Report says EU trade vital, but Birmingham lags in export league
EU trade deal must be Government’s top priority in Brexit negotiations, according to a new report which shows the EU is biggest export market for 61 of Britain’s 62 cities.
Cities Outlook 2017, Centre for Cities annual “health-check” on the UK’s largest city economies being published today, focuses on the geographical and industrial make-up of UK city exports, in the context of the vote for Brexit in last year’s EU referendum.
However, Birmingham is in the list of the ten UK cities (55 out of 62) with the smallest share of exports going to the EU (39% of exports in 2014).
The release of the report with its focus on exports to the EU and the post-Brexit trade deal comes on the day when LibDem mayoral candidate Beverley Nielsen formally launches her campaign where she is placing the EU and the Single Market centre stage.
Every British city but one – Hull – sells more of its exports to the EU than anywhere else across the globe, underlining the vital importance of securing the best possible EU trade deal in the Government’s Brexit negotiations, says the think tank.
Two thirds of British cities (41 out of 62) trade half or more of their exports to the EU.
Cities Outlook shows that on employment and skills, Birmingham regularly features in the bottom ten lists. It is the city with the highest percentage of residents with no formal qualifications (16.5% of working age population in 2015).
Birmingham is also in a list of cities which is below the national average in terms of both productivity and exports per job.
In terms of patent applications published, Birmingham is again in the list of the bottom ten cities, with just 8.2% of applications per 100,000 residents. Coventry is second (188.4%) splitting the two Oxbridge cities.
The good news arrives when looking at growth of private sector jobs, with Birmingham coming sixth in the list of 62 with a 4.3% increase in net private sector jobs growth in 2014-2015, an increase of 32,100.
Cities Outlook shows that British cities would have to dramatically increase trade with other international markets to compensate for a downturn in exports to the EU. For example, to make up for a 10% decrease in exports to the EU, British cities would have to nearly double exports to China, or increase exports to the US by nearly a third (31%).
In total, nearly half of all exports from British cities (46%) go to EU markets – three times more than the USA, the second biggest market for UK urban exports, and five times more than exports to India, Japan, Russia, South America and South Korea combined.
Commenting on the findings of the report, Alexandra Jones, Chief Executive of Centre for Cities said:
Securing the best possible EU trade deal will be critical for the prosperity of cities across Britain, and should be the Government’s top priority as we prepare to leave the single market and potentially the customs union. While it’s right to be ambitious about increasing exports to countries such as the US and China, the outcome of EU trade negotiations will have a much bigger impact on places and people up and down the country.
It’s also important that the Government aims to reach trade agreements covering as many sectors as possible, rather than prioritising deals for high-profile industries based in a small number of places. Broad trade agreements for all goods and services will help every city to build on its exporting strengths.
The UK faces a major challenge in boosting productivity and wages, and increasing the value and volume of city exports will be crucial in addressing those issues. National and local leaders need to consider how they can make cities more attractive to exporting firms. Improving skills and infrastructure across the UK will be vital in this, and should be a central part of the Government’s industrial strategy.
Britain’s top exporting city is Sunderland, with £40,650 worth of exports per worker in 2014, followed by Worthing (£29,640) and Slough (£27,560), while London is the 5th biggest exporter per worker (£23,470). In contrast, York has the smallest export-base per worker (£3,710). Four other Yorkshire cities are also among the bottom ten places for total exports, reflecting the region’s low level of exports per job overall.
Sunderland is also one of only seven cities which are heavily reliant on a specific industry for the majority of their exports (car-making in Sunderland’s case). However, in the vast majority of British cities, exports come from a wide range of sectors. This means that broad trade agreements will be required to help all cities sustain and grow their export base.
There is a North/South divide when it comes to the types of exports British cities specialise in. Places in the North and Midlands mainly export goods, which make up almost 90% of exports from Derby and Hull for example. Southern cities have a much greater reliance on exporting services, with nine out of the top British ten cities for services exports located in the South of England.
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