In many respects, the UK lags behind other countries in terms of understanding how and why goods and services are moved internally. There has never been comprehensive national statistics on interregional trade and, in the past, interregional trade could have been considered a peripheral issue, or something that “would be nice to have”.
However, with major economic changes such as Brexit on the horizon and the growing demand for improved regional economic analysis to help inform devolution and City Deal-type policymaking, this is a key gap to fill.
In other respects, the UK might be considered a leader in regional economic data. The Scottish Government and Northern Ireland Statistics & Research Agency have produced trade figures with the rest of the UK for a number of years. In both cases, these products can be considered high profile, and part of comprehensive regional accounts, which help inform economic policy in those countries.
Neither the Scottish nor Northern Ireland data, however, sets out the nature of interregional trade in great detail. There are headline figures, by category, of external sales to the rest of the UK, but with little detail of the destination of Scottish or Northern Ireland goods or services within the UK.
This report proposes a framework for estimating the origin and destination of interregional trade between the devolved nations of the UK: England, Scotland, Wales, and Northern Ireland. It explains where gaps exist in the current UK data landscape, and suggests various ways in which this could be addressed.
The final part of the report applies that framework with current data availability, and presents initial results for trade between the 4 nations of the UK. The sensitivity of the results to different assumptions is also presented to highlight the methods.
Recommendations for building on the work on this paper are presented, including the need to evaluate the current methods of the collection of trade information within the UK. The conceptual and practical challenges are such that the development of a framework for the consistent collection and definition of regional trade are proposed, which would fill data gaps and increase consistency.
Ultimately, this could lay the framework for the estimation of Supply and Use Tables for different parts of the UK, building upon the work already done in Scotland and Northern Ireland. This is the key method through which estimates of trade which are consistent with regional consumption and production could be generated.
This ESCoE paper was first published in June 2020.
Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.
Dean of External Engagement in the College of Social Sciences at Glasgow University and previously director of the Fraser of Allander Institute.