1. ITV Report

'No deal' Brexit to cost the North East economy £7bn a year by 2034

Credit: PA

The potentially devastating long-term economic impact of a ‘no deal’ Brexit on the North East has been laid bare in fresh analysis of government figures by the Confederation of Business Industry.

The study reveals how the North East could be among the regions most exposed to the economic fallout from leaving the EU without a deal with an estimated annual loss of output worth £7 billion1 by 2034.

Such a significant shortfall would hit people’s jobs, livelihoods and living standards. This figure is equivalent to twice the annual public spending on schools and education in the North East.

Nissan manufacturing plant in Sunderland Credit: ITV Tyne Tees

Manufacturing activity is particularly important to the North East, and the automotive sector, which employs tens of thousands, is likely to be severely impacted as it is particularly exposed to the risk of higher tariffs and trade costs.

With 59% of the North East’s goods exports going to the EU, any increased trade friction, added costs or delays would hit the region particularly hard.

Mike Norris, Managing Director of North East employer Draeger UK, said:

As a global leader in the manufacturing of medical and safety products, Draeger imports supplies from Europe on a daily basis, with as little as 24 hours’ notice.

In the early stages under a ‘no deal’ Brexit, this process could take six weeks, severely affecting our operations and our ability to service our customers, including the NHS.

In the longer term, without trade agreements similar to those as favourable as the current trading arrangements with Europe, a ‘no deal’ Brexit will ultimately impact our ability to grow as a key employer in the North East.”

– Mike Norris, Draeger UK
Ensus fuel plant at Wilton near Redcar Credit: ITV Tyne Tees

Sarah Glendinning, Regional Director for CBI North East, said:

CBI members across the region are clear: if the new approach to finding a Brexit deal continues to be a game of who blinks first, the North East economy will pay the price.

The deadlock will only be broken by a genuine attempt by all MPs to find consensus and compromise, not stick to rusting red lines and political conditions. Like the rest of the UK, the North East is not – and cannot be – ready for no deal.

The projected impact on our region’s economy would be devastating and while business will do all it can to reduce some of the worst aspects, a no deal scenario is unmanageable.

The message from the CBI to our politicians is clear – we must see compromise or the whole country faces the unforgivable prospect of a disorderly Brexit which will affect jobs and livelihoods in the North East for decades to come. It’s time to put our region’s prosperity before party politics and dogma.”

– Sarah Glendinning, CBI North East
Prime Minister Theresa May brought her Cabinet to the North East in July 2018 Credit: ITV Tyne Tees