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UK’s trade export growth slower than EU, US and G7 countries under Tories

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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 – the lowest rate in the G7 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 its forthcoming export strategy will turn the UK's performance around, 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 reform, along with 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 new barriers to trade with Britain’s closest neighbour – the EU – were 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, while France saw broadly similar levels of growth.

The analysis is based on numbers from the UN trade and development conference, which uses official national figures.

Labour also said the latest Department for International Trade (DiT) figures showed that the deal struck by then-trade secretary Liz Truss with Japan in 2020 was an “irrefutable” failure.

DiT figures showed that British exports to the country decline from £12.3bn to £11.9bn in the year running up to June 2022 – including a 4.9 per cent slump in goods.

Despite future prime minister 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 to 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 UK exports have reached £748bn in the past 12 months, an increase of £132 billion on the previous 12 months. But this sharp rise is just £48bn higher than in 2019, with UK exports affected by Brexit and the pandemic in the intervening period. This amounts to a 6.9 per cent rise in the intervening 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 firms that previously enjoyed single market and customs union membership.

Rishi Sunak earlier this month effectively abandoned any hope of getting a US trade deal before the next election, telling reporters at the G20 in Bali that there were other ways the US and UK could cooperate.

Trade economists have pointed out that even with such deals there is little hope of making up ground lost due to 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 the department for international trade had failed to do enough to help firms send goods overseas.

Will McGarrigle, head of global trade policy at business group, the Confederation of British Industry (CBI), said new barriers to trade between Britain and the EU were 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 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 to the UK's competitors comes after the Bank of England governor Andrew Bailey told MPs Britain was also falling “dramatically” behind in growth terms.

Last week, he told the Treasury select committee that the UK was still -0.7 per cent behind its pre-Covid GDP level, compared to the eurozone which was at plus 2.1 per cent and the US which was 4.2 per cent.

A spokesperson for the Department for 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.”