Rutley DavidDavid Rutley is the Member of Parliament for Macclesfield, Damian Green’s PPS, and a member of the Free Enterprise Group.

The latest GDP figures are encouraging. But with the
UK’s improving competitiveness, why aren’t British businesses exporting more?  We have been importing more than we export
for nearly 30 years.  More particularly,
this is a deficit in goods.  In services,
we enjoy a surplus of some £70 billion; in traded goods our deficit is £100
billion.  And where we export to is also
imbalanced: just 4 per cent of our exports go to the huge, growing consumer
markets of India and China.

The good news is that HSBC forecasts that UK export
growth to Asia over the next few decades will be an average 9 per cent a year
compared to just 4 per cent to Continental Europe. Half of this growth to Asia
is expected to be in industrial machinery and transport equipment, with UK
chemicals and pharmaceuticals “managing to remain internationally competitive
by innovating new products, improving quality and driving up efficiency.”  This is important as we have become
over-reliant on exporting to traditional markets in America and the EU. 

However, in the current world exports league,
Germany is 2nd only to China. The UK is 12th – having plummeted from 5th place just a decade ago. This leaves us firmly behind smaller EU
members, such as Belgium and the Netherlands. In fact, our exports in goods
have grown by an average of just 2.8 per cent over the last decade, slower than
both France and Germany. Whatever problems may be associated with EU
regulation, it’s not stopping other Member States from exporting. This points
to a domestic exports challenge: one that is an urgent priority to address.

So, what are “we” going to do about it?  Firstly, it should be recognised that “we”
can’t just mean the Government.  It is
time for British business to step up to the plate.  Much is being done to bolster the Britain
brand and open trading relationships. But it is becoming clearer that business
itself must be more active in exploiting opportunities overseas.

Rediscovering our trading roots is a challenge for
businesses of all sizes, but one most marked for small and medium enterprises
(SMEs). Last month, the House of Lords Committee on SMEs released an
eye-opening report, Roads to Success.  By increasing export values by one third,
SMEs would eliminate the UK’s visible trade deficit. Sadly, it appears that British
businesses could be showing more interest in exploring export options. “The raw
truth that we have to face up to,” hard-working Trade Minister Lord Green says,
“is that we do not have enough SMEs that are exporting. …Quite a lot of
companies that are perfectly well positioned to export do not.” 

Among SMEs that produce exportable goods, some of
the most important ones to target are those which neither export nor are aware
of the potential to do so. More clearly needs to be done to raise awareness of
the support on offer.  But equally,
business needs to be more curious about the possibilities.  A simple internet search will reveal reams of
information on “support available for exporters from Britain”.  A deep-rooted, post-war cultural bias against
exporting is often disguised by our great trading past.  And it has been acknowledged by the CBI.  “The only way is exports,” they declare in
their latest paper, dedicated to “renewing” the UK’s role as a trading nation.

It would be unrealistic to expect that the United
Kingdom will be able to emulate Germany’s performance overnight.  But we can learn from its success.  Germany’s highly active chambers of commerce
and trade associations are geared towards exports, supported by a more business-friendly
banking system and a highly-skilled workforce with a tradition of work-based
training and apprenticeships. Private, customer-focused, family-owned firms –
the Mittelstand – are supported by
trade guilds and have often found export success by concentrating on being the very
best at making a few products or even just one. As a result, one study has
found that certain German firms supply up to 90% of the world’s exports of
particular engineering components. 

Britain needs to fall in love again with enterprise,
entrepreneurs and exporting. The Prime Minister’s personal commitment to
leading trade missions to growth markets, such as India and south-east Asia,
should be applauded. But business itself needs to take more action. Trade
associations and chambers of commerce need to help raise awareness of export
opportunities and sources of support. They have another important role in
creating stronger business networks and ensuring that British businesses are
better, more actively represented in growing markets, such as Brazil and South
Africa. Our banks also need to do more by significantly improving their
exporting expertise and the way they share that know-how with their clients. 

The Government is
establishing the foundations for sustainable private sector-led growth by
lowering corporation tax and working to reduce regulatory burdens and flatten
barriers to growth in key industrial sectors. At the same time, despite the
challenging economic climate, our competitors are demonstrating that clear
export opportunities exist. British businesses should seize the day and make
exports our business again.

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