Published by Rt Hon Hugo Swire MP on 25 March 2015
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This report follows a series of three roundtable seminars held by Reform in partnership with Barclays during 2013. It was launched at a major conference on Tuesday 12 November 2013.
UK exports would need to grow at 9 per cent per year if the Government is to meet its £1 trillion target, first established by the Chancellor in the 2012 Budget. That compares to an average growth of only 5 per cent from 2000 until now. Earlier this year, it was reported that the USA is unlikely to meet a similar pledge to double exports by 2015.
As global trade patterns shift, Government’s role in helping open up new markets is crucial. In a foreword to the report, Antony Jenkins, Group Chief Executive of Barclays, says that “its message to Government and larger companies is clear: supporting access to new markets must be a fundamental goal of interventions on behalf of UK business.”
UK business ambition to export is low, particularly among small firms. In a new survey of SMEs undertaken for the report, less than 3 per cent of firms with an annual turnover up to £500,000 had sought advice on exporting in the last year. That proportion rose to 9 per cent for firms with a turnover between £1 million and £5 million, and 16 per cent for firms with turnover over £20 million. UK labour productivity is lower than Germany’s, as is the quality of trade-related infrastructure.
The UK’s export potential is however high, the report argues. Already the world’s sixth largest exporter, UK education, financial and legal services, creative industries and luxury goods should be in demand from an expanding global middle class. Compared to Germany, the UK has a lower headline corporation tax (23 per cent compared to 29.6 per cent), a greater ease of doing business and a lower cost to export as measured by the World Bank.
Advice and support are crucial for new exporters but the landscape of government support, according to the report, is “complex and hard to navigate”. Those who have used UKTI praise the service but only 13 per cent of SMEs are aware of the support available from the agency. The report argues that the answer lies in business-to-business support. According to the report’s survey of SMEs, firms are more likely to take advice from their advisers, banks and business organisations than from government agencies. 50 per cent of SMEs had sought information and advice from their accountants in the last twelve months compared to 12 per cent from government agencies.PDF DOWNLOAD