7th March 2017
Leave-voters will feel a greater economic brunt from Brexit
Regions that voted to leave the European Union (EU) are more likely to feel the detrimental impact on their economic development from Brexit as they have a stronger reliance on EU markets, a new study in Regional Studies finds. Regional Studies is published by Taylor & Francis Group and co-published by the Regional Studies Association.
Pro-leave narratives at the time reinforced the idea that ‘metropolitan-elites' of London were the major beneficiaries of the EU membership. However, authors, Bart Los, Philip McCann, John Springford and Mark Thissen, tested this argument using new data from the interregional extensions to the World Input-Output Database (WIOD) to calculate the economic impact of UK regional trade structures on the domestic economic performance of the UK regions. Analysis of the data found:
• Regions more economically interdependent with EU markets displayed higher leave votes.
• UK NUTS-2 regions, excluding inner and outer London, are highly dependent on the EU for both local manufacturing and service industry supply chains.
• EU trade accounts for little over 7% of London’s gross domestic product (GDP), while most other UK regions are 50%-100% more dependent on EU markets than London.
The WIOD interregional data concludes that if there are significant trade-related issues as a result of Brexit, the UK’s weaker regions will feel the detrimental impact more so than the UK capital.
Moreover, each of the alternative potential opportunities for trade relationships post-Brexit – i.e. a customs union, similar to the EU and turkey; a bilateral agreement like those between the EU and Switzerland; or the option to trade with the EU under World Trade Organisation (WTO) rules – are likely to lead to much poorer prospects for the UK’s weaker regions, while leaving London relatively less adversely affected.
A key contributing factor of voting behavior during their 2016 UK referendum was economic geography. A voter’s local economic conditions markedly influenced their voting patterns. Local prosperity levels, combined with perceptions of the impact of globalization in their region heavily determined what they marked on their ballot papers.
The authors used the phrase a ‘geography of discontent’, to describe leave-voters’ perceptions, with local economic conditions interacting with and overlaying each of the individual characteristics in determining their vote. The authors conclude that “leaving the EU single market… is likely to be very challenging for most of the regions that voted to leave”.