George Osborne will miss his target of doubling UK exports to £1tn by 2020 because the government has failed to take the radical action needed, a leading business lobby group has said.
The British Chambers of Commerce said exports would have to grow by 10% a year to meet the target set by the chancellor in 2012.
The UK's export performance over the past two years indicates that double-digit growth is out of reach, said the BCC, with exports increasing by 0.5% in 2012, and by 2.1% in 2013 to £505.6bn.
John Longworth, director general of the BCC, said: "As it stands at the moment we will not hit that target.
We've got a government that is not putting its money where its mouth is and we need to do something radically different in support for exports."
The BCC cut its forecasts for export growth this year from 1.9% to 0.8%. It expects export growth to increase to 4.1% and 4.6% in 2015 and 2016 respectively. Longworth said businesses were not receiving sufficient support to justify the risk of entering fresh markets and selling their goods and services abroad.
"We're not in a war, it's not Lord Kitchener saying your country needs you. It's completely unreasonable that you should ask a business to put their livelihood and employees at risk out of the goodness of their hearts. It's unreasonable for the government to say fix your bayonet and get over the top."
Osborne has persistently argued that a sustainable future for the UK is dependent on a rebalancing of the economy away from debt-fuelled spending and towards more manufacturing and exports.
The Treasury said that since the government came to power, exports of goods have risen by 25%, with exports to fast-growing emerging economies up by 78%. "It remains the government's ambition to double exports to £1tn by 2020," said the spokesman.
Trade minister Lord Livingston said there was a lot of government support available to companies wanting to export, with UK Trade and Investment helping more than 40,000 small- and medium-sized businesses last year.
"The goal of reaching £1tn exports is an ambitious one and we make no apology for that," he said. "Businesses and trade bodies can play a key role in encouraging their peers to expand their trading horizons."
Longworth said that while a shift to greater exports was desirable, it would require state backing on the scale seen in countries such as Germany, where the government invests more heavily in supporting exports.
A stronger pound – which makes UK goods more expensive abroad – had left companies with "an even bigger hill to climb" on exports, Longworth said.
Despite a weak outlook for exports, the BCC said the short-term outlook for the economy overall was positive, with growth of 0.8% in both the third and fourth quarters predicted, in line with the first and second quarters. It raised its growth forecasts for 2014 to 3.2% from 3.1%, which would be the strongest since 2007.
The BCC also raised its forecast for 2015 to 2.8% from 2.7%, but left expectations for 2016 unchanged at 2.5%. While the UK's growth is outpacing that of its G7 peers, Longworth said the expected slowdown in 2015 and 2016 was "a warning sign" for the UK economy and its reliance on consumer spending for growth.
He said external threats were rising, with "lots of red lights in the global economy at the moment" and urged the Bank of England to keep interest rates low for as long as possible to give businesses confidence to invest.
The BCC is predicting that the first rate rise will come in the first three months of 2015, taking rates from 0.5% to 0.75%.
Consumer spending is expected to slow when borrowing costs do start to rise in 2015 as households are put under greater financial strain, but it is still expected to contribute to growth more than other areas of the economy.
The BCC also thinks Obsorne will fall behind on his deficit reduction targets. The Treasury's independent forecaster, the Office for Budget Responsibility predicted in March government borrowing will move into a small surplus in 2018/19, but the BCC thinks it will take one to two years longer.
theguardian.com
The British Chambers of Commerce said exports would have to grow by 10% a year to meet the target set by the chancellor in 2012.
The UK's export performance over the past two years indicates that double-digit growth is out of reach, said the BCC, with exports increasing by 0.5% in 2012, and by 2.1% in 2013 to £505.6bn.
John Longworth, director general of the BCC, said: "As it stands at the moment we will not hit that target.
We've got a government that is not putting its money where its mouth is and we need to do something radically different in support for exports."
The BCC cut its forecasts for export growth this year from 1.9% to 0.8%. It expects export growth to increase to 4.1% and 4.6% in 2015 and 2016 respectively. Longworth said businesses were not receiving sufficient support to justify the risk of entering fresh markets and selling their goods and services abroad.
"We're not in a war, it's not Lord Kitchener saying your country needs you. It's completely unreasonable that you should ask a business to put their livelihood and employees at risk out of the goodness of their hearts. It's unreasonable for the government to say fix your bayonet and get over the top."
Osborne has persistently argued that a sustainable future for the UK is dependent on a rebalancing of the economy away from debt-fuelled spending and towards more manufacturing and exports.
The Treasury said that since the government came to power, exports of goods have risen by 25%, with exports to fast-growing emerging economies up by 78%. "It remains the government's ambition to double exports to £1tn by 2020," said the spokesman.
Trade minister Lord Livingston said there was a lot of government support available to companies wanting to export, with UK Trade and Investment helping more than 40,000 small- and medium-sized businesses last year.
"The goal of reaching £1tn exports is an ambitious one and we make no apology for that," he said. "Businesses and trade bodies can play a key role in encouraging their peers to expand their trading horizons."
Longworth said that while a shift to greater exports was desirable, it would require state backing on the scale seen in countries such as Germany, where the government invests more heavily in supporting exports.
A stronger pound – which makes UK goods more expensive abroad – had left companies with "an even bigger hill to climb" on exports, Longworth said.
Despite a weak outlook for exports, the BCC said the short-term outlook for the economy overall was positive, with growth of 0.8% in both the third and fourth quarters predicted, in line with the first and second quarters. It raised its growth forecasts for 2014 to 3.2% from 3.1%, which would be the strongest since 2007.
The BCC also raised its forecast for 2015 to 2.8% from 2.7%, but left expectations for 2016 unchanged at 2.5%. While the UK's growth is outpacing that of its G7 peers, Longworth said the expected slowdown in 2015 and 2016 was "a warning sign" for the UK economy and its reliance on consumer spending for growth.
He said external threats were rising, with "lots of red lights in the global economy at the moment" and urged the Bank of England to keep interest rates low for as long as possible to give businesses confidence to invest.
The BCC is predicting that the first rate rise will come in the first three months of 2015, taking rates from 0.5% to 0.75%.
Consumer spending is expected to slow when borrowing costs do start to rise in 2015 as households are put under greater financial strain, but it is still expected to contribute to growth more than other areas of the economy.
The BCC also thinks Obsorne will fall behind on his deficit reduction targets. The Treasury's independent forecaster, the Office for Budget Responsibility predicted in March government borrowing will move into a small surplus in 2018/19, but the BCC thinks it will take one to two years longer.
theguardian.com
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