United Kingdom: Exports

Lord Borwick Excerpts

Thursday 8th May 2014 Lords Chamber

Asked by

[Lord Borwick]

To ask Her Majesty’s Government what assessment they have made of the export potential of the United Kingdom service sector; and what steps they are taking to strengthen it.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

My Lords, the UK is the second-largest exporter of services globally, with services exports valued at £193 billion in 2012, accounting for 40% of overall UK exports. The Government have identified opportunities for further growth and are taking steps to strengthen exports of the service sector through trade negotiations, UKTI business support for service exporters, and through the current industrial strategy, which incorporates 11 sector strategies, including for the highly regarded professional and business services sector.

[Lord Borwick (Con)]

Does the Minister agree that service export figures are understated given that they are often hidden in the figures for goods exports?

[Viscount Younger of Leckie]

My noble friend is right: gross export data may underestimate the role of services, omitting the linkages between services and manufacturing. Services account for around 60% of the value added in the UK’s total exports, which demonstrates their importance both as direct exports and as embedded services within manufacturing exports. It is interesting to note that Rolls-Royce now earns more from managing clients’ procurement strategies and maintaining the aerospace engines itself than it does from making them.