Ian McConnell: No sign UK Government cares one whit on Brexit woe – HeraldScotland

EVIDENCE of the hugely detrimental impact of Brexit on UK exporters and the countrys economy is continuing to pile up but there is no sign the hidebound Boris Johnson administration cares one whit.

The Centre for European Reform think-tank estimated on Monday that, in October, UK goods trade was 15.7 per cent, or 12.6 billion, lower than it would have been if the country had stayed in the European single market and customs union.

The think-tank, which is focused on making the European Union work better and strengthening the blocs role in the world, bases its estimates in this context on a sophisticated model using a doppelgnger UK. This is a group of countries whose trade and other economic data closely matched that of the UK between the 2016 Brexit referendum and December 2019.

In a general sense, much has been difficult to discern amid the economic fog created by the fall-out from the coronavirus pandemic.

However, the Brexit effects have shone through clearly, and are increasingly apparent for anyone who cares to take an objective look and acknowledge them.

And what the Centre for European Reforms analysis does, by examining the trading performance of the doppelgnger UK, is strip out the impact of the pandemic to shine a light on what the UKs hard Brexit has done to trade.

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The Centre for European Reform notes: The doppelgnger is a subset of countries selected from a larger group of 22 advanced economies by an algorithm. The algorithm finds the countries that, when combined, create a doppelgnger UK that has the smallest possible deviation from the real UK data until December 2019, before the pandemic struck. The data includes goods trade, GDP growth, population, inflation, industrial production as a share of output, as well as some other measures.

The impact of Brexit on the UKs international trade was inevitably going to be huge, given the EU is as a bloc by far the countrys biggest export market. And there has been plenty of evidence at sectoral and company level of huge woes for exporters following the UKs exit from the European single market at the end of last year.

However, the Centre for European Reforms analysis is nevertheless both eye-catching and alarming.

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Notably, the Confederation of British Industry, in its latest UK economic forecast published last week, warned that recovery in exports isexpected to be lacklustre, following disappointing growth over this year so far. The CBI also highlighted its expectation that UK business investment will continue to lag other advanced economies.

These astute and entirely credible observations seem to contrast starkly with the hot air emanating from the Johnson administration, which has often appeared at pains to portray the UK as a resurgent colossus now strutting the global stage, free to do as it pleases because of Brexit.

CBI chief economist Rain Newton-Smith said: Let us be candid: UK exports are being outpaced by our global peers which, if allowed to continue, will negatively impact our economy in the long term.

And she declared: Lets not forget the importance of normalising relations with the EU our biggest and nearest trading partner which will aid cooperation in a host of other areas.

The CBI revised down its projection of UK growth this year from 8.2% to 6.9%. And it reduced its forecast of expansion in 2022 from 6.1% to 5.1%.

It noted: Short-term headwinds including rising costs and shortages have grown since the...previous forecast in June.

Responding to news of the CBIs downgrading of its growth forecasts for this year and 2022, Labour MP Hilary Benn, who chairs the cross-party, independent UK Trade and Business Commission which also includes leading business figures, said: While Covid-19 continues to affect the economy, many businesses have told us that the new barriers created by the Governments Brexit deal [have] also damaged growth particularly in exporting.

READ MORE:Brexit: Why does this Tory Government build barriers to growth?

He added: Unless the Government improves their threadbare deal with the EU, UK businesses will face a much greater challenge recovering from this pandemic relative to their overseas counterparts, potentially meaning supply problems and fewer opportunities long into the new year.

The UKs Office for Budget Responsibility also highlighted again the major impact of Brexit on UK exports and imports on October 27, the day on which Chancellor Rishi Sunak presented his latest Budget.

It said: Since our first post-EU referendum EFO (economic and fiscal outlook) in November 2016, our forecasts have assumed that total UK imports and exports will eventually both be 15% lower than had we stayed in the EU. This reduction in trade intensity drives the 4% reduction in long-run potential productivity we assume will eventually result from our departure from the EU.

It was good to see SNP MP Angus MacNeil last month highlight to Secretary of State for International Trade Anne-Marie Trevelyan the huge economic damage from Brexit and the virtually non-existent or imperceptible overall benefit of the New Zealand free trade agreement sealed with great noise in October by the Johnson administration.

Mr MacNeil was chairing a session of the International Trade Committee, at which Ms Trevelyan claimed there isnt a downside to the UK-New Zealand deal. She made this assertion in spite of dire warnings about the likely impact on UK farmers and food producers.

Ms Trevelyan did not try to dispute the major detrimental effect of Brexit on UK gross domestic product, which Mr MacNeil noted was estimated to be at least 4%. And she was not able to come up with figures showing any kind of significant boost to UK GDP from the New Zealand trade deal.

This was no surprise. We might still be waiting for the Department for International Trade to come up with detailed figures on the precise impact of the deal now concluded with New Zealand.

However, the general picture is already crystal clear.

A document published by the Johnson administration last year entitled UK-New Zealand Free Trade Agreement/ The UKs Strategic Approach, declared: A trade agreement with New Zealand is estimated to have limited effects on headline gross domestic product (GDP) in the long run, with the estimated impact on GDP being 0.00% under both scenarios.

Thats zero, to two decimal places.

Figures published by the Theresa May government in November 2018 showed Brexit would, with an average free trade deal with the EU, result in UK GDP in 15 years time being 4.9% lower than if the country had stayed in the bloc if there were no change to migration arrangements. Or 6.7% worse on the basis of zero net inflow of workers from European Economic Area countries. The Tories have, sadly, clamped down on immigration, to the detriment of the UK economy and living standards.

It is the myriad numbers highlighting the damage of leaving the EU, European single market and customs union which tell the real, sorry tale of Brexit. In contrast, the bold mighty-Blighty-style pronouncements of a UK Government which must surely know the actuality of Brexit but refuses to act to mitigate the damage are of no value in assessing the reality.

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Ian McConnell: No sign UK Government cares one whit on Brexit woe - HeraldScotland