Exporters find cheer in Chancellor’s Autumn Statement

AN extension of the Export Finance Guarantee Scheme in the Chancellor’s Autumn Statement offers encouragement to firms looking to export outside the European Union.

Iain Wright, tax director at RSM Tenon, said the extension of the scheme to companies turning over up to £44m was welcome, especially with continued fluctuations in Europe.

“With the Eurozone in meltdown, this could be essential in encouraging exports to riskier but high growth economies such as India and China,” he said.

Mr Osborne said the Government was keen to encourage more SMEs and mid-sized businesses to develop exports.

Among the package of measures outlined in the Autumn Statement is additional support for firms to develop successful export strategies.

Under the measures, UK Trade & Investment (UKTI) will receive £10m of additional funding to provide a tailored package of export support to an estimated additional 500 mid-sized businesses per year.

UKTI and UK Export Finance will also work with businesses to promote existing trade finance support for mid-sized businesses, to raise awareness of export opportunities. Alongside this, the Government will spend £35m to double, from 25,000 to 50,000, the number of SMEs that UKTI supports each year.

This means UKTI will receive an additional £40m over the next three years – £5m of which will be generated from UKTI’s own income streams.

The funding is intended to help companies identify potential opportunities in high growth markets such as Latin America, Asia and North Africa.

“We already know exporting companies show a strong uplift in productivity, achieve stronger financial performance and are more likely to stay in business.

“The extra funding will be used by UK Trade & Investment to support even more small and medium-sized businesses, ensuring they are taking up the export opportunities open to them,” said the Autumn Statement.  

The Government will next year work through the EU to complete free trade agreements with India, Singapore and Canada. It also intends making substantial progress towards completing trade agreements with Mercosur, most ASEAN countries and Japan within the next three years.

To capitalise on the growth potential of education exports it will also launch HE Global, an online information and advice portal for higher education institutions looking to expand abroad. It will also develop a vehicle to bring together government, HE and industry expertise to package and sell education offers overseas.

CBI Director-General John Cridland said the additional funds would boost the export potential of mid-sized businesses.

Ian Stewart, chief economist at Deloitte, said: “Recent events highlight the linkages within the global economy. The Euro debt crisis risks turning the UK’s slow and faltering recovery into a recession.

“Decisions made in Berlin and Frankfurt over the coming months are likely to have a bigger impact on the UK outlook than those made in 11 Downing Street or Threadneedle Street.”