“The Midlands and the North of England are more exposed to Brexit than any other region in Europe”

The St George’s flag flies over Teesside. Image: Getty.

The very areas of the UK which voted Leave in June 2016 are likely to be the ones hardest hit by Brexit. Our research on the likely economic consequences of leaving the European Union on different regions and industries is consistent with the recently leaked government analysis which suggests that London will be one of the areas least hit in the event of a no-deal Brexit. The north-east of England, meanwhile, will be one of the worst affected.

An important element here is that these regions (and the sectors of the economy based there) have little representation in the Brexit negotiations and rarely figure in media discussions. When it comes to the potential impact of Brexit, the most prominent stories are those with underlying political or business interests. For example, the case for special treatment of particular industries after Brexit tends to revolve around financial services, automobile and aerospace firms.

On the one hand this is because these industries are widely understood as critical for the UK economy. But it’s worth noting that these industries also have strong lobbying power and access to government policymakers. In contrast, many other parts of the UK economy do not. Our analysis suggests that, in reality, it is many of the less high-profile sectors – and the regions where they are located – that could be the most exposed to Brexit.

We examined the extent to which British industries depend on trade with the EU. On the basis of an analysis of global trade patterns across 43 countries and 54 industries, we were able to calculate a Brexit risk-exposure index.

We did this for each UK sector under a “no deal” Brexit scenario in which much of UK trade faces severe disruptions and impediments. We also put together a “hyper-competitive” scenario in which UK industries can rapidly adapt and mitigate against the effects of losing single market access.

In our analysis, an industry’s exposure to Brexit is defined by the extent it is dependent on products or services that cross a UK-EU border at least once. We calculated exposure levels for different industries. They indicate how much the industry has to restructure its supply chains and employees to mitigate against the losses caused by reduced post-Brexit trade and movement with the EU. This gives us a picture of which industries are likely to be hit hardest by a no-deal Brexit and which ones will most likely remain virtually unaffected.

Deal or no deal

Across the UK, the results for a no-deal Brexit scenario show:

  • More than 2.5m jobs are directly at risk.
  • Almost £140bn of UK economic activity annually is directly at risk.
  • Many important manufacturing and primary industries are at risk, but so are many service industries – not just financial services.
  • Many of these services are not only exported directly to EU countries, but are also sold to UK manufacturing firms who then export to the EU.
  • Workers in the jobs at risk are on average slightly more productive than the average British worker – so Brexit is likely to exacerbate the UK’s productivity problems.

The findings show that, in 15 out of 54 industries, more than 20 per cent (and up to 36 per cent) of economic activity is at risk from Brexit. Industries include fisheries, chemicals and motor vehicle manufacturing.

GDP exposure to Brexit of European regions. Image: Chen et al (2018).

The industries facing the highest risks overall, and likely to be the hardest hit by a no-deal Brexit, are service industries such as professional, scientific, administrative and technical services. Others at high risk include the wholesale trades, legal and accounting services, retail trade, warehousing, land transport services, computer programming, and activities that support financial services. These are all industries which are dissipated across the wider economy and have very little structured lobbying power or media profiles.

Alternatively, in a “hyper-competitive scenario” – where UK industries can rapidly adjust to life outside the single market by sourcing parts in the UK that are currently sourced from the EU – our findings suggest that increases in UK employment and GDP could be about one-third of the losses in a no-deal scenario. So the risks for the UK would be much less in this scenario.

But current UK productivity figures suggest that most of the UK economy is nowhere near being hyper-competitive, so this case appears to be largely unrealistic.

Sector and region inequality

Our research also found that financial services is one of the least vulnerable sectors to Brexit with an exposure level of 8 per cent of its GDP being at risk. This is still significant, but it is low in comparison to many other sectors – largely because the financial services sector is already highly globalised and therefore displays a low dependence on EU markets.

Brexit vote map. Image: Chris Green.

Instead of financial services, greater emphasis should be placed on helping other, much more exposed sectors. Those that are likely to be the hardest hit by a no-deal Brexit are a range of other services industries. But these are parts of the economy which don’t lobby Westminster and rarely get the attention they need.

Our other analyses also show that it is the Midlands and the North of England which are by far the most vulnerable. They are more exposed to Brexit than any other region in Europe. The reason is that the Midlands and north of England are much more dependent on EU markets for their trade than London, the South East or Scotland.

As such, in the UK-EU negotiations there is no real representation from either the most exposed sectors or the most exposed regions. Instead, the focus of government discussions tends to be on those sectors and regions which are actually the least exposed parts of the UK economy. This means that whatever is finally negotiated is unlikely to alleviate the effects of Brexit on the vast majority of the UK.

 


Raquel Ortega-Argilés, Chair in Regional Economic Development, University of Birmingham and Philip McCann, Chair in Urban and Regional Economics, University of Sheffield.

The ConversationThis article was published in conjunction with the UK in a Changing Europe initiative. Wen Chen, Bart Los, Mark Thissen and Frank Van Oort were co-investigators on the research mentioned.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

Self-driving cars may be safe – but they could still prevent walkable, liveable communities

A self-driving car, driving itself. Image: Grendelkhan/Flickr/creative commons.

Almost exactly a decade ago, I was cycling in a bike lane when a car hit me from behind. Luckily, I suffered only a couple bruised ribs and some road rash. But ever since, I have felt my pulse rise when I hear a car coming up behind my bike.

As self-driving cars roll out, they’re already being billed as making me – and millions of American cyclists, pedestrians and vehicle passengers – safer.

As a driver and a cyclist, I initially welcomed the idea of self-driving cars that could detect nearby people and be programmed not to hit them, making the streets safer for everyone. Autonomous vehicles also seemed to provide attractive ways to use roads more efficiently and reduce the need for parking in our communities. People are certainly talking about how self-driving cars could help build more sustainable, livable, walkable and bikable communities.

But as an urban planner and transportation scholar who, like most people in my field, has paid close attention to the discussion around driverless cars, I have come to understand that autonomous vehicles will not complement modern urban planning goals of building people-centered communities. In fact, I think they’re mutually exclusive: we can have a world of safe, efficient, driverless cars, or we can have a world where people can walk, bike and take transit in high-quality, human-scaled communities.

Changing humans’ behavior

These days, with human-driven cars all over the place, I choose my riding routes and behavior carefully: I much prefer to ride on low-speed traffic, low-traffic roads, buffered bike lanes or off-street bike paths whenever possible, even if it means going substantially out of my way. That’s because I’m scared of what a human driver – through error, ignorance, inattention or even malice – might do to me on tougher roads.

But in a hypothetical future in which all cars are autonomous, maybe I’ll make different choices? So long as I’m confident self-driving cars will at least try to avoid killing me on my bike, I’ll take the most direct route to my destination, on roads that I consider much too dangerous to ride on today. I won’t need to worry about drivers because the technology will protect me.

Driverless cars will level the playing field: I’ll finally be able to ride where I am comfortable in a lane, rather than in the gutter – and pedal at a comfortable speed for myself rather than racing to keep up with, or get out of the way of, other riders or vehicles. I can even see riding with my kids on roads, instead of driving somewhere safe to ride like a park. (Of course, this is all still assuming driverless cars will eventually figure out how to avoid killing cyclists.)

To bikers and people interested in vibrant communities, this sounds great. I’m sure I won’t be the only cyclist who makes these choices. But that actually becomes a problem.

The tragedy of the commons

In the midsize midwestern college town I call home, estimates suggest about 4,000 people commute by bike. That might not sound like many, but consider the traffic backups that would result if even just a few hundred cyclists went out at rush hour and rode at leisurely speeds on the half-dozen arterial roads in my city.

Technology optimists might suggest that driverless cars will be able to pass cyclists more safely and efficiently. They might also be directed to use other roads that are less clogged, though that carries its own risks.

But what happens if it’s a lovely spring afternoon and all those 4,000 bike commuters are riding, in addition to a few thousand kids and teenagers running, riding or skating down my local roads? Some might even try to disrupt the flow of traffic by walking back and forth in the road or even just standing and texting, confident the cars will not hit them. It’s easy to see how good driverless cars will enable people to enjoy those previously terrifying streets, but it also demonstrates that safety for people and efficiency for cars can’t happen at the same time.


People versus cars

It’s not hard to imagine a situation where driverless cars can’t get anywhere efficiently – except late at night or early in the morning. That’s the sort of problem policy scholars enjoy working on, trying to engineer ways for people and technology to get along better.


One proposed solution would put cars and bicycles on different areas of the streets, or transform certain streets into “autonomous only” thoroughfares. But I question the logic of undertaking massive road-building projects when many cities today struggle to afford basic maintenance of their existing streets.

An alternative could be to simply make new rules governing how people should behave around autonomous vehicles. Similar rules exist already: Bikes aren’t allowed on most freeways, and jaywalking is illegal across most of the U.S.

Regulating people instead of cars would be cheaper than designing and building new streets. It would also help work around some of the technical problems of teaching driverless cars to avoid every possible danger – or even just learning to recognize bicycles in the first place.

However, telling people what they can and can’t do in the streets raises a key problem. In vibrant communities, roads are public property, which everyone can use for transportation, of course – but also for commerce, civil discourse and even civil disobedience. Most of the U.S., however, appears to have implicitly decided that streets are primarily for moving cars quickly from one place to another.

There might be an argument for driverless cars in rural areas, or for intercity travel, but in cities, if driverless cars merely replace human-driven vehicles, then communities won’t change much, or they may become even more car-dependent. If people choose to prioritise road safety over all other factors, that will shift how people use roads, sidewalks and other public ways. But then autonomous vehicles will never be particularly efficient or convenient.

The Conversation

Daniel Piatkowski, Assistant Professor of Community and Regional Planning, University of Nebraska-Lincoln

This article is republished from The Conversation under a Creative Commons license. Read the original article.