The Government has set out plans for helping UK firms develop and export.
The announcement came against the background of worsening trade figures. A slight fall in exports saw the trade deficit, the balance between exports and imports, widen to £4.831 billion in December.
To help boost UK exporting, 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.
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.
Launching the White Paper, Vince Cable, the Business Secretary, said: “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 regulation, an ambitious programme of Free Trade Agreements, finalising the Doha round – these are practical measures to help drive growth.”
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.
“There’s a particular need to tackle export under-performance in smaller companies, so SMEs should be encouraged by these new trade finance products designed to help them break into foreign markets and grow their businesses.
“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: “Trade finance and credit insurance grease the wheels of Britain’s export machine. As we have repeatedly argued over the last three years, that ‘grease’ has been in short supply. This has left many small- and medium-sized companies unable to start trading in new markets, or increase the amount they export.
“The new trade finance schemes and the ‘Export-EFG’ 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.
“Yet even with these improvements, the British Government still does not offer the same level of support to small and medium-sized exporters as some of our major competitor countries. There’s more for the Government to do over the coming months. 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.
“I would also welcome the Government’s acknowledgement of the role it needs to play in taking the lead on international trade and devising an overall strategy on behalf of smaller exporters.”
