Liam Fox is Secretary of State for International Trade and President of the Board of Trade, and is MP for North Somerset.
Business and enterprise is the lifeblood of our economy, and it must remain that way. We should be giving more credit to our entrepreneurs and start-up champions, our risk-takers and innovators – those who drive our economy and our collective prosperity. These are the wealth creators who ultimately provide the income on which we depend for our public services, from health to defence.
Last year, in 2017, there were an estimated 5.7 million businesses in the UK, up four per cent from the previous year, and an increase of over 1.2 million since 2010. Over 99 per cent of our businesses are small or medium-sized employing between 0-249 people. What is even more astonishing is that 96 per cent of UK businesses are micro-businesses, meaning that they employ fewer than nine people. The continued growth in our business start-ups is clear for all to see. It is therefore the task of government to help them take best advantage of the future economic and trading opportunities that leaving the European Union will present.
Following the British people’s decision to leave the European Union, there were siren voices warning about dire economic consequences of the vote itself. These have not been borne out in the real economy. Instead we have a near-record in employment, the lowest levels of unemployment since the 1970s and we have maintained our position as number one in Europe for inward investment, ahead of Germany and France. Some have expressed doubts about our ability to continue as a heavyweight world economic power, let alone a global trader. The facts tell a different story.
As politicians, we know all too well that for people to hear the message, we must repeat it, hundreds if not thousands of times. This is a message I repeat a lot: in the next 10 to 15 years, around 90 per cent of global economic growth is expected to be outside the EU. This will have profound consequences for the patterns of global trade, including our own.
This is already happening as British businesses large and small look increasingly to the opportunities arising in the fastest growing markets. The UK already sells almost 56 per cent of our exports outside the EU, part of a steady trend over the past decade.
To put this in the global context, the UK should be looking to South Asia, East Asia and Africa for its future prosperity, those regions with the most potential for growth, with rapidly growing economies and a burgeoning middle class that are most likely to buy the high-quality goods and services produced by UK firms. It is predicted that there will be 1.1 billion middle-class Africans by 2060. By 2030, China will have 220 cities with a population of more than a million, when the whole of Europe has just 35. These are the consumers of the tomorrow and our customers of the future.
Clearly, forging a new role for the United Kingdom on the world stage and providing the jobs and prosperity the UK needs means navigating this shift in the global economy successfully. This is an opportunity – not a threat. Free trade has already taken a billion of our fellow human beings out of extreme poverty in just one generation.
There are many reasons to be optimistic. Every day, fantastic UK businesses are seizing new openings in overseas markets. I see the demand for British products everywhere I go. But there are still many opportunities which are not being realised. Of all our businesses who produce a good or service only nine per cent actually export them. The UK is punching above its weight, but is still not reaching its potential.
The Department of International Trade is leading a cross-government exercise to help improve this. Our new Export Strategy, which I am launching today, will put in place the tools businesses have told us they need to help them on their exporting journey. It sets out a national ambition to raise our exports as a proportion of GDP from 30 per cent to 35 per cent, propelling us towards the top of the G7 and above similarly large, advanced economies such as Canada and France.
To achieve this, the strategy sets out a new range of measures to help support UK companies with practical, promotional and financial support.
Every business is different, from our micro-businesses to global companies, across the length and breadth of the UK. No matter how big or small, some firms cannot find finance or lack the information about how to start doing business in a new market. Others simply do not believe they are suited to overseas sales or believe that there is not a market abroad for their product. And there are those who are exporting already, via an online e-commerce site, that do not yet consider themselves exporters or don’t know how to export more.
That is why this strategy also creates a network of Export Champions – people in business who are already exporting – to guide their peers and share their expertise. It builds on our digital services to make it as easy as possible for businesses to access the support government can provide. And it paves the way for a better relationship between government and all our business, ensuring that whatever the need and whichever part of government industry goes to for help, there is no wrong door. Because this is the start of our exporting journey, not the end.
I truly believe that Brexit is an opportunity. At Chequers, the Government agreed its proposal for an economic partnership with the EU after the UK leaves on 29 March next year. It confirmed that the UK will leave the Single Market and the Customs Union and will seize new opportunities from trading with the rest of the world. And as we pursue our first independent trade policy in over four decades, we must maximise our global export potential, delivering benefits for business, workers and consumers around the UK. To do this, we must embrace the huge changes underway in global trade patterns, look to the future, and recognise that the time is now to set ourselves on this path to our collective prosperity.
Yet at the same time, while the opportunities of Brexit are there to be grasped, this drive to supercharge our exports would be necessary whether the British people had decided to leave the European Union or not. More than 90 per cent of companies aren’t currently seizing the opportunities of exporting. My mission is to ensure that more British companies can follow in the footsteps of companies such as Cambridgeshire-based Elgoods Brewery, which is set to export an additional 20,000 pints of beer to Argentina over the next 12 months, or Durham-based educational toy manufacturer Big Little Toys who have secured contracts with distributors in Australia, South Africa and New Zealand. These are the real champions of exporting, and we want more companies across the country to be able to enjoy the success they’ve seen.
There is a Chinese proverb which says that: “the best time to plant a tree was 20 years ago. The second best time is now”. If we are to take advantage of the huge potential in the global economy, and meet our exporting ambitions, we need to start planting, today.