The government’s Nissan deal should not be the blueprint for other Brexit trade agreements

Robots making cars in Sunderland. Image: Getty.

 The future of British trade following the EU referendum has dominated political discourse in recent months, and will no doubt continue to do so as Brexit negotiations begin in earnest over the coming weeks. Oddly however, there has been little mention of the one trade deal that the government has already struck following the Brexit vote: its agreement with car manufacturer Nissan to keep its car plant open in Sunderland.

The importance of Nissan and its supply chain in Sunderland is hard to understate, with around 7,000 people employed directly in car-making in the city. As the new Centre for Cities report Cities Outlook 2017 shows, Sunderland is the highest exporter of all cities in Britain, selling over £40,000 of goods and services abroad for every job in the city in 2014 (second placed Worthing sold £30,000).

But take Nissan and its supply chain out of the equation, and Sunderland would have had the 12th lowest exports of all cities.

The political gain for the government in striking the deal is therefore obvious, as the impact of Nissan leaving Sunderland would be disastrous for the city’s economy. And if the government’s industrial strategy and Brexit white paper are anything to go by, we are likely to see other similar short-term deals in future, with both documents outlining the ambition to strike more sector-led deals.

This, however, would be a mistake – for as our research shows, the Sunderland-Nissan deal doesn’t offer a long term solution for either the national economy generally or Sunderland specifically.

In terms of the national economy, doing specific deals with individual companies or sectors will benefit only a small number of places in Britain. As Cities Outlook shows, exporting industries such as cars, chemicals or pharmaceuticals are located in only a handful of places across the country.

And while Sunderland is not alone in its dependence on a single industry – Derby's exports are dominated by Rolls Royce, and Coventry by Jaguar Land Rover – in most cities their exports depend on a broad number of sectors. For these places, trade deals with specific businesses or sectors will do little to support their exports.

Click to expand.

For Sunderland, while a specific deal is a no brainer in the short term, it does little to alter the city's longer term path. Nissan's success in Sunderland should be rightly celebrated, but it also highlights the city's over-reliance on one company.

Sunderland has struggled to attract in business investment in high-skilled work (it ranks 44 of 62 cities for its proportion of jobs in knowledge-intensive business services) and it has the lowest number of business starts of any UK city. Even Nissan does little of its high-value activities in the city – for example, while its Qashquai model is assembled in Sunderland, it was designed in Paddington and engineered in Cranfield.

Without this changing, Sunderland will once again be in the position of requiring the government to strike another short-term deal with Nissan in future, as it did in 1984 to tempt the Japanese company to Wearside in the first place, and which it has done on a number of times since over the last three decades.

So to compliment the agreement that government came to with Nissan at the end of last year, policies need to be put in place now to deal with the challenges that have limited its ability to attract in and grow jobs in higher-skilled activities.

In Sunderland's case this is twofold. The first is to deal with skills. The city performs poorly on a number of skills measures, which undermines attempts to attract in high-skilled jobs. To change this, national and local leaders need to focus in particular on improving GCSE attainment at school level and literacy and numeracy skills in the current workforce.

The second is to improve its city centre as a place to do business. In recent decades a number of local and national policies have subsidised the building of our of town employment space while ignoring the problems of the city centre. This is continuing even now – the local council has used the city-deal it struck with the government to create the International Advanced Manufacturing Park next door to Nissan's plant, on top of securing enterprise zone status for a neighbouring site.

But until very recently the problems faced by the city centre had been ignored. There has, thankfully, been some progress on this recently, but making the city centre a more attractive place to do business needs to be at the very centre of the city's attempts to improve the job opportunities available to those who live in and around it.

Improving exports generally will be critical in boosting growth in the national economy, an issue acknowledged in the government’s recent industrial strategy green paper. But in order to help every city across the UK grow their export base, ministers need to focus on trade deals covering all sectors – and should avoid the temptation to prioritise deals for high-profile industries that will only benefit a small number of places.

Paul Swinney is senior economist at the Centre for Cities.

Want more of this stuff? Follow CityMetric on Twitter or Facebook.


Was the decline in Liverpool’s historic population really that unusual?

A view of Liverpool from Birkenhead. Image: Getty.

It is often reported that Liverpool’s population halved after the 1930s. But is this true? Or is it a myth?

Often, it’s simply assumed that it’s true. The end. Indeed, proud Londoner Lord Adonis – a leading proponent of the Liverpool-bypassing High Speed 2 railway, current chair of the National Infrastructure Commission, and generally a very influential person – stood on the stairs in Liverpool Town Hall in 2011 and said:

“The population of Liverpool has nearly halved in the last 50 years.”

This raises two questions. Firstly, did the population of the City of Liverpool really nearly halve in the 50 year period to 2011? That’s easy to check using this University of Portsmouth website – so I did just that (even though I knew he was wrong anyway). In 2011, the population of the City of Liverpool was 466,415. Fifty years earlier, in 1961, it was 737,637, which equates to a 37 per cent drop. Oops!

In fact, the City of Liverpool’s peak population was recorded in the 1931 Census as 846,302. Its lowest subsequent figure was recorded in the 2001 Census as 439,428 – which represents a 48 per cent decline from the peak population, over a 70 year period.

Compare this to the population figures for the similarly sized City of Manchester. Its peak population also recorded in the 1931 Census as 748,729, and its lowest subsequent figure was also recorded in the 2001 Census, as 392,830. This also represents a 48 per cent decline from the peak population, over the same 70 year period.

So, as can be seen here, Liverpool is not a special case at all. Which makes me wonder why it is often singled out or portrayed as exceptional in this regard, in the media and, indeed, by some badly briefed politicians. Even London has a similar story to tell, and it is told rather well in this recent article by a Londoner, for the Museum of London. (Editor’s note: It’s one of mine.)

This leads me onto the second question: where have all those people gone: London? The Moon? Mars?

Well, it turns out that the answer is bit boring and obvious actually: after World War 2, lots of people moved to the suburbs. You know: cars, commuter trains, slum clearance, the Blitz, all that stuff. In other words, Liverpool is just like many other places: after the war, this country experienced a depopulation bonanza.

So what form did this movement to the suburbs take, as far as Liverpool was concerned? Well, people moved and were moved to the suburbs of Greater Liverpool, in what are now the outer boroughs of the city region: Halton, Knowsley, St Helens, Sefton, Wirral. Others moved further, to Cheshire West & Chester, West Lancashire, Warrington, even nearby North Wales, as previously discussed here.

In common with many cities, indeed, Liverpool City Council actually built and owned large several ‘New Town’ council estates, to which they moved tens of thousands of people to from Liverpool’s inner districts: Winsford in Cheshire West (where comedian John Bishop grew up), Runcorn in Halton (where comedian John Bishop also grew up), Skelmersdale in West Lancashire, Kirkby in Knowsley. There is nothing unique or sinister here about Liverpool (apart from comedian John Bishop). This was common practice across the country – Indeed, it was central government policy – and resulted in about 160,000 people being ‘removed’ from the Liverpool local authority area.

Many other people also moved to the nearby suburbs of Greater Liverpool to private housing – another trend reflected across the country. It’s worth acknowledging, however, that cities across the world are subject to a level of ‘churn’ in population, whereby many people move out and many people move in, over time, too.

So how did those prominent images of derelict streets in the inner-city part of the City of Liverpool local authority area come about? For that, you have to blame the last Labour government’s over-zealous ‘Housing Market Renewal Initiative’ (HMRI) disaster – and the over enthusiastic participation of the then-Lib Dem controlled city council. On the promise of ‘free’ money from central government, the latter removed hundreds of people from their homes with a view to demolishing the Victorian terraces, and building new replacements. Many of these houses, in truth, were already fully modernised, owner-occupied houses within viable and longstanding communities, as can be seen here in Voelas Street, one of the famous Welsh Streets of Liverpool:

Voelas Street before HMRI implementation. Image:

The same picture after HMRI implementation Image: 

Nonetheless: the council bought the houses and ‘tinned them up’ ready for demolition. Then the coalition Conservative/Lib Dem government, elected in 2010, pulled the plug on the scheme. 

Fast forward to 2017 and many of the condemned houses have been renovated, in a process which is still ongoing. These are over-subscribed when they come to market, suggesting that the idea was never appropriate for Liverpool on that scale. 

At any rate, it turns out that the Liverpool metropolitan population is pretty much the same as it was at its peak in 1931 (depending where the local borough boundaries are arbitrarily drawn). It just begs the question: why are well educated and supposedly clever people misrepresenting the Liverpool metropolis, in particular, in this way so often? Surely they aren’t stupid are they?

And why are some people so determined to always isolate the City of Liverpool from its hinterland, while London is always described in terms of its whole urban area? It just confuses and undermines what would otherwise often be worthwhile comparisons and discussions. Or, to put it another way: “never, ever, compare apples with larger urban zones”.

In a recent Channel 4 documentary, for example, the well-known and respected journalist Michael Burke directly compared the forecast population growths, by 2039, of the City of Liverpool single local authority area against that of the combined 33 local authority areas of Greater London: 42,722 versus 2.187,708. I mean, what bizarre point is such an inappropriate comparison even trying to make? It is like comparing the projected growth of a normal sized-person’s head with the projected growth of the whole of an obese person, over a protracted period.

Having said all that, there is an important sensible conversation to be had as to why the populations of the Greater Liverpool metropolis and others haven’t grown as fast as maybe should have been the case, whilst, in recent times, the Greater London population has been burgeoning. But constantly pitching it as some sort of rare local apocalypse helps no one.

Dave Mail has declared himself CityMetric’s Liverpool City Region correspondent. He will be updating us on the brave new world of Liverpool City Region, mostly monthly, in ‘E-mail from Liverpool City Region’ and he is on twitter @davemail2017.