Faith waning in UK’s free trade deals

Faith waning in UK's free trade deals

Recent government research has highlighted a waning faith amongst UK companies in the benefits of new free trade deals post-Brexit.

The study by the Department for Business and Trade, which surveyed over 3,000 firms, revealed that three in five believe that these deals will not significantly influence their businesses. This sentiment was shared by half of all exporting firms.

The YouGov poll for The Times also underscored a growing public discontent with Brexit’s economic ramifications, with 61% of respondents saying they felt that Brexit had left the UK in a worse economic position, with only 10% believing the country has benefitted.

Over half of the respondents, 53%, opined that the UK should foster a closer relationship with the EU compared to the current trade agreement, whereas only 22% favoured the existing relationship. Trust in political parties to manage post-Brexit relations remains low – 19% trust the Conservatives, and 17% back Labour.

Despite government pledges promoting a “global Britain”, there’s a tangible pessimism amongst firms. Export statistics echo this sentiment. In 2016, 33% of businesses, with a turnover exceeding half a million pounds, confirmed their engagement in exports. Fast forward to the previous year, this figure experienced a nominal increase to 34%.

Concerningly, 40% of firms stated they had no intention of engaging in exports, 40% of exporters said they experienced a decrease in goods exported last year, and 29% of service exporters reported diminished sales.

The business community’s outlook on export opportunities has further dimmed, even with the announcement of new trade deals with countries like Australia and New Zealand. In 2017, 73% of businesses felt there was robust demand for UK products and services.

This figure plummeted to 55% last year. Post-Brexit, 49% believed global demand for UK products and services had lessened, a rise from 39% in 2021.

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