Chancellor George Osborne's plans to rebalance the economy received a pre-Budget boost yesterday as figures showed the UK exported a record level of goods to countries outside the European Union – such as the US and China – in January.
And while the trade deficit on goods and services - the gap between exports and imports - widened to £1.8 billion in January from £1.2bn in December, the figure is still far below the average for 2011.
Exports of goods to non-EU countries rose to £12.9bn, from £12bn in December and to the highest level since records began in 1998, as the US, Russia and China bought higher levels of cars from the UK.
The Chancellor is relying on a shift in the economy towards the private sector, particularly in manufacturing and exports, to withstand his far-reaching package of spending cuts. Mr Osborne will unveil his Budget on March 21.
For both Mr Osborne and the business community at lare, trade links with China and the Far East have never been more important, with the UK’s economy still struggling to drag itself out of recession.
Lord Stephen Green, Minister for Trade and Investment, came to Bristol earlier this year to host a regional National Challenge: Exporting for Growth event.
The event was hosted by South West Chambers of Commerce, UK Trade & Investment and sponsored by HSBC. It was part of a long-term initiative to encourage professional organisations to play their part in increasing the number of SME exporters from 20 to 25 per cent.
During the event, which was held at the National Composite Centre in Bristol’s Science Park, Lord Green called on companies to compete for the “Exporting for Growth” prize.
The competition aims to encourage more small businesses to take their products to overseas markets by offering a comprehensive package of support to the company with the best export idea. The winner of the prize will receive UK Trade & Investment support worth £5,000 and three grants for overseas travel to target markets, plus expert business knowledge.
Lord Green said: “Government alone cannot turn round the export performance of this country.
“We need to work with those that have most to do with small companies, can help them to understand the benefits of exporting, and can then help make it a reality.”
He added: “Our future prosperity will not come from relying on domestic markets alone. Across the world there are markets showing strong, long- term growth. We want to make sure that UK firms are not just trading abroad but thriving there.
“UKTI has a crucial role to play and will seek to double its client base to 50,000 over the next three years.”
Russell Jones, Regional Director of UKTI South West, added: “Less than a quarter of the 10,000 medium-sized firms in the UK export, and most of those that do are already receiving help from UKTI. There is demand all around the world for products from the South West but too many of our smaller firms are missing out on these opportunities.
“UKTI has the expert staff and relevant support packages to help them take the first step. All they have to do is pick up the phone and ask to speak to an international trade adviser. And for small companies with a big export idea our Export for Growth competition could be the springboard to international growth that you need.
“We’re very keen to hear from you, particularly if you’re new to exporting or relatively inexperienced. Just tell us – in 200 words – what your idea is, why it’s workable, and why now is the best time to take it to market.”
Rob Lewis, West & Wales Regional Chairman from PwC, added: “Export is critical to lifting the UK out of the economic slump and creating British jobs. By increasing the number of companies who export by a quarter, about £36 billion could be added to the UK economy. Clearly, the many SMEs based in the South West have a big part to play in this.
“There has been a perception that exporting is only for large companies, but there are plenty of examples of small companies who have taken the leap, overcome the challenges and are now reaping the rewards of exporting. Hopefully, with initiatives likes this one and the help and advice from professional advisors, we will see many more South West companies making their dreams of exporting a reality.”
Gary Burton, HSBC Regional Commercial Director for the South West and Wales, said: “HSBC research suggests UK trade volumes will increase by 60 per cent by 2025, and SMEs will have a critical role in supporting and driving that growth.
“We appreciate that entering a foreign market for the first time can be a daunting step into the unknown, and this means gaining insights into the way business is done in particular markets. Securing introductions can be just as important as the international products we can provide.
“HSBC and other banks have a vital role to play in helping SMEs access foreign markets, and we are delighted to be working with UKTI to help firms achieve even greater profitability and increase the UK’s GDP growth at the same time.”
Over 300 delegates attended the event with representatives from trade associations, banks, accountancy and legal firms, the Local Enterprise Partnership, Chambers of Commerce, regional and private sector networks and professional advisors and intermediaries as well as local businesses.
Also speaking at the event were Lara Morgan, UKTI Catalyst member, founder and director of Pacific Direct; Colin Skellett, joint chair of Business West and Chair of West of England LEP, Steve Roberts–Mee, head of communications at UK Export and Dr David Anderson, senior vice president of Gooch & Housego.
The Institute of Directors in Bristol has also been involved in encouraging people to do business with China. The Bristol branch is building momentum for its multi-partite Trade Mission later this year to Bristol’s sister city of Guangzhou.
It is hoped that the mission, which is being organised by the IoD along with the UKTI, will highlight strong existing trade links between Bristol and China, while demonstrating how local businesses can develop products and services in order to succeed in the world’s fastest growing economy. Richard Lowe of the IoD Bristol branch, who is organising the trip, said: “The China Trade Mission will provide directors considering China’s market potential with a fantastic opportunity to take their first steps into the Chinese market with the backing of businesses already trading with China. We have several businesses already signed up to take part, which is fantastic, but we have 30 spaces in total. The trip will be sometime in late October or early November and funding is available from the UKTi to assist anyone who wants to join us.”
Anyone interested in the mission should contact Richard Lowe on 0845 116 1383 or email richardlowe@ hrandtrainingsolutions.co.uk.