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Budget: Export finance doubled

Export finance is to be doubled taking it from the least competitive in Europe to the most competitive said Chancellor George Osborne as he announced the Budget.

The amount of lending available will be doubled to £3 billion with interest rates cut by a third in a bid to support businesses in winning contracts.

Investment and exports are on the up said the Chancellor but Britain has got 20 years of catching up to do. “Our exports have grown each year and the OBR today forecast rising export growth in the future,” he said. “Our combined goods exports to Brazil, India and China have risen faster than those of our competitors. But we’re starting from a low base and we’ve got many lost years to catch up. Britain has to up its game – and today we do.”

While the reach and support that UKTI offers British businesses is expanding many firms can only win contracts if they are backed by competitive export finance, he explained.

“For decades the British government has been the last port of call, when we should be backing British businesses wanting to sell abroad,” he said. “Today we fundamentally change that. And we’re going to start with the finance we provide our exporters. Instead of having the least competitive export finance in Europe we will have the most competitive.”

“Following last year’s Budget, the Chancellor has refocused the recovery away from relying on the consumer to the export led growth we need, but more needs to be done,” said Martin Lambert, International Tax Partner at business and financial adviser Grant Thornton UK LLP.

“Doubling the amount of export finance available to £3bn is clearly an improvement, but to really help dynamic UK growth businesses drive their overseas expansion further funds need to be made available for this essential initiative. Improving awareness and ease of access to these funds is also required and government needs to outline how it is going to address this. The reduction in interest charged on export finance is encouraging but as the Chancellor acknowledged, we are starting from a low base.

“It is fundamental that British business people travel abroad to meet their potential customers face to face, especially in the real high growth economies, and as such the cut to flight taxes should be applauded.”

“It’s the best economic backdrop to the Budget that we’ve seen since 2010 but while the country is most definitely in recovery mode, businesses, particularly SMEs, are still in need of help if they are to grow and prosper,” said Gary Lee, partner at Begbies Traynor. “Help with exporting was top of the wish list for the SME community and on this the Chancellor has delivered by confirming the Government will double the amount available for lending to exporters to £3bn and cut interest by a third. This should open up the export arena for traders in the North West, asserting our position on a global map.”

The Chancellor also announced that Air Passenger Duty will be reformed to end the “crazy system where you pay less tax travelling to Hawaii than you do travelling to China or India.”

“It hits exports, puts off tourists and creates a great sense of injustice among our Caribbean and South Asian communities here in Britain. From next year, all long haul flights will carry the same, lower, band B tax rate that you now pay to fly to the United States” said Osborne.

“Private jets were not taxed at all under the previous government. Today they are, and I’m increasing the charge so they pay more.

“And because we want all parts of our country to see better links with the markets of the future we’re going to provide start-up support for new routes from regional airports, like Liverpool, Leeds or indeed Inverness.

“More support for businesses; competitive finance; cheaper global flights… I want the message to go out that we are backing our exporters – so that wherever you are around the world you can’t fail to see: Made in Britain.”

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