John Burke writes an exclusive article for Get Britain Out.
In the run-up to the EU Referendum, Cameron & Co told a different section of the British public each week how it could be ruined by breaking free of Brussels. On cue, a succession of interfering busybodies from France, Germany, Korea, Canada, Mexico and America each plucked from the air a frightening figure that must spell doom.
As a former, greater Conservative Prime Minister, Disraeli wrote, “There are three kinds of lies: lies, damned lies and statistics.” Instead of the speculative scenarios, the true guide to Britain’s future is history and geography. The fact is that we lost Continental markets four times in the last 600 years, yet prospered as an island that could trade overseas.
England’s dominant export during the Middle Ages was wool, originally through Bruges, and then cloth, both being exchanged for luxuries coming from France and Italy. But then came more than a hundred years of Continental wars which badly hit foreign trade.
In 1453, England lost Gascony where wheat and cloth were traded for wine. France’s capture of Calais in 1558 was as shocking as the evacuation from Dunkirk in 1940. Wool and leather were traded almost exclusively at Calais, and a transfer back to towns in the Low Countries was halted by fighting between the Dutch and Spanish.
Cloth merchants then went to Hamburg, but were expelled in 1577 by the Hanseatic League – the European common market of its day. Instead, they found new buyers and suppliers in the eastern Baltic and eastern Mediterranean just when the cash-strapped Venetians stopped exchanging glass and other wares for cloth in Southampton.
English merchantmen were already rounding the Cape of Good Hope. The East India Company, founded in 1600, brought tea, silk and spices from Asia. Nine years later, the London Company established Virginia, and trade grew in Britain’s favour as the American colonies took 57% of our exports in exchange for fish, fur, rice, corn, timber, iron… Glass now came from Pennsylvania and North Carolina.
To quote Professor G.M. Trevelyan (Cambridge and Durham) who lived through both World Wars, “… the greatest social change in Elizabeth’s England was the expansion of overseas enterprise. During her reign our merchants found new and more distant markets, some of them on the other side of the globe, in place of the commerce with the Netherlands and France which had from time immemorial furnished the vent of English goods”.
From 1789 to 1815, the French Revolution and subsequent warfare closed parts of Europe to British business. Napoleon’s blockade reduced exports there by 25-55%, being only partially and intermittently successful. Because it hurt France’s own ports, allies and industries, the so-called Continental System was abandoned after four years.
Meanwhile, Britain upped trade with its new colonies in Africa, India and Canada as well as the West Indies which supplied sugar and cotton. Trade also flourished with the United States despite a short-lived and half-hearted embargo. Between 1807 and 1812, British exports to Brazil rose from £1¼ million to £2 million. This would be worth £129 million today whereas we now export a yearly £2½ billion to that country.
In the year of Waterloo, 8% of our imports came from Latin America.
Sarajevo Closes Markets
Panic closed the London Stock Exchange for a week in 1914, but Britain had overseas assets of £4 billion (equivalent to £416 billion today) and subsidised France and Italy for two years. Foreign trade was halted throughout most of Europe, partly due to a blockade by the Royal Navy, but we still managed to buy and sell civilian goods overseas.
Britain was the world’s chief exporter of coal, and had even supplied Germany, but colliers still went to the Mediterranean, Africa, Asia and most of the Americas. The war halved the total of all exports, but the value recovered to 75% by the mid-twenties, and there was still a favourable balance of trade, even if down from £225 million to £50 million (at current prices, £23 billion and £2½ billion).
Destruction by Dictators
An even greater part of the Continental market was lost due to military action between 1936 and 1949, coupled with a Communist stranglehold on ten countries of eastern Europe until about 1990.
Even more merchant ships were sunk by the enemy in the Second World War than in the first, but each time enough transatlantic supplies came in to prevent starvation. British exports were only two-thirds of the pre-war level, but goods to pay America for vital imports fell far less.
Argentina supplied meat, and the slogan Britain delivers the goods was all over South America. Despite the fact that the Continent was largely a distressed area post-war, 1945-1960 saw the fastest growth ever in the British economy.
Ireland Needs Us
Even trade with our neighbour has flourished despite confrontation. The new Irish Free State became protectionist, forcing a trade war in 1932. The mutual disadvantages, however, were acknowledged in the coal-cattle pact of 1938.
Today, we are Ireland’s second biggest market after the USA, and we sell twice as much back so that about 30% of Ireland’s supplies come from Britain.
Clearly, since the British people could survive all that Continental strife and the loss of 8,700 merchant ships to enemy submarines, independence is even easier today when worldwide trading is more open than ever before.
John Burke is a foreign correspondent, financial journalist and travel-writer who has visited 79 countries including every single one in Europe. He speaks six languages. Originally posted to Brussels, Paris and Berlin by Reuters Economic Services, he then covered Continental stock markets at the Investors Chronicle before editing Global Banking and Global Reinsurance. At London University in 1964, he played a leading role in the fourth seminar for Europe’s students, backed by NATO, the Foreign Office and Council of Europe – and covered by the BBC Overseas Services.