APPENDIX 3
Memorandum by the British Chambers of
Commerce
BCC—EXPORT SUPPORT BRIEFING
— BCC concerned about cuts imposed
to UKTI's support budget for existing exporters following 2004
spending review.
— UKTI's expenditure on trade development
will fall from £231 million to £166 million per annum
by 2008.
— 17% of the trade promotion budget
will be handed over to the promotion of inward investment. Support
will also be channelled away from existing exporters towards "new
to export" firms—funding for new exporters will increase
by 30% by 2008.
— The BCC is not opposed to increased
funding for inward investment, or to increased support for new
to export firms. On the contrary, both elements are crucial to
the success of the UK economy. Rather, we are opposed to increased
funding in these areas at the expense of support for existing
exporters.
— Indeed, the reduction in support
comes at a time when our exporters are facing intense competitive
pressure from abroad and our share of world exports is declining.
The share of UK exports (in value terms) in total world exports
fell from 5.6% in 1998 to 4.5% in 2005.
— Expressed in 3-year averages, the
growth in UK exports fell from 9.1% in 1994-96 to 3.5% in 2003-05.
— Part of the problem is that UK exports
are still too concentrated in the Eurozone, a market with persistently
sluggish growth in domestic demand.
— Over the longer term, the UK economy
would benefit if our exports become more diversified, with a larger
share going to more dynamic regions, notably Asia.
— However, such a geographical restructuring,
which is necessary if we are to achieve a much-needed improvement
in our export performance, will take time and will require considerable
Government support.
— Given the recent changes to UKTI's
budget, the BCC is concerned that there is insufficient support
for existing exporters, who we should be engaging in "new
to market" ventures in countries with rapidly developing
economies such as India and China.
— Indeed, new to export firms (who
have been the subject of increased funding following the 2004
spending review) are likely to focus on markets closer to home
(ie the Eurozone), or which are traditionally easier to access
because of language, etc (eg the USA), rather than the "newer"
markets.
— Greater support, not less,
is required to help UK firms to explore the opportunities that
exist within these newer markets and to encourage increased trade
with India et al.
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