Some commentators have argued that the UK can’t keep blaming Europe for our economic challenges. These trouble me and I want to correct some of claims that I’ve read.
First, the claim that our trade with Europe isn’t significant, and thus doesn’t have an impact on our economic growth. Europe is Britain’s largest trading partner, accounting for over 50% of our exports. Not surprising because the Single Market draws it. The Eurozone is a big part of Europe – you can’t remove it from the equation. A weak economy in Europe, including the Eurozone, is therefore bound to hit us hard.
Second, that Britain doesn’t make anything anymore. Britain is the world’s tenth largest manufacturer, with the world’s second largest share of the aerospace markets (ever heard of Rolls Royce or Airbus?), and a leader in autos too (we make a third of Ford’s engines, have secured new investments and jobs from Nissan, GM, Lear, Jaguar Landrover and others in the last few months). Plus GSK too.
Third, that our exports don’t have an impact on our economy. Exports account for 30% of UK’s GDP. Let’s put that into context – US exports account for 14% of its GDP. So we’re bothered that UK exports dropped last month (although the most recent three-month goods exports held steady compared to the previous quarter). America and other countries suffered similar drops in exports last month.
Every country needs to be responsible for its own economic performance. Hence the UK’s focus on returning the UK to restoring growth through stabilising the economy, a fairer more efficient tax system (already the lowest corporate tax rate in the G7), and reforms to support growth.
Europe is hugely important to the UK economy and a resolution of the crisis is the single biggest boost our economy could have right now, as the Chancellor has repeatedly said. Which is why we’re so busy putting as much effort into resolving the Eurozone issues as we are on our economic and growth strategies. We can’t afford to turn our backs on either.