SUMMER OF ACTION 2018 The impact of a chaotic and disorderly Brexit on the North East Demand a People’s Vote on the final Brexit dea l THE IMPACT OF A CHAOTIC AND DISORDERLY BREXIT ON THE NORTH EAST CONTENTS 1. ECONOMY .................................................................................................................... 3 2. SECURITY ...................................................................................................................... 5 3. REGIONAL DEVELOPMENT ............................................................................................ 6 5. RESEARCH AND DEVELOPMENT .................................................................................... 7 6. STUDENT MOBILITY ...................................................................................................... 8 7. AGRICULTURE AND PROTECTED FOOD NAMES .............................................................. 9 8. BEACHES ..................................................................................................................... 10 ANNEX: ECONOMIC IMPACT OF BREXIT BY LOCAL AUTHORITY ........................................ 11 ANNEX II – COST OF LIVING............................................................................................. 12 ANNEX III: LIST OF ERDF PROJECTS .................................................................................. 12 1. ECONOMY Examples of business exporting in the North East The North East has long been a powerhouse for the Accapi Group country’s economy. Its strong industrial heritage and • Accapi have exclusive European rights for 3 proud farming communities are a global success dog accessory brands. Total exports have stories that have benefitted households across the risen from £225,000 to over £2 million since 2013. region. Renovation Store The EU strengthens trade in the North East. • Specialising in luxury niche brands in the bath and body, home fragrance and lifestyle, they now have an extensive trade Many of these achievements have been a direct presence in France and Germany and consequence of the region’s strong ties to our throughout Europe. European neighbours and our membership of the EU. The North East exports up to £7.6 billion worth of Nissan • goods to the EU each year, which is over half of Nissan’s Sunderland plant is the UK’s largest car assembly facility, producing everything the region exports, and equal to 10% of more than one in three cars built in the UK. the North East’s GDP. • It produced more than 500 000 cars in 2013. This has led to enormous growth for top North East • Over 80 per cent of Nissan vehicles companies like Accapi, who sell millions of pounds produced in the UK are exported and the bulk to the EU worth of dog accessories, and is of course the reason Nissan produces so many vehicles in Sunderland. The European Companies investing in the North East ability to freely export their goods across the EU has been fundamental to their success. Arriva • Multinational public transport company, headquartered in Sunderland. Manufacturing is the largest industry in the region, • Arriva operates 19,500 buses across 14 corresponding to 15.5% of regional GVA in 2010, European countries. which is also relatively high in comparison to the UK • It is Europe’s largest transport provider. average. It is one of the sectors likely to be hit most • It has planned £7.8 million worth of severely by Brexit, as imports and exports could face investment to improve Grand Central Rail new barriers and restrictions (link). service over the next 12 years following the extension of their operating licence to run trains between London, North East and Investment from the EU boosts jobs and growth in Yorkshire until 2026 the North East. Gestamp Tallent (Spain): • But trade is not the only way in which the North East Gestamp Tallent is a multi-national engineering company a world class design, benefits from Europe. In the last 5 years there have developer and manufacturer of leading been 104 investment projects from other EU edge, innovative products for the countries in the North East, creating or protecting automotive industry. • over 5,900 jobs. That amounts to over one third of all They have 2 locations in the North East in foreign investment projects in the North East in that Washington (based on the Nissan complex) and Newton Aycliffe time (Department for International Trade, 6 July 2017, link). The benefits of this investment can be seen across the region, with the multinational company Arriva headquartered in Sunderland, and Spanish engineering company Gestamp Tallent who design and manufacture car parts in Washington and Newton Aycliffe. EU investment in the North East has brought enormous benefits to the region. Brexit poses a threat to the North East economy, and businesses are already acting. A chaotic and disorderly Brexit, however, poses an immediate risk to the future of the North East’s economic development. Serious disruption to exports and supply chains for businesses, a fall in international investment, as well as slower growth of the economy overall are all among the myriad of difficulties Brexit poses to the economy. Sadly, before Brexit has even happened, companies are already taking the tough decisions associated with cutting off our access to the world’s largest market. It has been reported that the North East’s digital sector could be severely harmed by Brexit (link), and that our manufacturing industry would be worse off (link). Companies like Newcastle’s law firm Muckle have reported a drop in profits because of Brexit (link). This is devastating news for the North East economy, and shows the real cost that Brexit has already had. The Government’s own impact assessments show that this would cause serious damage, and that the North East economy alone is expected to lose up to 16% of GDP over the next decade under a disastrous ‘no deal’ scenario (EU Exit Analysis Cross Whitehall Briefing, January 2018, link). This is recognised by companies represented in the North East, who have rising concerns according to two surveys (link), and are looking to relocate to Europe as a result of Brexit (link). Households across the North East would be worse off as a direct result of Brexit. But while the hit to the overall economy may generate the headlines, it is the impact on households and families in towns and villages across the North East that is most worrying. The Government’s figures translate into a loss of over £3000 every year for each person in the North East as a direct consequence of Brexit. That is devastating, and something that not a single person in the region voted for in the 2016 referendum. Brexit threatens the tourism industry in the North East, putting livelihoods at risk. Another cornerstone of the North East economy is tourism, with over 25,300 people in the North East employed in tourism as their main and second jobs. (Annual Population Survey, 2016). Tourism from the EU greatly supports this industry in the North East. There were 274,000 inbound visits to the North East from EU tourists in 2014, which made up 63 per cent of all international visits, and the total spend by EU tourists in the North East was £90 million in 2014, which represents 45 per cent of all international visitor spend and brings a boost to the North East economy (Office for National Statistics, 2016, link). But Brexit is likely to impact the sector by making it more costly and difficult for European tourists to visit the North East. 2. SECURITY Being in the EU makes the North East a safer place, and makes it easier for our excellent police forces to bring people to justice for the crimes they have committed by cooperating with authorities in other European countries. A great example of the real benefit this brings is the arrest of the Wheatley brothers from Hetton, who tried to smuggle 12 kilograms of high-grade heroin before being extradited from the Netherlands to face justice in the UK (link). The European Arrest Warrant makes the North East a safer place. All regions across the UK benefit, with the UK having removed over 5,000 alleged criminals from the country, and have brought back 675 Brits back over the last parliament to face justice (National Crime Agency, 2017, link). In the North East, the EAW was used to remove 73 criminals and bring 16 criminals to face justice in the UK since 2010 (National Crime Agency, 2017, link). 3. REGIONAL DEVELOPMENT Examples of EU-funded projects in the North East The EU operates large-scale operational Durham • programmes in the North East, called the Portobello Trade Park in Durham was financed with £2.7m in ERDF funding the European Regional Development Fund • (ERDF) and European Social Fund (ESF). Consett Business Park in Durham received £1.1m in ERDF funding The money is used to create jobs, to assist Newcastle the start-up of businesses, and to support • The regeneration of a 660-hectare area on the River research and technical development Tyne North Bank benefitted from £2.4m in ERDF funding projects. • The Core Science Central in Newcastle city centre was built with the support of £5.6m in ERDF funding Examples include the regeneration of the • The refurbishment of Newcastle’s Toffee Factory River Tyne north bank, a learning received £2.8m in ERDF support funding programme for students with difficulties in Stockton, and the Institute of Digital Middlesbrough • The Institute of Digital Innovation (DigitalCity) in Innovation in Middlesbrough, all of which Middlesbrough was funded with £1.9m by the