The Chancellor reversed a 2010 decision to cut the budget of UK Trade & Investment in Wednesday’s Autumn Statement, promising a 25pc increase over the next two years, worth £140m.
The money will also be used to take thousands more small companies overseas for the first time as the Government attempts to address Britain’s flagging trade performance, reports The Telegraph.
While Mr Osborne has set a target to double UK exports to £1 trillion, the value of our companies’ overseas sales is little changed over the past year. In September, the trade deficit hit a record high.
Lord Green denied that the Chancellor’s change of heart represented a tacit admission that it was a mistake to cut UKTI’s budget when the Government was attempting to inspire an export-led recovery. “I wouldn’t put it that way – but the increased funding is very welcome,” he said.
He told The Sunday Telegraph that the extra resources will be used to complete an overhaul of UKTI’s approach that has been taking place over the past year.
“We’re a very different animal now, with a different strategy and a focus on emerging markets and small businesses. That’s all been put in place in the past 12 months with a new leadership team, and a much stronger balance towards private-sector experience,” he said.
Some of the £140m will pay to establish or upgrade chambers of commerce in 20 markets, including Indonesia, Nigeria, Vietnam and Colombia, as well as the so-called BRIC countries – Brazil, Russia, India and China.
“Our chambers overseas need to close the gap and be as good as the German and American ones. They will support small businesses coming to a new market for the first time with office space, mentoring and market research.”
In inward investment, UKTI is aiming to attract 100 of “the world’s most impressive entrepreneurs to Britain” next year. “We’ll focus on business schools, like MIT and Harvard, and provide an open service to help those people come and start companies here. That includes smoothing the visa arrangements.”
It will also be used to help large and small firms bid for key infrastructure projects around the world and for “export vouchers” to encourage more small businesses to use UKTI, Lord Green said.
He admitted that improving small companies’ knowledge of what UKTI does is a priority. According to the Institute of Chartered Accountants in England and Wales, 70pc of small and medium-sized companies that already export are not aware of UKTI’s work.
“We have high satisfaction scores but recognition of our role is disappointing. It’s not right and we have to crack it.”
A network of “trade advisers” is being built around the country to “spread the word” to small businesses using chambers of commerce, accountants and banks.
The Government’s trade credit agency, UK Export Finance, also has challenges.
A £1.5bn trade credit facility was announced on Wednesday, which will allow overseas buyers that want to access British products and expertise to secure loans of up to £50m through UKEF.
When the organisation launched a series of guarantee products for small firms last year, however, they were taken up by just 18 businesses.
But Lord Green said he has no intention of “putting them out to pasture”.
“We need to work harder on the marketing – it’s a bigger issue than UKTI has. We’ve put UKEF people in regional UKTI offices around the UK and it’s their job to network with banks and companies and drum up business.”
Despite Britain’s weak trading performance, exports to many emerging markets are growing, although they are being offset by a decline in sales to the crisis-hit eurozone.
Sales to Brazil, for example, grew from £3.1bn in 2010 to £3.7bn last year. Sales to Thailand, meanwhile, grew from £1.6bn to £1.9bn.
One company that contributed to that was watchmaker Bremont, which makes 75pc of its £11m revenues overseas. Co-founder Giles English says he has used UKTI a number of times. “We used the British embassy in Thailand. It was the best venue in town and they invited their local contacts. We met people we’d never be able to get on our own and won business. UKTI does a great job but I get the sense they needed extra resources.
“You have to look abroad for sales at the moment and the services to assist you are there – it’s down to small businesses to make use of them.”