The importance for UK businesses to focus on international markets
Why are UK exports lagging behind?Szu Ping Chan of The Telegraph discusses why Britain are failing to achieve George Osborne’s ambitious target doubling the value of Britain’s exports to £1 trillion a year by 2020.
Fat and lazy. Insulting the business community wasn’t the best way for Liam Fox to introduce himself as the man in charge of negotiating trade deals once the UK has left the EU.
The Trade Secretary’s comments sparked a backlash from business leaders and politicians, with claims that the former GP “had never done a day’s business in his life”.Others backed Dr Fox, branding some UK boardrooms as filled with “idle, incompetent and ineffective” executives. While the Government insisted that Dr Fox’s remarks represented his personal view, does he have a point?Is Britain punching below its weight when it comes to exporting?
It was a nice ambition. George Osborne announced in the 2012 Budget a target of doubling the value of Britain’s exports to £1 trillion a year by 2020.The former Chancellor’s target grabbed Industry News, but was quickly branded unrealistic by none other than the Government’s own fiscal watchdog.As the Office for Budget Responsibility (OBR) highlighted this March, at the time, it expected exports to grow to £850bn by the end of the decade. As the 2020 deadline gets closer, the target has moved even further out of reach.The OBR now believes exports will reach £643bn in 2020. That’s 36% lower than the Government’s aspiration.
In dollar terms, the UK was the world’s fourth-biggest exporter by value in 2015 (it overtook Japan, but mainly due to movements in the exchange rate).But most of the world’s trade is in goods and the UK is only 10th in the league table when it comes to these exports, lagging behind smaller economies such as South Korea.
The UK’s strength is services. Only the US exports more than us.Services accounts for 44%of the UK’s exports, compared with just 12% in China, which is the world’s biggest exporter of goods, and 17% in Germany, where the total value of exports was double the UK’s in 2015.
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