No-deal Brexit would hit 'red wall' areas hard, manufacturers warn

  • 7/16/2020
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Britain’s manufacturers have warned Boris Johnson that former “red wall” seats won by the Tories in last year’s election would be at most risk of severe economic damage from Brexit talks collapsing. Sounding the alarm with less than six months before the end of the Brexit transition period, the manufacturing lobby group Make UK and the accountancy firm BDO said industrial areas in the north of England, the Midlands and Wales could face a “triple whammy” should a deal with the EU fail to emerge. On top of the economic hit to the country at large from coronavirus and Brexit, it said traditional industrial heartlands had greater trade links with the EU than other places, exacerbating the damage to jobs and growth should talks fail. In their regional economic outlook report, Make UK and BDO said regions with formerly solid Labour “red wall” constituencies had a high dependence on exports to the EU, as well as a higher-than-average dependence on manufacturing, which would put them at most risk from a no-deal scenario with barriers to trade and tariffs. It said almost two-thirds of exports from Wales, the north-east of England and Yorkshire and the Humber went to the EU, while the contribution of manufacturing to the economy overall in these regions was higher than the national average. Stephen Phipson, the chief executive of Make UK, said: “Should the UK fail to reach a comprehensive trade agreement with the EU, then those regions with a high concentration of manufacturing and a dependence on Europe as a major market will suffer a triple hit, given the impact of Covid-19. For some companies the combination may prove fatal.” Despite mounting fears over the scale of the economic damage from Britain exiting the transition period without a deal, the government has no plans to publish an economic impact assessment. The last time official analysis of the economic impact was published was in November 2018, as Theresa May struggled to get her Brexit deal through parliament. At that time, the government said Britain’s economy would be 9.3% smaller after 15 years under no deal than it would have been under remain. On Tuesday the chancellor, Rishi Sunak, told MPs on the Commons Treasury committee that it would be difficult for economic forecasters now to come up with an accurate forecast due to the coronavirus crisis. “Given all the uncertainty in our economy I don’t think it would be a particularly accurate or constructive exercise,” he said.

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