Source · Select Committees · Public Accounts Committee
Recommendation 3
3
The Department is not doing enough to help businesses, particularly SMEs, to take advantage of...
Conclusion
The Department is not doing enough to help businesses, particularly SMEs, to take advantage of opportunities offered by new trade agreements. Businesses need to understand and take advantage of the opportunities arising from trade agreements if agreements are to deliver their predicted benefits. However, UK businesses’ use of existing agreements may be relatively low. For example, less than a third of surveyed UK businesses knew whether the goods they most frequently exported were eligible for reduced customs duties. We raised concerns in 2020 that the Department was not doing enough to support small and innovative businesses to export. The Department’s November 2021 export support strategy sets out a new approach, aiming to bring its export support services together in one place. To promote the new agreement with Japan, the Department conducted a virtual trade mission with around 250 businesses, but it could not tell us if this event had led to new export opportunities. Recommendation: The Department should write to the Committee within 12 months to set out how it has supported businesses, particularly SMEs, to take full advantage of existing and newly negotiated trade agreements. It should: i) regularly measure and report the preference utilisation rate for UK exports (the rate at which exporters use preferential tariffs) for each of its trade agreements; ii) consider how it can reduce burden and costs for SMEs; and iii) set out initial progress with its new export strategy.
Government Response
Not Addressed
HM Government
Not Addressed
3: PAC conclusion: The Department is not doing enough to help businesses, particularly SMEs, to take advantage of opportunities offered by new trade agreements. 3: PAC recommendation: The Department should write to the Committee within 12 months to set out how it has supported businesses, particularly SMEs, to take full advantage of existing and newly negotiated trade agreements. It should: • regularly measure and report the preference utilisation rate for UK exports (the rate at which exporters use preferential tariffs) for each of its trade agreements. • consider how it can reduce burden and costs for SMEs; and • set out initial progress with its new export strategy. 3.1 The government agrees with the Committee’s recommendation. Target implementation date: April 2023 3.2 The department will write within 12 months on this recommendation. DIT is already helping businesses take advantage of trade agreements and market openings and is committed to further improving its offer. The department will write to set out how this is being done. 3.3 Supporting small and medium-sized enterprises (SMEs) is a key part of the refreshed Export Strategy, including supporting the department’s broader efforts to remove market access barriers. The Export Support Service (ESS) provides cross-government advice and support for exporting to Europe, the Export Academy offers business-led exporting training, and UK Export Finance has expanded its range of lenders, meaning SMEs will be better served in securing new opportunities. The department estimates that of the 7,300 ESS enquiries received by 20 March 2022, 7,000 have been from SMEs. To ensure the connection with departmental initiatives, ESS will expand globally creating an export system to support all businesses. 3.4 Across all regions and devolved administrations, partnerships with external stakeholders will help inform businesses how to utilise FTAs and develop export plans. Supporting SMEs to understand and access the benefits of FTAs is part of the domestic facing 'Made in the UK, Sold to the World' campaign, which shifts attitudes towards exporting. The Department will continue to deliver missions and events, activating a programme to encourage business-to-business collaboration and utilisation of FTA gains. 3.5 As part of this ongoing work DIT has already launched a new project which will consistently and continually evaluate and improve the department’s approach to FTA utilisation. This project will inform the department’s work in response to this recommendation.