A harder Brexit will have a more severe effect on the economies of the core cities of than on London, according to a new report from economics consultancy Cambridge Econometrics in partnership with Cambridge University.
The City Evolutions report’s co-authors Ben Gardiner from Cambridge Econometrics and Prof Ron Martin of Cambridge University, said they hoped the evidence base they have gathered acts as a ”wake-up call” to central government to improve the allocation of public resources beyond the M25.
The report sounds a warning that growth in core UK cities of Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Belfast could be at risk of a relative fall in both GVA and employment from a hard Brexit due to the nature of the economies there.
In the early 80s, the report claims that these core cities’ productivity was higher than the national average and higher than London’s, and that since then, growth has been stymied by recessions and other economic set-backs.
It reflects evidence in the recently published Cisco Productivity Index 2019 which found that all 10 core cities in the UK are lagging behind their productivity benchmark levels, with six of them falling short by more than 10%. Bristol has been found to be the best performing city, reaching 98% of its industrial productivity standard. The index is dominated by London boroughs, with 15 of the 20 strongest-performing areas belonging to Greater London.
The City Evolutions report raises concerns that the economic benefits of the controversial HS2 rail network, which if it is fully completed will connect London, Birmingham, the East Midlands, Leeds and Manchester, may come at the expense of smaller cities.
It states that smaller cities need to be “properly connected and integrated”, and warns that the effects of similar high-speed rail investment in France is mixed, with smaller regional centres seeing an outflow of businesses there.
The report advocates the Northern Powerhouse Rail (HS3) network championed by the National Infrastructure Commission, which would link Liverpool in the west to Newcastle and Hull in the east, as bringing “key benefits” to northern cities, and also finds evidence supporting the Midlands Rail Hub.
It also warns that “substantial investment” is required in the road networks that connect the core cities and their towns and surrounding areas.
Judith Blake (Lab), chair of Core Cities UK and leader of Leeds City Council, said the report underlines the case for government to invest in cities “to improve their resilience in the face of Brexit”.
“It also makes the point that unless we rebalance the UK economy, millions of livelihoods across the entire country will be at risk from the next economic downturn,” she added.