The British Exporters Association (BExA) has published its 12th annual benchmarking report on UK Export Finance (UKEF) – the export credit agency (ECA) of the UK government.
The report, published today, provides an analysis of UKEF’s activities and reflects upon the range and quality of support provided to UK exporters from April 2020 to March 2021. It also offers comparisons with other countries’ ECAs.
Titled ‘Sustainable Exporting’, the report praises UKEF for stepping up to support exporters during the COVID-19 pandemic, and for the increase in its business volumes.
However, BExA’s report also raises concerns with regard to UKEF’s turnaround times and premium pricing.
Looking back on one year at UKEF
The report reviews 10 recommendations that BExA put forward to UKEF at the end of 2020 in its previous benchmarking report, ‘Exporting in the new “normal”‘.
It analyses the progress made on each suggestion, with new proposals based on what has been achieved.
It also provides two new recommendations for 2021 and presents a series of suggested actions to drive progress in these areas.
One of the new recommendations for 2021 focuses on the UK government’s new fossil fuel policy, which prevents UKEF from financing overseas oil and gas projects.
BExA has called for this policy to be reviewed in order to remove what it describes as a “cliff-edge” approach to financing, so that UK businesses can keep pace with sustainable transitions and not get left behind by overseas competitors.
The other new recommendation centres on the wording of UKEF’s Export Insurance Policy (EXIP), which BExA believes would benefit from adopting more “plain English” principles, avoiding cross-references, and being clear about what risks are being covered.
‘Made in the UK, Sold to the World’
After reviewing the progress made on its 2020 recommendations, BExA welcomes the government’s new export strategy, ‘Made in the UK, Sold to the World’, which was launched last month.
BExA said the strategy represents an “impressive commitment” to developing exports, with an ambitious target of £1 trillion of exports by 2030.
In its report, BExA also applauds UKEF’s Export Development Guarantee (EDG) and General Export Facility (GEF), which are considered to be game-changers for UK exporters, and recommends that these products be marketed effectively to ensure as many exporters as possible benefit from the support.
With tender to contract (TTC) foreign exchange rate cover still missing from UKEF’s portfolio, BExA capped its score for product range at 9/10.
However, lobbying by BExA for the introduction of TTC has continued, including submission of evidence to the International Trade Select Committee inquiry into the work of UKEF.
In its response this month to the inquiry report, UKEF said that “we will work with BExA over the next few months to understand if there is a viable product that will complement what is on offer from the private market and report back.”