WHY BRITAIN, NOT EUROPE, IS BEST PLACE TO INVEST
YESTERDAY’S figures from the Office for National Statistics give the lie to claims made during the referendum campaign that separating Britain from the market of 500 million people in Europe would be a calamitous mistake.
The data shows that as the 19 countries of the eurozone stagnated, the UK successfully turned its attention to the rest of the world.
Indeed, in each of the last four years our exports to the rest of the world have exceeded those to the much vaunted single market.
The ‘Pink Book,’ which examines every aspect of our trade across the globe, says that in 2015 we sold £151 billion of goods to non-EU countries – far exceeding the £13 billion to Europe. The still unresolved crisis in the eurozone meant that Britain’s exports to the bloc fell by 3. per cent in 201 and 2.7 per cent in 2015.
The new figures will be grist to the mill for Brexit Secretary David Davis and International Trade czar Dr Liam Fox as they seek to forge new trading arrangements with fast growing nations such as China, India and the United States.
Meanwhile, Britain’s status as a provider of services to both Europe and the rest of the world continues to expand exponentially.
At the cutting edge of this expansion have been legal and consulting services, none of which are covered by existing trade agreements. Britain is regarded as a legal powerhouse and now hosts many of the biggest American and Continental law firms who favour the fairness and incorruptibility of the English legal system.
What the overall data shows is that among the non-EU countries the United States is our most important trading partner with the surplus on trade rising to £39 billion last year. In contrast Britain has recorded ‘persistent’ trade deficits with Germany, partly fuelled by demand by UK citizens for expensive German cars.
The data shows how Germany, as a coun- try with a huge surplus in all its dealings with the rest of the world, is sucking wealth out of all of its trading partners.
Some experts have voiced concerns about the increasing size of Britain’s capital account deficit with the world, which is made up of our trade in goods and services as well as the income from our investments in other countries.
The new figures show that the current account deficit stood at 5. per cent last year and the governor of the Bank of England Mark Carney has argued that this makes the UK ‘dependent on the kindness of strangers’ to pour money into Britain.
The ONS suggests it is partly a consequence of the success of the UK economy compared to our European trading partners.
Investments by foreigners in Britain, particularly those from Europe, have made far fatter returns than those of UK companies in the eurozone where the economies have been slumping.
If that is the case then it is far from being the danger signal for Britain and the pound that some economists have claimed.