How Brexit will hit different UK regions and industries

This article discusses the findings from a research project The Economic Impacts of Brexit on the UK, its Regions, its Cities and its Sectors, which was a ESRC funded project as part of UK in a Changing Europe project. A series of articles, features and reports linked with the project were published in 2017 and 2018.

The research showed that the very areas of the UK which voted Leave in June 2016 were likely to be the ones hardest hit by Brexit. The results on the likely economic consequences of leaving the European Union on different regions and industries was consistent with the leaked government analysis in early 2018 which suggested that London would be one of the areas least hit in the event of a no-deal Brexit. The north-east of England, meanwhile, would be one of the worst affected.

Further information

The research showed that if there was a no-deal Brexit the situation would lead to:

+ More than 2.5m jobs were directly at risk.
+ Almost £140 billion of UK economic activity annually was directly at risk.
+ Many important manufacturing and primary industries were at risk, but so were many service industries – not just financial services.
+ Many of these services were not only exported directly to EU countries, but were also sold to UK manufacturing firms who then exported to the EU.
+ Workers in the jobs at risk were on average slightly more productive than the average British worker – so Brexit was likely to exacerbate the UK’s productivity problems.

The findings showed that in 15 out of 54 industries, more than 20% (and up to 36%) of economic activity was at risk from Brexit. Industries included fisheries, chemicals and motor vehicle manufacturing.

UK in a Changing Europe
The UK in a Changing Europe promotes rigorous, high-quality and independent research into the complex and ever changing relationship between the UK and the European Union (EU).

It provides an authoritative, non-partisan and impartial reference point for those looking for information, insights and analysis about UK-EU relations that stands aside from the politics surrounding the debate.

The Initiative’s work is tailored to be easily accessible to policy makers, businesses, journalists, civil society organisations, educational institutions and the general public who are interested in the UK’s relationship with the EU.

It is funded by the Economic and Social Research Council (ESRC), and based at King’s College London.

Further information

In a separate report published in July 2018 from the Institute for Public Policy Research (IPPR) called An equal exit? The distributional consequences of leaving the EU related themes were examined.

The UK’s vote to leave the EU arose in part from deep social and geographical divides across the country. But could the decision to leave in turn impact on inequalities?

In the two years since the referendum, some have argued that Brexit could boost the incomes of poorer groups through cheaper food prices, while others have argued that the most vulnerable groups and regions would bear the greatest burden of a ‘hard’ Brexit.

Based on data on GVA impacts and price impacts, this briefing tests these claims and explores how the effects on trade of Brexit could influence inequalities across income groups, geographies, genders and ethnicities.

• Primary Source

The Conversation, 20.02.18: Why Brexit is a double blow to the regions that voted to leave the EU https://theconversation.com/why-brexit-is-a-double-blow-to-the-regions-that-voted-to-leave-the-eu-91785

ESO: In Focus: Brexit - The United Kingdom and the European Union http://www.europeansources.info/record/brexit-the-united-kingdom-and-the-european-union/

United Kingdom: House of Commons: Library: Briefing Paper, No.8128 (09.03.18): Exiting the EU: sectoral impact assessments (et al) http://www.europeansources.info/record/exiting-the-eu-sectoral-impact-assessments/

The Conversation, 09.02.18: How Brexit will hit different UK regions and industries https://theconversation.com/how-brexit-will-hit-different-uk-regions-and-industries-91287

University of Birmingham: Birmingham Business School > Research > Research Projects > The Economic Impacts of Brexit on the UK, its Regions, its Cities and its Sectors (ESRC funded project as part of UK in a Changing Europe) https://www.birmingham.ac.uk/schools/business/research/research-projects/economic-impacts-of-brexit-on-the-uk.aspx

Papers in Regional Science, Vol.97, No.1, March 2018: The continental divide? Economic exposure to Brexit in regions and countries on both sides of The Channel http://onlinelibrary.wiley.com/doi/10.1111/pirs.12334/full

The Guardian, 04.07.18: Brexit to have greatest negative impact on regions outside London https://www.theguardian.com/politics/2018/jul/04/brexit-greatest-negative-impact-regions-outside-london

IPPR: Briefing, July 2018: An equal exit? The distributional consequences of leaving the EU https://www.ippr.org/files/2018-06/brexit-and-trade-july2018.pdf

Oliver Wyman: Report, July 2018: Brexit: Costs Up, Prices Up https://www.oliverwyman.com/our-expertise/insights/2018/jul/brexit-costs-up--prices-up.html

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