A committee of MPs is launching an investigation into the activities of UK Export Finance (UKEF), the government’s export credit agency that celebrated its 100th anniversary last year.
The agency’s purpose is to help UK exporters win business and UK firms to invest overseas, by providing guarantees, insurance and reinsurance against any losses.
However the International Trade Committee, a group of cross-party MPs, announced yesterday (Thursday 30 July) that it has launched an inquiry into the UKEF's activities.
Exporters are being asked to contribute their views on UKEF here with a deadline of Friday 25 September.
NAO report
The inquiry follows publication on 15 July of a National Audit Office (NAO) report on UK government support for exports.
Titled ‘Department for International Trade and UK Export Finance: Support for Exports’, the report highlighted that although UKEF supported exports to 72 countries in 2018-19, 80% of the value of those transactions was concentrated in just five countries.
Inquiry questions
The inquiry asks exporters about the application process for UKEF support, whether particular sectors, projects or destinations receive more support than others, and whether its performance targets are suitable.
Exporters are also asked about the user-friendliness of UKEF’s products and how well it works with other bodies such as the Department for International Trade.
A UKEF spokesperson told Global Trade Review that it is “committed to ensuring that no viable UK export fails for lack of finance from the private sector”. The agency pledges to review the inquiry’s findings.
Boosted support
In the last financial year the UKEF reported that it had significantly increased the number of businesses it supported.
The agency provided £4.4bn in support for UK exports across 2019-20, helping 339 UK companies trade with 69 countries – a 30% increase on the previous financial year.
The agency has also boosted its support for exporters during the Covid-19 pandemic by temporarily extending its Export Insurance Policy.
Its recently launched General Export Facility – working capital support for the UK’s smallest exporters – was hailed by IOE&IT director general Marco Forgione as a “great move forward”.
It is also asking respondents whether UKEF’s products are sufficiently user-friendly, how well it works with partners such as the Department for International Trade (DIT), and what it could learn from other export credit agencies around the world. The committee is accepting responses until September 25.
A British government committee has launched a fresh inquiry into the activities of UK Export Finance (UKEF), following criticism of the agency’s project choice, target-setting and lack of user-friendliness.
The International Trade Committee (ITC), a cross-party group of MPs, announced on July 30 that it is seeking feedback on several questions related to the export credit agency’s “operations and engagement with stakeholders”. The inquiry was first mentioned in a separate ITC report published the previous day.
On the operations side, the inquiry is examining the application process for UKEF support, whether particular sectors, projects or destinations receive more support than others, and whether its performance targets are suitable.
It is also asking respondents whether UKEF’s products are sufficiently user-friendly, how well it works with partners such as the Department for International Trade (DIT), and what it could learn from other export credit agencies around the world. The committee is accepting responses until September 25.
A UKEF spokesperson says it is “committed to ensuring that no viable UK export fails for lack of finance from the private sector”. The agency supports exporters through loan guarantees and direct lending, among other products.
“We look forward to working with the International Trade Committee on its inquiry, and will review its findings as we continue to develop our support for UK exports,” the spokesperson tells GTR.
Several of the inquiry’s areas of focus pick up on criticisms raised in a recent review by the National Audit Office (NAO), an independent watchdog that assesses public spending.
That review – which also examined the work of DIT – points out that although UKEF supported exports to 72 countries in 2018-19, 80% of the value of those transactions was concentrated in just five countries.
The NAO adds that the agency has not supported export deals in a majority of African countries despite targeting the continent as a region with significant potential.
