Regions '˜will feel different Brexit impacts' - Sheffield University study

Poorer regions of the country including Yorkshire face greater uncertainty from a decision to leave the European Union, according to a new report.

Wednesday, 25th May 2016, 9:56 am
Updated Wednesday, 25th May 2016, 10:58 am

Experts from Sheffield University found that northern regions are more reliant on exporting goods to the EU than the south raising questions over the impact of any change in the trading relationship between Britain and Europe.

The North also receives a higher percentage of cash from the European Union which is largely distributed on the basis of economic prosperity.

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Historically, Yorkshire has been a major recipient of EU funds as one of the less economically successful parts of the country.

Dr Craig Berry, deputy director of the Sheffield Political Economy Research Institute and co-author of the two studies published today, said: “It is regrettable that the regional dimension of the UK/EU relationship has received relatively little attention in the public debate around the impact of ‘Brexit’. This research highlights how the UK’s poorest regions face greater economic uncertainty than richer regions if Britain votes to leave the EU on June 23.

“The economic status quo does not work in the favour of the UK’s poorest regions, in particular Wales, Northern Ireland, the South West and the North of England, yet it is these regions which face the most uncertainty if there is a leave vote.

“In England the government’s ‘Northern Powerhouse’ agenda is designed to address such regional imbalances.

“However it is questionable whether that agenda is compatible with ‘Brexit’ if it leads to the loss of regional economic development funds and more restricted access for regional manufacturing exports to pivotal EU markets.”

He added: “Both sides of the referendum campaign need to provide more clarity for voters about the regional implications of staying in or leaving the EU.

“A ‘leave’ vote could cause a huge degree of economic uncertainty and short-term disruption, and this would be felt most acutely in the UK’s poorest regions.”

The university’s study showed the sharp difference in reliance on EU trade between different parts of the UK.

Places such as the North East and the devolved nations sell more to Europe than they import, arguably making them most vulnerable to any change in the UK’s trade relationship with the EU.

Yorkshire has a £4.3bn goods trade deficit with the EU but that is small compared to the South-East with a trade gap of £39bn suggesting that part of the country has less to lose.

Almost half of Yorkshire’s exports go to the EU, the study showed, while for London and Wales the figure is less than 40 per cent.

In a separate study, the university showed the major differences in the amount of money received by different parts of the UK from the EU to support the local economy.

Yorkshire will receive around £600m in the current EU funding round that runs from 2014 to 2020 compared to the South East which will receive just £218m.

The difference is even more stark when population is taken into account.

Yorkshire is due to receive £114 per head while the South East will receive just £25.

Wales is the biggest recipient of so-called ‘structural funds” at £600 per person.