10 October 2018

  |  CBI Press Team

Press release

The ebb and flow of UK's economy depends on ports

Ports are vital to the wider British economy and can be the perfect channel to increase the UK’s export performance, according to the CBI’s President, John Allan.

The ebb and flow of UK's economy depends on ports

Demonstrating how exports will give a boost to the economy, and make a company more productive and profitable, Mr. Allan explained why it is time to steer towards rapidly expanding the UK’s exports at a speech celebrating the 50th anniversary of the Port of Tyne.

Talking to leaders in the ports industry, Mr. Allan focused on three key areas - infrastructure, innovation and skills. By developing upon our existing infrastructure, nurturing talent from both here and abroad and reforming the apprenticeship levy, he said the UK is well on the way to increasing its competitiveness.

On the UK’s current imbalance of exports to imports, John Allan CBE, CBI President, said:

“The UK’s trade deficit is the greatest it’s ever been, second only to the US. The vast majority of ports handle far more imports than exports. And more often than not, cargo ships arriving in the UK will leave here completely empty.

“Today, less than 10% of businesses engage in exporting activity. And that’s the challenge.

“When we are facing threats to global trade through protectionism when our ports have invested hundreds of millions of pounds in increasing capacity that imbalance – between exports and imports – is a wasted opportunity.

“In fact, CBI research shows that demand isn’t the issue. The export market is growing rapidly. It’s our export supply that is falling behind.

“Boosting exports is a sure-fire way to revive our stagnating productivity. And we also know that companies which export are more competitive, more profitable, more innovative, and more productive.”

On infrastructure, Mr. Allan said:

“First, a lot of it starts with infrastructure. We can’t have exports without ports.

“We also need long-term investment in the roads and railways which connect these ports to people and to goods. This includes delivery of long-term projects – HS2 and Crossrail.

“This includes planning infrastructure at a local level, through the creation of new Strategic Transport Bodies, to provide full coverage across English regions.”

On innovation, Mr. Allan said:

“The most competitive countries in the world all have one thing in common, they incentivise new ideas.

“It’s something the UK has always been good at but today we’ve fallen behind on innovation. The UK lags well behind our international peers with our total spend on combined public and private R&D at only 1.7%, compared to an OECD average of 2.4%.

“Our economy depends upon long-term investment in R&D if we are to keep up with the pack. Fifty years from now, we want to have long felt the benefits of a 3% GDP spend on innovation.  

“We are recognising the need to reverse this decline. With a welcome government commitment to 2.4% of GDP for R&D funding and an ambition of £1 billion in funding for catapult centres.”

On skills, Mr. Allan said:

“Domestically, we need to look at how we encourage apprenticeships. Since the introduction of the apprenticeship levy, apprentice numbers are down 40%. 

“And as we approach this year’s Budget, now is the time to fix it. By increasing flexibility, ensuring quality, and widening accessibility.

“If we are to compete globally, we also need global talent. This starts with an immigration system that really reflects this ambition, one which is open enough to grow the UK economy with the right controls to build public trust and confidence. Get it right, and it will help lift our exports.”

On getting the right Brexit deal for ports, Mr. Allan said:

“No matter what trade deals we sign the EU will continue to be our nearest landmass. It is our job to provide the facts. To be frank about the real impact of Brexit on the border checks and the pay cheques.

“And it’s why we need ports and the businesses they support to help the CBI get it right when it comes to customs, or regulation. To minimise the challenges.  And maximise the opportunities.

“We must focus on our exporting agenda starting with the right infrastructure, innovation, and skills. So that the choices we make in the next few years set us up for the next fifty.”