Ten ways to maximise UK services trade

UK businesses are globally renowned for producing creative services that solve some of the world’s most pressing problems and make people’s lives better.

The UK is the world’s ideas factory: its strengths are in services sectors which make up 80% of GDP and contribute consistently strong trade surpluses - £127 billion in 2021 alone.

The global success of British services businesses allows them to create jobs throughout the country. Professional and business services sectors provide 4.9 million jobs and financial services businesses provide 1.1 million jobs – two thirds outside of London.

Across the country, British workers are using their creative skills to develop high-value services for export. Examples of how UK services are making people’s lives better include:

  • Promoting health and wellness: UK businesses are creating leading AI to accurately diagnose patient conditions and develop tailored treatment plans. UK entrepreneurs are creating global wellness brands that help people lead healthier, more active lives, using digital channels to export tips for nutritious diets, fitness tracking, and exercise classes.
  • Financing and supporting the green transition: UK financial institutions are providing billions of pounds of green investment to help businesses manage the green transition and fight climate change. Professional advisors are helping their global clients deliver sustainability strategies, keep pace with new green standards, and develop a sense of mission to achieve very ambitious environmental, social, and governance (ESG) targets.
  • Creating and connecting spaces: UK planners, architects, and engineers are designing the cities of the future, attracting interest from Africa, the Middle East and Indo-Pacific and positioning the UK as a world leader in creating functional and sustainable homes, energy-efficient public transport, and cleaner, greener public spaces.
  • Powering up: Innovative UK businesses are spearheading the global renewables revolution, developing cutting-edge technology to deliver more environmentally efficient power. Green technologies are kept in great shape by UK services exporters: for example, UK businesses sell solar panels internationally and provide installation and maintenance services in the destination market to ensure that the panels work. This is just one of many examples of how UK goods exports (solar panels) rely on UK services exports (maintenance) to function.
  • Helping all UK Regions & Nations win from trade: Financial and professional services businesses provide funding and advice to companies in all sectors and regions of the UK, helping British businesses to grow their exports of goods and services to every corner of the globe and attract global talent and investment.

British businesses could achieve so much more internationally if the UK government focuses its trade policy objectives on removing services trade barriers that are holding them back, such as:

  • Restrictions on selling cross-border services, including digital and online services.
  • Measures that make it very hard for UK businesses to set up offices overseas.
  • Laws that limit the ability of UK professionals to travel to meet overseas clients and refuse to acknowledge UK professional qualifications.

Equally, UK trade promotion efforts should prioritise UK services: the government should provide services businesses, especially SMEs, with timely advice about market dynamics in key international countries and hold trade shows that highlight UK services just as much as UK goods.

It’s time for the UK to get serious about services trade. Trade agreements, export drives, and trade promotion efforts will only deliver value for the UK if they reduce services trade barriers.

At a minimum, UK trade policy needs to prioritise these ten things from now on:

1. Remove barriers to cross-border services trade, especially in activities like insurance, financial and investment advisory services, and e-payment services.

2. Remove restrictions that hold UK businesses back from opening international offices and businesses like foreign investor equity caps, joint venture requirements, economic needs tests, nationality and residency requirements.

3. Help UK entrepreneurs, professionals and employees develop face-to-face relationships with global clients by securing faster business visa turnaround times and ensuring that UK workers can work abroad for longer periods. Equally, the UK should help UK businesses bring in highly skilled international workers from overseas offices for short term projects by removing the need for UK businesses to apply for intra-company transfer visas and widening business visitor rules.

4. Provide for the mutual recognition of professional qualifications so that UK professionals can practise in regulated professions overseas.

5. Guarantee digital trade and the data flows vital to all services businesses, by enabling cross-border data flows, preventing unjustified data localisation rules, recognising the validity of e-signatures and e- contracts, and protecting digital intellectual property.

6. Safeguard UK innovation by ensuring that all trade agreements contain robust intellectual property protections and prevent the theft of trade secrets, including by cyber theft.

7. Establish regular regulatory dialogues between UK and partner country regulators that cover financial services and other highly regulated services. These dialogues, with industry participation, should explore how regulators can better align existing regulations, collaborate on emerging regulations, and recognise the validity of each other’s regulatory approaches to boost cross-border services trade, and influence global regulatory best practice.

8. Ensure fair treatment of UK businesses in other jurisdictions, by requiring the trade partner’s regulators to allow them reasonable time to comment on proposed regulatory measures that affect them, and by operating fair, transparent rules on awarding licences and qualifications.

9. Protect UK savers and pensioners by safeguarding overseas investments through effective investor dispute resolution mechanisms offering adequate, effective, and prompt compensation, and protect UK consumers by ensuring that trade agreements require services to be provided with reasonable skill and care and in a reasonable time.

10. Secure effective government procurement arrangements in markets worldwide, giving UK businesses a fair chance to bid for government contracts related to financial and professional services, including government-sponsored financial services like pensions and health insurance.