Will Boondoggling Help UK Exports?

Theresa May, like George Osborne, recognised the importance of exports for Britain but her solution is similarly simplistic. George Osborne doubled the UK Trade and Investment budget and Theresa May has grossed the quango up to become a Department of State under Dr Liam Fox with three ministers and the usual baggage train of advisers.

UKTI has been a muddle since it was created twenty years ago as an unholy marriage of FCO trade, and the Business Department’s overseas, interests. The worst of both resulted in a non-stop rotation of management with each giving only the illusion of progress.

The last daft idea was to disperse the central UKTI staff across Whitehall. According to Francis Maude, the then Chairman, this would infuse the spirit of exporting across all government and thence throughout the country.

The new department’s boondoggle at the Rio Olympic Games, “The British House”, provided typically mis-targeted promotion: “guests to the House can expect to hear from high profile VIPs, Ministers, and inspiring industry-leaders from the UK.”

Meanwhile the House of Commons Business Select Committee set up an enquiry into UKTI in 2015. Evidence was taken and their report, due in May, has yet to appear and may never do so. On the one hand, Government considers exports of overwhelming importance and, on the other, Parliament is preoccupied by more newsworthy events such as Sir Philip Green and BHS.

The April-appointed Lord Price, previously MD of Waitrose, and Catherine Raines, are probably the best ever UKTI chairman and CEO. Now they are swamped with politicians who know nothing of exporting, one must fear the worst.

The Department for International Trade needs focus. One reason UKTI has always failed is its excessive number of initiatives: government should focus only on what the private sector cannot do for itself.

The British Chambers of Commerce are building international networks for small businesses; they should be left to get on with it with support from FCO overseas posts where required. Large companies have their own UK-based specialists. In other words, UK based UKTI staff, apart from the very few policy makers in Whitehall and those setting up major overseas missions, should be disbanded. The focus should be on networking through overseas posts.

Unfortunately, as the National Audit Office have routinely reported, the FCO is temperamentally unsuited to deal with anything as vulgar as trade. Leaving overseas posts with the FCO whilst taking international trade away (it had a half share in UKTI) will not help.

The only other area for government involvement is with the big banks who claim to support small exporters but, in practice, demand their umbrellas back whenever it rains. Transferring UK Export Finance from the Business, Innovation and Skills Department to the new Department for International Trade is a good idea but monitoring the big banks needs to go much further if the banks are to practice the support for exports that they preach.

In short, international trade should not be built up into yet another great Whitehall bureaucracy, with politicians scrabbling for power, but be shrunk to focus on what only government can do and be accountable for that.