British exporters should get a tax cut, lobby group the Forum of Private Business has said, as business groups prepare to give evidence to the business, innovation and skills committee on the Government’s support for firms.
The FPB, which represents 18,000 firms, has called on the Chancellor, George Osborne, to introduce tax breaks for businesses that want to grow their firms in overseas markets.
The group said the Government should consider incentives which align higher tax credits with increased overseas sales.
“Meeting the government target of £1 trillion by 2020 will be no mean feat,” said FPB chief Phil Orford. “We should encourage our wealth of small business talent to look to foreign shores. However, most small firms we talk to still see their growth coming from the UK and there’s still a limited appetite and few incentives to move into exports.”
This morning, representatives from business groups including the FPB, manufacturers’ organisation the EEF, and the Federation of Small Businesses (FSB) will advise MPs on measures the Government should take to support Britain’s businesses.
It comes as the Government’s UK Trade & Investment (UKTI) arm promotes exporting through Export Week. Vince Cable, the Business Secretary, has described SMEs as “the lifeblood of our economy”.
Lee Hopley, the EEF’s chief economist, said the Government had set itself a “phenomenally ambitious” target but that politicians should remain committed to increasing trade.
“The external economic climate for exporters has been a tough one,” she said. “Growth in the global economy has not been favourable. The focus should be on what else needs to be done.”
SMEs represent more than 99pc of all private sector businesses, forming 59.3pc of private sector employment.
Ed Salt, the owner and managing director of Cheshire-based Delamere Dairies, one of the UKTI’s “export champions” for 2015, said the Government should focus on improving trade agreements with non-EU countries.
China accounts for a fifth of sales at Delamere Dairies, which has a turnover of £27m, yet trade is hindered by duties and red tape, Mr Salt said.
“New Zealand is currently working at having free trade agreements with China. In contrast, we have import duties against our milk product out of Europe. On a world stage, Britain is not as competitive,” he said.
British exports to China fell by 1pc in the past decade, government figures show.
The Association of Translation Companies said it was part of a wider challenge where the UK is losing out on £48bn a year in lost exports, the equivalent of 3.5pc of GDP. The organisation blamed a lack of language and cultural skills, which make business owners nervous about doing business outside the UK.