Exports drop sparks call for aid in boosting sales

Mar 10 2010 by Chris Knox, The Journal

THE biggest plunge in UK exports for more than three years has provoked calls for government help to boost overseas sales from the North East.

Exports in January fell by £1.4 billion, or 6.9%, to £19.5 billion, compared with December in the largest month-on-month fall since July 2006 scotching hopes that a weak pound would help the trade balance.

But the decline far outstripped a 1.6% fall in imports, which has caused the UK’s goods trade gap with the rest of the world to widen from £7 billion to £8 billion during the period, which is biggest since August 2008. The pound sank back below US$1.50 and 1.10 euros as markets sold off the currency.

Statisticians have no data yet on the impact of the cold snap, although experts said snow-bound manufacturers were likely to have struggled to get their goods to ports.

The figures come after a report by the British Chambers of Commerce (BCC), which said that £9.2 billion worth of UK exports were at risk due to a lack of trade finance.

The BCC has also recommended a state-backed insurance scheme along the lines of the models adopted by the German and French governments, which would provide exporters with more protection.

Jonathan Walker, policy adviser at the North East Chamber of Commerce (NECC), said: “These latest figures are hugely disappointing, especially as the export market had seen some signs of growth during the back end of 2009.

“I fear that the trade gap will continue to grow, unless the Government invests in supporting UK exporters by helping them source trade finance and introducing measures such as state-backed insurance. Many of our members in the North East feel that they are just not being given the right kind of support and that there are just too many risks at the moment to fully commit to export activity.”