Swindon will be one of the worst-hit towns and cities in the UK as a result of leaving the European Union, according to a report released this week.
The findings of a study by the London School of Economics suggest that the town will see a 2.8 percent reduction in economic output if the UK goes for a hard Brexit – placing it fourth on a table of the worst-hit centres. Only Reading, Worthing and Aberdeen fare worse.
If the UK opts for a soft Brexit where the UK remains in the single market, however, the decline will only be 1.5 percent.
Voters in Swindon narrowly backed Leave in last year’s referendum. Car manufacturers Honda and BMW are major employers in the town, and would be adversely effected if the UK resorted to trading under World Trade Organization rules, which would attract higher trade tariffs.
The report – The Local Economic Effects of Brexit – was written before BMW announced that its new electric Mini would be produced in Oxford. Many Mini components are manufactured at BMW’s Plant Swindon.
The report’s authors, Swati Dhingra, Stephen Machin and Henry G. Overman, wrote: “Average effects are predicted to be negative under both scenarios, and more negative under hard Brexit.
“The spatial variation in shocks across areas is somewhat higher under hard Brexit because some local areas are particularly specialised in sectors that are predicted to be badly hit by hard Brexit.”
The full report can be read at http://cep.lse.ac.uk/pubs/download/brexit10.pdf