How is single market access 'crucial' to the local economy post-Brexit?

According to a new report, the UK must ensure that it retains access to the single market, has an open trading regime and maintains a stable regulatory framework with the EU to minimise the impact of Brexit on the local economy.

This is the key conclusion of ‘Leaving the European Union’, a report by a regional economic group.

‘The North East Brexit Group’ was formed to provide a collective voice for the region in order to contribute to the ongoing national dialogue around the UK leaving the EU. It includes networks representing businesses, education, trade unions, local authorities and voluntary organisations.

The group has compiled evidence from government, academic and business sources to develop a potentially better understanding of issues, challenges and opportunities which businesses and other economic partners believe need to be addressed.

Andrew Hodgson, North East LEP Chair, said: “This is a helpful report by the North East Brexit group, which identifies the economic opportunities and challenges of Brexit for the North East’s economy and businesses.

“The North East LEP will continue to deliver the ambitions of the Strategic Economic Plan (SEP) and adapt activities to maximise the economic opportunities, but also address the challenges, of Brexit in the North East.”

The ‘Leaving the European Union’ report looks at economic forecasts as well as specific issues of concern, and opportunities identified, for each of the key North East business sectors.

The common finding throughout the range of economic studies collated is that lower levels of economic activity are forecast in the region over different timescales as a result of the decision to leave the EU.

In addition to the need to deliver a positive outcome to the discussion about the single market, trading regime and regulatory framework, another key finding is that more advice and support is needed for businesses to help them to prepare for the range of changes which could lie ahead.

Jonathan Walker, head of policy and campaigns, North East England Chamber of Commerce, added: “We communicate daily with our members on Brexit, hold regular consultations on trade policy and facilitate the shipment of millions of pounds worth of goods overseas every month.

“We do not believe Government should pursue a Brexit strategy that could cause any harm to our status as a strong exporting region and we’re delighted to contribute to any work which makes this point.”

The report also identifies opportunities from Brexit. Businesses could build on devaluation to boost exports, and there may be opportunities to secure more local supply chain activity given relatively cheaper capital costs.

The group’s report adds that some North East exporters, such as medicine manufacturers, have seen uplift in trade volume with businesses benefiting from the devaluation of sterling.

However, the overall balance of trade value has reversed to put the North East in a net importing position for the first time in many years.

Alongside manufacturing, a particular UK wide impact of Brexit is expected in places hosting knowledge intensive services. In the North East these are concentrated in Newcastle, Gateshead and North Tyneside.

Beth Farhat, TUC Northern Regional Secretary, concluded: “We welcome the report and are pleased to be able to work with others to highlight this evidence.

“[Around] 140,000 North East jobs depend on EU trade, and paid holidays, fairness for part-time workers and parental leave are guaranteed by the EU. The best way to keep the good jobs and rights at work that the single market provides is to be part of it.”

Some businesses are planning ahead, in the absence of clarity and some are planning for a perceived worst case scenario of reverting to World Trade Organisation (WTO) trade arrangements.

The majority of local businesses have yet to start to plan as the implications of Brexit for them are not yet clear.

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