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The Government has rightly placed great emphasis on exports to drive the economic recovery in the United Kingdom. UK Trade & Investment (UKTI), the Government's lead organisation supporting trade, will play a key role in delivering that ambition. It is therefore disappointing that the Department took so long to publish UKTI's new five-year strategy. The delay was compounded by the late appointments of a government Trade Minister and Chief Executive of UKTI.
That said, we welcome the new strategy. It is a well-focused and constructive document which has taken on board many of the concerns we heard from industry. The strategy also contains some innovative policies, for example the High Value Opportunities Programme and the ambition to encourage more SMEs to export as part of the supply chain of larger companies.
We support the Government's attempts to ensure that trade policy is understood across Whitehall with the establishment of the new Strategic Relations Unit, the Cabinet sub-Committee on trade and the requirement for the Foreign Office to think more commercially in the way it carries out its work. We also agree that UKTI should work closer with Trade Associations and Chamber of Commerce on trade promotion work to produce a more consistent message on support for UK exports.
However, we have concerns about the Government's ability to deliver on its strategy. Without adequate funding and resources there is a significant risk that the vision will not translate into reality. UKTI is subject to a 20% cut in funding of its current services and a 19% reduction in its trade advisers. As a result, face-to-face meetings with trade advisers, trade shows and visits to potential markets may be increasingly replaced by web-based support. Without a strong advice network it will not be easy to encourage the SMEs of this country to enter the international market, especially the less familiar emerging and high growth economies.
The Government has increased UKTI's target to reach out to SMEs from 20,000 to 25,000 but this target will have to be met with fewer advisers to carry out that work and less money to spend on SME programmes such as Passport to Export and Gateway to Global Growth. The Government will have to demonstrate that this can be done without any reduction in the quality of service provided.
Local Enterprise Partnerships are being asked to assist in the delivery of some UKTI services but there is little, if any, detail on what will be expected of them or how they will fund these activities. Without clarity on the role, extent and cost of this activity, the involvement of LEPs will be seriously undermined.
While we welcome the Government's ambition to make UKTI more entrepreneurial, we remain unconvinced that UTKI can attract suitable applicants from the business world at a time when cuts to its funding will put a strain on its ability to match commercial salaries. This may already be evident in the recruitment of a career civil servant rather than a business leader as the new chief executive of the UKTI.
We support the extension of the export finance support services delivered by the Export Credit Guarantee Department (ECGD). It was unacceptable that ECGD was allowed to ignore the SME sector for so long. We welcome the expansion in the number of products ECGD will now provide. However, it is also subject to a reduction in its budget and resources. Only time will tell if it can deliver its new portfolio of products within these constraints.
It is early days for a new trade strategy, a new Trade Minister and a new Chief Executive of UKTI. Given the funding constraints faced by UKTI successful delivery of the strategy represents a significant challenge. Its success can only be measured by positive outcomes for business and we will judge the Government's strategy in that light.
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