We put your questions to Lord Livingston – former CEO of BT Group, now UK Minister of State for Trade and Investment – on what the government is doing to help medium-sized businesses expand into new markets overseas
Specifically, you wanted to know about export help, access to finance and what the government is doing to level the international playing field in terms of anti-corruption, a particular issue in many high-growth markets.
Why are we struggling to export our goods and what are the barriers to success?
– Strategies for growth
While we have seen strong growth in exports to a number of countries, exports to many of our traditional trading partners have been more subdued. This reflects a number of factors, including the weakness of their economies. It should however be remembered that the UK is still the world’s sixth biggest exporter.
Red tape and other barriers to exports in a number of countries remains a big issue. This government is working to remove excessive red tape, ease tariff barriers and eliminate regulatory differences so British companies can successfully compete in the global market place.
Free trade agreements (FTA) are one such measure that help UK companies trade more freely. For example, since the EU-South Korea FTA was signed the value of goods exported there from the UK nearly doubled. This year, the EU has concluded FTA negotiations with Canada and Singapore, and I expect these agreements to have a similar positive impact on our trade with the two countries.
The Transatlantic Trade Investment Partnership (TTIP) promises to deliver even bigger benefits. Independent analysis suggests an ambitious agreement could add £10 billion to the UK economy. It is particularly good news for the UK’s small businesses. By removing costly and unnecessary regulation, companies will no longer have to produce multiple product lines to meet the conflicting standards that currently exist across the EU and US, freeing them up to do business in one of the world’s most dynamic markets.
When might we see active government involvement to ensure that UK SME companies see improved access to funds from financial institutions, such as banks, to help them to make international investments. A broad ‘can do’ agenda is required as lending is currently hindered by a multitude of unachievable criteria.
– Michael Thirkettle, Chief Executive, McBains Cooper
The government already has a package of measures in place to improve the supply of affordable credit to SMEs and encourage more people to invest in them. For example, we are championing challenger banks and, through the British Business Bank, are stimulating the development of alternatives to bank finance, such as peer-to-peer lending and supply chain finance. The Start Up Loans scheme is another measure to help people get their business ideas off the ground. More than £117 million is available to help fuel the UK’s entrepreneurial spirit and create tens of thousands of new businesses up and down the UK.
Access to finance is crucial when looking to expand into new markets, and in most cases the private sector is able to fulfil the needs of UK exporters. However, there may be occasions when private market support is unavailable due to the nature of the export market or the scale of finance required. UK Export Finance (UKEF) has launched new products to facilitate access to finance, which are particularly relevant to the needs of small and medium-sized businesses. It provided support to 50% more companies last year and will increase that number substantially this year.
Recognising the complexities that can come with financing export contracts, UKEF has also put in place a network of regional export finance advisers. They not only explain the support available from UKEF but also signpost businesses to other sources of support both from government, such as through UK Trade & Investment or the British Business Bank, and the private sector if this is more appropriate for their particular needs.
We set a great example with our gold standard in anti-corruption legislation with the UK Bribery Act. What diplomatic action is being taken to persuade EU, Commonwealth and other nations that they should adopt a similar standard?
– Adrian Went, MD, Griffon Hoverwork
We use our extensive global network to lobby on behalf of UK business against corruption, bureaucracy and protectionism. Our Embassies, High Commissions and Consulates are pushing hard for a level playing field for British businesses to ensure that governments enact and implement appropriate laws to eradicate bribery and corruption within their country, and by their companies overseas.
Individual diplomatic posts help businesses overcome specific local difficulties. For example, in Indonesia we are involved in a procurement integrity project run by Indonesia Corruption Watch and championed by the Governor of Jakarta. In Vietnam we convened the first high-level international business and government forum focused on corruption.
For further information on this topic, see what happened when Grant Thornton held a round table with Lord Livingston.