I read today that the government has pledged “personal” support to help UK medium-sized businesses trade with emerging markets. Yesterday the trade minister Lord Livingston announced that he will write to all of the UK’s 8,900 mid-sized businesses (those with a turnover between £25m and £250m a year) to offer them support from UK Trade and Investment in a bid to boost flagging exports.
You might ask this: aren’t these businesses already big enough to get on with their export activities. Surely it’s firms in the £1m to £10m range that really need help?
Anyway, back to Lord Livingston. It seems that his move comes after it emerged that just 17 per cent of mid-sized businesses in the UK currently transact business outside of the EU. Germany does 25 per cent whilst Italy does 30 per cent. Earlier this month the government said that exports have only seen “modest growth” since 2011. The Office of Budget Responsibility attributed weak export figures to low demand in Europe, cementing the need for UK businesses to trade with emerging markets instead.
You might ask, and I would agree with you, how it that the Germans and Italians have cottoned on how and where to export but we haven’t?
But the IOD thinks it’s all a good idea. Alexander Ehmann, deputy director of policy at IoD says: “Doing business abroad will always involve risk, so companies want to have as much information as possible before diving in.”
The BBC wrote last week, here, that efforts to boost UK exports are being hampered by strict visa controls and a lack of co-operation between government departments, MPs have warned. The Public Accounts Committee (PAC) says the UK “is not performing as well as Germany, France and Italy”. The PAC’s report said that despite the Foreign & Commonwealth Office (FCO) and UK Trade and Investment (UKTI) spending £420m last year on promoting exports, growth remained flat. Worse still, the FCO lack the necessary information to assess the effectiveness of its promotional activities, while UKTI needs to work harder on finding new opportunities in overseas markets.
The British Chambers of Commerce say that “More support for SMEs looking to trade internationally is needed, and this means giving UK businesses more resources in areas such as trade finance, insurance and promotion.” Note the emphasis on SMEs rather than firms in the £25m to £250m range.
So, against this background, it’s hard to see what Lord Livingston is up to.
Does anyone out there know?
But things are looking up, at least for pigs. Three British pig breeding companies are preparing to start exporting pig semen to China after a deal was struck between the two countries last month. Half the world’s pigs are in China and the deal is worth up to £45m a year to British pig producers.