Pressure is mounting on the Government to secure a Brexit deal that supports the region’s booming finance and services industries, as new figures reveal Leeds is among the 10 cities set to be worst-hit by Britain’s exit from the EU.
According to the new analysis, Yorkshire’s biggest city, which is currently one of the UK’s largest financial services centres, could see a drop in economic growth of between 1.3 and 2.6 per cent over the coming decade as a result of new trade barriers and tariffs.
Previous reports have already shown Yorkshire and the Humber to be one of the areas most at risk from a hard Brexit, due to its high levels of exports to EU member states.
But the new figures add to concerns that northern towns and cities will be left worse-off by Britain’s exit from the trading bloc, prompting calls for further guarantees that any future deal will meet the region’s social and economic needs. “These findings come at a critical time for the city’s economy which has been growing strongly and shows the vital importance of securing the best possible Brexit deal when it comes to jobs and investment,” said Leeds West MP and business select committee chairman Rachel Reeves.
“We need more honesty from the Government about its Brexit negotiations, particularly the nature and length of the transitional arrangements and assurances that trade with Europe will continue without tariffs, additional regulations and bureaucracy so the impact on local jobs and
businesses can be minimised. “The Government must do everything possible to protect the region from the threat of an economic shock from Brexit.
“Warm words are not enough. We need clarity, transparency and certainty from the Government about its Brexit negotiations so businesses can plan for the future.”
The Centre for Cities report lists Leeds as number nine in the cities most likely to be affected by a “hard” Brexit – where Britain defaults to World Trade Organisation rules – which it estimates would result in a 2.6 percent dip in economic output. And even in the case of a “soft” Brexit – where the UK joins a free trade area with the EU – it predicts legal barriers and customs checks would mean a decline of 1.3 percent.
This is due to the city’s high share of business and financial services – the two sectors set to be most affected by the economic shocks ahead.
Leeds is home to England’s second largest financial services industry outside of the South East, with the sector generating around £6.6bn a year.
Miles Celic, chief executive of membership body TheCityUK, said maintaining strong regional financial centres like Leeds and Sheffield “is critical to ensuring the UK remains a world-leading place to do business”.
He added that the best Brexit outcome for the industry will be a “bespoke deal” that grants British businesses mutual market access while giving them plenty of time to prepare for and adapt to new regulations and trading conditions.
Responding to the report, Leeds City Council leader Judith Blake said the local authority is working hard with local businesses “to get to a place where we can respond well to the opportunities Brexit may create”. She said the councils has prioritised five areas to help achieve this, including “maintaining progress on major development and infrastructure schemes” and securing devolution.
A Government spokesman said it was engaging extensively with businesses and organisation across the country and is “committed to a bold and ambitious Free Trade Agreement that works for the whole of the UK”.