Jacob Rees-Mogg, the newly appointed Brexit secretary, says current supply chain disruptions are caused by the pandemic and not Brexit, despite disagreement from trade bodies, importers and exporters.
Mr Rees-Mogg has sparked controversy, after claiming that evidence shows Brexit-related impacts on trade drops were “few and far between”.
The Brexit secretary’s comments came a week after a report by the Public Accounts Committee found that since the end of the transition period on 31st December 2020, UK trade volumes have been suppressed by the fallout created by COVID-19, “but it is clear that EU exit has had an impact, and that new border arrangements have added costs to business.”
Dame Meg Hillier MP, Chair of the Public Accounts Committee, said. “One of the great promises of Brexit was freeing British businesses to give them the headroom to maximise their productivity and contribution to the economy…yet the only detectable impact so far is increased costs, paperwork and border delays.”
The latest Office for National Statistics (ONS) figures showed UK exports of goods to the EU have fallen by a record £20bn compared to the last stable period of trading with Europe in 2018, which is a 20% fall. That’s traumatic however you lay the blame and is a fact.
The ONS also found that Brexit failed to encourage trade with non-EU countries, as originally promised in the build-up to the referendum, with total annual imports 4.8% lower than in 2018 and total exports 10.5% lower than in 2018.
Mr Rees-Mogg, who was appointed Brexit minister earlier this month, insisted that Covid – not post-Brexit border arrangements – were causing “the most enormous disruptions to supply chains”.
He told the BBC: “We’ve had containers simply being stuck in the wrong place, being stuck in Chinese ports, being stuck in the port of Los Angeles. This has been a global trade issue – and we do have to recover from the problems of Covid.”
“Brexit has been extremely beneficial for the country,” he claimed, but a British Chambers of Commerce (BCC) survey of 1,000 businesses found 71% of exporters said EU trade deals were not enabling them to grow or increase sales and only 8% of businesses felt Brexit had allowed their businesses to grow.
The survey also asked companies to comment on specific advantages or disadvantages of the trade deal – just 59 firms identified advantages of post-Brexit trade agreements, while 320 registered disadvantages, including rising costs, additional bureaucracy and complexities.
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