Recent figures show that despite UK exports increasing over the past year, the UK’s trade deficit persists.
According to the latest figures published by the Office for National Statistics (ONS), the UK ran a £27.5 billion trade deficit, between March 2017 and February 2018. Whilst a trade deficit remains, it did shrink by £12.9 billion compared to the previous year. This is mainly due to a widening of the UK’s trade surplus in services and a slight narrowing of the goods deficit.
In order to reduce the goods deficit even further, the Government must encourage successful export-focused industries, such as the video games industry, and work to increase the proportion of SMEs that export.
Following a question posed to Department for International Trade, Minister of State for Trade and Export Promotion, Baroness Fairhead laid out several steps the Government are taking to support small and medium-sized enterprises (SMEs) in obtaining the funds and resources necessary to take full advantage of global trade. This included:
- The gov.uk website which offers digital tools to help businesses export.
- UK Export Finance (UKEF) which offers SMEs support to export overseas with confidence. In October 2017 UKEF partnered with high street banks, offering SMEs access to government backed trade finance directly from their banks.
- The Government publishing a new Export Strategy in the coming months.
Dr Richard Wilson OBE, CEO of TIGA, said:
“In order to reduce the trade deficit, the Government must continue to encourage and support export-focused industries. The digital sector plays an ever increasing role in UK exports, contributing more than £32 billion in 2015; a growth of almost 40% since 2010. The video game industry is supporting this trend, with at least 95 per cent of developers exporting their games. However, we must not allow obstacles such as access to finance and skill shortages to hold the sector back.
“We need to improve access to finance for the games industry by introducing a Games Investment Fund (GIF). A GIF would provide pound for pound matched funding, up to a maximum of £500,000, for original game projects. This would support the growth of our export focused video games industry.
“Meanwhile, the Video Games Tax Relief (VGTR) has supported almost £700 million of UK expenditure in the industry since its introduction in 2014. VGTR enables the UK to compete on a more level playing field against our overseas competitors. It is vital that this measure is retained and potentially strengthened in the years ahead.
“Finally, we must increase the supply of highly skilled graduates available to work in our sector and ensure that we can continue to access highly skilled personnel from the EU post-Brexit. Access to skilled workers will enable UK studios to grow, develop and export.”