Budget 2015 reaction: Incentives to export
With a modest announcement focused on increasing exports to China, is the government’s target of £1 trillion UK exports by 2020 realistic?
Following last year’s announcement to double export lending to £3bn, the government pledged a continued commitment to improving economic ties in emerging markets in the 2015 Budget report.
George Osborne revealed plans to nearly double funding for UK Trade and Investment activities in China to £15m as well as funding for a series of trade missions with a focus on regional strengths.
While the announcement was fairly modest, it was welcome news for growing businesses – although many may feel there’s still more to do.
Phil Orford MBE, chief executive, Forum of Private Business
“Foreign investment also remains a key focus for future growth. While we welcome the Chancellor’s measures to encourage trade with China but we would like to have seen additional tax incentives to encourage a wider spectrum of smaller firms to consider trading overseas. Further stimulus will be crucial if we are to remain on course to meet the UK’s ambitious export target of £1 billion by 2020.”
Philippe Gelis, CEO and co-founder, Kantox
“George Osborne’s pledge to invest further into UKTI resources for exports to China is a great opportunity for businesses looking to diversify from a reliance on the struggling Eurozone. As Osborne referenced, the number of exports to non-EU countries has risen to 24% since 2010, and further investment in the UKTI is a positive step in continuing this trend.
“Quite rightly, a weak euro and the effects of the ongoing problems with Russia are worrying for exporters, so this increased support offers the opportunity for businesses to consider more flourishing economies as viable business options.”
Carl Hasty, director of international payments, SmartCurrencyBusiness.com
“I would have liked to hear further detail about how the chancellor expects to achieve the government’s target of £1 trillion UK exports by 2020. It is encouraging that the government aims to encourage exports to areas outside of the beleaguered Eurozone, which is currently still the UK’s largest exports market. China is in the process of opening its doors, and is an exciting market to consider. However, although all currencies are subject to national and global uncertainties and risk, China’s currency is less predictable, given that it is in the process of moving towards a free-floating currency. Without the right guidance, companies could see significant currency losses given unfavourable exchange rates.
“Seen this way, it could be said to be risky to place all of our eggs in one basket if the government is to focus pumping new resources into opening up China to UK exporters. It would seem prudent to spread or extend resources to help UK businesses export to a wider range of overseas markets, so that UK exporters can make the most of other markets in addition to China and the Eurozone.”