Speak out to consolidate your financial position
Arguably the UK needs its exporters now more than it ever has, but the iron grip of the Treasury and poor use of resources at the Department for International Trade seem to be working against our key industries rather than helping them.
GAMBICA is taking members’ many and growing concerns to those with the power to actually do something on four main issues:
• New EU ‘importer’ duties which have the power to halt SME exports overnight;
• New and variable requirements for trade and work permits for EU exhibitions;
• Slow turnaround and increasing refusals of export licences which are costing UK manufacturers millions in lost sales; and
• The scrapping of the Tradeshow Access Programme (TAP) funding – axed just when our EU competitors are providing more subsidies to exporters.
In a letter to Lord Grimstone, Minister for Investment jointly at the Department for International Trade and the Department for Business, Energy & Industrial Strategy this month, GAMBICA has demanded assistance for the tens, possibly hundreds of thousands of small businesses whose exporting activity will be severely hindered by the new EU regulation on market surveillance [(EU) 2019/1020] which came into force in July. The regulation makes it necessary for exporters to have an EU address when selling products to end users in the EU directly or via a distributor.
As lab companies will be aware, this EU address cannot be simply a postal address but must be the address of the entity which takes on the role of ‘importer’ to the EU. Setting up an EU office, which requires legal assistance and often a locally resident board member, presents serious practical and financial difficulties sufficient to halt exporting activity of many SME members to our largest overseas market. “Unless this situation can be addressed,” GAMBICA’s CEO, Steve Brambley, told the Minister: “DIT’s plans to increase exports will be dead in the water.”
Our hope is that the Department for International Trade will be able to provide some sort of ‘importer’ function based at the relevant embassies. (We are awaiting the Minister’s response but in the meantime have set up a relationship with Chamber International to provide lower cost help to members to deal with this issue.)
Let’s hope Lord Grimstone gets busy because it would appear that staff from all over the Department are being seconded to work on Free Trade Agreements. Is this being done at the expense of the administrative work which makes our exporting activity possible?
Members have reported increasing delays in the granting of export licences and increasing refusals of licences particularly for trade with China. They are clear that these delays are caused by resource constraints in the department. The increase in refusals is an major worry because, as one member commented: “We calculate that this has cost our company many millions of pounds in the last year in direct or consequential loss of business. I don’t think we are alone in this, I’m sure that other companies are being similarly affected.”
The fear is that refusals cause customers to look elsewhere, and that German and US firms are picking up business which could have been ours. If China finds it difficult to access equipment from existing expert suppliers, it will look to develop local sources of equipment. The effect on UK companies and UK jobs is already significant and will get worse, unless this key UK administrative unit is sufficiently resourced.
To add to the misery, it was revealed at a recent GAMBICA webinar that visas and work permits will now be required to exhibit at EU events. If you need to know the detail of this (it’s complicated) email me at Jacqueline.email@example.com.
And all this has been followed up by the DIT axing the popular and effective Tradeshow Access Programme (TAP). For over 30 years, the scheme (and its predecessors) have provided much needed financial support to SME companies attending major international trade shows with support from their industry trade body.
Analysis by UK Export Partners, of which GAMBICA is a founding member, reveals that for every £1 invested by the Government in the TAP scheme, on average £40 has been returned to UK in taxable income, creating jobs around the country. But the UK was the only European country not to increase its commitment to companies at Trade Shows (physical or virtual) during the pandemic.
Obviously it’s not just the lab industry which is affected, Ruth Evans, CEO of the Brewing, Food and Beverage Suppliers’ Association commented: “With an ROI of 35.8, to our members, over a five year period, the TAP scheme provides proven value to both UK companies and Government. What other scheme can return £3,364,822 sales from grant funding of £94,000? At a time when UK companies are being urged to increase export sales in order to drive Brand UK out of Covid, to remove the fuel from the engine is, quite frankly, ludicrous.”
GAMBICA members have hugely valued the Tradeshow Access Programme’s ability to support UK groups to attend overseas exhibitions, particularly events where a return cannot be guaranteed but where there is the potential to open up significant new markets. It is extremely short-sighted to reduce tradeshow support at this critical time.
GAMBICA has surveyed members and not one has yet received any funding via the Internationalisation fund which is the only current alternative to TAP – have you? DIT has asked for a meeting with GAMBICA to discuss the successor to TAP so if you have messages for them – do get in touch at Jacqueline.firstname.lastname@example.org