Full economic recovery from the global coronavirus outbreak, loading on top of Brexit, is expected to take four or five years, with parts of regional UK set to suffer most.
That’s according to a report by Social Market Foundation (SMF) chief economist Kathryn Petrie and researcher Amy Norman, sponsored by cross-party group Best for Britain, released over the weekend.
James Kirkup, director of the SMF, wrote the foreword to the report, which specifically examines the impacts of covid and Brexit together.
“The evidence shows that both ending our close trading relationship with the EU and the measures taken to combat the coronavirus will have negative impacts on the UK economy as a whole.
“In some cases and some places, that double impact will be severe. At base, this report demonstrates the simple fact that leaving a developed free-trade agreement with our nearest and largest trading partners at the same time as facing a pandemic will expose many local areas of the UK to a painful double economic impact,” he said.
Many if not most local areas across the UK could suffer some sort of double hit from Brexit and coronavirus, the report suggests.
However, more than one in three (35%) local areas in Scotland were placed in Category 4 or 5 for their exposure to a double economic hit, based on the gross value-added of sectors locally.
The City of Edinburgh would be the most severely affected local area if the UK leaves without a deal at the end of the year, with almost 70,000 jobs in the sectors most exposed by the double economic blow of Brexit and coronavirus.
In addition, while London and the South of England would be highly exposed to the double economic hit caused by Brexit and coronavirus under a proposed free trade agreement with the EU, leaving the EU without a deal in place would create pockets of severe disruption across the country, particularly in the North West and Midlands regions.
As a result, 50% of local areas in the North-West were placed in Category 5 (the highest category) and a further 40% in Category 4 for their exposure to a double economic hit based on the gross value-added of sectors locally.
Naomi Smith, CEO of Best for Britain, said the report “definitively rebuts” any speculation that the impact of leaving the transition period could be masked by the coronavirus recession.
“The data is clear: when you scratch beneath the surface, so many key sectors and local areas will be exposed to a dangerous double whammy of economic hits,” she said.
“With public debt spiralling, the government is boxing itself into a fiscal corner unless it extends the transition period and secures a trade deal at the end . . . "