Britain will be 15 years behind schedule in reaching £1tn annual export target, figures | International trade

Ministers have been accused of leaving a “record of mistakes and broken promises” as internal forecasts show Britain will be 15 years behind schedule in meeting its £1tn annual export target after being hit by Brexit.

Forecasts from the Department for International Trade (DIT) show that the value of UK exports will not reach £1tn until 2035, based on current trends, with the total set to fall to £707bn next year.

The delay underlines how difficult British ministers have found it to meet the lofty predictions Brexiteers made about international trade after leaving the EU.

The pledge was first made by David Cameron in 2012, with the original target of hitting the £1tn mark in 2020. But Boris Johnson later gave an end date of 2030 after reviving the pledge in 2021 as the centerpiece of a campaign called “Made in Britain, sold to the world”.

However, new figures show that the UK will not reach £1 billion until 2035. They emerged in a parliamentary response from Andrew Bowie, the minister responsible for UK exports.

The projections are based on forecasts from the independent Office of Budget Responsibility (OBR), which show exports falling from £739bn last year to £707bn next year, before rising again to £725bn by 2027.

Bowie said in his statement: “Extrapolations of the Office for Budget Responsibility forecast suggest that the £1bn export could be achieved by around 2035 without further intervention.”

He also blamed external factors for Britain’s lagging performance. “We recognize that the speed at which the UK reaches this milestone will be affected by macroeconomic factors such as global demand and exchange rates,” he said. “This has proven to be the case over the past year where we have experienced external shocks and an increase in inflation,” he added.

Tina McKenzie, chair of the Federation of Small Businesses (FSB), said: “Trade barriers, including red tape, weak economic performance domestically and globally and inadequate export support have led to continued suppression of exports. Our research shows that one in eight small exporters have stopped selling to the EU temporarily or permanently, while a further one in ten are considering doing so.”

The FSB suggested changes to trade policy, such as a new fund to support small exporters and changes to the terms of trade between the UK and the EU, could help ministers boost the numbers sufficiently to still meet the 2030 target.

Nick Thomas-Symonds, Labour’s shadow international trade secretary, said: “The Conservatives’ export record is one of failure and broken promises. In 2012 they pledged to reach £1tn of exports by 2020. Six Chancellors and four Prime Ministers later, the OBR predicts the target will be reached 15 years late.”

He added: “This failure will mean the UK misses out on growth and job opportunities, and risks us falling further down the world economic rankings.”

Vote Leave said during the Brexit campaign: “If we vote Leave and take back control, we will have the power to make our own trade deals, create new business opportunities and create more jobs.”

But British exports fell after the country left the EU, with companies suddenly hit by extra border checks and disruption at customs. In January 2021, UK trade recorded its biggest monthly fall in 20 years.

In recent years, the government has found it difficult to conclude negotiations with large and complex economies such as India and the United States. Such bilateral agreements were something the UK was unable to do as a member of the EU, as it had to participate in agreements across Europe.

So far, the ministers have signed agreements with Australia, New Zealand, Japan and Singapore.

They hope to make progress on India-US trade deals by 2023, with US President Joe Biden planning a visit to Britain later this year to mark the 25th anniversary of the Good Friday Agreement. But that visit – and the entire trade deal – could depend on whether the British government can first reach an agreement with the EU on the Northern Ireland Protocol.

The OBR has previously said that the effect of Britain leaving the EU would be to weaken the position of the country’s exporters. However, ministers are maintaining their target in the hope that new policies and trade deals can boost international trade sufficiently to achieve it.

Cameron originally promised to reach the £1tn target by 2020, but in 2019 the UK exported just £689bn.

Boris Johnson relaunched the £1tn target by 2021 as the government looked for ways to reverse the decline and showcase the Brexit benefits. At the time, they unveiled “Made in the UK, sold to the world”, which involved giving companies loans for exports and access to trade experts.

A British official told the Financial Times in 2021: “This is the first time we’ve had an export strategy since we left the EU.”

The UK’s decision to opt for a hard Brexit with the departure from the single market resulted in the loss of four freedoms to trade – in labour, capital, goods and services.

Last year, a senior EU official said Britain’s trade with the EU was down by almost 14% in 2021 compared to 2020. Maroš Šefčovič, European Commission vice-president and Brexit negotiator, said: “Brexit has increased red tape, not reduced it . It is no longer as frictionless and dynamic as before. This applies to both goods and services, he said.

The Department of International Trade did not respond to an approach for comment

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