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Exports: Support for Businesses

Volume 820: debated on Thursday 31 March 2022


Asked by

To ask Her Majesty’s Government what recent assessment they have made of the effectiveness of their support for businesses to increase exports.

My Lords, evidence shows that exporting businesses are 21% more productive and pay higher wages than non-exporters. Government support can help businesses to overcome exporting barriers. In February, 96% of export support service users would recommend it to other businesses and our 2018-19 export client survey indicates that 76% of those using DIT’s face-to-face export support were satisfied with its service. DIT is developing its strategy for monitoring and evaluation to assess the impact of the refreshed export strategy.

My Lords, I thank the Minister for his Answer, but contrary evidence exists that states that UK exports are underperforming in comparison to those of all advanced economies. In view of this, can he detail what additional support the Government will develop and provide for businesses that previously exported but have since stopped because of unpredictable obstacles and barriers?

We want to continue providing as much export support to businesses as possible. I do not think that the noble Baroness’s criticisms are valid. The latest ONS monthly data shows goods exports to the EU above the level that they were before the TCA was signed. EU exports have performed better than non-EU exports, but it is quite difficult to get a firm picture, as there are a lot of contrary statistics around. We of course want to provide all the support that we can to businesses.

My Lords, will the Minister explain to the House why the Government rejected the recommendation of your Lordships’ European Affairs Committee that the scheme for helping small and medium enterprises to deal with the problems of Brexit be revived and continued? Why was that decision taken and what was its rationale?

We are continuing to provide service to a range of businesses, including small businesses, with the export support service. I outlined in the Answer to the noble Baroness the general satisfaction level of businesses with those services.

My Lords, as ever the Minister tries to paint a rosy picture of how our exports are going but, as the noble Baroness, Lady Ritchie, said, UK exports are underperforming against the rest of the world. Exports across the world have bounced back strongly coming out of the pandemic, yet the UK is the only country tracked by the CPB where goods exports remain below the 2010 average. As a result, the UK has become a less trade-intensive economy. Those are the facts. With no evident plan—the Prime Minister’s comments yesterday rather suggested complacency—can the Minister tell the House what steps the Government are taking urgently to address this and other export-related issues?

We can trade statistics and I can give the noble Lord alternative statistics, but we are optimistic for our export service. We are providing good support to businesses. Businesses across the UK are continuing to export to EU member states and to non-EU member states. We continue to be optimistic for the service. We will provide support to businesses and I am confident that British business will bounce back.

My Lords, has the Minister had a chance to read paragraph 1.16 of the OBR’s Economic and Fiscal Outlook? It states:

“With little evidence to suggest that we revise our assumption about the negative effect of Brexit on UK trade flows, we continue to forecast little growth in export and import volumes and a fall in the trade intensity of the economy over the medium term.”

Does he recognise how devastating a statement that is for a trading economy such as ours? Can he tell the House what the Government intend to do to address these highly damaging impacts of Brexit?

I have not had a chance to read the paragraph that the noble Lord refers to, but I know that there are a number of contrary statistics out at the moment and it is quite hard to disentangle the various impacts. Of course, the pandemic had a serious effect on all countries’ export performances, and many supply chains are still suffering. I will certainly take the opportunity to read the paragraph the noble Lord refers to.

My Lords, I note the presentation of the Minister’s figures in his initial response, but is it not the case that the DIT calculates that for every £1 of government support, exporters get a £4 return? The Heseltine No Stone Unturned competitiveness report stated that a chamber-led approach would provide a 1:6 return. Why would the Government opt to use public finance for a lower ROI option when public finances are stretched?

I do not know the validity of those numbers. I will certainly speak to the department and find out whether that is the case, but I take the thrust of the noble Viscount’s question. The export support service acts as a single point of inquiry for businesses and traders. We have expanded the provisions that we are offering. Export Finance, of course, is world leading. We have trade ambassadors based in a whole range of our embassies around the world to help exporters to expand their potential.

My Lords, does the Minister acknowledge the huge contribution made by the British aerospace industry, still a great reservoir of skills and success and perhaps edging beyond £8 billion in its annual exports? What prospects are there for more research grants for this great industry, bearing in mind the exciting possibilities and potential of composites for ever more green flight? Lastly, he might consider a visit to Broughton in north-east Wales, where some 5,000 aerospace workers construct the wings for the successful, world-beating Airbus company. There he would see the consequences of investment, which means more and more British exports.

I totally endorse the noble Lord’s sentiments. The aerospace industry is hugely successful, including at the Airbus site that he referenced in Broughton in north Wales. A number of other companies across the UK are also providing excellent aerospace exports. Of course, we want to do everything that we possibly can to encourage them. The aerospace industry has had a particularly difficult time during the pandemic, with not many people flying anywhere.

My Lords, I am usually supportive of the Government, but I speak from my personal experience of involvement in a small horticultural business. Not only do we have difficulty in getting people to pick the daffodil flowers that are in bloom at present, but we also have other enormous problems. We used to be able to load lorries in the evenings; the flowers were shipped across overnight and were sold in the Dutch auctions before dawn the next day. That is now totally impossible. Through plant health regulations and customs requirements, we are no longer able to ship overnight to the Netherlands auctions. It may be just an indication, but these problems exist for a number of businesses.

I am obviously very sorry to hear of my noble friend’s experience. I will certainly take that back to the department to see what we can do to alleviate those difficulties. There is clearly some disruption at some ports, et cetera, and we are attempting to smooth the flows of paperwork and export requirements needed to trade with the EU at the moment. I know that a lot of colleagues across government are working to try to reduce those delays.

My Lords, I am sure that the Minister will agree that businesses in areas such as conference organisation, music and theatre, which rely on people travelling from this country to countries in the European Union, are suffering great confusion and difficulty in moving their people to the right place in time. Having agreed with that, can the Minister tell your Lordships’ House what the Government are doing to smooth the path for what are mostly small and medium-sized businesses that rely on moving their people efficiently and friction-free across Europe?

I am of course aware—we have discussed this before—that there were difficulties for travelling musicians and others, which principally revolved around the different visa requirements of different EU member states, but I know that DCMS in particular has been heavily engaged in working with member states to work out exactly what the visa requirements are and to publish them on the UK government website to provide support to businesses that are struggling, exactly as the noble Lord says. I think that the situation is a lot easier than it was last year.

My Lords, does the Department for International Trade research fully the demand potential for British products and services?

Indeed, a huge amount of work goes on to identify businesses that can export. The 2020 national survey informed us that something like one in seven have never exported but have the potential; their goods and services could be exported. They are very much our target audience for providing export services to help them to fulfil their potential.