The UK’s export credit agency, UK Export Finance (UKEF) has pledged support to exporters and supply chain SMEs (small and medium sized enterprises) by accessing finance through their banks.
This scheme is set to provide thousands of businesses access to government backed finance. UKEF will provide working capital loans and bonds to SME customers and direct trade finance for suppliers who support exporters.
UKEF are working in partnership with five major high street banks (Barclays HSBC, Lloyds Banking Group, RBS/NatWest and Santander) to give companies access to the finance through their bank.
The Secretary of State for International Trade, Liam Fox commented:
“As an international economic department, this new partnership shows the Department for International Trade’s commitment to help small businesses seize the global demand for British exports. Providing easily accessible finance, backed by UKEF’s guarantee, will lift a common barrier to exporting. Providing finance to suppliers as well as exporters means spreading the benefits of global trade, supporting more jobs and growth for companies large and small.”
A new digital platform is being launched in conjunction with the scheme to ensure the quickest transactions.
The Head of Barclays Corporate Banking, John Mahon added:
“Delegated authority will make accessing UKEF guarantees simpler for many businesses and will help companies we work with grow more quickly. Both exporters and companies involved in international trade through supply chains will benefit, and we look forward to further collaborating with UKEF and our colleagues across the industry to find more new and innovative ways to help UK businesses take full advantage of export opportunities.”
UKEF has recognised the importance of supply chain SMEs and obviously wishes to strengthen its base. This becomes imperative as the UK heads into the political abyss once it leaves the European Union. But simply throwing money around is a cop out.
Indirectly investing through company banks is evidence of tunnel vision. UKEF can’t see the broader threats to industry and how a deregulated system can fail the public. The government must provide support with direct action and take responsibility for the export industry.
Providing support to major UK ports should be on the agenda. Ports are the gateway to the world and act as the foundations of international trade. But British ports are owned and ran by private companies. These companies often suffer from financial constraints meaning investment varies from port to port. Therefore establishing a registered body for ports will allow the government to personally ensure that British exports are handled well. UKEF could also promote new electric automated technology for increased efficiency in ports to benefit and stabilise export growth.
Additionally, the recent Petya cyber-attack highlights that stronger cyber-security is needed to sustain supply chains. Maersk is yet to return to full steam and suffered losses due to the attack. We can see the threat to a merchant fleet has evolved into a cyber-presence. The days of the Royal Navy protecting exports with gunboats are long gone. We must strengthen cyber-security and I would call on the government and UKEF to invest in cyber-defence development, especially with the scheme’s new digital format.
If the government wants stability in the future then it must solve the problems of today. It must guarantee the money invested will strengthen the supply chain for security in a post-Brexit society. The government has to develop a closer relationship with industry and not indirectly invest via banks.
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