By Margot James MP, PPS to Lord Green, Minister for Trade and Investment and Chairman of the All Party Parliamentary Group on Trade & Investment. Follow Margot on Twitter.
Writing in response to Daniel Kawczinski’s piece for Platform last week, in which he criticised the performance of UKTI, the first point to make is that although Britain’s exports are improving there is still a long way to go to make up the ground we have lost in the last few decades.
The Government’s central strategy since 2010 has been to re-balance the economy, away from the South East to the regions, from services to manufacturing, from a ballooning public sector to a revitalised private sector, and from consumption and imported goods to savings and exports.
The trade deficit has fallen from 4% of GDP to 1% of GDP. Exports to the growth markets outside the EU are up 30% on two years ago. Since 2010 there have been 47 UKTI trade delegations to China alone involving 458 companies. The UK Automotive industry posted its first trade surplus this year since the bad old days of 1976.
So what of the specific criticisms Daniel makes in his article? Overall he is sceptical that Britain will meet its’ export goals of doubling the number of SMEs that export and he cites a low figure of just 25,000 companies exporting at the moment. In fact the current number of exporting SMEs is far more than 25,000, it is closer to 250,000. This is still not as many as in Germany and France, but it is a great deal healthier than the picture Daniel painted in his article.
The next criticism relates to the number of companies who use UKTI services to export. Daniel cites a figure of 530 companies using a chargeable service from UKTI last year. That figure is wrong. 3,500 companies paid for the UKTI Overseas Market Introduction Service (OMIS) and many thousands more used the Passport to Export service that is free of charge.
One statistic Daniel gets nearer the mark is awareness of UKTI among SMEs which he states is 30%. Awareness of UKTI support amongst SMEs ranges from 30% to 50% depending on the survey. Even if you take the lower end of 30% it is bizarre to suggest, as Daniel does and I quote, that such a figure is “embarrassingly low, and clearly shows that UKTI is facing a crisis of marketing”. My business career before I came in to politics was spent in marketing and I can tell you that businesses that had far more money to spend on advertising and PR than UKTI do, would cut their right arm off for awareness levels of virtually one in three of the potential market for their services!
Although most of the headlines surrounding UKTI have been export focussed, such as the goals to double our exports to £1 trillion and get more than 100,000 more companies exporting by 2020, promoting inward investment is just as important to job creation in the UK as is doubling exports.
The UN World Investment Report confirms Britain as the number one country in Europe for foreign direct investment (FDI) and the second highest destination for FDI in the world. Investment flows in to the UK in 2011/12 amounted to US $54 billion; UKTI and its partners played a part in securing almost 85% of those investments in to the UK. The progress has continued this last month with substantial investment in to the North East alone announced by Nissan, who will build the new Infiniti model here, Mitsubishi and Calsonic Kansei.
The Conservative Party has to move beyond the “public sector bad, private sector good” mindset that it has held in the past. Yes the public sector became far too bloated under the last government and there were some horrendous debacles; but Southern Cross, Comet and most of our High Street Banks, prior to nationalisation, matched the public sector for mismanagement by anyone’s standard.
I have worked closely with UKTI this last twelve months as PPS to Lord Green and Chair of the All Party Group on Trade & Investment. I have found UKTI to be a dynamic, results-driven organisation. It is now run very much along private sector lines with three quarters of its leadership team recruited from the private sector; and people with business experience are working throughout the organisation. Over the last two years the delivery of both its inward investment and trade / export support services have been contracted out to private sector partners on an incentivised basis.
The views of businesses that use UKTI are more important than the views of MPs. The independent market research that is commissioned quarterly in to the performance of UKTI demonstrates that just under 80% of businesses that have contact with UKTI are either satisfied or very satisfied with the services they receive.
Nick Baird, UKTI Chief Executive, is committed to improving performance so that satisfaction levels are nearer to 100%. What is needed though is a strategy of continuous improvement and not radical change, from an organisation that is basically on the right track to help British business export more and to promote Britain as a place to do business for foreign investors.