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Brexit Facts & Stats - leaving the single market and customs union

Here you will find facts and stats on Brexit, the region’s relationship with the EU and research on businesses views on key aspects of Brexit.

This information was prepared in consultation with support from the Greater Birmingham Chambers of Commerce Brexit Advisory Group.

 


Key Statistics

 

247,000
EU CITIZENS LIVING IN THE WEST MIDLANDS
87,000
EU Citizens living in Greater Birmingham
47%
of goods exported from the West Mids go to the EU
62%
of goods imported into the West Mids come from the EU

 


Among businesses in the West Midlands:

 

Single Market

47% believe the UK should aim to stay in both the Single Market and the Customs Union

WTO Rules

Just 4% believe that UK should aim for WTO Rules or a “No Deal” Brexit

Tariffs

43% identify tariffs as a significant barrier to international trade

EU Workers

38% believe restrictions on the rights of EU nationals to work in the UK would have a negative impact on their business

Transition

43% businesses support a Brexit transition period of three years

Export Growth

41% plan to start or grow exports to Western Europe over the next 3 years

Export Strategy

35% cite Brexit as a top factor influencing their export strategy

EU Trade

23% only import or export from countries inside the European Union


 

Brexit and Greater Birmingham: SWOT Analysis

The Birmingham city-region and wider West Midlands are home to many strengths and potential opportunities to exploit. However, Brexit throws into sharp relief some of the region’s weaknesses and potential threats on the horizon:


Growing economy

In 2015 Birmingham’s GVA figure was £24.8bn for 2015 with a growth rate of 5.2%, double the UK rate of 2.6%1

Attractive to Investors

More foreign businesses invested in the West Midlands in 2016-17 than anywhere outside London and the South East2

Excellent Transport Links

Half the UK’s population lies within two hours and 90% within a four-hour travel time of the Greater Birmingham city-region with 140 routes worldwide accessible via Birmingham Airport3

Confident Businesses

61% Greater Birmingham businesses are confident that their profitability will improve in the next 12 months4

Diverse industry base

The West Midlands region houses 6,000 advanced engineering firms and accounts for 25% of all automotive production in the UK5. Manufacturing accounts for 11% of jobs which remains one of the highest percentages for any region in the country6. Birmingham is only one of four cities that employ over 9,000 insurance professionals and 10,000 in the banking sector7. The region also contains more medical technology firms than any other in the UK8, the largest number of start-ups outside the capital and has a thriving wholesale and retail trade sector9

Skills

The West Midlands region has an above UK average rate of unemployment (3.1%) and proportion of the population with low or no qualifications (11.8%). Birmingham’s is higher still at 6.4% and 14.3% respectively 10

Productivity

GVA per hour worked in the West Midlands region is almost 15% below the UK average11

Global population

The West Midlands region is home to 204,000 citizens from outside the EU12. In Birmingham alone, 108 different languages are spoken13

Room to grow exports

Less than one third of companies in Greater Birmingham currently export their goods or services14

Host City & Region

Post-Brexit, the Government will need to create, and decide where to locate, new UK focused agencies to replace the EU agencies whose jurisdiction the UK will no longer fall under. Many businesses based in London and the South East may also look to relocate parts of their business to reduce their cost base.

FUTURE ACCESS TO TALENT

There are 247,000 EU Citizens currently living in the West Midlands region and 87,000 across the Greater Birmingham area (Birmingham, Burton, Chase, Lichfield, Tamworth, Solihull and Sutton Coldfield) . The West Midlands’ 10 universities attract over 8,000 EU students each year and employ approximately 5,000 academics who are EU citizens16. The details of the UK’s post-Brexit approach to immigration remain unknown.

Future of EU funding

The EU budget for 2014-2020 allocated funding of £765 million for the West Midlands from the European Regional Development Fund (ERDF) and European Social Fund (ESF) alone with £213.5 million allocated to Greater Birmingham and Solihull LEP . Over the last three years, universities in the West Midlands have received over £100m in EU funding for research18.

Future of Trade with the EU

47% of exports of goods from the West Midlands go to the EU. The region’s higher than average reliance on the manufacturing sector and automotive manufacturing in particular make it even more reliant on trade than other areas. The West Midlands also has one of the highest share of goods imports coming from the EU (62%) only the East, South East and Northern Ireland have a higher proportion .

  • 1 Birmingham City Council – Economic Research and Policy – Birmingham Update, April 2017, p. 2
  • 2 Department for International Trade – Inward Investment Results 2016-17, July 2017, p.5
  • 3 Business Birmingham – Reasons to Invest – Current Connectivity, July 2017
  • 4 GBCC Quarterly Business Report for Q4 2017
  • 5 Business Birmingham: Greater Birmingham – Advanced Engineering – Making it Happen Brochure 2016
  • 6 ONS Regional Labour Market Statistics, March 2017
  • 7 Business Birmingham : Greater Birmingham, Business Professional and Financial Services, Making It Happen Brochure, 2016
  • 8 Business Birmingham, Life Sciences in Greater Birmingham [webpage: accessed August 2017]
  • 9 ONS Regional Labour Market Statistics, March 2017
  • 10 Birmingham City Council, Unemployment Briefing July 2017, p.6
  • 11 ONS – Regional and Subregional Productivity in the UK, January 2017
  • 12 ONS – Population in the United Kingdom by Country of Birth and Nationality, 2015
  • 13 Birmingham City Council – Changing Times- The Future of Education in Birmingham, September 2017, p.11
  • 14 GBCC Quarterly Business Report for Q4 2017
  • 15 ONS – Population in the United Kingdom by Country of Birth and Nationality, 2015
  • 16 University of Birmingham, Chancellor Sir David Eastwood, Press Release, 26th April 2017
  • 17 Philip Bradborne OBE, MEP for the West Midlands, Press Release, 25th November 2013
  • 18 University of Birmingham, Chancellor Sir David Eastwood, Press Release, 26th April 2017
  • 19 HMRC, Regional Trade Statistics, June 2017

 

GBCC Commentary

Henrietta Brealey

Director of Policy & Strategic Relationships

"Greater Birmingham and the West Midlands are home to a dynamic, growing economy and excellent national and international transport links. Their global population makes it ideally placed to maximise international trade opportunities, particularly outside of the EU, during and post-Brexit and there is significant opportunity to grow the proportion of firms exporting.

Post-Brexit, the UK Government will need to create new agencies to take up the role of a number of EU agencies that will no longer have jurisdiction over our nation. Birmingham and the West Midlands will be ideally placed to bid to host a number of these agencies that reflect local sector strengths, such as the UK equivalent of the European Medicines Agency. We are also likely to see a continuation of firms moving activities to outside of London and the South East in order to reduce their cost base. Greater Birmingham is already ideally placed as a more affordable but excellently connected city to relocate to and will only become better connected to the capital in coming years with the advent of HS2.

However, the region faces challenges in the form of its comparatively low skills base and productivity and high unemployment rate. The region is heavily reliant on the EU as a trading partner and receives significant volumes of EU funding. Brexit negotiations have thrown the future trading arrangements and volume of regional funding post-Brexit into question."


 

Businesses' Views on Brexit:

What are local businesses' views on:

Almost half of West Midlands businesses (47%) believe that the UK’s Brexit negotiations objectives should be to remain in both the Single Market and the Customs Union. 23% believe the UK should aim to remain in the Customs Union only (in order to ensure no hard borders or tariffs, but understanding that there would be limited scope to negotiate trade agreements with third countries) . 17% believe that the UK should remain in the Single Market only (accepting EU regulations and rules in return for full access to market). Businesses are not supportive of a “no deal” scenario. Just 4% believe that the UK should aim to leave without a deal with the EU and leave the Single Market and Customs Union, relying on WTO rules for trade.

June 2017: British Chambers of Commerce Snap Poll on Brexit, West Midlands Responses – 247 respondents

Over a third (36%) of businesses identify Customs Procedures (e.g. checks, declarations) as a significant barrier to trading with their preferred international markets. 10% highlight rules of origin arrangements. These results highlight the importance of ensuring Customs Procedures between the UK and EU are kept as streamlined as possible post-Brexit in order to ensure ongoing trade.

October 2017: British Chambers of Commerce International Trade Survey, West Midlands Responses - 222

43% of West Midlands businesses identify tariffs (taxes or duties on imports/exports) as a significant barrier to trading with their preferred international markets. Almost a quarter, 22%, highlight non-tariff taxation (tax arrangements between countries, VAT, royalties and dividends) as a significant barrier. These highlight the impact tariffs and non-tariff taxation can have on businesses’ appetite to trade internationally.

October 2017: British Chambers of Commerce International Trade Survey, West Midlands Responses - 222

Almost a fifth (19%) of West Midlands businesses identify product standards, certification and compliance as a significant barrier to trading with their preferred international markets. 16% identify local regulations in the country of export/import (e.g. law relating to employment, competition procurement, ownership conditions, etc.). These highlight the importance of shared standards and approaches to regulation to facilitating international trade.

October 2017: British Chambers of Commerce International Trade Survey, West Midlands Responses - 222

The majority of West Midlands businesses do not believe that they would be impacted by any future restriction on the rights of EU nationals to work in the UK (54%). Over a third (38%) believe it would have a negative impact with 20% identifying slight negative and 18% identifying a significant negative (18%) impact. Just 5% believe it would be positive for their business with 2% identifying a significant positive impact and 3% a slight positive impact.

August 2017: British Chambers of Commerce Workforce Survey, West Midlands Responses – 205 respondents

Just under 2 in 5 (38%) of those polled said they had employees from other EU countries, with 22% of respondents saying they represented 1-9% of their workforce. Nearly half (48%) of West Midlands businesses receive job applications for roles within their company from the EU or the rest of the world. Only 3% of West Midlands businesses surveyed said they used recruitment agencies elsewhere in the EU.

If EU nationals were to face future restrictions on their rights to work in the UK, just 6% of businesses said they would respond by paying additional costs to recruit from the EU (if possible). 41% of businesses said they would not be affected and almost one fifth (19%) said they would focus recruitment on UK workers.

August 2017: British Chambers of Commerce Workforce Survey, West Midlands Responses – 205 respondents

Nearly half (43%) of West Midlands based businesses believe the transition period should last for three years. Around a sixth (16%) of the businesses surveyed felt the transition period should last longer than three years, with less than a quarter of respondents (24%) stating there should be no transition period whatsoever. These results highlight the need for a transition period to help businesses adjust to the new trading arrangements.

June 2017: British Chambers of Commerce Snap Poll on Brexit, West Midlands Responses – 247 respondents

Over a fifth of West Midlands based businesses (23%) export exclusively to the European Union, with over half (55%) saying they export both inside and outside the EU. Just 2% of businesses exported solely outside the EU. The results were similar for imports, with 23% importing from inside the EU only and 53% importing from inside and outside the EU. Only 4% of businesses import exclusively from outside the EU.

Exactly a quarter of the businesses surveyed reported increased export sales to Western Europe over the past year, with 23% saying imports had increased from the region. Less than a third (27%) of businesses said they did not export in any capacity to Western European markets. Nearly 1 in 5 (19%) businesses surveyed reported increased export sales to Central & Eastern Europe, with 11% recording increased imports from the region. Over 2 in 5 (41%) businesses stated they plan to either start, or will continue exporting to Western Europe over the next three years, and 35% of respondents selected ‘The UK’s future withdrawal from the EU’ as a primary factor influencing their export strategy for the next 3 years.

October 2017: British Chambers of Commerce International Trade Survey, West Midlands Responses – 222

Nearly two in three (61%) businesses disagree to some extent that the UK government is prioritising their needs ahead of Brexit, with just over 1 in 5 (21%) agreeing. Exactly 2 in 5 (40%) businesses think the UK’s Brexit objectives should remain unchanged from before the 2017 General Election (i.e. leave the Single Market & Customs Union and seek a Comprehensive Free Trade Agreement/Customs Agreement), with over half (53%) selecting The UK’s Brexit objectives should now be revisited following the outcome of the General Election.

June 2017: British Chambers of Commerce Snap Poll on Brexit, West Midlands Responses – 247 respondents


 

The Greater Birmingham Chambers of Commerce Brexit Advisory Group

Members of the group are:

  • Clare Francis, Partner, Pinsent Masons
  • Henrietta Brealey, Director of Policy & Strategic Relationships, GBCC
  • Jennifer Crisp, Public Affairs Manager, University of Birmingham
  • Martin Hanson, Regional Director Business Banking, HSBC
  • Paul Cadman, CEO, EFR Recruitment Ltd
  • Paul Faulkner, CEO, GBCC
  • Paul Knobbs, EU and Large Projects Partner, Aston University
  • Professor Julian Beer, Deputy Vice-Chancellor, Birmingham City University
  • Richard Guy, Co-Founder and Joint MD, SimkissGuy Recruitment
  • Rachael Maloney, Business Development Manager, RSM

brexit image

If you would be interested in finding out more please contact Henrietta Brealey on H.Brealey@Birmingham-Chamber.com. Alternatively you can call us on 0121 607 1868