The UK’s exporters are calling on the chancellor to back UK trade by investing in skills and supporting the adoption of the latest, cutting-edge trade technologies.
The Chartered Institute of Export & International Trade’s director general Marco Forgione is today (30 September) writing to chancellor Rachel Reeves with his recommendations to the Treasury, one month ahead of her first Autumn Budget on 30 October.
In the letter, Forgione declares that supporting businesses to trade internationally will be fundamental to the ability of the new government to achieve its mission of long-term economic growth. He writes:
“If we wish to see sustained, long-term growth in the UK, this will begin with supporting our business community to trade more effectively and competitively.”
Business confidence low
With a month to go until Reeves’ much-anticipated first budget, the latest Lloyds Bank Business Barometer has found that business confidence dipped to a three-month low in September.
According to the Guardian, the decline in confidence has been down to “mounting concerns about the economy”. While just over half (57%) of the businesses surveyed still felt confident about their prospects, about a fifth (19%) were less positive.
The gloom around the economy may be due to the multi-billion “black hole” in public finances that the new government claims it has inherited from the previous Conservative administration.
Increasing resilience
The chancellor also last week told the Labour Party’s annual conference that the UK’s economic resilience has been affected by the rise in supply chain disruptions globally, which has affected its ability to import critical goods, and its “depleted” ability to make goods that are “essential to our national security”.
She said a new “securonomics” model is needed and the UK must “rebuild” its ability to “make and sell here in Britain, so we are less exposed to global shocks”.
Trade key to productivity
Forgione argues that this approach will need to include supporting businesses to trade internationally because exporters have been proven to be more productive than counterparts who only sell in the domestic market.
“All the evidence shows that businesses which trade internationally are more resilient, more sustainable, employ more people, are more innovative and are more profitable.”
He also cites research from the Social Market Foundation that shows that enabling 70,000 SMEs to trade overseas online could boost UK GDP by £9.3bn.
Tech solutions
Forgione also referenced findings from the latest report from the E-Commerce Trade Commission, which the Chartered Institute convenes and he chairs.
The paper, titled ‘Small Business, Big World', calls on government to pay attention to three specific policy areas in order to succeed in activating this export potential: the adoption of trade tech, access to emerging markets and support for female-led businesses.
As well as these areas, Forgione is calling for the chancellor to look at ‘digital trade corridors’ as a way of facilitating enhanced trade between the UK and the EU.
“Under the current terms of the EU-UK Trade and Collaboration Agreement, a digital trade corridor could be established.
“This would reduce friction, increase visibility for UK and EU authorities and agencies, allowing much better targeting of stop and check, significantly lowering the cost of trade and increasing resilience.”
He cites evidence from a trial of related trade technology by the Cabinet Office last year, as part of its ‘Ecosystem of Trust’ initiative, that found that it could reduce trade-related costs by 40%.
Skills partnership
Forgione is also calling “for government and industry to partner together” to address the UK’s “serious skills shortage”. He writes:
“One way to reverse this skills gap is for government and industry to partner together on combined funding for training organisations to deploy sector-specific experts, from new regional training clusters, out into the business community.”
This call to action comes shortly after the Chartered Institute published a new report to highlight seven key skills that individuals and businesses operating in international trade need to ensure they have.
Navigating change
The Chartered Institute has also published a report into ten significant upcoming and recent changes that are changing how businesses import goods from the EU.
“This level of change requires businesses to ensure they are constantly maintaining and updating their understanding of new rules and systems in order to trade compliantly and competitively,” the Chartered Institute’s director of advisory services, Kevin Shakespeare, wrote in the paper’s foreword.