The Confederation of British Industry (CBI) has recommended new proposals it hopes will boost firms looking to increase foreign export.
In the report, ‘The Only Way is Exports: renewing the UK’s role as a trading nation’, the CBI says growing mid-sized companies with the potential to enter new markets is essential to any export-led recovery.
It also believes businesses are impeded by the perceived risks and costs of exploring new overseas markets, with only one fifth of the UK’s SMEs exporting in comparison with a quarter across the European Union.
New measures include an incentivising tax break, a review of the practicalities of the Bribery Act and making export finance schemes easier to access.
John Cridland, CBI Director-General, feels more government support is needed to assist the growth of medium sized businesses looking to tap into foreign markets.
“While we are making progress in some fast-growing markets, weaker than expected economic growth in our major trading partners has held us back,” he said.
“We also have a heavy dependence on imports: ships are arriving in UK ports bringing in more goods than they take back.”
Mr Cridland added: “The growing middle classes of Asia and Latin America want to purchase leading UK branded goods and services, so there is every reason for the UK to be confident as long as businesses continue to make headway.”
Last week, official trade figures showed that the UK’s deficit on trade in goods and services was £3.6bn in February, its largest figure in six months.
The UK has persistently run a trade deficit since 1998, and its share of global exports fell to just 3.4% in 2011, almost half that of 1980 (6.2%).
According to the Office for Budget Responsibility’s (OBR) latest forecasts, net trade will only contribute 0.1 percentage points to GDP growth in each of the next five years.
The CBI’s 11 recommendations to boost export performance are:
Businesses must match capabilities to changing demand
- RECOMMENDATION 1: Businesses and trade associations should take targeted action to strengthen domestic supply chains, invest and build key capabilities for the future.
Putting exports at the heart of industrial strategy
- RECOMMENDATION 2: Plans to boost export performance in emerging markets must be embedded in all government strategies for sectors.
- RECOMMENDATION 3: The Davies Commission must deliver a strategy for the short, medium and long term to boost capacity and promote investment in connectivity across the UK.
- RECOMMENDATION 4: The Government must work with industry on the review of the current night flights regime to ensure it carefully considers the needs of the air freight sector and its delivery cycles in the future.
- RECOMMENDATION 5: The Government should ensure that the EU uses its economic weight to press for robust IP protection provisions in international trade negotiations. This requires active UK engagement on IP initiatives in Europe.
- RECOMMENDATION 6: The UK needs to develop a reputation for being open to top talent, by streamlining processes and setting out which key markets are to have premium visa services.
- RECOMMENDATION 7: The Government should review the impact of the Bribery Act on competitiveness, with a particular focus on small and medium-sized enterprises.
Setting the right resourcing framework
- RECOMMENDATION 8: Prioritise increasing awareness of UKTI and UK Export Finance, with particular attention paid to communication with SMEs.
- RECOMMENDATION 9: To support high growth export champions, the government should introduce a New Markets Incentive – a targeted tax credit to underpin exploratory export activity by SMEs.
- RECOMMENDATION 10: The Government must urgently deliver and intensively market the UK Export Finance direct lending facility.
- RECOMMENDATION 11: Incorporating export finance schemes in to the planned Business Bank will create a ‘one stop shop’ for business finance.
UK Trade and Investment (UKTI) will be holding events across the country marking Export Week from May 13th-17th 2013.