‘Government funding cuts are stifling UK export growth prospects,’ says the Sponsors’ Alliance

Published:  09 May, 2011

The Sponsors’ Alliance – comprising around 40 independent national Accredited Trade Organisations (ATOs) – has written to UK Trade Secretary Vince Cable airing its concern about what it regards as a pronounced contradiction between the Government’s declared commitment to UK industry and its recent decision to make further cuts in funding to support exports.

According to the Sponsors Alliance, there is a marked disparity between the Government’s declared aim to encourage a strong manufacturing- and export-led economic recovery and the actual level of Government support offered through the UK Trade & Investment’s (UKTI) Tradeshow Access Programme (TAP) to facilitate and encourage such growth and leadership.

In the letter to the Trade Secretary, Tim Collins, Chairman of the Sponsors Alliance, commented: “UKTI's infrastructure is not viable in the present economic climate. Instead of injecting significant levels of investment in order to boost exports and encourage UK companies to increase their international sales efforts, UKTI is burdened by staff, overheads and administrative costs, which make up around 75% of its annual budget.”

He added: “Under the previous Government, support to help new-to-export and new-to-market companies exhibit at overseas exhibitions was reduced from £20 million to £8 million. Now it has been slashed by a further 25%, to £6 million, while the equivalent German budget has increased to 42 million Euros (around £38m).”

Collins recognises the Government’s recent Growth paper offers encouraging words; however he maintains that there is little real commitment to help UK companies – especially small- to medium-sized companies (SMEs) – to export their products and equipment to overseas markets – considered by many to be an essential element in the hoped-for economic recovery. “Much of the disappointment comes from the fact that there was initially very real hope that the new administration was committed to redressing the balance between the state-funded UKTI network and the UK's private trade associations,” he said. 

According to Collins, the reduction in Government support has resulted in a fall in the number of UK pavilions of British exporters in trade shows around the world. Instead, he points out that other national pavilions have grown bigger and better, so much so that in the past few years we have seen UK companies with offices overseas exhibit on German and Italian pavilions in China and other countries because the support they get amounts to a considerably cheaper option. “UK companies appearing on big, expensive-looking competitors’ stands may work well for them, but is hardly radiating a vibrant and independent image of UK plc,” he remarked.

Collins concluded: “We do have an opportunity to increase UK exports and therefore increase UK manufacturing, but competitor countries worldwide have the same strategy and, while many international competitors are doing all they can to support their exporters, the UK appears to be falling behind. If the Government wishes the UK recovery to be manufacturing- and export-led it needs to change the level of support it gives to exporters and not rely on a self-help website and a large number of civil servants. UKTI must reduce its operating costs, by reducing staff and administrative budgets; eliminating regional networks and reducing its marketing activities. The resulting savings should be channelled into programmes that directly benefit UK exporters. Trade associations remain committed to working with the Government but are still awaiting a meaningful call to arms.”

For further information please visit: www.sponsorsalliance.net

 

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