We’re fast approaching the date the Government pinned for Brexit in March 2019. With clarity still eluding the corporate sector in particular, it was interesting to hear the speech by international trade secretary Liam Fox regarding the Government’s post-Brexit plans.
On 21 August, as part of a speech detailing the general ambitions of a post-Brexit UK, Mr Fox spoke about how he wants exports to rise from 30% to 35%, as a proportion of the GDP. For context, in 2017, the value of services and goods exported rose to a record high of £620 billion.
Aspirational strategy
While the Federation of Small Businesses (FSB) are supportive of the Government’s hopes for exports, they say that many more financial incentives are needed. These could include export vouchers or grants.
The FSB’s Mike Cherry explained that small businesses could use these vouchers to invest in anything from market research to translation services. The UK Government’s export finance department can support £50 billion worth of exports. The department offers financial help to companies exporting goods and services.
Record high
UK exports are at a record high, due to the pound’s weakness and the fact that the global economic growth has been stronger than expected. However, the uncertainties surrounding Brexit, particularly if there is a ‘no deal’ outcome, could affect the economy in negative ways.
However, many businesses say that have full order books, as there are plenty of customers for businesses that export goods and services, particularly outside of the EU countries. And it’s this success that the Government insists it can build on.
There are an estimated 400,000 businesses, mostly SMEs, that could export services and goods but, as yet, have no presence internationally. If the Government can convince them to start exporting, then the UK economy could see a large boost.
Aiming high
Mr Fox said in his speech that the UK “should set it sights high” for life after Brexit. He insists that UK firms are “superbly placed to capitalise on the rapid changes in the global economic environment.”
His comments were backed by Baroness Rona Fairhead, Minister of State for Trade and Export Promotion at the Department for International Trade (DIT), who was interviewed on BBC Radio 4. She told the Today programme that while she understood that businesses want “stability and certainty” and that there are concerns regarding trade deals with the EU after Brexit, but that the Government is looking at the long-term future for UK companies. And the future lies in exports.
She said: “Research shows that businesses that export actually are healthier, make more profit, employ more people and in fact are more sustainable. Our message to small family businesses is take the plunge, we will provide support to you because you are more likely have a flourishing business that you can pass on to your generations.”
Improving competitiveness
Carolyn Fairbarn, from the Confederation of British Industry (CBI) thinks the Government’s export strategy shows commitment to improving the UK’s international competitiveness. She said: “The CBI strongly supports the ambition to make exports 35% of GDP, which will put the UK out in front of many of our international competitors.
“We estimate that in every region of the country there are around 10% of businesses that could export, but don’t, and we look forward to working alongside the government to support and inspire them to seize the opportunity.”
James Turner, managing director of turnerlittle.com said: “Until there is more clarity on the final trade deal with the EU post-Brexit, there is going to be a certain amount of documented concern from those in the corporate sector. It’s only natural that people are worrying about how such a massive change will affect their company and their sales, whether at home or overseas.
“This strategy is very encouraging for small businesses in particular, as it appears to show that the Government understands the very important part they have to play in the UK’s post-Brexit future. There is no reason why small and medium sized businesses can’t capitalise on these changes and diversify by moving into international markets. It’s going to be a very exciting few years for small businesses in the UK.”
Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.
