Rosamund Urwin @RosamundUrwin ·Oct 13 This is the first part of Operation Kingfisher - the business bailout part of no deal planning - to leak, and it’s grim reading
Rosamund Urwin
@RosamundUrwin
Senior reporter at The Sunday Times, currently focusing on Brexit.
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No-deal Brexit will hit leave-voting areas hardest, says report
A leaked government document shows that 29 out of 33 areas that will be worst hit by job losses backed Brexit
Caroline Wheeler, Rosamund Urwin and Tom Calver
October 13 2019, 12:01am, The Sunday Times
https://www.thetimes.co.uk/edition/news/no-deal-will-hit-leave-voting-areas-hardest-says-report-mxt8nqzxm
Salisbury, Sunderland and Carlisle are among the English cities where jobs would be worst hit in the event of a no-deal Brexit, according to a secret government list leaked to The Sunday Times.
The document, marked “official sensitive” — requiring security clearance on a “need to know” basis — reveals that 29 of the 33 areas most vulnerable to job losses if the UK crashes out of the European Union voted leave.
It is this kind of information that has put pressure on the prime minister, Boris Johnson, to move away from the idea of leaving the EU without a deal.
The list, which was compiled under the codename Operation Kingfisher, the government’s contingency plans to prop up businesses, was created in the run-up to the first EU exit deadline earlier this year by the Treasury and the Department for Business, Energy and Industrial Strategy.
However, the prognosis for companies has since deteriorated, according to the Operation Yellowhammer file leaked to this newspaper in August, which warned that “EU exit fatigue” had reduced “business readiness” since March.
In some cases, the doomsday forecasts have proved to be accurate, with companies announcing they would close their plants and cut jobs in recent weeks.
The Kingfisher document highlights “areas vulnerable to a shock by virtue of having large plants, in vulnerable sectors, with labour markets that would struggle to cope”.
These include Sunderland, where Nissan runs the UK’s biggest car plant, employing 6,000 people. The Japanese car-maker warned last week that a no-deal Brexit would make its European business model unsustainable due to tariffs imposed on exports.
Swindon, where Honda has announced that it will close its plant in 2021 with the loss of 3,500 jobs, and Coventry, the headquarters of Jaguar Land Rover which has said it will halt production for a week to mitigate potential disruption from a no-deal Brexit, are other car manufacturing areas featured on the list.
Surprising entries include Oxford, York, Harrogate and Cheltenham — the four areas on the list that voted remain. Cowley, near Oxford, is home to BMW’s Mini factory, which employs 4,500 people. BMW has warned that a no-deal Brexit would “lead to a reduction of produced cars in Oxford”.
Chichester, which marginally voted to leave the EU, is also featured. The West Sussex Growers’ Association, based near the city, has warned that an exodus of EU seasonal workers would make it impossible “to grow, harvest or pack many crops that are currently grown in Britain”.
Most of the worst-hit areas voted to leave the EU
Most of the worst-hit areas voted to leave the EU
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Area Leave or Remain Median salary Unemployment
Sunderland Leave £23,778 7%
Crewe Leave £31,117 3%
Carlisle Leave £23,829 3%
Preston Leave £24,404 5%
Blackburn Leave £22,174 5%
Chester Leave £29,205 4%
Skipton Leave £28,652 3%
York Remain £25,849 3%
Halifax Leave £25,667 4%
Harrogate Remain £31,831 3%
Table: The Sunday Times Source: ONS, Sunday Times research
In the run-up to the first exit date, Sir Mark Sedwill, the cabinet secretary, wrote to the other permanent secretaries, stating that only businesses for which “distress or loss of investment would be economically critical” would be given extra support.
The letter, which has also been leaked to The Sunday Times, warned that “the vast majority of firms will need to rely on management action, commercial finance and ‘business as usual’ government support”, in the event of a no-deal Brexit. Among civil servants there are concerns that this will mean that only the largest businesses will be eligible for bailouts.
According to an internal Cabinet Office report presented to Michael Gove’s no-deal planning exit operations committee last month, just 37% of small and medium-sized enterprises have made sufficient, or in some cases any, preparations for a no-deal Brexit.
Gove, the chancellor of the duchy of Lancaster, is now considering offering financial incentives to small companies which have not yet made any preparations for no-deal.
However, concerns have already been raised that such a scheme could not be introduced before exit day on October 31.
The Treasury said it did not comment on leaks. A spokesman added: “The whole of government is working tirelessly to ensure that the country is prepared to leave the EU on 31 October and has significantly accelerated efforts over the past months.”
https://www.thetimes.co.uk/edition/news/no-deal-will-hit-leave-voting-areas-hardest-says-report-mxt8nqzxm
