No-deal Brexit to cost West Mids £18bn

The study reveals how the West Midlands could be among the regions most exposed to the economic fallout from leaving the EU without a deal with an estimated annual loss of output worth £18 billion by 2034.

Such a significant shortfall would hit people’s jobs, livelihoods and living standards. This figure is double the annual public spending on education, including all schools and colleges, in the West Midlands each year.

Manufacturing activity is particularly important to the West Midlands, and the automotive sector, which employs thousands, is likely to be severely impacted as it is particularly exposed to the risk of higher tariffs and trade costs.

With 44% of the West Midlands’ goods exports going to the EU, any increased trade friction, added costs or delays would hit the region particularly hard.

Additionally, firms exporting to many of the leading non-EU countries such as Japan, South Korea and South Africa, benefit from the EU’s existing free trade deals to do so. These deals are expected to fall away if there is no deal, damaging trade with not just the EU but the rest of the world.

Nigel Driffield, Professor of International Business at Warwick Business School, University of Warwick, said: “A 'no deal' Brexit would be a disaster for the higher education sector – both in terms of 'measurable' things like support for research and innovation, the Erasmus Programme and our reliance on personnel from the EU, but also the reputational damage it is likely to do to us as a country.

“The UK Higher Education sector has an international reputation for honesty, quality and integrity. 'No deal' - where we as a country renege on previously agreed commitments - diminishes this hard-earned reputation, making us look more inward-looking and more parochial.

“As we look to promote the Higher Education sector abroad, this is not the way we should be presenting ourselves.”

Richard Butler, regional director for CBI West Midlands, said: “CBI members across the region are clear: if the new approach to finding a Brexit deal continues to be a game of who blinks first, the West Midlands economy will pay the price.

“The deadlock will only be broken by a genuine attempt by all MPs to find consensus and compromise, not stick to rusting red lines and political conditions. Like the rest of the UK, the West Midlands is not – and cannot be – ready for no deal.

“The projected impact on our region’s economy would be devastating and while business will do all it can to reduce some of the worst aspects, a no deal scenario is unmanageable.

“The message from the CBI to our politicians is clear – we must see compromise or the whole country faces the unforgivable prospect of a disorderly Brexit which will affect jobs and livelihoods in the West Midlands for decades to come. It’s time to put our region’s prosperity before party politics and dogma.”