Which British cities will be hit hardest by Brexit?

Theresa May in Brussels in June. Image: Getty.

The latest instalment of our weekly series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities.

A lot of my time at work is given over to worrying fitfully about two things. One is cities policy. The other is Brexit.

What could be more thrilling, then, than a report which combines those two topics into a single piece of research? The answer, as it turns out, is almost anything, because this report is one of the most depressing things I’ve seen in ages.

The study, a joint effort between the Centre for Cities and LSE’s Centre for Economic Performance, looks at what both “Hard” and “Soft” Brexit would do to the economies of 62 British cities. (In the unlikely event you’re unsure, “soft” Brexit means we stay in a free trade area with the EU, but have to content with new non-tariff barriers; “hard” Brexit means we leave the free trade area and have to deal with tariffs as well.)

In either scenario, literally every city loses out. Only two cities – Crawley and Barnsley; neither exactly an economic powerhouse – would lose less than 1 per cent of GVA, a measure of productivity, even in the softer scenario.

The vast majority of cities will lose between 1 and 1.5 per cent of GVA under the Soft Brexit scenario. Worst affected would be Aberdeen, heart of the Scottish petrochemical industry which would lose 2.1 per cent. That’s about as much productivity as the UK as gained in its lost decade since 2006.

And this, remember, is in the gentler scenario. Should we have a Hard Brexit – the plan the British government seems to favour – the impact will be twice as bad, and vast majority of cities will be losing between 2 and 3 per cent of GVA.

Aberdeen, once again the hardest hit, would lose 3.7 per cent. Indeed, the ranking of cities doesn’t change much between soft and hard Brexit: seven cities make the top 10 under either scenario; seven more make the bottom 10. A harder Brexit will take a deeper gouge out of the British economy, but won’t change which cities are the worst afflicted.

Much of the debate around Brexit has had a “turkeys voting for Christmas” subtext to it: a suggestion that the areas that voted Leave would be those most likely to take a hit.

The CfC/CEP report shows that the picture is rather more nuanced than that. In both scenarios, the report says:

“...it is economically vibrant cities - predominantly in the South of England - which will be hit hardest and most directly by Brexit... In contrast, the cities least directly affected by either form of Brexit are mostly less prosperous places in the North, Midlands and Wales.”

That implies a couple of things. One is that it wasn’t turkeys voting for Christmas at all: by and large, those cities with the most to lose from Brexit were actually more likely to vote against it. The other is that, since it’ll be the richer cities which are hit hardest, the aggregate effect of Brexit might actually be worse than a simple average suggests.

That, though, is only the short term effect. The report also makes clear that the most affected cities are also the most resilient, and so the best-placed to respond to the shock. Poorer cities may be less vulnerable to the post-Brexit downturn; but they’ll also find it harder to bounce back.

Oh – and then there’s the matter of EU regional funds, which go overwhelmingly to poorer, more pro-Brexit areas, and which are incredibly unlikely to be replaced by the British government. But that’s another story.

 

Here’s a chart showing the predicted reduction in GVA in every city in the report (blue is under soft Brexit, red and blue combined is Hard Brexit). I’ve grouped them by region, to enable you to see how different parts of the country will be affected.

Click to expand.

Andrew Carter, the CfC’s chief executive, called on the government to “secure the best possible trade deal with the EU”:

“That means ensuring that our post-Brexit trading arrangements are as close to our current relationship with Europe as possible.”

“But it’s also critical that the government uses its forthcoming industrial strategy to give cities across the country the investment, powers and responsibilities they need to make their economies as successful and competitive as possible.”

Such a move would make sense: cities must be given as many tools as possible to deal with the shocks ahead. The fear, though, must be that Brexit will take up so much of the government’s time that devolution policy is basically off the table. Even if ministers still want to empower their cities – by no means certain, when you look at the rest of Theresa May’s agenda – it’s by no means clear that they have the capacity to do it.


You can read the full report here.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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Everything you ever wanted to know about the Seoul Metro System but were too afraid to ask

Gwanghwamoon subway station on line 5 in Seoul, 2010. Image: Getty.

Seoul’s metro system carries 7m passengers a day across 1,000 miles of track. The system is as much a regional commuter railway as an urban subway system. Without technically leaving the network, one can travel from Asan over 50 miles to the south of central Seoul, all the way up to the North Korean border 20 miles north of the city.

Fares are incredibly low for a developed country. A basic fare of 1,250 won (about £1) will allow you to travel 10km; it’s only an extra 100 won (about 7p) to travel every additional 5km on most lines.

The trains are reasonably quick: maximum speeds of 62mph and average operating speeds of around 20mph make them comparable to London Underground. But the trains are much more spacious, air conditioned and have wi-fi access. Every station also has protective fences, between platform and track, to prevent suicides and accidents.

The network

The  service has a complex system of ownership and operation. The Seoul Metro Company (owned by Seoul City council) operates lines 5-8 on its own, but lines 1-4 are operated jointly with Korail, the state-owned national rail company. Meanwhile, Line 9 is operated jointly between Trans-Dev (a French company which operates many buses in northern England) and RATP (The Parisian version of TfL).

Then there’s Neotrans, owned by the Korean conglomerate Doosan, which owns and operates the driverless Sinbundang line. The Incheon city government, which borders Seoul to the west, owns and operates Incheon Line 1 and Line 2.

The Airport Express was originally built and owned by a corporation jointly owned by 11 large Korean firms, but is now mostly owned by Korail. The Uijeongbu light railway is currently being taken over by the Uijeongbu city council (that one’s north of Seoul) after the operating company went bankrupt. And the Everline people mover is operated by a joint venture owned by Bombardier and a variety of Korean companies.

Seoul’s subway map. Click to expand. Image: Wikimedia Commons.

The rest of the lines are operated by the national rail operator Korail. The fare structure is either identical or very similar for all of these lines. All buses and trains in the region are accessible with a T-money card, similar to London’s Oyster card. Fares are collected centrally and then distributed back to operators based on levels of usage.

Funding

The Korean government spends around £27bn on transport every year: that works out at 10 per cent more per person than the British government spends.  The Seoul subway’s annual loss of around £200m is covered by this budget.

The main reason the loss is much lower than TfL’s £458m is that, despite Seoul’s lower fares, it also has much lower maintenance costs. The oldest line, Line 1 is only 44 years old.


Higher levels of automation and lower crime rates also mean there are fewer staff. Workers pay is also lower: a newly qualified driver will be paid around £27,000 a year compared to £49,000 in London.

New infrastructure is paid for by central government. However, investment in the capital does not cause the same regional rivalries as it does in the UK for a variety of reasons. Firstly, investment is not so heavily concentrated in the capital. Five other cities have subways; the second city of Busan has an extensive five-line network.

What’s more, while investment is still skewed towards Seoul, it’s a much bigger city than London, and South Korea is physically a much smaller country than the UK (about the size of Scotland and Wales combined). Some 40 per cent of the national population lives on the Seoul network – and everyone else who lives on the mainland can be in Seoul within 3 hours.

Finally, politically the biggest divide in South Korea is between the south-west and the south-east (the recently ousted President Park Geun-Hye won just 11 per cent of the vote in the south west, while winning 69 per cent in the south-east). Seoul is seen as neutral territory.  

Problems

A driverless train on the Shinbundang Line. Image: Wikicommons.

The system is far from perfect. Seoul’s network is highly radial. It’s incredibly cheap and easy to travel from outer lying areas to the centre, and around the centre itself. But travelling from one of Seoul’s satellite cities to another by public transport is often difficult. A journey from central Goyang (population: 1m) to central Incheon (population: 3m) is around 30 minutes by car. By public transport, it takes around 2 hours. There is no real equivalent of the London Overground.

There is also a lack of fast commuter services. The four-track Seoul Line 1 offers express services to Incheon and Cheonan, and some commuter towns south of the city are covered by intercity services. But most large cities of hundreds of thousands of people within commuting distance (places comparable to Reading or Milton Keynes) are reliant on the subway network, and do not have a fast rail link that takes commuters directly to the city centre.

This is changing however with the construction of a system modelled on the Paris RER and London’s Crossrail. The GTX will operate at maximum speed of 110Mph. The first line (of three planned) is scheduled to open in 2023, and will extend from the new town of Ilsan on the North Korean border to the new town of Dongtan about 25km south of the city centre.

The system will stop much less regularly than Crossrail or the RER resulting in drastic cuts in journey times. For example, the time from llsan to Gangnam (of Gangnam Style fame) will be cut from around 1hr30 to just 17 minutes. When the three-line network is complete most of the major cities in the region will have a direct fast link to Seoul Station, the focal point of the GTX as well as the national rail network. A very good public transport network is going to get even better.