UKEF must reach more exporting businesses and support renewable energy initiatives, report says
28 September 2021
Urgent action needs to be taken by the Government’s export credit agency, UK Export Finance (UKEF), to support more UK exporters, a new report by the International Trade Committee concludes.
UKEF has a good track record in providing products that support exporters, including new working capital products for large and small businesses and its initiatives to reach more SMEs through high street banks and supplier fairs are welcomed, the report says.
However, according to the report, UKEF's headline figure of supporting 549 businesses during 2020–21 was open to misinterpretation.
It says that the real total of exporters that had received direct UKEF support was significantly lower. Almost 90% of £12.3bn finance went to only nine companies, four of which were London-based. Furthermore, 92% of UKEF support was allocated to just ten exporting countries. Overall, UKEF support was limited to a very small number of commercial sectors.
UKEF's aim to expand its network of International Export finance executives to 30 was welcomed by the committee that asked for an update by the end of March 2022 on where the new staff will be based and progress in recruitment.
It adds that the Government should consider amending UKEF’s mandate so that it is better able to take environmental, social and human rights considerations into account when making decisions about which projects to support after its commitment to end support for overseas fossil fuel projects.
The report invites UKEF to consider how it can further contribute to meeting the UK's 2030 net zero emissions target and welcomes its first climate-related financial disclosure.
Chair of the International Trade Committee, Angus Brendan MacNeil MP, said: “UK Export Finance has an important role to play in backing exporters. However, it’s clear that UKEF is at a critical juncture and changes will be required if it is to continue to meet exporters’ needs.
“UKEF should put serious thought into how it will increase support for renewables projects, or else its actions will continue to risk actively contradicting the Government’s ambitions.”
Chamber International export advisor, Peter Bainbridge, says: “UK Export Finance is an important tool in our armoury to bolster UK exports by supporting and protecting UK exporters to access new opportunities.
“But we agree with the International Trade Committee’s conclusion that if UKEF is to continue to meet exporters’ needs, more must be done to ensure that its support reaches a larger number of UK exporters from a wider range of sectors.” Follow Chamber International on Twitter @ChamberInt and on Facebook for the latest in international trade.
The committee said that UKEF’s role in supporting and protecting UK exporters exploring new markets through loans, guarantees and insurance, is even more crucial following the Covid-19 pandemic and the UK’s withdrawal from the EU.
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