‘No deal could cost £7bn a year’ warning

A ‘no deal’ Brexit could cost the North East economy up to £7billion a year, business bosses fear.

The Confederation of British Industry (CBI) has analysed Government figures and warns of a devasting longterm economic impact of a ‘no-deal’ Brexit on the region.

Its study says the North East could be among the regions most exposed to the economic fallout from leaving the EU without a deal, with an estimated annual loss of output worth £7billion by 2034, a figure equivalent to twice the annual public spending on schools and education in the region.

The CBI said that manufacturing activity and the automotive sector, which employs tens of thousands, is likely to be severely impacted as it is exposed to the risk of higher tariffs and trade costs.

About 59% of the North East’s goods exports go to the EU, and the CBI said any increased trade friction, added costs or delays would hit the region hard.

Sarah Glendinning, Regional Director for CBI North East, said: “CBI members across the region are clear: if the new approach to finding a Brexit deal continues to be a game of who blinks first, the North East economy will pay the price.

“The deadlock will only be broken by a genuine attempt by all MPs to find consensus and compromise, not stick to rusting red lines and political conditions. Like the rest of the UK, the North East is not – and cannot be – ready for no deal.

“The projected impact on our region’s economy would be devastating, and while business will do all it can to reduce some of the worst aspects, a no-deal scenario is unmanageable.”

Mike Norris, Managing Director of North East employer Draeger UK, said: “As a global leader in the manufacturing of medical and safety products, Draeger imports supplies from Europe on a daily basis, with as little as 24 hours’ notice.

“In the early stages under a ‘no-deal’ Brexit, this process could take six weeks, severely affecting our operations and our ability to service our customers, including the NHS.

“In the longer term, without trade agreements similar to those as favourable as the current trading arrangements with Europe, a ‘no-deal’ Brexit will ultimately impact our ability to grow as a key employer in the North East.”