Britain’s export growth has fallen well behind that of other major countries, including Germany and the US, since the Tories came to power, new analysis shows.
Figures collated by the House of Commons Library show that UK trade exports grew just 24.4 per cent between 2010 and 2021, representing the lowest rate of growth among G7 countries except for that of Japan.
The EU averaged export growth of 35.5 per cent during the same period, while the US saw a 37 per cent boost and Germany averaged 34.5 per cent – all substantially better than the UK.
That’s despite a high-profile government trade blitz and claims that Brexit would help the UK to do business abroad. Under the last Labour government, the value of exports grew from £243.3bn in 1997 to £452.9bn in 2010.
The government has said that its forthcoming export strategy will turn the UK’s performance round, and there are already signs of good export performance this year. But Labour accused ministers of a “consistent failure to champion exports” and said the Brexit trade deal needed to be reformed alongside the introduction of a new industrial strategy.
Gareth Thomas, Labour’s shadow trade minister, told The Independent: “These devastating figures underline a decade of weak economic growth with a consistent failure to champion exports and help British businesses get their products into overseas markets.
“When the Conservatives’ own former export minister thinks the government isn’t doing enough to help, it’s time for change. Labour will make economic growth our priority for government, to tackle the cost of living crisis and increase the number of well-paid jobs.
“As part of our growth plan, we will reform the trade deal with Europe to reduce red tape, will establish a new industrial strategy to boost manufacturing, and will boost export promotion.”
Business groups have said that new barriers to trade with Britain’s closest neighbour – the EU – are now making it even harder to export goods. Under the analysis, only Japan, whose economy was stagnant for large parts of the 11-year period, performed worse than the UK, while France saw broadly similar levels of growth.
The analysis is based on numbers from the UN Conference on Trade and Development, which uses official national figures.
Labour also said that the latest Department for International Trade figures show that the deal struck with Japan in 2020 by the then trade secretary Liz Truss was an “irrefutable” failure. The figures show that British exports to the country declined from £12.3bn to £11.9bn in the year ending in June 2022 – including a 4.9 per cent slump in goods.
Despite Ms Truss’s famous boasts at the 2014 Tory conference of “selling tea to China” and “opening up new pork markets” in Beijing, British exporters were at the time underperforming compared with their competitors.
And voting to leave the EU in 2016 has made matters significantly worse. The government’s own Office for Budget Responsibility said last week that Brexit has had a “significant adverse impact” on UK trade “via reducing both overall trade volumes and the number of trading relationships between UK and EU firms”.
Government trade officials say that UK exports have reached £748bn in the past 12 months, an increase of £132bn on the previous 12 months. But this sharp rise is just £48bn higher than in 2019, with UK exports having been affected by Brexit and the pandemic in the intervening period, meaning that the new figure amounts to only a 6.9 per cent rise over the past four years.
Previously released Eurostat figures from Brussels show a 14 per cent hit to exports from Britain in 2021 amid mounting red tape for businesses that previously enjoyed single market and customs union membership.
Earlier this month, Rishi Sunak effectively abandoned any hope of getting a US trade deal before the next election, telling reporters at the G20 summit in Bali that there were other ways in which the US and UK could cooperate.
Trade economists have pointed out that even with such deals in place, there is little hope of making up the ground lost by leaving the single market.
Former environment secretary George Eustice said earlier this month that one free trade agreement signed with Australia was “not actually very good”, while former Tory exports minister Mike Freer has previously said that the Department for International Trade failed to do enough to help businesses sell their goods overseas.
Will McGarrigle, head of global trade policy at business group the Confederation of British Industry (CBI), said that new barriers to trade between Britain and the EU are constraining exports.
“UK trade as a percentage of GDP is the lowest in the G7. Improving export performance is vital for growth across the country,” he said. “That starts with our nearest neighbour. Despite having a tariff- and quota-free deal with the EU, firms still face significant administrative burdens and costs to export there, and for the full potential of the deal to be felt by business, compromise from both sides is needed to resolve [the problems relating to] the Northern Ireland protocol.”
He added: “More holistically, helping businesses of all sizes to scale up their global sales, including by using trade deals, is crucial. Firms which export not only benefit from higher growth and profit but are more resilient, being better able to weather domestic economic shocks.”
The poor trade performance compared with that of the UK’s competitors comes after the Bank of England governor Andrew Bailey told MPs Britain was also falling “dramatically” behind in terms of growth.
Last week, Mr Bailey told the Treasury select committee that UK GDP was now 0.7 per cent lower than its pre-Covid level, compared with that of the eurozone, which was 2.1 per cent higher than it was at the end of 2019, and that of the US, which was 4.2 per cent higher.
A spokesperson for the Department of International Trade said: “We’re promoting the UK’s world-class exporters to help them take advantage of global opportunities. UK exports have reached £748bn in the last 12 months, an increase of £132bn on the previous 12 months and £48bn higher than in 2019.
“Our 12-point export strategy and new export academies give businesses the tools they need to sell to the world, while our ambitious new trade deals open up even more opportunities to create jobs, boost higher wages and grow the economy.”
