‘Significant challenges’ over post-Brexit exports
UK FIRMS face “significant challenges” in boosting post-Brexit exports in the long term, a financial watchdog has said.
A report by the Comptroller and Auditor General of the National Audit Office (NAO) said the Department for International Trade (DIT) had made a good start in overseas efforts but needed to work more closely with the credit agency UK Export Finance (UKEF) to keep up momentum.
Meg Hillier, head of the Commons Public Accounts Committee (PAC), said the DIT was concerned about securing “quick wins” and needed to make sure it supported small firms as well as big ones.
Comptroller and Auditor General (C&AG) Gareth Davies, the head of the NAO, said: “DIT has made a good start in developing a strategy and the arrangements it needs to support export growth, and UKEF has expanded its offer of export finance to support UK businesses.
“Continued progress is needed for both DIT and UKEF to strengthen their approach and address the significant challenges that UK trade exports will face.
“To increase exports and boost UK productivity and growth, DIT and UKEF must work closely together and across government to ensure efforts and resources are focused in the regions and sectors where there are the greatest opportunities to support UK businesses.”
In 2019, the UK exported £701bn of goods and services abroad, the report said.
Labour chairwoman of the PAC Ms Hillier said: “DIT is too geared towards banking ‘quick wins’ at the expense of demonstrating steady progress towards the Government’s long-term goals. DIT wants to focus even more of its resources on supporting larger companies – it must make sure it doesn’t leave smaller, innovative businesses behind.
“Now, more than ever, these small businesses need support to help get the economy going again.”
The NAO study questioned the value of the Government’s 2018 stated aim to increase exports from 30% to 35% of GDP.
The organisation stated: “The lack of a time-frame for the ambition and the existence of other factors that can affect export growth, some of which are outside of Government’s control, make it difficult to hold DIT accountable for its progress.”
The NAO said the Government was doing well at addressing a data gap regarding exports.
It stated: “DIT is making early progress in addressing a gap in the data it holds on UK exporters.
“It needs good data to identify which of the 5.9 million UK businesses already export or have the potential to do so.
“To make the best use of its resources, DIT plans to target its bespoke support at larger businesses and to direct smaller businesses to its digital services. However, a recent DIT survey of its clients suggests that some services on its website are not meeting the needs of some UK businesses. There is scope for UKEF and DIT to work more closely together overseas.
“UKEF supported exports to 72 countries in 2018-19, but 80% of the value of these exports was concentrated in five countries.
“UKEF relies on DIT staff to help identify potential customers, but those who are not finance experts may lack the skills to promote export finance. To address this, it aims to increase the number of UKEF staff overseas and has introduced training for DIT staff.”
A DIT spokesman said: “We will continue to support UK businesses across a range of sectors to export to all parts of the world, by focusing on securing longer-term opportunities as well as working hard to boost trade and investment in the short-term.
“We will do whatever it takes to ensure businesses can access the right tools, finance and in-market expertise to succeed on the global stage.”