Bristol is predicted to be the 11th hardest hit city by Brexit according to a new report published on Thursday, but is said to be ‘better-placed’ than others to adapt.
The study, published by the joint Centre for Cities and Centre for Economic Performance, looked at the possible outcomes for UK cities under both a so-called ‘soft Brexit’ and a so-called ‘hard Brexit’. It concluded that all British cities will be negatively affected due to higher trade costs, but to different extents.
Under ‘soft Brexit’, Bristol’s economic output (measure by Gross Value Added) is estimated to decrease by 1.31-2.4%. Under ‘hard Brexit’, the change is estimated to decrease by up to 2.71%.
Bristol compares favourably to Aberdeen, predicted to be the worst hit city, which would see an economic downturn of up 3.71% under ‘Hard Brexit’ and 2.05% under ‘Soft Brexit’.
Andrew Carter, Chief Executive for the Centre for Cities, suggested the decline in Bristol’s economic output is ‘because the city is home to a high number of jobs and firms in business services such as law and accountancy, which are set to be hit hardest by the increase in trade costs resulting from leaving the EU. These costs will be particularly high in the scenario of a ‘hard Brexit’, because of the trade tariffs it would bring.’
Despite these negative predictions, Bristol is said to be in a strong position to deal with the coming challenges. Andrew Carter added: ‘The good news is that Bristol is also better-placed than most other cities to respond to the downturn ahead, thanks to the city’s large share of high-skilled workers, innovative firms and strong business networks.’
Students from the University of Bristol, for example, commonly stay in the city to work after graduating, adding to its skilled workforce which is said to give the city an ability to adapt. Indeed, the study also found that cities most negatively affected may be the ones to find it easier to adapt in the long term.
— Centre for Cities (@CentreforCities) July 27, 2017
MPs and commentators have frequently defined ‘soft Brexit’ as one in which the UK would remain within the single market and customs union, retaining freedom of movement. This report defines it as: ‘a scenario where the UK joins a free trade agreement with the EU’. This could involve leaving the single market.
Similarly, MPs and commentators have referred to a ‘hard Brexit’ as one where the UK simply leaves the single market and customs union, but this report has been defined it as: ‘a scenario where the UK and EU do not immediately form a free trade area and the default situation is to trade under World Trade Organisation (WTO) rules’.
61.7% of voters in Bristol voted to remain in the EU. The report, in contrast with other reports, suggests that those areas that voted heavily to remain are more likely to be negatively impacted.
— Bloomberg Brexit (@Brexit) July 27, 2017
Professor Steven Machin, from the Centre for Economic Performance, added: ‘The estimated decline in economic activity is higher in richer local economies like London. But Brexit – whether hard or soft – would still hurt economic activity in poorer areas like Hull and Burnley, that have some of the lowest incomes in the country.’
Those who supported remaining inside the European Union have said that Single Market membership (a possible ‘soft Brexit’ option) is vital to secure jobs, whereas those who supported leaving the EU argue that being outside of the Single Market (a possible “hard Brexit” option) gives the UK the freedom to expand our horizons by making our own trade deals with the whole world.
The terms ‘soft’ and ‘hard’ Brexit have been dubbed ‘fake Brexit’ and ‘real Brexit’ by prominent Leave supporters.
Keep up to date with Epigram..