British Exports

Debate between Chris White and David Rutley

Wednesday 8th February 2012 Westminster Hall

[David Rutley]

My hon. Friend is right. There is an equity gap, and I will talk about SMEs, which are the main thrust of my speech. From his experience, he knows more about the problem than I do, and I welcome his intervention.

There are some encouraging signs. We have seen a steady fall in our trade deficit from 4% of gross domestic product in 2007 to about 1% in early 2011, and that is beginning to help to rebalance the economy towards international trade. A recent article in The Economist reported that there are also signs of success in the motor industry. It was estimated that in 2011 the UK manufactured 1.5 million vehicles, and we exported three quarters of those. That is an important statistic, and I understand that Tata is considering expansion of its Land Rover factory at Halewood, and that Nissan will be looking to increase its production and capacity in Sunderland. It also exports to many countries around the world.

There is export success not only with motor vehicles and automobiles, but with life sciences. AstraZeneca manufactures many leading-edge pharmaceuticals, and we are seeing real success in Macclesfield where its major manufacturing plant accounts for 2.2% of the UK’s exports, which is a huge contribution. The Government’s life sciences strategy was announced in December, and sets out an approach by which we can obtain extra focus on the sector. One aim in the strategy is to create new partnerships in translational medicines and biopharmaceuticals between the UK and China so that those partnerships can enhance trade, investment, and research and development that will help us to have greater export success in that area.

Many hon. Members here can talk about, and will probably want to boast about, the export success of companies in their constituencies, but before they do, I want to take the opportunity to do the same. When I was preparing for this debate and when I spoke to more businesses in the Macclesfield area in north-east Cheshire, it became clear that there are some real export success stories. Plastic Card Services manufactures an innovative, biodegradable credit card, and is seeing huge success in Scandinavian markets. Its exports to foreign countries have risen from nothing to 25% in just a year. Over the past 10 years, Ukash, which is a provider of online payment services and has received the Queen’s Award for Enterprise for international trade, has increased its trade to 50 countries. It has a completely different international focus from many of the SMEs that, as a parliamentarian, I work with in Macclesfield.

Although there are success stories, it is important to come back to the challenge that has been alluded to. It is to improve our export performance across the piece, but particularly among SMEs, which is where the challenge is most marked. A short look at the statistics shows that in the UK, only one in five—25%—of SMEs export and are involved in international trade, compared with the European average, which is 25%, and in Germany it is above 30%. We must make a step change. As I said, the problem has existed for a while, but the size of the prize is huge. If we increased the penetration of exports by our SMEs up to the European average, we would wipe out the trade deficit in one fell swoop.

[Chris White (Warwick and Leamington) (Con)]

I congratulate my hon. Friend on securing the debate. He referred to China. Does he agree that with the weakness of the eurozone market at the moment, UK Trade and Investment should try to focus more resources on emerging markets, such as south America and south-east Asia, so that our businesses, particularly manufacturers, have greater access to the fast-growing markets of the world?

[David Rutley]

My hon. Friend makes an important point. The good news is that UKTI has in recent months started to focus more efforts on emerging markets. I cannot speak about South America, but I know that more resource in terms of headcount is being pushed into markets in China and India, which I will mention later. It is good to see the Government responding to that good point.