Brexit costing shows carmaking, financial services hardest hit

Brexit will hurt locations as diverse as London and the Isles of Scilly, in particular, say official figures.

London will be severely affected by Brexit, analysis shows

Britain’s exit from the European Union will hurt the car and financial services industries and locations as diverse as London and the Isles of Scilly, in particular, according to Britain’s Office for National Statistics.

The ONS has drawn up an analysis showing which parts of the country could be most affected “because they are home to a concentration of industry or industries which have most at stake when the terms surrounding access to the single market, the free movement of labour, levels of funding and existing EU regulations are discussed”. London, West Somerset, Weymouth and Portland in Dorset, the Isles of Scilly and South Ribble, near Preston in Lancashire, have been identified by the ONS as locations that have an especially heavy reliance on European Union workers.

The ONS said: “The EU is the UK’s biggest single trading partner. It accounted for 48 per cent of goods exports from the UK and 39 per cent of services in 2016. And some industries will have a particular focus on (Brexit) negotiations. ”

All British businesses enjoy free trade with the EU at present, but a failure to reach a trade agreement could mean tariffs and quotas under World Trade Organisation rules. The car industry is particularly reliant on EU trade, both for export sales and imports of key components in the production process.

The ONS said that the EU accounted for 42 per cent of British car exports and 88 per cent of imports in 2016, and added: “If the UK and EU were to trade under WTO rules, cars would face a 10 per cent tariff. About one third of the jobs in the car industry are in the West Midlands.”

Trade with EU countries is also crucial for Britain’s banks, insurers and other financial institutions.

Britain exported about £24 billion ($39.7bn) of financial services in 2015, nearly half which went to the EU. Areas of the country where financial services companies are dominant employers include London, Surrey, East and West Sussex, Gloucestershire, Wiltshire, Bath and Bristol, Cheshire, West Yorkshire and eastern Scotland. One of the hottest Brexit negotiation topics is the future of EU nationals living and working in Britain.

European migrant workers are considered important to many sectors, particularly hotels, restaurants, construction and public services. The ONS said that local economies could face staff shortages if EU nationals were to leave en masse.

Any changes to EU workers’ rights could have an impact on construction projects across Britain.

South Ribble has the highest concentration of construction jobs, more than four times the national average.

According to the ONS, overall there were more than 150,000 EU nationals working in construction across Britain in 2015.

Public services could be affected as more than 300,000 EU nationals were working in education, health and social care in 2015.

Scientific research is essential for driving innovation and productivity across Britain and benefits from EU funding and access to European researchers.

The ONS said that the east of England and the southeast accounted for more than half of employment in the scientific research and development sector in 2015. However, agriculture and fishing arguably are most affected by EU regulation.

The Times