Helping regional economies to thrive in a post-Brexit Britain
It’s probably fair to say that this week in Westminster has been somewhat turbulent. With the Queen assenting to the prorogation of Parliament, and the Spending Review brought forward, it looks possible that the UK is on course for a No-Deal Brexit. But what does this mean for the UK’s regional economies?
The real cause for concern will be the impact that leaving the EU will have on business in the UK regions with respect to the withdrawal of European business funding. Cornwall, for example, will have received around £1.4 billion from EU funds by 2020, and this money likely contributes significantly to the region’s GVA figures. A sudden withdrawal of EU funding, without an appropriate substitute, could do significant damage to these regional economies, and whilst ideas for replacement funds have been outlined by government, more detail is required. With this in mind, over the next few months, ICAEW will be taking views from members on what future business support funds, like the Shared Prosperity Fund should look like.
In our recent consultation for the Treasury Select Committee’s Regional Imbalances inquiry, poor infrastructure was the biggest bar to regional business growth. Money from the European Investment Bank (EIB) has helped fund major projects like the expansion of the ports of Liverpool and Aberdeen and the second River Severn crossing linking England to South Wales. These investments are a crucial means by which businesses in those regions can improve their logistics operations and they enable the movement of skilled staff from other areas. The effective wiping-out of such a funding stream post-Brexit could see vital improvements like transport projects shelved. ICAEW is clear that such a situation is unacceptable, and in ICAEW’s recent response to the Government’s Infrastructure Finance Review, call for the development of a UK Investment Bank (UKIB) as an anchor investor to replace EIB funds.
Put simply, every sector, every business, everywhere in the UK will be affected by a No-Deal scenario. Whether you’re a corner shop owner in Cumbria or work for an accountancy firm in London; the way you do business will change and the key to surviving will undoubtedly be preparation. The Government seems to be doing its utmost to communicate the need to prepare to businesses across the UK and a multi-million pound “Get ready” publicity campaign launched last week. However, the fact remains that there is still more to be done in terms of putting in place a post-Brexit business funding framework and providing industry with the certainty of knowing that there will be adequate support for them in the form of clear and fully costed succession plan after the UK leaves the EU.
If you’d like to know more about the work ICAEW is doing around economic prosperity in the regions, please get in contact with me at Rosalia.firstname.lastname@example.org.