British businesses have been helped to export to 61 countries around the world over the past year with £7.4 billion of government support – providing a significant boost to jobs and the UK economy.
The finance provided by UK Export Finance (UKEF) in 2021-22 supported 72,000 UK jobs and added a gross value of £4.3 billion to the economy, meaning more money in people’s pockets and continued job security for British workers.
Of those supported by UKEF, 83 per cent were located outside of London and a record 81 per cent were small and medium-sized enterprises, according to the organisation’s annual results published today.
The £7.4 billion – the highest level for 14 years – brings the total support over the last five years to £33.4 billion.
It helped businesses to recover following the pandemic and is now supporting exporters facing challenges with global supply chains worsened by the Russian invasion of Ukraine.
And in its first year without providing any support for overseas fossil fuel projects, UKEF has launched a new mission statement and made ambitious carbon reduction targets to address climate change.
Anne-Marie Trevelyan, Secretary of State for International Trade, commented:
The UK is awash with untapped export potential. We have opened the door to the world with historic trade deals and now we are helping businesses walk through it. That’s why our national export credit agency, UK Export Finance, is boosting firms’ ability to export to the world with record-breaking support year after year.
Benefiting small businesses
UKEF has stepped up its support for small and medium-sized enterprises (SMEs). The number of SMEs that benefited from a UKEF support scheme increased by 25% compared to the previous year, with over 560 insurance and guarantee schemes issued.
In a new annual record, 81% of the companies UKEF supported directly with a scheme were SMEs. These milestones were underpinned by the ‘game-changing’ General Export Facility – a product designed specifically to give SME exporters more flexibility in accessing trade finance, unlocking almost £250 million of working capital loans.
A further £300 million was also awarded to 263 UK companies supplying to infrastructure projects UKEF has financed across the globe, supporting UK exports. These include doors made in Birmingham sold to an airport in Ghana, fridges made in Norfolk sold to a hotel in Dubai and critical medical supplies shipped from South Wales to hospitals in Zambia.
Moreover, UKEF provided £27 million to support importers buying from UK SMEs using its Standard Buyer Loan Guarantee Scheme, ensuring UK companies get paid upfront while overseas buyers benefit from more flexible repayment terms.
New emissions targets
As the need to address climate change becomes increasingly urgent, UKEF has launched a new mission statement, putting sustainability at the centre of its purpose.
In its report, UKEF set new targets to reduce absolute emissions (tCO2e) of oil and gas sector exposure by 75% by 2030 and reduce economic emissions intensity (tCO2e/£AAR) of power sector exposure by 58% by 2030 as it seeks to operate on a net-zero basis by 2050.
Further to its mission statement, UKEF was also recently recognised as the top export credit agency for sustainable financing in 2021, according to an independent ranking of ECA-backed deals.
It comes as UKEF maintained sizeable levels of financial support in its first year without backing overseas fossil fuel projects: it supported the clean energy, healthcare and critical infrastructure sectors with over £3.6 billion.
Mike Freer, Minister for Exports, added:
It was a pioneering and crucial step for UKEF to end its support for fossil fuel projects over a year ago. Now, with the new targets and mission statement we are launching today, UKEF is going even further to be a driving force behind the UK’s role in supporting the global energy transition. This can only be made possible with the skills and expertise of businesses across the UK, and UKEF is primed to offer its support as they seize these opportunities.
Protecting the UK taxpayer
As a self-funding department, UKEF takes on risk to make exports happen and works within an agreed framework set by the Treasury to ensure it makes measured decisions.
Since the start of the pandemic, UKEF enhanced its suite of products to meet the changing needs of UK businesses and stimulate exports – providing £8.2 billion of support through its Temporary COVID-19 Risk Framework since its inception.
Throughout this time, the department continued to operate efficiently and manage financial risk to protect the interests of the UK taxpayer in 2021-22, generating a net profit of £324 million for the Treasury.
Carl Stephen Patrick Hunter OBE, Chairman of the British Exporters Association, said:
UK Export Finance (UKEF) has provided vital support to exporters during the pandemic and is setting the pace amongst the ECAs in the global transition to sustainable trade. We at BExA look forward to working with UKEF over the coming year to continue to refine and develop its products to simplify and accelerate export journeys for UK SMEs.
This follows an announcement by the UK government today that it is set to unlock around 100 trade barriers worth more than £20 billion to help more businesses export.