What use are exports if they can't be exported?by David Leighton / November 16, 2016 / Leave a comment
The UK is a maritime nation. Our ports handle 95 per cent of the country’s trade in goods. But for every five containers that arrive in the UK loaded with imported goods, two to three leave these shores empty. Addressing that deficit needs to be a top priority post-Brexit and our ports are part of the answer. They can be the vanguard of an ambitious and creative industrial strategy, playing a central role in helping the nation to increase its manufacturing and exports.
The Port of Southampton is the UK’s number one export route, handling exports worth some £40bn. Of that total, about £36bn represents goods destined for countries outside the EU. Those exports are produced by leading manufacturers such as Jaguar Land Rover and JCB: the Port of Southampton is their gateway to global markets. That’s why, to enable the UK to boost its manufacturing and exports, it’s important to make sure that ports like Southampton can grow and are well-connected by road and rail.
For ports to serve exporters effectively they also need to be able to continue to invest in new infrastructure and facilities. This requires a regulatory environment that is appropriate for the UK.
Over the past five years, the UK ports industry has attracted more than £2bn of private investment, helping to create 50,000 private-sector jobs. Unfortunately, this success has been put at risk by the proposed EU Port Services Regulation, a set of rules designed for the majority of ports elsewhere in Europe which, unlike those in the UK, are largely state-owned and state-funded. This regulation should be one of the first EU laws to be repealed upon completion of the Article 50 negotiation process.
The contribution that ports can make to increasing manufacturing and exports, however, goes beyond their role as conduits of trade; they also offer a major strategic opportunity to develop new manufacturing industries. A number of ports across Britain, from Hull to Port Talbot, have large areas of land close to deep water and as such offer ideal locations for new manufacturing businesses that need to import raw materials or components and export of finished products. The construction of a new £310m offshore wind manufacturing plant by Associated British Ports (ABP) and Siemens near Hull is one example of these benefits in action but they can apply to all types of manufacturing, not just those related to offshore activity.
Government can help realise the opportunity to develop ports as centres of new manufacturing by marketing those ports which offer the greatest potential to investors and companies overseas. Government can also help to increase the attractiveness of port locations for new manufacturing and development. The “Super Enterprise Zone” is a concept that builds on current Enterprise Zones by incorporating additional advantages for businesses around the payment of duty on imports and exports; it’s an idea particularly suited to unlocking the full potential of ports as drivers of economic growth.
The Super Enterprise Zone is just one example of the ambitious and innovative thinking that the UK will need in order to forge a prosperous future. Indeed, such thinking should be the guiding principle of an industrial strategy that aims to increase manufacturing and exports. It is also imperative that the development of this strategy is based on a mandate to align policy across government in order to achieve the overarching objectives of our new industrial strategy. Ports offer a perfect demonstration of why this approach is necessary since, as we have seen, maximising their ability to drive growth in manufacturing and exports depends on actions that cut across a number of government departments.
Regardless of Brexit, it is right that government is looking to build an industrial strategy. Ports are ready to be at the forefront of this and to support an approach that will join up government policy in a way that promises greater success in delivering a reinvigorated manufacturing base, more exports and a stronger economy. Ports can be the foundation of our prosperity in a post-Brexit world.
On the 17th of January 2017, Prospect hosted a roundtable discussion with the contributors to: Brexit Britain: the trade challenge. This report is designed to act as a guide for parliamentarians, officials and businesses with a stake in the UK’s changing relationship with the world following Brexit. The discussion was chaired by Tom Clark, Editor of Prospect. Participants included Tasmina Ahmed-Sheikh MP, Miriam González and Vicky Pryce.
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