Credit where credit’s due: UK government looks to ‘turbo-charge’ business exports

By on 04/12/2023 | Updated on 04/12/2023
Minister for Exports Lord Malcolm Offord speaking at UK Trade and Export Finance Forum 2023
Minister for Exports Lord Malcolm Offord speaking at UK Trade and Export Finance Forum 2023.

The UK Trade and Export Finance Forum 2023 showcased how the UK government is increasing its support for small-and medium-sized companies and international commerce

Amid the daily headlines about the challenging global geopolitical environment, it’s easy to forget how businesses are working round the clock to keep goods and services flowing internationally.

As it seeks to forge, cement and grow new alliances in this rapidly changing world, the UK government is stepping up its support for companies looking to sell into international markets.

UK Export Finance (UKEF) announced a package of measures to help small- and medium-sized businesses with financing on 23 November – the day of its UK Trade and Export Finance Forum 2023 conference in London.

UKEF is the UK’s export credit agency, working alongside the Department for Business and Trade to ensure that no viable UK export fails for lack of finance or insurance.

New measures include an expansion of UKEF’s ‘auto-inclusion’ scheme, which provides fast-track access to trade finance products such as its General Export Facility (GEF). Under the changes, the maximum support that UKEF can offer under auto-inclusion has doubled from £5m to £10m. The maximum tenor for loans under the GEF has also increased from two to five years, giving businesses more flexible repayment terms where most needed.

As well as announcing the new support, the event – taking place for the sixth year – heard UK government representatives, major financial institutions such as HSBC UK and Standard Chartered, and other members of the international trade ecosystem discuss the opportunities and challenges of trade finance.

British trade’s ‘bounce-back-ability’

UK government Minister for Exports Lord Malcolm Offord kicked off proceedings with an upbeat appraisal of British exports’ “bounce-back” since the Covid-19 lockdowns – “our goods are good!”, he told the audience – and the value of SMEs.

As part of its 2021 Export Strategy, the government set a target of achieving £1 trillion-worth of UK exports per year by 2030. The current figure is £880m. SMEs have latent potential to help to meet the target as the government looks to “turbocharge” the UK economy, Offord said.

He mentioned digital and financial technologies, green energy, life sciences and advanced manufacturing as among the sectors with particularly attractive potential, alongside established export sectors such as food and drink and pharmaceuticals.

With 70% of UK SMEs located outside London and South-East of England, the increased SME focus should also help the UK government’s skills and ‘levelling-up’ agendas, he pointed out.

The UK’s recent accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will also help exporters. “It’s a big world out there, and they all want to buy British goods and services. ‘Global Britain’ is back…,” he said. “I think UKEF has a really important role to play in this agenda.”

Support for exporters ‘at every stage’

UKEF Chief Executive Tim Reid followed, giving a keynote address in which he described UKEF’s mission as “advancing prosperity through providing trade finance for UK exports, and doing that sustainably  with no net cost to the taxpayer”. The department is, he said, involved “at every stage” of businesses’ export journeys, providing expertise as well as finance.

UKEF directly supports “hundreds” of UK SMEs – a number it wants to push into the “thousands” – as well as financing overseas buyers so they can buy from [UK] SMEs directly,” he said.

The agency is “able to provide support in challenging markets where the private market cannot”, he said, “enabling our customers to win contracts on global projects.”

He mentioned five key aims driving UKEF overall: creating “positive impact” for communities in the UK and overseas through financing sustainable infrastructure projects; catalysing growth in new markets and sectors; significantly increasing the number of SME projects it finances; delivering support to a broader range of UK customers to drive regional growth; and placing UK businesses at the heart of the global low-carbon transition through clean-growth projects.

Reid concluded his remarks by referencing specific UKEF projects in Guyana and Tanzania, as well as a shipbuilding project on Merseyside in North-West England. “Our collaboration creates results that are felt by communities in the UK and around the world – that is why today’s event is so vital,” he said.

Read Global Government Forum’s interview with Tim Reid at the event

Commercial banks lead the way

The Conference was attended by UKEF’s banking partners.

HSBC UK’s Head of Commercial Banking, Stuart Tait gave a keynote speech during which he referred to the “challenging” and “fast-changing” trade environment. But he also highlighted statistics showing heightened appetite among businesses for international growth.

Saif Malik, CEO, UK and Regional Head – Client Coverage (UK & Europe) at Standard Chartered Bank, also spoke, during which he described UKEF as “one of the bank’s most important partners in helping unlock the opportunities for British businesses across emerging markets”.

“How we work together not only supports countries’ developing economies but it also puts British firms at the heart of major infrastructure projects and other opportunities across the globe,” Malik told the audience.

‘Innovative’ and ‘agile’ approach

Panel discussions and breakout sessions saw UKEF representatives and businesses discuss trends in international trade and trade finance, with a focus on the practicalities of collaboration between UKEF, banks and the businesses themselves.

UKEF Director of Legal and Compliance Jayne Whymark highlighted the GEF and Export Development Guarantee as among UKEF’s “flagship products” and exemplifying the agency’s “innovative” and “agile” approach.

One business panellist mentioned that she faced “constant” discussion internally over whether UKEF support was ‘state aid’. Whymark clarified that UKEF is not itself allowed to provide grants, highlighting how it differs from the British Business Bank, the government-owned economic development bank.

UKEF overseas representatives highlighted the impact that different UKEF-supported projects had made while emphasising the opportunities available for British businesses.

UKEF’s Country Head for South Africa and other Southern African countries, Dirk Van Den Berg, made the point that UKEF was ‘complementing’ private banks, rather than competing with them, during a session highlighting opportunities across a wide range of sectors in regions including the Caribbean and Asia.

‘Huge opportunities’ available

The scale of opportunities available, as well as a reflection of the extent to which exporters are looking to benefit from external support, is illustrated by the expansion of the Institute of Export and International Trade. The organisation, a UK professional membership body offering business support, training and qualifications, has grown about six-fold in size over the past five years to reach about 170 team members.

Roger Marshall, trade and customs specialist at the body – which was among the event’s exhibitors – was pleased to see UKEF’s increasing support for SME exporters. “It can often be difficult for smaller businesses to understand and navigate what boxes need to be ticked to get financial support but UKEF definitely want to provide it,” he said.

He was positive about the prospects for exporters. “Potentially it’s becoming easier to export because of digitalisation and other mechanisms although change does provide its own hurdles,” he said. “It can be complex to understand exporting initially, but often it’s a repeat of the same process each time. There are huge opportunities.” 

Whether firms are first-time exporters or looking to do more, the UK Trade and Export Finance Forum 2023 demonstrated that UK government has shown that it wants UKEF standing ready to help companies achieve their aims.

UK Export Finance CEO Tim Reid interview

Tim Reid started as UKEF’s chief executive on 1 January 2023, having previously been UKEF’s Director of Business Group for eight months. He joined UKEF from HSBC in 2022, where he held senior positions around the world.
UK Export Finance CEO Tim Reid speaking at UK Trade and Export Finance Forum 2023

How would you reflect on your first 11 months in the role?
I have been focused around four priorities. First, our customers, which breaks down into different groups: SMEs , large corporates in the UK, and also governments and overseas companies that are buying from the UK. Second, the impact that we can very visibly have on communities around the UK and overseas. One memorable example for me so far has been financing one of our exporting customers on an electricity distribution grid project in Angola – getting electricity to a place that hadn’t had electricity before. Our involvement helped to finance some of some of the tools and services to deliver the project. The reaction of the children in the village when electric lights were switched on for the first time was very memorable: you feel very good about that. It’s really what makes this one of the best jobs around, frankly – we’re doing good things around the world. Third, and more broadly, this is all about encouraging growth: how do we support more exporters? I want to help more SMEs, I want to do more projects in more countries, and I want to have more of an impact on creating more jobs around the UK. So, it’s ‘more, more, more’ – that’s the message. The fourth priority is our people – we have a workforce who are driven by our mission, and by the impact that we can have. It’s a very powerful message, it really gets people out of bed in the morning, wanting to come to work and see what more they can do so.  

A business representative on one of the panels this morning mentioned that she has to spend time tackling internal perceptions that UKEF support is ‘state aid’ and, as such, could carry a stigma. What’s your reaction?
In my time so far as CEO, nobody’s ever said to me that they’re worried about using UKEF support. I think the important point here is that we’re providing commercial finance. This is not a government subsidy. This is not a grant. This is support provided on a commercial basis in situations where banks’ risk appetite doesn’t allow them to provide all the financing by themselves. So, we are supplementing the risk appetite that exists in the private markets and enabling transactions to happen. We’re enabling deals to happen that wouldn’t happen otherwise.

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