Swindon will have one of the UK’s fastest-growing local economies by the end of this year as a result of changing lifestyle preferences caused by the Covid-19 pandemic, according to a new report.
The latest UK Powerhouse study by law firm Irwin Mitchell and the Centre for Economic and Business Research has revealed mixed fortunes in terms of Gross Value Added (GVA) and employment levels for the 50 largest towns and cities in the UK due to coronavirus and Brexit uncertainty.
According to the report, Swindon will have the fifth-fastest GVA growth in Q4 2021 with a 7.4 percent annual increase. Leading the field is Solihull with growth of 7.7 percent, followed by Warrington, Milton Keynes, and Peterborough
The in-depth economic report also examined the impact of Brexit – in particular the localities that will be hit hardest by the EU-UK Trade and Cooperation Agreements (TCA) which ended the free movement of services.
The report highlights that London is being hardest hit by the uncertainty in relation to the export of services in the TCA and new non-tariff barriers, including extra customs checks and forms.
London has the highest share of any region for exporting services with £23 billion worth of exports at risk.
In addition, the end of furlough, which will impact the capital’s significant leisure and tourism sector, is expected to contribute to London losing 151,900 jobs between Q4 2020 and Q4 2021.
The report says that the three least exposed regions to the impacts of the Brexit deal are Yorkshire, the West Midlands and Wales.
Although all economic restrictions are expected to be lifted by October 2021, UK Powerhouse expects only 36 percent of the towns and cities in the report to increase employment levels during 2021.
Following the report’s analysis, it makes a series of recommendations to tackle the current difficulties faced by businesses:
- Businesses need to take advantage of policies to encourage investment and improve skills.
- Local governments should have bespoke plans in place to support job creation heading out of the Covid-19 crisis, when the furlough scheme ends.
- The UK Government needs to prioritise the implementation of the UK-EU Trade and Cooperation Agreement with as little disruption as possible to businesses and negotiate where possible to reach a smoother trading relationship with the EU.
Commenting on the findings Vicky Brackett, CEO of Irwin Mitchell’s business legal services division, said: "This report shows the huge challenges faced by UK businesses as result of Brexit uncertainty and Covid-19 lockdowns.
“This report has shown that a large volume of UK businesses has revenues stemming from services exports, which are not covered by the free trade agreement with the EU.
"Furthermore, there is a significant proportion of businesses which trade with the EU specifically either in goods or services, which has been disrupted by Brexit border frictions.
"Therefore, further negotiations between the UK and EU are crucial for sustaining business activity across all UK regions.”
Josie Dent, managing economist at Cebr and report author, said: “The impacts of the pandemic have not been equal across the country.
"Cities with large hospitality and entertainment industries have been hit hard by forced closures amid lockdowns and could face additional difficulties with the end of the furlough scheme in September.
"Meanwhile, the UK leaving the EU has caused further disruption in 2021, with London being particularly badly affected due to the city’s large services sector which is not covered by the trade deal signed in December.”