Behind the new Export Strategy: A Q&A with the Minister
Baroness Fairhead sets out what the government's new Export Strategy means for businesses willing and able to trade
Expanding trade is fundamental to creating new jobs, raising productivity and increasing prosperity across the country. And in August, the government launched its new Export Strategy – a timely signal that it is committed to improving the UK’s international competitiveness.
When the success of the strategy will depend on its execution – and businesses doing the legwork – we asked Baroness Fairhead, Minister of State for Trade and Export Promotion at the Department for International Trade, to talk us through the government’s ambitions and the support being put in place.
Q. How is this Export Strategy different from what has gone before?
A. The Export Strategy is the start of a genuinely new collaboration between government and business, as we establish an independent trade policy for the first time in more than four decades.
It has been developed with businesses and designed for companies both large and small. The new framework will enhance our ability to help businesses meet the challenge of raising exports as a proportion of GDP from 30 per cent to 35 per cent.
It takes forward existing support from government which companies value, and builds on them with new ideas, concentrating on doing things that only government can do.
We have built it around four key areas:
• Encouraging businesses to export and attracting overseas customers to consider UK goods and services;
• Informing companies about exporting;
• Putting finance at the heart of our offer; and
• Connecting UK businesses to overseas opportunities, buyers and each other.
Crucially, this strategy builds on the Industrial Strategy and lays the foundation for how we plan to support businesses in the years ahead and ensure the UK economy is fit for the future.
Q. You’ve said you are taking a business-led approach to exports. What does that mean in practice?
A. One of the key points I’ve emphasised during the development of the strategy is that it is UK companies that export, not government. It’s why we have consulted so extensively with more than 200 businesses and business representative organisations, including the CBI, across the UK. We’ve also held more than 25 roundtable discussions across England, Wales, Scotland and Northern Ireland.
We are totally committed to continuing this engagement as we implement the strategy
We are totally committed to continuing this engagement as we implement the strategy and will ensure our support is designed around the needs of those who use them. We look forward to continuing working with businesses, the CBI and other groups to make sure we do this effectively.
Q. How realistic is your ambition to grow exports to 35 per cent of our GDP – and how do you ensure it happens?
A. We believe this ambition is both realistic and achievable. As government ministers, we see the demand for the high quality, innovative goods and services the UK creates.
The UK is already the sixth largest exporter globally and second for exports in services. Businesses have told us they hugely value many of the existing government services – from the GREAT campaign to the £50bn of support from UK Export Finance, from UK Trade advisers to sector specialists and the network of DIT people in 108 countries around the world.
But this still leaves us in the middle of the international league tables.
So, we will build on existing support. For example, we will build out a network of Export Champions who can provide peer-to-peer support to SMEs, including the 400,000 who currently do not sell their products or services overseas. We will expand our database of opportunities from below 2,000 to tens of thousands over the next few months as well as enhancing the eCommerce offer.
We intend to increase the number of government-to-government agreements, consortia-based approaches, supplier fairs and focused trade missions. We will help resolve market access barriers through working with other governments and regulators. Ultimately, we will work to ensure that UK companies are better informed about what the government can provide.
To achieve our goal we must be joined up across government
To achieve our goal, we must be joined up across government and that’s why I’m delighted this strategy has received support from a broad range of government departments – not just the Foreign Office and the DfID.
We also need to focus on doing what only government can do, so we’ll complement, rather than compete with, the many excellent public and private sector providers to ensure there is “no wrong door” for companies.
This strategy is the just the first step and sets out how we will provide the information, contacts and finance to help UK businesses enter into new markets overseas or expand their existing exports.
We know more needs to be done, and with the helpful contribution from British business, we will continue to review the policy and regulatory changes to improve UK exporting performance.
Q: How are you making sure businesses of all sizes can access the support they need?
A. We’ve always been clear that there is no one size fits all approach to export support, and that was made clear by businesses throughout the development of the strategy.
Under our measures designed to encourage, inform and connect we are determined to cater for a range of needs, whether you’re a micro business taking your first exporting steps, or a seasoned firm looking to use government-to-government contacts to overcome market access issues.
We also have UK Export Finance, which aims to ensure that no viable project fails for want of finance. It offers solutions for businesses of all sizes to allow them to export with confidence. UKEF not only provides financial support to exporters, but also to those who supply exporters, which particularly benefits the supply chain of small and medium-sized businesses.
In addition, UKEF offers insurance against non-payment and working capital support – protecting cash flows – and can offer solutions in local currencies, allowing businesses to buy British but pay locally.
Q. Ultimately, it’s businesses that need to do the heavy lifting when it comes to exports. You want them to “rise to the challenge”, but why should they?
A. As I set out in my speech launching the Export Strategy, exporting brings a variety of benefits to businesses and the economy. It increases sales, improves profitability, creates and secures high quality jobs. But, most importantly, it increases the sustainability of businesses – which is likely to be of interest to family companies, whose aim is to ensure that they pass down a thriving business to future generations.
Cycling technology firm See Sense in Northern Ireland is one of many examples we’ve heard where competing in the global marketplace has made the business more innovative. And its co-founder Irene McAlese has said that the lessons they have learned from exporting have even improved performance at home.
And in your own report, your Director-General Carolyn Fairbairn notes that exporting is “all about opportunity”.
World trade is shifting significantly. 90 per cent of global economic growth in the next 10 to 15 years is expected to be generated outside the EU. Trade in services is growing at a rapid rate. A recent study shows that almost 60 per cent of customers in China would pay a premium for UK fare. The digital economy is making selling overseas easier than ever.
We want to support UK businesses take advantage of these trends – building our exports with our existing partners while building new.
Our companies are known for their high quality, innovation and reliability. And this is a perfect time to work together to reach the highest ranks of global exporters. Let’s go for it!