Brexit economic downturn expected to hit East Midlands hard

Is the East Midlands on a poverty slide?

New research from KPMG is revealing that coronavirus and Brexit-induced economic problems are likely to have a particularly serious impact on the East Midlands next year, if the Brexit deal, currently being negotiated by the government, is not sufficiently far-reaching.

Unemployment, cuts in income and price rises are likely to increase levels of poverty across the East Midlands, and several areas of Leicestershire are expected to be particularly badly hit, with some local economies hit by over 3 per cent. This contrasts starkly with London and South East England with a hit of around 1.1 per cent.

The downturn is going to disproportionately harm industries, communities and individuals in many parts of our region. The data reveals that a greater percentage of local authority areas in the Midlands are likely to be seriously affected, compared with elsewhere in the country.

Some manufacturing industry sectors will be particularly badly affected, especially those that depend on maintaining strong links with European markets and supply chains.

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In addition, an analysis from the London School of Economics (LSE) concludes that Brexit will affect the sectors that are not already suffering from the Covid-19 pandemic and lockdown. Rushing Brexit through this year without a new deal in place would therefore broaden the set of sectors that see worsening business conditions.

So, the damage to local communities in the East Midlands region can be limited if the government keeps to the commitment to a deal upon which it was democratically elected. Pressure groups, such as European Movement branches, which have recently been active in the #No2NoDeal campaign, are appealing to members of the public to write to the prime minister, Boris Johnson, to urge him to reach a comprehensive deal which protects jobs, living standards and rights.

Regionwide forecast data suggests that the East Midlands is likely to be affected far worse by the combination of Brexit and coronavirus than many other areas of the country. The effects, particularly the Brexit-related ones, are likely to persist for several years.

The electorate did not vote for a damaging no deal or thin deal Brexit. Failure to reach a comprehensive deal would cause a breakdown in public trust in the government’s ability to deliver its electoral promises and act in the interests of the people of the East Midlands and the rest of the UK.

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