Scots exports slump by 13 per cent since Brexit

It reverses a trend that had seen Scotland's exports to EU countries rise by £420m between 2018 and 2019.

Scots businesses have raised concerns about continuing challenges in trading since the UK left the EU at the start of 2020 and has called on the UK government to act to make dealing with Europe easier.

The slump has been supported by a £3bn drop in Scotland's most exported goods, mineral fuel, mainly oil and gas - with sales dropping from £9.139bn to £6.246bn.

According to Offshore Energies UK, oil and gas activity supports 90,000 jobs in Scotland - some 42% of the total UK workforce.

According to the analysis, exports of food and live animals also dropped - by £67m to £1.099bn.

But there were some gains with machinery and transport exports rising by £416m from £1.880bn to £2.297bn.

Separate more Scottish Government analysis found that 'petroleum, petroleum products & related materials' fell by £826m (41%) to £1.4bn to the EU in the year between the first three months of 2020 and the same period of 2021. Shellfish exports to the EU fell by £33m, or just over a fifth over the same period.

Beverage exports, mainly whisky, fell from £858m to £833m, by £25m, or 3%. Most of the fall came from a £23m, or 9%, decrease in exports to the EU.

Medical and pharmaceutical product exports to the EU fell 34%, or £38m, while exports to the rest of the world rose by 21% or £15m.

Office machines and advanced data processing machines saw £29m (50%) drop in exports with most of this fall, £26m, related to the EU.

Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “Scottish exporters are telling us that they continue to face growing challenges trading with countries in the EU post Brexit. New customs procedures, tariffs, regulatory barriers and transport disruption are consistently cited as the top challenges facing firms.

“Faster customs processes, tariff reductions, removing technical barriers to trade, focused support for small and medium-sized enterprises' easier labour mobility, and mutual recognition of professional qualifications are top priorities for Scottish exporters.

“Businesses have been through enormous challenges over the last two years, but they have shown incredible resilience. During times of economic uncertainty, having a presence in a number of markets is an effective way to minimise risk, so we need to ensure that Scottish businesses are also encouraged to keep looking for international trade opportunities.

“To support this, the UK Government must ensure trading internationally is made easier for Scottish exporters, for example, by creating resource hubs which can better guide businesses to particular areas and regions of interest."

It earlier emerged that Scotland had increased its reliance on exporting to the rest of the UK, leading to Unionist warnings about the risks of independence.

The proportion of Scottish exports going to the rest of the UK in 2019 increased from 59.4 to 59.8%.

But international exports fell as a proportion of the total, from 40.6 to 40.2%, and within these, exports to the EU fell from 19.1% of all exports to 18.8%.

The SNP always cites the size of the overall European market as an argument in favour of leaving the UK and rejoining the EU.

But while the EU may be seven times the size of the UK market in theory, in practice the UK has been the destination for three times as many Scottish exports as the EU.

In 2019, exports to the EU increased due to a 33.9% jump in information and communication (£140m), 25% in transportation and storage (£185m) and 32.1% in pharmaceutical products.

Petroleum and chemical products remained the biggest proportion of exports to the continent, with the EU buying £3.2bn from the sector – but the figure dropped by £200m based on the previous year.

Meanwhile, UK-wide analysis reveals post-Brexit drops in export sales of £26bn have been being registered with the top four biggest economies in the EU.

Sales to Germany have dropped from £56.345bn in 2019 to £47.285bn while the value of exports to France has slumped from £40.285bn to £32.289bn, according to the UK Government’s Office for National Statistics (ONS) Sales to Italy dropped by £3.5bn to £14.245bn while exports to Spain dropped from £19.391bn to £13.216bn.

Since the end of the Brexit transition period on December 30, 2020 non-EU imports have surpassed EU imports into the UK.

Non-EU imports rose sharply by 13% in August alone. It was the highest level of imports from non-EU countries since records started in January 1997 and has been put down to high gas prices.

A Scottish Enterprise spokesperson said: “Exporting remains vital for Scotland’s economy and through our network of offices, we are working hard to help companies realise their export potential and tap into new markets around the world.

"Recent years have been challenging for a variety of reasons, however our intelligence suggests Scottish companies expect to see export levels increase during 2022/23 with greater interest in new markets, predominantly in Asia and the Americas.”

It comes as ministers have been warned that UK government red tape could lead to a block to meat exports that will have a "devastating" effect on the Scots industry and raise prices.

Scots farmers and meat producers are among those objecting to regulatory changes due to come in from December 13 that will mean that a "significant" amount of meat production will become "non-compliant" for export to the EU overnight.

With 72% of all meat exports going to the EU, the UK government has been warned that it will have a "devastating effect on farmers, auction markets and meat processors".

The National Farmers Union Scotland (NFUS) and Scottish Association of Meat Wholesalers (SAMW) have both put their names to concerns sent to the Department for Environment Food and Rural Affairs (DEFRA) that the new rules will be "another shot in the foot for the economy, with big unintended consequences for farmers, processors and consumers alike."

Th issue surrounds pre-export requirements which are set to change from a farmer declaration to a veterinary attestation with immediate effect on December 13, under a new Defra animal health documentation policy.

A Scottish Government spokesman said: “These latest figures show that while the economy is recovering, Scotland is still feeling the ongoing combined negative impacts of Brexit and the pandemic on trade.

“Scottish Government analysis showed that Scotland’s trade in goods with the EU was 12% lower in 2021 because of Brexit, which has taken us out of the world’s biggest single market, which is around seven times bigger than the UK. The Scottish Government is committed to Scotland re-joining the EU as an independent country.”