Amidst the onslaught of bad news for the government over the past few weeks, the Department for International Trade (DIT) published its Export Strategy, aimed at encouraging more British businesses to export. Government research shows that exporting supports 6.5 million jobs and that exporters pay higher wages, while other data indicates exporting businesses are more than a fifth more productive than companies who don’t. Currently, however, only 10 percent of UK firms actually export. Given the government’s desire to see a ‘high wage-high skills’ economy, it is therefore no surprise that boosting exports is a top priority, but ministers know this can’t be done without the support and buy-in of the business community.
A post-Brexit update to the previous version drawn up in 2018 by the May government , the new Strategy outlines how the government will support businesses to increase their exporting activities to reach a target of £1 trillion of UK exports every year by 2030.
The Strategy, in the words of the Prime Minister, will “bring the whole government together to deploy a cornucopia of trade outposts in distant lands, experts to provide the support you need, trade shows to put you in the international shop window, finance for those who need it and more”. In short, it is the government’s pitch – or “joint framework” – to business to work with it, representing one of the strongest overtures to the business community since Boris Johnson took office. It points to better support, better access to finance, a better business environment, and better data, as key improvements being made compared with its 2018 predecessor. So what will the Export Strategy do to help increase the number of British businesses export?
The 12 points of DIT’s plan are:
- An Export Support Service – a one-stop shop for businesses looking to export to Europe
- Dedicated teams across the whole of the UK
- Financial support for exporters (through the Internationalisation Fund)
- Expanding the products and network of UK Export Finance
- Strengthening government-to-government partnerships
- Extending the reach of the UK Export Academy, offering bespoke training programmes and digital tools to assist businesses navigate exporting technicalities
- Increasing export networks by extending the community of Exporting Champions
- Launching the ‘Made in the UK, Sold to the World’ campaign
- Piloting a new UK Tradeshow Programme to promote ‘Team UK’ at global tradeshows
- Making exporting easier by putting it front of mind when reforming regulation
- Utilising the UK Government’s global reach to provide sector and market specific support
- Opening markets worldwide through Free Trade Agreements (FTAs).
Is it enough?
The government has long been criticised for not providing enough support for the services sector, something that the Export Strategy goes some way to rectify. Services make up around 80% of UK GDP, accounting for 49% of exports in 2020. With 83% of British jobs coming from the sector in 2018, initiatives such as the creation of the Trade in Services Council will have come as welcome news to business organisations such as the CBI and the City of London Corporation.
But while the ambition is to be applauded, it has not gone unnoticed that this is not the first time that the £1 trillion pledge has been made – and missed. The Financial Times notes that former Prime Minister David Cameron pledged in 2012 to meet this figure in 2020, a promise repeated again in his party’s 2015 manifesto, and even pre-pandemic figures in 2019 showed exports at £689 billion, some way off the £1 trillion mark.
Optimists however would argue that the situation is different now; the UK has left the EU signed a number of FTAs, including with the EU, and is on track to accede to the plurilateral Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), opening more markets for British businesses to take advantage of.
Wherever you sit on this argument, it’s apparent that the Strategy is yet another illustration of the importance the government places on trade, and cements it as the linchpin of the government’s agenda alongside building back better from the pandemic, net zero, and – of course – levelling up.
Businesses that currently export – or that are looking to start – will therefore be keen to study the detail of the various strands of support promised by the Strategy – not least the Made in the UK, Sold to the World campaign, and to capitalise on renewed government focus on hitting its £1 trillion target.