difficult to demonstrate whether the FCO achieves value for money on its work to promote exports.
- UKTI and FCO need to identify the key problems which business travellers face in obtaining UK visas, and the impacts on export opportunities. They should work with the Home Office to minimise barriers while maintaining UK border security.
Source: Parliament UK