Sunderland could be among areas hit worst by a hard Brexit, says new report

Workers at Nissan
Workers at Nissan
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A bungled Brexit will have ‘devastating consequences’ for Sunderland and the wider North East, says a city MP.

Sunderland Central MP Julie Elliott was speaking as a new report today singled out the city as one of the places in the UK likely to be worst hit by a ‘hard’ Brexit.

Nissan exports more than half its cars to Europe

Nissan exports more than half its cars to Europe

Progressive policy think tank IPPR says UK regions outside London will experience greater impact from price rises than the capital, and identifies the areas it says are particularly vulnerable because of their reliance on EU trade.

“Wales and the North East are the regions with the highest EU goods exports relative to the size of their economies, putting them at greater risk of an adverse economic impact from trade barriers in goods,” it says.

“Localities with the highest EU goods exports relative to the size of their economies are Flintshire and Wrexham, Sunderland, Telford and Wrekin, South and West Derbyshire, and Luton.”

Sunderland’s reliance on the EU is a reflection of the importance of Nissan to the city’s economy.

If the Government does not make a very quick and substantial decision on the tariff issue, and reduce the uncertainty for our large manufacturers around their export and import costs, there will be devastating consequences of leaving the EU for our region.

Julie Elliott

The plant, which employs more than 6,000 people directly and supports another 28,000 in its supply chain, exports more than half the cars it builds to Europe.

Julie Elliott said the latest report underlined the importance of getting a deal with the EU that protected business and jobs.

“There is no surprise in what the IPPR are saying today,” she said.

“The very fact that we are the region that benefits the most from being a member of the EU means we will lose the most from leaving the EU.

Julie Elliott MP.

Julie Elliott MP.

“If the Government does not make a very quick and substantial decision on the tariff issue, and reduce the uncertainty for our large manufacturers around their export and import costs, there will be devastating consequences of leaving the EU for our region.”

The IPPR says regions outside London are likely to see the cost of living rise more sharply because of rises in transport costs, which will have a disproportionate impact outside the capital.

Researchers found larger impacts for people outside London, in part because housing costs – expected to be less affected by Brexit – make up a smaller part of their spending, while transport costs, likely to rise more through increased prices of vehicles, make up a larger part.

They estimated a ‘hard’ Brexit, where the UK is forced to fall back on World Trading Organisation rules, would see an average ‘basket’ of goods and services rise in price by 2.7 per cent in London, but between three and 3.2 per cent elsewhere.

IPPR senior research fellow and author of the report, Marley Morris, said: “Our findings suggest that post-Brexit price rises will squeeze incomes more in parts of the UK outside London.

“Limiting these impacts will require a new relationship with the EU that preserves our trade links.

“Negotiating a ‘shared market’ – based on a customs union and a deal on alignment with the EU’s single market – is the most promising strategy for minimising post-Brexit price increases for households.”