by Harry Western for Briefings for Britain 01/07/2021
Recent claims that UK services exports have been badly hit by Brexit are not backed up by the data. Unlike with goods, there was no dip in services exports to the EU at the start of 2021, and nor does the evidence support the contention that services exports growth slowed in the years after the Brexit referendum. Indeed, UK services exports seem to have performed better since 2015 than those of key competitors such as the US or France.
Much attention has been focused recently on the performance of UK goods exports following the UK’s exit from the EU single market and customs union (for our recent analysis of this, see here). But what about services exports, which macro-economically speaking are as important, if not more so, to the UK?
Here, too, there have been claims that Brexit has caused massive damage. Most notably, one group of academics has claimed that UK services exports have been £113 billion lower than they would otherwise have been, due to Brexit.
A brief glance at the basic data should already make us wary of this lurid headline figure. This figure is equivalent to over 35% of total UK services exports in 2019, which looks enormous. But we soon discover that the £113 billion figure is a cumulative estimated loss over four years from 2016-2019 (when cumulative services exports were £1.2 trillion), so there is already statistical sleight of hand at work just in the presentation of the data.
Worse still, the actual UK services trade data do not point to any significant negative effect on UK services exports since 2015 attributable to Brexit.
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