In the 1970’s, the news headlines often flagged Britain’s massive trade gap and reported on it. They used to blare out about the UK being ‘in the red again’ as did the TV news. Allegedly, PM Harold Wilson was supposed to have blamed the trade gap for his loss to Ted Heath who became the new incumbent at Downing Street soon after. This was all over a relatively small trade deficit of £31 million, which was supposedly made worse by the purchase of a few jumbo jets that arrived in Britain at that time.
Historically speaking, Britain’s overall trade performance with the EU has been at best, poor. The House of Commons library produced data stating that the UK has had a trade deficit in both services and also goods every single year since 1999. The significant part of this is, the deficit is getting larger every year, and it more than doubled from £40 billion to £82 billion between 2012 and 2016 alone.
Conversely, global trading with the UK has shown better results with imports and exports essentially in equilibrium from 2000 to 2011 and from 2012 we have seen an increase of 5x of the surplus from £8bn to almost £40 billion.
Back to the EU group and the trade deficit between the UK has widened to 5% per annum, with France to 7% per year and the deficit with the remainder of the EU countries has risen to 11% a year.
This could be a positive signal for Brexit, with Smallwood stating that the UK trade performance has fallen essentially because Britain does not suit a single market economy whereas it works far better for a country like Germany.