The UK government is likely to miss its target of hitting £1 trillion worth of exports by the end of the decade by 14 years, business leaders today warned.
In 2012, the Prime Minister announced a target for British companies to double the value of goods and services sold overseas by 2020, to help reverse the country’s historic trade deficit.
However, publishing its latest international trade survey, the British Chambers of Commerce (BCC) said that at current growth rates, the £1tn exports goal was unlikely to be reached until 2034.
While the overall UK trade deficit last year stood at £34 billion, the services sector saw its highest ever surplus at £86bn – equivalent to 5 per cent of gross domestic product (GDP).
Despite that, the sector has much more untapped potential, according to the BCC, which gathered its findings from some 2,500 businesses.
It found that just 23 per cent of services firms currently export, and a further 17 per cent have either previously traded internationally or are looking to do so in the next two years. By comparison, 53 per cent of manufacturers – a much smaller sector – surveyed currently export their goods, and an additional 13 per cent have done so previously or plan to do so again.
John Longworth, director-general of the BCC, said: “The services sector is regularly overshadowed by manufacturers in the media and public imagination, despite the fact that we are one of the world’s leading exporters of financial and professional services.
“The low proportion of these firms actively exporting highlights the enormous untapped potential UK services firms hold.
“For some time we’ve been saying that we need a radical change in how we support export businesses. That we are set to miss the export target by 14 years tells us that the radical shift needed has not happened.
“The government must take these figures seriously and help exporters to catch up. Our businesses have the potential to meet the target. They need ongoing support and access to finance to help them thrive on the world stage.”
The UK currently ranks as the second largest exporter of services in the world behind the US, but the BCC said its survey highlighted the need for government action to open up markets, as well as the need for UK businesses to increase the skills range of their workforces.
It noted that the greatest barriers to exporting among services firms were differences in regulations and standards – cited by 27 per cent of those polled – and language or cultural differences (26 per cent).
Meanwhile, Santander said yesterday that its analysis of official UK export data for 2014 found that exports to China grew 12 per cent to £13.9bn, resulting in the Asian powerhouse displacing Belgium & Luxembourg as the sixth most-significant export market for the UK.
Exports to Hong Kong, counted separately by the Office for National Statistics, increased 11 per cent to £6.3bn – meaning that total exports to China and Hong Kong were worth more than either France or the Republic of Ireland.