Scotland's £9bn Brexit blow as UK suffers exports drop since leaving EU

The SNP has claimed the statistics show that Brexit has already cost Scotland "billions of pounds” and “will continue to hit our economy, cutting Scotland’s GDP by up to £9 billion by 2030 compared to EU membership”.

The data shows that Ireland has seen the biggest increase in its export trade balance of almost 50% from 2016 to 2021, while France has recorded a surplus of 6.7% and Germany had a positive trade balance of 9.5% over the same same-year period.

When the impact of the Covid-19 is taken into account, and figures compared from 2020, the UK’s accumulated change of -19.3% is still the worst when compared to 13 of its close European neighbours.

Of the top five countries that have kept up a positive trade balance since the EU referendum more than five years ago, three are similar in population size or smaller than Scotland.

The top three countries that have maintained a positive export trade balance since the coronavirus outbreak are all similar in size to Scotland or smaller.

Data shows that in the first four months after the UK joined the European Economic Community in 1973, the pre-cursor for the European Union, the total value of the country’s goods exports increased by 16% compared to the first four months of the previous year.

In the first four months of 2021, the total value of UK goods exports fell by 11% compared to the first four months of 2020.

SNP MP Drew Hendry

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The SNP’s trade spokesperson, Drew Hendry, said: “Far from boosting trade – like we were told it would by Boris Johnson and company – Brexit has seen the UK’s exports decrease and its trade balance slump to the worst in north west Europe.

"Brexit, which Scotland didn’t vote for, has already cost our country billions of pounds – and analysis shows it will continue to hit our economy, cutting Scotland’s GDP by up to £9billion by 2030 compared to EU membership.”

He added: “Scotland deserves better than this. Three of the top five countries who have kept up a positive trade balance since the EU referendum, and the top three since the coronavirus outbreak, are similar in size or smaller than Scotland.

“This is an insight into just what Scotland could do and be if we had the full powers of independence.

"It is increasingly clear that independence is the only way to keep Scotland safe from the long-term damage of Boris Johnson's hard Tory Brexit deal.”

But the Scottish Conservatives have warned that the SNP has no authority on trade and the economy, claiming the party “is gambling with Scotland’s economic recovery by striking a deal with an anti-business and anti-jobs party”, the Scottish Greens.

Tory constitution spokesperson, Donald Cameron added: “These are absurd comments, given that the SNP still has no solutions for how they would deal with Scotland's growing budget deficit.

International Monetary Fund figures for the cumulative net change in annual percentage changes in volume of exports of goods and services between 2016 and 2021

"60% of our trade is with the rest of the UK and the SNP have no answers for how they would replace that or the half a million jobs that depend on it.

"This nationalist coalition and its extreme policies will only damage Scotland’s ability to recover from the pandemic."

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The SNP Government has claimed Scotland’s GDP could be 6% lower by 2030 than if the UK not left the EU.

Analysis published by the Scottish Government in June claimed that "overall UK trade in goods has fallen considerably with total exports and imports falling from £266.4 billion in the first four months of 2018 to £237.6 billion in the equivalent period in 2021".

The study added that "many Scottish businesses have faced additional trading costs due to EU exit since the start of 2021", stressing that research "suggests that businesses experiencing challenges with exporting or importing attribute the main cause of these difficulties to the end of the EU transition period not the Covid-19 pandemic".

It added: "According to HMRC, UK exports of food and live animals to the EU, which includes seafood and fish, decreased by £1.2 billion (34%) in the first four months of 2021 compared to the equivalent period in 2018, with stricter checks and certifications being one of the main reasons."

Economic experts at the Fraser of Allander Institute have told the Herald that the new statistics show the UK has failed to see its exports recover from the pandemic, unlike its EU and European neighbours.

Mairi Spowage, deputy director of the Fraser of Allander Institute, said: “In the statistics, we can obviously see the bounce back other countries are experiencing this year, which isn’t happening in aggregate for the UK.

“It is quite difficult to tell the impact at the moment because everything is mixed up with Covid.

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"We saw some stockpiling of goods prior to December and then some disruption to exported goods but mostly that has recovered. It’s services where there’s still reduced demand in the economy and we do still see services at a low level.”

She added: “If we are talking again about plans for an independent Scotland, one of the issues they will need to address is that obviously trade with the rest of the UK is three times bigger than the rest of the EU, at least it was prior to the pandemic.

“So it will really depend on what the trading arrangements are in any independent Scotland.”

In 2020, the UK’s exports of goods and services totalled £574 billion and imports tallied up £586 billion – while the EU accounted for 42% of the country’s exports and 50% of imports.

The UK generally imports more than it exports meaning that it runs a trade deficit.

A deficit of £119 billion on trade in goods was partially offset by a surplus of £107 billion on trade in services in 2020. The UK’s overall trade deficit was £12 billion in 2020.

A UK Government spokesperson said: “The pandemic and restrictions across Europe have affected trade and depressed demand, so it is too early to draw firm conclusions on the long-term impact of our new trading relationship with the EU and the rest of the world.

“We have secured deals with countries that account for 64% of UK trade - worth £744bn - and we are pursuing ambitious trade deals with countries like Australia, Japan and New Zealand as well as the £9 trillion Indo-Pacific free trade area.

“We are supporting businesses in Scotland to seize fantastic opportunities through free trade deals and reductions in trade barriers. Earlier this year we secured a suspension on retaliatory US tariffs on Scottish whisky, and through our new trade deal with Australia, distillers will also see the removal of 5% tariffs.”