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Image of Alan Winters21 November 2018

L. Alan Winters CB is Professor of Economics and Director of the UK Trade Policy Observatory. Ilona Serwicka is Research Fellow in the economics of Brexit at the Observatory

A ‘no deal’ Brexit could cost the jobs of up to 43,000 Sussex and Hampshire residents with around one in 40 of all jobs of residents within the 34 parliamentary constituencies at risk if there is no deal, our latest Briefing Paper – The Brexit burden: A constituency level analysis for Hampshire and Sussex  – reveals.

Even a soft Brexit, such as detailed in the current Withdrawal Agreement agreed by Cabinet last week, will have a significant negative impact on Hampshire and Sussex and could lead around 20,000 jobs being lost across these counties.

Dr Serwicka said:

This research makes very clear that both soft and hard forms of Brexit, but in particular, a ‘no deal’ Brexit, are likely to have a negative impact on the lives of many residents in Hampshire and Sussex. Of course, we cannot say for certain that this number of job losses will definitely happen, as employers may choose to reduce number of hours and wages rather than cut workforce numbers. But this analysis gives some indication of which places in our region may be most vulnerable to Brexit.

The analysis, based on estimates of the effects of a ‘no deal’ Brexit on output and employment in different sectors of the UK economy and statistics for the composition of employment in each constituency, reveals that some 23,000 jobs of Hampshire residents could be at risk along with 10,000 in both East Sussex and West Sussex.

Aldershot is expected to suffer the largest negative shock, with a potential loss of 2,000 jobs – the equivalent of one in 28 of all jobs among the constituency’s residents. Brighton Pavilion and Eastleigh, with job losses in excess of 1,600 are also anticipated to be hit with the large employment losses while Brighton Kemptown and Worthing West lose a larger share of their total employment (3.5-3.6%).

L. Alan Winters, Professor of Economics at the University of Sussex and Director of the UK Trade Policy Observatory, said:

As constituency MPs in Sussex and Hampshire vote on the Withdrawal Agreement next month, they will have very difficult decisions to make knowing that the livelihoods of hundreds of their constituents will rest in their hands.

The majority of job losses, around 11,000, will be in professional, real estate and other business services, with Crawley the hardest hit, followed by Aldershot and Brighton Pavilion within this sector. Jobs in public administration, education and health will also be badly affected with Southampton Test, and Winchester suffering the most. There will also be sizeable employment loss in Brighton Pavilion in the information, communication, financial and insurance sectors.

Source: authors’ own calculations using ONS, Census 2011, Gasiorek et al. (2018) and Dhingra et al. (2017a, 2017b).
Contains National Statistics data © Crown copyright and database right 2018· Contains OS data © Crown copyright and database right 2018.

The impact will be felt most strongly in the South East because the region is the most heavily engaged in cross-border trade  – exporting £45.3bn worth of goods last year (and £39.2bn worth of services in 2016) – with nearly a half of these exports destined for the EU. This large value of cross-border trade, with high exposure to trade with the EU, means that a ‘no deal’ Brexit could be particularly disruptive to the South East’s economy.

Read the full Briefing Paper – The Brexit burden: A constituency level analysis for Hampshire and Sussex

 

Disclaimer:
The opinions expressed in this blog are those of the author alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.

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