EU: UK Trading Deficit

Lord Vinson Excerpts

Tuesday 21st May 2013 Lords Chamber

Asked By

[Lord Vinson]

To ask Her Majesty’s Government what steps they are taking to reduce, and raise public awareness of, the United Kingdom’s £46 billion annual trading deficit with the European Union, as set out in the Treasury Pink Book.

[Lord Popat]

My Lords, the UK’s current trade balance with the rest of the EU reflects a range of factors. The recent rise in the deficit reflects the shrinking EU market, not a loss of UK market share. The UK is pursuing a range of policies—supporting measures to stabilise and revitalise the EU as well as encouraging firms to internationalise—which will boost UK trade with the EU.

[Lord Vinson]

I thank the Minister for his very considered reply. Indeed, we must all try harder to export. Does he agree that our relationship with the EU is changing and that the strength of our trading position would be a key factor in any future negotiations? Should it not be widely known that while 3 million of our jobs are reciprocal with our trade with the EU, the continuing £46 billion a year trade imbalance means that overall 4 million of its jobs rely on us? We are indeed its biggest customer. Is this not likely to lead to sensible bilateral trading arrangements similar to those that we have with the rest of the world, as it needs us rather more than we need it?

[Lord Popat]

My Lords, our trade with the European Union, and the deficit of £46 billion, is counterbalanced by our surplus on invisible trade. Our membership of the EU is still in the best interests of the UK. It provides tariff-free access to a market that is worth around £11 trillion and has half a billion customers, and its trade with the UK enables 3.6 million employers in this country.