Saturday, June 6, 2020

‘No deal’ Brexit could create annual loss of £12bn in East Midlands

Fresh analysis of government figures assessing the long-term economic impact of a ‘no deal’ Brexit, together with evidence from firms across the country, lay bare the serious future harm to the East Midlands, according to the CBI.

If the UK leaves the EU without a deal, real GVA in the East Midlands could be 8.5% lower by 2034, compared to if the EU-UK relationship remained the same. ‘No deal’ Brexit could create an annual loss of output of £12bn by 2034 in the region. In comparison to the rest of the UK, the East Midlands would fare worse in a no deal scenario, say the CBI.

The study from the CBI highlights how no region or nation would be left untouched by the significant economic fallout from leaving the EU without a deal, harming jobs, livelihoods and living standards.

As a region reliant on the manufacturing industry (manufacturing businesses operating in the region account for 16.5% of the East Midlands’ GVA), no deal brings further worries as manufacturing businesses are at high risk of exposure to rising tariffs and trade costs in a no deal scenario. The sector employs 12.4% of the region which the CBI note will mean any economic impact may be felt in jobs being lost or not created.

Over half of exported goods from the East Midlands go to the EU, indicating a that major proportion of businesses are generating revenue from exports, and would be impacted in a no deal exit as trade becomes harder.

Carolyn Fairbairn, CBI Director-General, said: “The message from business cannot be simpler: a March no-deal must be ruled out immediately. This is the only way to halt irreversible damage and restore business confidence.

“The best route to pulling back from the cliff edge is for politicians of all parties to start showing real flexibility. Only then will they find a path that can command support in the Commons, be successfully negotiated with the EU and protect the prosperity of communities across the UK.

“Our analysis of the Government’s own figures shows that Northern Ireland, Scotland, Wales and every English region would pay an unacceptable economic price. From Penzance to Perth, this damage would be far greater than the sums spent on our schools, colleges, GPs and hospitals.

“The UK is not and cannot be ready for a ‘no deal’ Brexit. Only Parliament can avoid it, and now is the time to do so.”

David Bondi, Managing Director of East Midlands employer Freshcut Foods, said: “Freshcut Foods is a £30m turnover fresh produce business that employs 280 people and supplies many of our favourite retailers and sandwich shops.

“Most of our raw materials are imported from the EU and have very short shelf lives. At no part of the supply chain – from grower to retailer – can more than a day or two’s stock be held.

“In a ‘no deal’ scenario, a delay of as little as 12 hours – coupled with lorry tailbacks at crucial ports – would adversely affect our ability to maintain full continuity of supply.”

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