The plans announced by Chancellor George Osborne to double UK exports by the year 2020 spelled good news for exporters and export packers alike.
Osborne’s Budget speech in 2012 included the government’s commitment to doubling exports to reach the £1 trillion mark, but now the administration’s own forecasters believe that the Chancellor’s target will be missed.
Forecasts from the Office for Budget Responsibility (OBR) produced to coincide with the Autumn Statement in December 2014 reveal that by 2019 to 2020 the export value is likely to reach £617 billion rather than the trillion-pound target. This means that the actual level achieved would be falling short of the hoped-for levels by nearly 40 per cent.
A trade deficit is being blamed for dragging down the UK economy each year since 2011, and this is predicted to continue. The OBR, however, is forecasting a growth in household consumption, which looks set to be the largest contributor to growth in the years between 2015 and 2019.
Ministers are also placing blame on weaknesses within Britain’s largest export market, the Eurozone. Oxford Economics expert Andrew Goodwin said that sterling appreciation had impeded growth in 2014 by making competitiveness within global markets a struggle for British businesses. Mr Goodwin added that Oxford Economics’ own forecasts were broadly in agreement with those of the OBR, although they were slightly more optimistic on the future of British export growth.
At the start of December 2014, the OBR cut its predictions for export growth in 2015. In March 2014, the forecast for the next year was set at 4.7 per cent, but this was later reduced to almost just over half of its earlier prediction, at 2.4 per cent.
The British Chamber of Commerce (BCC) had actually predicted earlier in 2014 that Mr Osborne and his colleagues would fail to reach the target they had set for 2020. At the same time, it criticised the government for not giving UK exporters and firms enough support compared to their economic peers. John Longworth, director general of the BCC, said the government was not making the investments necessary to back up its pledges.
The government has, however, spent money on taking a range of trade delegations filled with British executives to the planet’s largest emerging markets, including China and India, over recent years. In 2013, exports to China had risen by 80 per cent compared to levels recorded in 2010, and exports to India had gone up by 40 per cent over the same period.