The forecasts that have emerged from Government today indicating that North East England would potentially be the region hardest hit by Brexit should come as no great surprise.
After all, our businesses are the most successful in the country when it comes to trading with Europe. If doing that trade is going to be made more difficult, it stands to reason that we have the most to lose.
What is a surprise is that 20 months after the vote, the Government has still failed to adequately address this point. That’s particularly staggering when you consider that the Conservatives were elected last year on the basis of a manifesto that says closing the gap between London and other parts of the UK is “the biggest prize in Britain today”, a “great endeavour”, and that they were “determined to lead the way in the next Parliament”. If figures being shared around Whitehall suggest that their stated top priority could be seriously undermined, I would expect to see some concerted action to tackle it. Instead, all we’ve seen is arguments and obfuscation.
So what should happen now? Firstly, we need some frankness from the Government. Presumably they believe it will work out better than this, otherwise they wouldn’t be going through with Brexit. Also, given the manifesto commitments set out above, they must believe that it will work out at least as well for the North East as for London. They should explain what these beliefs are based on, and that should be something rather more substantial than vague talk of a bespoke trade agreement. Don’t keep taking us for idiots, and don’t leave the only counter argument to come from long-term anti-EU ideologues like John Redwood claiming the figures are wrong without any evidence.
Secondly, the Government must reconsider leaving the Customs Union. The advantage to doing so is the opportunity to pursue independent trade deals with other countries. That will present opportunities – but it will also present huge risks, involve great complexity and require huge capacity building. It is questionable whether the opportunities can genuinely be greater than the negative impact of disrupting trade with our nearest markets.
If there is sufficient evidence to show there will be benefits from leaving the Customs Union, then the transition period should be extended. The time to put in place the capacity to deliver such trade deals, and the time for businesses to adjust to new terms of trade and respond to a signal that they should prioritise different markets, is perilously short.
There should also be major investment taking place now to enhance the international trade support available to businesses, and crucially the technical training and advice needed to deal with new customs procedures. We should also see investment going into the systems that are needed. That’s not visible, which doesn’t build confidence.
I could go on – I haven’t even touched on massive issues like the effect of changes to migration and how European funding for regions like ours will be replaced.
The bottom line is this: businesses in North East England need to attract people to live, work and invest in our region. Given that these figures have now been released, we need something much more concrete than we have seen to date from Government to support us in doing that, and in winning for them “the biggest the prize in Britain today”.
Delivering Brexit successfully and in line with that manifesto commitment can’t be impossible, otherwise our Government wouldn’t be devoting all its focus to doing so. But it is very difficult, and so far the Government have shown themselves either incapable or unwilling to take the tough choices needed. They have also been appalling at communication. The release of these forecasts must be a watershed moment when they rise to the massive challenge they have taken on.
Director of Policy