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£515 Million-a-WeekHit in UK Exports to Top European Partners
New Government data shows rapidly falling trade with countries on the continent, reveals Sam Bright
The UK has seen a reduction in exports to our top European trading partners equivalent to £515 million a-week, new Government data reveals.
The Department for International Trade released new statistics on 29 October, tracking the UK’s exports and imports with countries around the world during the year from July 2020 to July 2021.
Total exports to some of the UK’s closest European trading partners fell by by £26.8 billion during this period, equivalent to £515 million a-week or £73.6 million a-day. Exports to Germany fell by £5.4 billion (10.2%), to the Netherlands by £1.4 billion (4%), France by £4.7 billion (13.4%), Switzerland by £9.8 billion (34.8%), Spain by £4.1 billion (23.6%), and Italy by £1.4 billion (8.7%).
As acknowledged by the Government, these figures cover various periods of social distancing restrictions, due to the COVID-19 pandemic. “Trade has been affected by the COVID-19 pandemic and the associated lockdown measures globally,” the statistics note. As of September 2021, UK GDP remained at 0.8% below its pre-pandemic level, though the economy grew by 5.5% in the second quarter of 2021 – exceeding expectations.
However, this period also coincides with the end of the Brexit transition period and the commencement of a new trading relationship between the UK and the EU – with mainland Britain leaving the single market and the customs union. During the EU referendum campaign, Vote Leave promised that the UK would save £350 million a-week in payments that it would otherwise have made to the EU’s budget. This claim was criticised as a “clear misuse of official statistics” by the UK Statistics Authority.
The Vote Leave claim also didn’t take into account the impact of decreased trade with the EU on the UK economy. Just last week, the chairman of the UK fiscal watchdog warned that Brexit would be twice as bad for the economy as the pandemic. Richard Hughes, chair of the Office for Budget Responsibility, noted that COVID-19 is expected to shrink the economy by 2%, while leaving the EU is likely to “reduce our long run GDP by around 4%”.
Byline Times and Byline TV have already extensively catalogued the ways in which Brexit is damaging the domestic economy – reducing staff numbers and imposing new barriers to trade in sectors ranging from fishing to farming to drinking.
In contrast, the post-Brexit trade deals signed with the rest of the world are only expected to modestly grow the UK economy. The Government last year estimated that agreeing a new trade deal with New Zealand – ratified in late October – would have a “limited effect… in the long run” on GDP, anticipating that it may only grow the economy by as little as 0.01%.
Meanwhile, there seems little immediate prospect of the UK signing a free trade deal with the USA – one of the promised benefits of Brexit. And even if a deal is signed with Biden’s America, the benefits are expected to be limited. By its own estimates, the Government expects a USA free trade deal to boost UK GDP by up to 0.16% “over the long run”.
“There are two possible outcomes from the government’s current trade strategy, either we will replace this lost trade with more distant countries, massively increasing costs and emissions, or, as many experts predict, we will fail to replace the trade meaning less business, fewer jobs and lower incomes across the UK,” Naomi Smith, chief executive of internationalist campaign group Best for Britain told Byline Times.
“The way forward is clear, we need to rebuild trade with Europe by improving the Government’s threadbare deal which has left businesses floundering, our creative sector faltering and our country on course for a trade war with our largest trading partner.”
The Coronavirus pandemic undoubtedly limited the UK’s international trade – but this predicament certainly is not helped by Brexit.