Kemi Badenoch, the UK's Business secretary, has 'hailed' Brexit Britain becoming the world's 4th biggest exporter, overtaking Japan, France and Holland in the process. This is in the Daily Express but the figures apparently come from UNCTAD, the United Nations Conference on Trade and Development showing that Britain was behind only China, the US, and Germany in 2022. CityAM also picks up the story but makes an important point. The improvement comes in services, not goods. Their headline is: Services trade sees UK become world’s fourth largest exporter.
Now this is obviously good news but I don't believe it's quite what Badenoch claims. Firstly, UK services exports haven't been negatively impacted by Brexit in the same way as goods exports have. Everyone agrees that. Next, it shouldn't be a surprise that we have overtaken Holland. It's a nation of 18 million, a little over a quarter of Britain's.
Japan and France are different. Japan's exports in 2022 were a record $746 billion but I think they have huge investments overseas and manufacture goods in local markets far more than we do so their 'exports' are not quite as important. Britain and France are more similar and often swap places in the world trade and GDP leagues. Also, Holland runs a $75 billion trade surplus while France and Japan run deficits, albeit smaller ones than ours.
Finally, it has zero connection with Brexit since services trade is not covered very much in trade deals so quitting the EU has had far less impact and the growth in services exports would almost certainly have happened in any event and without Brexit's impact on goods exports the overall numbers would have been far, far better.
Badenoch welcomed the news, and said: “The appetite for world-class UK produce continues to grow and this government will keep supporting our brilliant businesses, helping to create more jobs, pay higher wages and grow the economy.”
But we aren't exporting more 'produce' it's services like banking and insurance.
Nevertheless, the figures are in stark contrast with news about The City of London. Services exports may be on the up (although note the ONS says they showed a "large fall" in the last quarter to January 2024) but the Stock Market is well down.
The Telegraph reports that: Britain’s stock market is being dwarfed by a blockbuster European rally. Sir John Bell, described as one of our top life science leaders, says the London stock market is ‘going down the gurgler.’ This is also reported by The Telegraph, where he claims London is a bad place to raise money for life sciences.
It comes as Shell, the petrochemical giant, is said to be mulling a move to listing in New York.
So, I don't think the UK economy is in the sort of rude health Ms Badenoch would have you believe and Brexit has been nothing but damaging.
I also noted an interesting exchange on Twitter between colleagues at The Times and Sunday Times:
What supply side reforms has Brexit led to? Genuine question. I'm writing the conclusion to my series on the last 7 years. Most Brexiteers lament the lack of reforms. How do you apportion our problems out of Brexit/Ukraine/Covid/Underlying issues with productivity etc.
— Tim Shipman (@ShippersUnbound) April 7, 2024
Simon Nixon hit back at Andrew Neil and said Brexit had delivered a "gigantic supply-side reform" which had been "an unmitigated disaster." Tim Shipman then asks what reforms?
Nixon says, "Brexit was itself the ultimate supply-side reform in that it inflicted huge damage on the supply side of the economy with new trade barriers, increased red tape, end of free movement. The exact reverse of Thatcher's greatest supply side reform: the creation of the single market."
Shipman ends by claiming "[Brexit's] done. People voted for it. What next? NIre is improved and some problems with the TCA are being quietly ironed now that No10 isn’t bloviating about concessions etc. What should next govt do?"
But Brexit isn't done and never will be done. That's the problem. The next government will do well to start undoing it.
