Letters: The Brexit effect

In Tom Clark’s excellent round-up of the economic effects of Brexit, he noted that exports to the EU “look almost unaffected on the headline numbers.” As ever with statistics, it depends on how you cut it.

If you compare UK goods exports to the EU with sales to the rest of the world, the headline export numbers seem fine. But the other way is to compare UK exports to those of other rich countries. This data tells a much worse story, which suggests that Brexit is damaging UK goods trade both in Europe and ­elsewhere.

Advanced economies’ goods exports have mostly recovered rapidly from the coronavirus pandemic, and are now above their 2019 level, while UK exports are lower. I’ve ­estimated how badly Brexit has hit goods exports by comparing Britain to a “doppelgänger UK,” which is made up of a few rich countries that are picked because their economic performance closely matches the UK’s before it left the ­single market and customs union. The ­countries are the US, Germany, Canada, New ­Zealand and Australia. By the end of 2021, the UK’s goods exports were 16 per cent lower than the doppelgänger’s.

British exports to the EU have underperformed, but so have those to the rest of the world. UK exporters serving global markets may be finding it harder to source components from Europe, and global manufacturing companies have moved some plants to the EU from Britain, which would reduce UK exports generally if these companies use plants to serve EU and non-EU markets.

What is clear is that Brexit, far from ushering in “Global Britain,” is making it harder to achieve.

John Springford is deputy director of the Centre for European Reform and runs the regular “Cost of Brexit” report series.