The United Kingdom’s withdrawal from the European Union has affected the level of overseas trade, Chancellor of the Exchequer Rishi Sunak has acknowledged.
Giving evidence to the UK Commons Treasury Committee on last week’s Spring Statement, Mr Sunak said it was “inevitable” that UK trade with the EU would fall as a result of Brexit.
At the same time, he said that it was too early for the benefits of trade deals the UK had struck with other countries to kick in.
Mr Sunak was challenged by the committee chairman, Tory MP Mel Stride, about new figures from the Office for Budget Responsibility, showing that while other countries’ “trade intensity” had come back “quite strongly” since Brexit and the pandemic, the UK’s had not.
“Doesn’t that tell you that the main distinction between ourselves and them is that we went through Brexit and they didn’t?” Mr Stride said.
Mr Sunak said it was too soon to disentangle the effects of the pandemic and of Brexit, but acknowledged that leaving the EU had had an impact.
“We are still trying to work through what all the impacts are,” he said.
“It was always inevitable that there would be a change in our trade intensity with Europe as a result of the change in the trade relationship.
“Without doubt we are changing our trading relationship with the EU and that means a different set of controls and things people will have to do and that will obviously have an impact.
“That is, I am sure, a big part of the reason why this is happening. I think it is maybe a bit early to be definitive about which bits are doing what.”
Mr Sunak, however, rejected the suggestion that the UK was becoming “a more closed economy”, insisting the government wanted it to be much more open to the world on trade.
“The benefit of new trading relationships takes time. They don’t happen all overnight. Of course, that will happen over a period of time,” he said.
