A true economic miracle is happening. An extraordinary leap in the UK’s global export trade has occurred – a complete reverse of the ‘Doomsday’ predictions of the Treasury, Bank of England and Department for Business in London both before after the Brexit vote.
According to figures published by the UK Office of National Statistics in November – in the second calendar year following the EU referendum – exports to non-EU countries were £342 billion while exports to EU countries were £274 billion.
In the same period, the growth in exports continued to outstrip the growth in imports, almost halving the UK’s trade deficit from £23.4 billion to £15.8 billion. Most exceptionally, since the referendum, exports have increased by £111 billion to £610 billion.
Doubters will say it is a temporary blip caused by the falling pound. Not true. The boom is in new markets, and largely in new products and services, too. UK exports not just increased but doubled in hitherto obscure countries such as Oman and Macedonia. Exports to distant Kazakhstan climbed to $2 billion, only slightly less than the UK’s exports to Austria, worth $2.43 billion in 2017, which like many EU nations buys very little from the UK.
In the 12 months to September, the value of UK exports grew by some 4.4%, including strong growth in the manufacturing sector. Indeed, HMRC stated that exports of goods had shown “robust growth in every single region of the UK”. The number of Welsh SMEs which export doubled during the last two years to 52%.
Curiously, none of this has been spotted by any of the UK’s headline media – the BBC, Sky News or the FT. Not a peep from the new editor of the Daily Mail. Even The Economist was asleep on the job. Meanwhile, various government departments are spending much of their time issuing ‘Death in Brexit’ forecasts in a co-ordinated campaign with the Bank of England and other allies – and rarely champion our achievements.
Four years ago I was interviewed by Richard Cockett, The Economist’s UK business editor. I told him the UK was experiencing an unparalleled SME boom. How did I know, he asked? Since leaving the FT as a technology correspondent and columnist in 2003, my small team in central London has maintained a uniquely comprehensive database of more than 70,000 UK smaller companies.
As a result, daily we receive an avalanche of success stories. In the food and drink sector alone, if you want whisky marmalade or beetroot ketchup, or 500 new gin varieties or more than 1,000 new craft beers launched since 2011, our very brave, risk-adoring micro-SMEs will deliver.
If a New York cathedral needs a new, hand-made organ that £3 million contract comes to Britain. We sell sand to Saudi Arabia, china to China, and Turkish delight to Turkey. In the ultra-competitive auto components sector, UK exports are up 20%. Luxury goods, consumer goods, clever instrumentation for NASA and crucial cerebral input into US defence projects are all avidly listed in our dataset.
And yet, in our view the true importance of the export boom is as much political as economic. It proves that a No-Deal exit from the EU – or what I much prefer to call ‘Our Own Deal’ – is by far the best option, and far less damaging and disruptive than the ‘experts’ at the Bank of England, IoD, CBI, OECD and World Bank have forecast.
Far from being the ‘poverty and isolation’ scenario predicted by the chin tremblers who endlessly appear on Radio 4, the UK will be far much dependent on the EU in as little as five years.
Fears about UK-made cars from Japanese firms such as Nissan and Toyota being cut off from Europe are groundless. First, the UK could retaliate against BMW and VW – something no post-Merkel German politician would tolerate. Any anti-Japanese actions by the French would result in the rapid diminution of the £4 billion annual exports of French cosmetics to Japan. And the French know it, no matter what Macron might bluster.
But the export explosion is not the only piece of recent great news for the UK – there is more. First, in October 2018 Japan’s Prime Minister, Shinzo Abe, invited the UK to become part of the Pacific free trade pact – although this is dependent on the UK leaving the EU’s Customs Union. It would make the UK the sole geographically-distant member of the grouping, helping the country to rebuild trading links around the Pacific Ocean that stretch back more than two centuries.
Next, BP’s huge Claire Ridge oilfield, west of the Shetlands, just came on stream, providing no less than £42 billion in revenues over the next 25 years. It is a development much envied across energy-starved Europe – and there are more oilfields to come.
At this critical moment in the Brexit saga, it is vital the UK now wakes up to the much brighter future it has outside of the EU, and vital that Mrs May copies the bravery of our SME exporters. The so-called ‘No-Deal’, a term that needlessly frightens ordinary citizens, should indeed be re-named ‘Our Own Deal’, in which we invite all nations to trade with us on fair trade, low or no tariff, basis.
The UK economy will soon be in a solidly secure position to refuse any damaging ‘deal’ from the European Commission. Perhaps it was always the height of imbecility to think we could ever get a good deal from the Commission.
Finally, the tide of history is in our favour, even in Europe. The current, sub-optimal generation of European politicians – Cameron, Merkel, Juncker – will soon ‘be history’. Merkel goes next year – and every EU Commissioner will be replaced, too.
As Brexit talks limp from one embarrassment to the next, a No-Deal option will not be the doomsday Theresa May, the financial and property elites, and the heads of the UK’s top organisations and PLCs have long predicted. In fact the UK should never have negotiated with the Commission – from whom no fair deal was ever possible. The UK should introduce its own deal, ‘Our Deal Now’, in which we offer all nations fair trade agreements with no or low tariffs.
For hundreds of thousands of small UK companies, a complete split from the EU can’t come soon enough.
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