EU main export market for most UK cities, says thinktank
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Version 0 of 1. Almost every British city depends on the EU more than any other market for their exports, according to a new analysis that underscores the risks to the jobs and growth from a hard Brexit deal. Research by the respected thinktank Centre for Cities found British cities would have to dramatically increase trade with other international markets to compensate for a downturn in exports to the EU once the UK leaves the bloc. Almost half, or 46%, of exports from urban centres go to the EU, compared with just 15% to the US and 4% to China. The focus on exports in the thinktank’s annual healthcheck on cities follows Theresa May’s speech this month setting out a vision for a “global Britain”. In her first key announcement on Brexit, the prime minister also confirmed the government planned to take the UK out of the EU single market. That plan has raised fears for the UK’s long-term prosperity, given its strong reliance on the EU as a trading partner. The Centre for Cities said its report showed the importance of getting a new EU trade deal in Brexit talks. It says that while UK cities cover just 8% of land in the UK, they account for 54% of the population, 60% of jobs and 62% of all exports. Data from 2014 shows 61 of the 62 places the thinktank defines as cities send more goods and services to the EU than anywhere else. In the one exception, Hull, almost a third of exports are to the EU, while 46% go to the US thanks to the city’s strong overseas sales of pharmaceutical and medical goods. Nurofen maker Reckitt Benckiser has a research and development centre in Hull. The thinktank’s chief executive, Alexandra Jones, said protecting and promoting exports from cities would be key to improving the UK’s productivity performance and ensuring living standards continue to rise. “Securing the best possible EU trade deal will be critical for the prosperity of cities across Britain, and should be the government’s top priority as we prepare to leave the single market and potentially the customs union,” she said. “While it’s right to be ambitious about increasing exports to countries such as the US and China, the outcome of EU trade negotiations will have a much bigger impact on places and people up and down the country.” Some supporters of leaving the European single market have argued the move would free the UK from the bloc’s protectionism and also push British businesses to seek trade with faster growing markets further afield. But the Centre for Cities report estimated trade with non-EU markets would have to rise substantially to fill the gap of any EU trade downturn. For example, to make up for a 10% decrease in exports to the EU, British cities would have to nearly double exports to China. The thinktank also urges the government to seek trade agreements covering as many sectors as possible, rather than prioritising deals for high-profile industries based in a small number of places. It notes that some places like Sunderland, where carmaker Nissan is based, are heavily reliant on a specific industry but they form the minority of cities – a total of seven. “For most cities, their exports are generated by a range of industries. In total, 35 cities had less than one-fifth of their exports concentrated in one industry,” the report notes. It found a north/south divide. Places in the north and Midlands mainly export goods, which make up almost 90% of exports from Derby and Hull, for example. Southern cities have a much greater reliance on exporting services, with nine out of the top 10 cities located in the south of England. The report’s analysis of cities’ trade links with the EU showed Exeter was most reliant on it for exports, with 70% going to the bloc. The city exports across a range of industries, including transport equipment, insurance and pensions. Exeter is followed by Plymouth, Bristol, Mansfield, Cardiff and Aberdeen, which all send 60% or more of their exports to the EU. The city least reliant on the EU for exports was Derby, home to Rolls-Royce. A quarter – 25% – of its exports go to the EU, 22% to the US and 5% to China. For Hull, 29% of exports to go the EU, 46% to the US and 2% to China. |