UK's regions set for large-scale economic decline

Academics are calling on the British government to support areas outside London to boost economic growth, regardless of Brexit outcome

epa07223873 A currency exchange dealer shows British Pounds, in Karachi, Pakistan, 11 December 2018. The British pound dropped to a 20-month low against the dollar over Brexit situation.  EPA/SHAHZAIB AKBER
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Regional economies in the UK face the prospect of a prolonged downturn over the next 20 years.

The UK Competitive Index (UKCI), compiled by researchers at Cardiff University and Nottingham Business School, found the Welsh town of Merthyr Tydfil will experience the biggest economic decline, with gross domestic product (GDP) per capita predicted to drop by 0.56 per cent every year. England’s Mansfield, in the country’s Midlands area, and Thanet in Kent, south-east England, are also predicted to drop by 0.48 per cent and 0.34 per cent, respectively.

Researchers pointed to de-industrialisation, lack of high-skilled, high-paid employment and the inability to attract and retain entrepreneurs as reasons for lower rankings. They also noted that some of the lowest-ranked areas contained the highest proportion of people who voted to leave the EU in June 2016.

In general, the study found Welsh localities are likely to continue to remain at the bottom of the growth table, contrasting with Scottish success in recent years.

London is once again ahead of the crowd, with the top nine areas of predicted growth being boroughs in the capital, including Tower Hamlets, Camden and Islington.

Professor Robert Huggins from Cardiff University’s School of Geography and Planning warns that whatever the consequences of Brexit, “the competitiveness gap between London and other parts of the UK is going to soar”. However, he says a no-deal Brexit presents an even worse prospect for areas outside the capital and UK’s other financial centres.

“For areas such as London, which are the competitiveness leaders, they face a danger of becoming less affordable and accessible to the majority. On the other hand, there will be parts of the UK that will become increasingly disadvantaged due to a lack of opportunities for growth.”

The UKCI is in its 19th year of measuring competitiveness. Each report focuses on the development and sustainability of businesses and the economic welfare of individuals in the UK

In October, the UK as a whole dropped two places to eighth in the World Economic Forum’s global competitiveness index. One of the biggest causes for the drop was a marked reduction in labour mobility between the UK’s regions as workers flock to and stay in London and larger cities for better opportunities and pay, it found.