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UK Exports Saw the Trade Deficit Widen
In December 2010 a slight fall in UK exports saw the trade deficit, the balance between exports and imports, widen. This state of affairs has prompted the UK Government to help UK firms develop and export their goods and services.
The Government’s Trade and Investment White Paper includes:
- a new Export Working capital scheme,
- a Bond Support scheme, and
- an extension of the Enterprise Finance Guarantee to include exporters, offering finance of up to £1 million for SMEs (small and medium enterprises).
New Online Sales Leads Service
The Paper also aims to create:
- a new online service providing access to sales leads around the world;
- a new online peer-to-peer exchange to enable companies to help each other; and
- a new high profile award for companies which are ready to export, but need encouragement to take the next step.
Vince Cable, the Business Secretary, said:
- the UK had “consumed too much and exported too little”.
- “Trade and inward investment are key drivers of growth – they are fundamental to rebuilding and rebalancing our economy.””Improving the finance and insurance products that oil the wheels of trade, exempting SMEs from unnecessary EU (European Union) regulation, an ambitious programme of Free Trade Agreements, finalising the Doha round – these are practical measures to help drive growth.”
Note: Doha Development Agenda (DDA)
John Cridland, CBI’s director-general, said:
- “The new Export Enterprise Finance Guarantee Scheme and other new forms of financial support are good news for business, and long overdue. They will help UK companies step up export activity which is vital to deliver private sector growth and drive the economic recovery.””Many of these new finance products are already on offer by most of the other G8 countries, so this scheme will bring the UK up-to-speed in competition terms.”
“The Government now needs to focus on getting the marketing of these products right. This needs to be straight-forward and carefully targeted so that it reaches the companies with export potential. Banks also need to be ready to roll out these facilities quickly.”
Adam Marshall, the director of policy and external affairs at the British Chambers of Commerce (BCC), commented:
- “The new trade finance schemes and the ‘Export-EFG’ (Enterprise Finance Guarantee) scheme are a real step forward. That is provided they get assistance to small companies quickly, efficiently, and at a reasonable cost. BCC data shows that the Export Credits Guarantee Department, our national export credit agency, is unknown by two-thirds of SMEs. That has got to change over the coming months if any of these new finance schemes are to make a real difference.”” Ministers need to announce practical measures to help small companies across the UK realise that exporting could be their path to growth – and at the same time, ensure that we’re promoting British innovation and ingenuity in fast-growing markets overseas.”
Phil Orford, the chief executive of the Forum of Private Business (FPB), added:
- “A lot of these measures are very welcome and reflect precisely what we have been lobbying the Government for in recent months.””They will mean that the UK Government is a step closer to other European nations in terms of the support it gives to SME exporters.”
“The ‘export EFG proposal’ is particularly welcome and should, if implemented properly, be hugely helpful to SMEs which have been prevented from accessing the funding required to exploit foreign markets.”
“And while we shouldn’t downplay the value of the European export market – our close proximity to Europe and shared legislation mean it’s a vital export market for many SMEs – the white paper’s stated aim of opening up fast-growing economies such as India and China to British SMEs should be applauded.”
