By Paul Giles
Below is the body of a letter plus appendix sent last month to the new Secretary of State for Business and Trade, the Rt Hon Jonathan Reynolds MP.
The text in the first paragraph “…appears that even basic accuracy checks weren’t carried out …” is key here; it’s difficult to avoid the conclusion that the previous Secretary of State saw any report appearing to cast Brexit in a positive light “was a good report” and checks were not needed.
Perhaps the electorate will be lucky enough to see the record corrected?
15 August 2024
Dear Mr Reynolds
Reset of three trade announcements in support of the PM’s “reset” of UK-EU relations
Given the PM’s 17 July last statement expressing desire to “reset UK-EU relations,” I’m writing to request that, in support of his efforts, we take this opportunity to “reset” three key historic trade announcements through announcing the correct values. It appears that even basic accuracy checks weren’t carried out on these before the original announcements:
- “… the UK, outside the EU, became the world’s fourth biggest exporter in 2022”
Per Hansard, the above announcement was made by your predecessor in the Commons, 1 May last. The statement includes the words “According to the latest UN statistics.”
Heartening though this announcement appeared, subsequent analysis has shown UN Comtrade data to be £15bn overstated vs UK ONS. ONS data places the UK at 6th. Details in the attached appendix. As far as I know, no correction announcement has yet been made.
- “UK GDP gain from CPTPP FTA modelled as 0.08%”
Again, reported via Hansard, 17 April 2023, but also in the press for example in The Daily Telegraph of 10 April, and by the BBC on 31 March.
Per the DBT the correct GDP gain is actually 0.066%. While both admittedly are tiny percentages, 0.08%, widely reported at the time, was overstated by 20%. Details per appendix. Again, no correction announcement has yet been made.
- 6 November 2023 International Trade Week – Secretary of State keynote speech
The Secretary of State’s speech made unreserved reference to a report coincidentally published the same morning, quoting “UK-EU trading relations haven’t been negatively impacted by Brexit.” A subsequent peer review held by the publisher concluded that trade had been damaged. Details in the appendix. Correspondence with the Secretary of State has yet to elicit a correction.
Please let me know if new, correcting, announcements can be made for each of the above.
Yours sincerely
Paul Giles, Performance, Attribution and Risk Specialist
Appendix
- “… the UK, outside the EU, became the world’s fourth biggest exporter in 2022”
To allow cross-country comparison, UN Comtrade data converts national export data to US$ using the average rate for the year; for the UK $1.2369. This gives the $1,015,397 below.
GoodsAndServicesBpm6 (unctad.org)
The ONS reports £805,777. Applying the same exchange rate gives $996,665, a difference to Comtrade of $18,731 (£15,144).
The Resolution Foundation attributes this difference to the inclusion by Comtrade of Non-Monetary Gold, traditionally excluded by the ONS as not a trade item, but discussions with the ONS have shown that no formal Comtrade/ONS reconciliation has yet been attempted.
Source: ONS
The adjusted US$ equivalent export values for the UK ($996,665, above), the Netherlands ($1,004,659) and France ($1,007,540) were close before adjusting for the overstatement, thus the UK is now placed 6th, one place up from 2021.
2. UK GDP gain from CPTPP FTA modelled as 0.08%
The overstatement was due to a mathematical error in the DBT’s April 2021 strategic approach document. Although the error was corrected in the subsequent July 2023 impact assessment, the correct modelled gain of 0.066% was not stated in the IA, in the Commons or the press at the time, despite the Regulatory Policy Committee highlighting this omission in its 17 July 2023 RPC Opinion, page 9.
The correct modelled gain of 0.066% was confirmed by the DBT on 7 August 2024 in a follow-up to FoI 2024/05395.
3. 6 November 2023 International Trade Week – Secretary of State keynote speech
The link below includes the following statement by the Secretary of State:
“She referred to a recent report by the Institute of Economic Affairs (IEA), which claims UK-EU trading relations haven’t been negatively impacted by Brexit.”
The report was immediately criticised by academics as being misleading. The publisher later held a peer review of the report (30 January 2024), the conclusion of which was that UK-EU trading relations had been negatively affected by Brexit.
