Don’t let doom and gloom drown out good news on trade
BRITAIN has, of course, chosen to isolate itself from the rest of the world, its Little Englander mentality helping to freeze it out of export markets. How do we know this? Because frustrated Remainers keep telling us.
Yet there is one problem with this thesis – it is not remotely true. As the Office for National Statistics revealed yesterday, we are trading with the rest of the world like never before.
In the year to September we sold £876.6billion worth of goods, an increase of 11.1 per cent on the preceding 12 months – or a 4 per cent rise when you take inflation into account. In 2022 we climbed from being the world’s sixth biggest exporter to being its fifth biggest.
How depressing, though, that we rarely hear positive news like this reported. I am not saying the infighting on the Tory backbenches shouldn’t reach the top of news bulletins – it matters, of course. But somewhere, surely, on our 24-hour rolling news channels space should be made to flag good news about the economy.
So why did Trade Secretary Kemi Badenoch’s announcement of the latest trade figures on Wednesday almost sink without trace? Since Britain voted for Brexit in 2016, every time a think tank or global body produces some gloomy outlook for Britain, it is hammered into us.
REMEMBER the IMF’s forecast last January that Britain would be the only major economy in the world to shrink in 2023, with a predicted 0.6 per cent contraction making it even worse than Russia? We couldn’t get away from gleeful Remainers trying to say “told you so”.
Now the IMF looks like it’s hopelessly wrong, it hardly gets reported at all. While the UK economy has kept its head above water, Germany’s economy, by contrast, has sunk into recession this year. This is not to say that it is time to perform cartwheels. In truth, the UK economy is flat-lining, just like most economies in Europe.
Figures released by the Office for National Statistics this week show economic growth of 0.2 per cent in September was cancelled out by a fall of 0.3 per cent in October.
There are many reasons why Britain and Europe are underperforming. Low productivity growth, especially in the public sector, is acting as a drag anchor. High energy prices have boosted incentives for industry to relocate to South Asia, where efforts to promote growth have taken priority over cutting carbon emissions. Moreover, working practices in Britain haven’t fully adjusted to Covid with long months of furlough damaging the work ethic and too many employees resisting an office return. We need more work to boost economic growth. Liz Truss and Kwasi Kwarteng were right to prioritise this even if they unsettled markets by going too far and too fast on tax cuts.
But trade has increased across the board since 2019. We are trading more within and outside the EU. While services have done particularly well, up six per cent over the past year, it isn’t true that we lack goods to sell to the rest of the world.
In the 12 months to September, we sold £34.9billion worth of cars, £32.8billion worth of electrical equipment, £25.8billion worth of medicines and £11.4 billion worth of aircraft and parts. Some 280,000 UK companies exported goods or services. I understand Brexit introduced some unwelcome bureaucracy and costs for some importers and exporters.
That, unfortunately, is the nature of the EU – even when you are supposed to have a free trade deal officials always manage to find some way to try to frustrate competition for the EU’s protected industries. But now that UK trade policy is in our own hands we can form our deals with the rest of the world, without having to incorporate the EU’s vested interests.
AND that is exactly what we are doing. We now have deals with Australia and New Zealand and last week, Rishi Sunak flew to India to begin the final stage of negotiations for a trade deal with what is one of the world’s fastest-growing economies.
Moreover, there are signs of sweetening in our sour relations with the EU. Last week, it agreed to delay for three years the imposition of a 10 per cent tariff on cars traded between the EU and the UK in cases where fewer than 45 per cent of vehicles, by value, were built in either economy. That has eased pressures on our car industry, particularly the electric vehicle sector, which can source cheaper batteries from China than Europe.
Britain is not booming, but neither is it in a Brexit-induced slump. There is good news – if only you are prepared to look.
‘There are signs of sweetening in our sour relations with the EU’