UK Exports Debate - 08 March 2017
My Lords, I thank the noble Viscount, Lord Waverley, for securing this important and timely debate. Britain’s trade deficit is the greatest economic challenge facing our country. For almost all the past four decades, we have run a trade deficit. Last year, it was around £40 billion. Put simply, we do not have enough exports to pay for imports and we have to borrow to finance this problem. We need to be very clear that it is unsustainable; any exports strategy must identify why the situation exists and how we can address those problems.
There are many causes that I would like to highlight, but time limits me to three specific issues. The first is productivity. Britain’s productivity problem is well documented and means that we are inefficient and our exports more expensive. Business investment rates remain too low; our businesses are often not operating with the most up-to-date technology.
The second is complacency. For the past three years, I have been part of the judging panel for the Queen’s awards for exports. We review hundreds of amazing applications, from businesses which have created what should be world-leading products. But they are not, because they limit themselves to our nearest trading partners. Too few of those companies are leading the charge in emerging markets, where we really need to be. We must be more outward-looking and ambitious.
The third issue is the lack of joined-up thinking between the public and private sectors on exports, which I have often seen in my role as the Prime Minister’s trade envoy to Uganda and Rwanda. Those companies which wish to export—despite my previous comments, I know that there are many—often look to government for support. Sometimes, I think they wish they had not bothered. We have many strategies and many organisations ready to help, but there are so many gaps between those organisations and departments that it is easy for companies to fall down the middle.
In the time I have left, I want to make three small suggestions on ways in which the Government can help improve our export performance. The first is further to expand UK Export Finance, as the noble Viscount, Lord Waverley, mentioned. Secondly, we need to increase the staffing of the Department for International Trade in overseas markets. In the two countries I cover, we have one permanent staff member for DIT, yet east Africa has huge potential for growth. Winning contracts in emerging markets means more taxes paid to the Exchequer; it will pay for itself. Finally, we have to change the mindset of both our leading companies and our SMEs towards exports and emerging markets. We must be outward-looking and start to think global.
These are only a few points on part of a much bigger issue, but I want to conclude with one important point: the demand for British goods and services abroad is absolutely huge. Establishing a market for our products is not the issue; it is the supply that is the problem. We simply must change that.
The full debate can be read through the following link: