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82 days until Brexit: MM discuss impact on Greater Manchester economy, trade, funding, education, residents, unemployment and aviation

In the June 2016 referendum, the city of Manchester had the fifth highest vote to Remain in the EU with 60%.

Many here believed that would be the same across the country but seven of the ten Greater Manchester boroughs, and most of the UK, disagreed.

Wigan, just 20 miles away, voted to leave by 64% in a complete reversal of Manchester’s vote.

Both sides are still as adamant as ever they are right but looming over all is the ever growing possibility of no deal. Most see this as a threat but some an opportunity.

We contacted all ten boroughs to find out how they were preparing and learned only Manchester and Oldham have prepared impact reports.

Bolton Council said it was “not yet possible to foresee the many different scenarios in enough detail” while Wigan claimed the current level of uncertainty meant “no organisation is able to say what the impact will be nationally or locally.”

With just over 80 days to go until we leave the EU on March 29, we will use these impact reports and hear from a range of voices to discover what this will mean – both for the city of Manchester and the wider region.

The Economy

In the most recent report from the Greater Manchester Combined Authority, the potential impacts from each of the current scenarios on the table were outlined.

Jeff Smith, MP for Withington, said any kind of Brexit would be damaging for Manchester but no-deal would be “catastrophic”.

Without a deal, economic growth for the region would be £8.2 billion smaller under current projections and take around £2,730 from the pocket of every resident.

The North-West on the whole would be the third worst affected area of Britain, something Sir Richard Leese, GM Council Leader, said we are “sleepwalking” towards.

The other scenarios modelled range from £0.4 billion smaller from the White Paper (the ‘Chequers’ plan) to £5.1 billion under the average FTA deal which would take us outside the customs union.

The report revealed that almost one quarter of firms are unsure of how Brexit will affect their investment plans, although this is less than the 35% who felt the same early in 2018.

Manchester Digital represents the city’s digital and technology sector and Managing Director Katie Gallagher argues that hiring from outside the EU can be “clunky, slow and hard to navigate.”

She added: “Preventing freedom of movement – a policy that provides access to the additional talent Manchester’s digital and tech businesses need to grow – without fixing the existing problems, will have a negative impact on tech businesses.”

Figures from GM Chamber of Commerce show a decline in fortune for the services industry but an upturn for manufacturing.

Construction has expanded nationally according to the latest PMI score and orders within Greater Manchester are anticipated to grow. The Brexit Monitor did note that despite this expected increase, optimism for the future was at its lowest level for nearly six years.

Trade

Dr Jonathan Swift, a senior lecturer in international business at Salford University, argues that your perception on Brexit depends on what you see our exit as.

“People like me look at it like leaving a club. The EU use it as a divorce. They want to share out everything.”

Dr Swift called the £39billion that the UK will have to pay the EU “reparations” and said that by leaving without a deal we can use that money to pay for services in our own country. This £39 billion would be good for Britain, he argues, and “what is good for Britain will be good for Manchester”.

Once we have a clean break from the EU, Britain can make trade deals with whomever we wish and as Manchester has “traditionally looked westward”, deals with the United States of America will bring a lot of opportunities.

Statistics from the ONS show that Manchester is more reliant on trade with the EU than other parts of the UK.

In 2017, the EU accounted for 49% of goods exports from the UK as a whole, but 57% from Greater Manchester. Less trade with European nations would necessitate more from elsewhere, something the Chairman of UKIP Manchester says is a good thing.

Trade with our “commonwealth allies and across the developing world can expand once again”, just as it did when Manchester was a ‘hive’ of activity in the 19th Century.

They added: “Manchester has proudly been setting examples to the world for centuries in economics, science, and culture. Free trade in particular was a hallmark of this area at a point in history when such ideas were deemed radical.”

Funding

Manchester City Council’s economic scrutiny committee estimated the city received over £150 million from European Structural and Investment Funds (ESIF) between 2007-13.

This included The Sharp Project, a digital production complex, which received a £7 million grant and now provides 1000 jobs; the National Graphene Institute which opened in 2015 with £23 million from the ERDF; and the National Football Museum which was given a further £3.7 million, 25% of its total.

Dominic Jackson, Secretary for Manchester for Europe, believes the city (and region) have “benefitted immensely” from a history of funding support from the European Union, including over £20 million to help rebuild the city centre after the 1996 IRA bomb.

In the current funding period (2014-2020), Greater Manchester is due to receive almost twice its previous funding.

£322.75m will be split across European Regional Development Funding (ERDF) (£176.78m) and European Social Funding (ESF) (£145.97m), which is equivalent to £53.8m per year.

The Shared Prosperity Fund is due to replace ESIF funding at the national level but the European Commission announced the region will continue to be eligible for funding until 2020/21, while the UK government has guaranteed any funding secured before March 29 in the event of no deal.

UKIP Manchester argues Brexit will be good for the city because the EU “will not be attaching smug propaganda plaques to Manchester buildings”.

They suggest the funding gap can be filled by our own private sector, highlighting “£3 billion of new investment” from Legal & General into Greater Manchester. When contacted, however, the firm said they were not sure where this figure came from.

Education

Over 150,000 EU citizens live in Manchester, many of them former UK graduates, and Jeff Smith MP worries their rights will be impacted by Brexit.

“Our city produces world-leading academic research with the help of EU funding and the freedom for European academics to live and work here.”

FOI requests show that between Manchester and Salford Universities over 1600 UK students have taken part in the Erasmus exchange programme over the last three years, with around 1500 European students coming to the city in exchange.

Since the referendum, the number of outgoing Erasmus students has increased by over 70% while incoming students from abroad decreased by 78%.

Jamie Brown, Head of Communications for Manchester University, said the scheme is currently planned until the end of 2020 but applications submitted while we’re still in the EU can continue after Brexit.

“The University will continue to make representations in support of our staff and students and collaborators who are affected in different ways by the consequences of the referendum vote,” he said.

Residents

Both of the councils that have conducted Impact Studies are united in their belief that those in worse-off areas are likely to be hit the hardest.

Oldham Council said: “Regardless of the type of deal agreed with the EU, consumers are likely to be hit by an increase in prices, particularly for food and energy.”

Dominic Jackson of Mcr4EU calls this the “perfect storm” of declining personal incomes and diminished council funding.

In 2016 Stockport’s residents voted narrowly to Remain and though the council have not prepared an impact study, they did note that EU support from Stockport residents is at a “substantially higher level” than two years ago.

Investment in the area is in jeopardy, living costs have gone up and public sector funding has gone down, persuading the council to call upon the government to abandon a hard Brexit and give the people a final say.

Without a deal, Manchester City Council listed four immediate risks and civil contingencies for residents: food, fuel, medicines and social cohesion/ hate crime.

Sir Richard Leese said: “In the meantime, we have to continue making our own preparations in Greater Manchester, thinking about the worst that might befall us.”

Steven Woolfe MEP says Brexit will result in new international trade deals, adding: “These deals will open fresh business opportunities for Manchester companies and improve job prospects for employees.

“The new immigration policies which will result from Brexit will cause wages to increase for employees in Manchester, especially for low-skilled or low-paid workers.”

Unemployment

Analysis from the Migration Observatory shows that the hospitality, finance and construction industries of Greater Manchester contain the largest number of EU nationals and will be most affected by Brexit.

The most recent Brexit Monitor by GMCA was slightly more upbeat in terms of unemployment after falling to 4.6% in the 12 months before June 2018, though it remains above national rates.

However, though the numbers of unemployed according to the traditional labour force survey are down, the amount claiming unemployment or underemployment benefits in Greater Manchester has risen to its highest level in over four years.

With more people in work, the housing market remains stable. The Brexit Monitor notes that the most recent housing sales data from the Land Registry have shown little impact from the referendum.

House prices in Greater Manchester have risen faster than national and regional averages, showing steeper growth even than London.

In a February 2018 report, investment management firm JLL said the growth of the city centre population, the rise in new build prices and the graduate retention rate have made Manchester the most attractive city centre market in the UK.

They said: “Despite national and global headwinds, Manchester’s momentum continues unabated.”

Aviation

One of Manchester City Council’s biggest concerns from no deal was Manchester Airport. Shadow Foreign Secretary Emily Thornberry claimed that flights would be grounded without a deal and many Mancunians are worried their holidays in April will never take flight.

However, Manchester Airport Group CEO Charlie Cornish told us the signing of an aviation agreement meant this would not occur.

“We have also welcomed the publication of technical notices from both the UK and the EU which have set out a clear and positive commitment to allowing airlines continued access between the UK and the EU, even in a no deal scenario,” he said.

Mr Cornish said the best result for the aviation industry would be one which “preserves the liberal flying freedoms and competitive approach” but the new routes to Mumbai, Beijing and Houston could become even more popular after Brexit.

At the very least, come March 30, Manchester residents will be safe in the knowledge that the planes will take off and the world will keep spinning.

Conclusion

If there is one thing these disparate groups can agree on, it’s that Parliament have dropped the ball.

Pro-Manchester represents the business community in the North West and say that despite the cranes littering the Manchester skyline, uncertainty stemmed from the “political bickering” of Parliament.

Chief executive Sam Booth said: “A concrete plan will benefit our business community greatly, allowing us to plan accordingly and move forward.”

UKIP Manchester criticised the “political shenanigans” that have held up the negotiations and argue the establishment is doing its “bare minimum” to bring about a Brexit that will be much weaker than they wanted.

Sir Richard Leese described the lack of decisive action as “absolutely shameful” and that while we found out we still have a Prime Minister, there’s still no evidence of a government at work.

Andy Burnham, Mayor for Greater Manchester, said the lack of focus from government had added 10-20% more work for GMCA this year alone regarding the rail crisis and homeless problem.

He said: “We are not getting the support that we should get from a fully functioning government at the centre of the country. This situation cannot carry on.”

Manchester Liberal Democrat Leader John Leech blamed council leaders for playing “political games”, refusing to back a People’s Vote and condemning future generations to fewer opportunities as a result.

“Labour themselves have acknowledged that Brexit will be catastrophic for Manchester – why then are the likes of Labour’s Richard Leese, Jeremy Corbyn and Andy Burnham teaming up with Theresa May and Nigel Farage who are so afraid to let the public have a final say?”

Defence Secretary Gavin Williamson announced to the House of Commons that 3,500 troops will be on standby should the ominous no deal occur.

With 82 days to go, Parliament continues to pass the blame and let tensions rise but as the countdown ticks ever closer the only thing certain to increase is more uncertainty.

Image courtesy of Jonathan Rolande via Flickr, with thanks.

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