Where are industry eyes on Brexit?

As Brexit negotiations progress, the staff and leaders of British industry will be keeping a keen eye on developments.

The EU is the UK’s biggest single trading partner: it accounted for 48% of goods exports from the UK and 39% of services exports in 2016.

And some industries will have a particular focus on negotiations – given the value of their exports to the EU – such as British carmakers and finance companies.

The EU also helps fund scientific research and development, its regulations govern areas like British agriculture and there are more than two million EU nationals working in the UK, their employers ranging from hotels and restaurants to public services.

While the outcomes of Brexit – whether positive, neutral or negative for different businesses – will not be known for some time, analysis from the ONS shows where various industries are concentrated.

This gives a clearer insight into parts of the country that may have a particular interest in the Brexit debate, because they are home to a concentration of industry or industries which have most at stake when the terms surrounding access to the single market, the free movement of labour, levels of funding and existing EU regulations are discussed.

Find out which industries are most and least concentrated in your area.

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To embed this interactive on your own site, use the following code:

<iframe width="100%" height="700px" src="https://www.ons.gov.uk/visualisations/dvc421/charts/all/index.html" scrolling="no" frameborder="0"/>

Which areas benefit most from trade links with the EU?

British businesses enjoy free trade with the EU at the moment, but a failure to reach a trade agreement could mean facing tariffs and quotas under World Trade Organization (WTO) rules.

The auto sector is particularly reliant on trade with the EU for both export sales and imports of key components in the production process. The EU accounted for 42% of UK car exports and 88% of imports in 2016. If the UK and EU were to trade under WTO rules, cars would face a 10% tariff. Around one-third of jobs in the car industry are in the West Midlands. This was equivalent to more than 50,000 jobs in 2015.

Trade with EU countries is equally crucial for UK finance companies. The UK is a net exporter of financial services, and the EU is a significant consumer. Around £24 billion of financial services exports, 45% of the total, went to the EU in 2015.

Concentration of industry, 2015

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London is at the forefront of the UK’s service-based economy. More than one in three financial services roles are in the capital, against just 2% of manufacturing jobs.

However, its status as a financial centre could be under threat depending on the Brexit outcome. Several major banks are considering moving jobs elsewhere amid fears over future trade arrangements.

Big companies moving away from London could have an impact on the rest of Britain. Recent ONS figures indicated that London is the largest net contributor to UK public finances.

There remains a clear industry imbalance between London and the major northern cities. This is partly behind the government’s Northern Powerhouse initiative, which aims to create more skilled jobs and boost economic growth in the North. In 2015, jobs in skilled service industries such as IT, finance and science were all far more concentrated in London than in Manchester, Liverpool, Newcastle, Leeds and Sheffield.

Whereas Londoners voted strongly in favour of maintaining the status quo and remaining in the EU last June, the majority of voters in the north of England chose to leave.

Concentration of industry, 2015

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Where in Britain are the sectors most associated with migrant workers?

The future of EU nationals living and working in the UK will be discussed during Article 50 negotiations. EU migrant workers are important to many sectors including hotels and restaurants, construction and public services.

Employment in hotels and restaurants is concentrated in coastal areas of Britain. West Somerset, Weymouth and Portland and the Isle of Scilly have higher than average proportions of jobs in the sector. Such local economies could face staff shortages if EU nationals were to leave en masse. More than 210,000 EU nationals were employed in UK hotels and restaurants in 2015, equivalent to 13% of the sector’s workforce.

Concentration of industry, 2015

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Any changes to EU workers’ rights may also have an impact on construction projects across Britain. South Ribble, near Preston in Lancashire, had the highest concentration of construction jobs (more than four times the national average). Further south, Epping Forest, between Greater London and Essex, had nearly three times as many construction workers than the British average. Overall, there were more than 150,000 EU nationals working in construction across the UK in 2015.

Finally, there were more than 300,000 EU nationals working in education, health and social care in 2015. Education professionals were highly concentrated in university towns such as Oxford and Cambridge.

Where are the sectors affected by EU funding and regulation?

Scientific research across Great Britain benefits from EU funding and many EU researchers are employed by British firms and universities. Scientific research and development is crucial for discovering new medical techniques, promoting innovation and improving productivity in the economy. Brexit negotiations could have a major bearing on the sector’s future.

The East of England and the South East are hotspots for scientific research and development. Together, they accounted for more than half of employment in the sector in 2015.

Agriculture and fishing are arguably most affected by EU regulation. The EU’s Common Agricultural Policy and Common Fisheries Policy have governed their respective industries for decades. Both sectors could therefore see changes post-Brexit.

Wales and Scotland have the highest concentration of jobs in agriculture, forestry and fishing. More than half of British employment in fishing and aquaculture is in Scotland, with the share in the Highlands and Islands more than 50 times its share of total employment.

Concentration of industry, 2015

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To embed this interactive map on your own site, use the following code:

<iframe width="100%" height="900px" src="https://www.ons.gov.uk/visualisations/dvc421/map/maps/index.html#73,1" scrolling="no" frameborder="0"/>

For more information, please contact: better.info@ons.gsi.gov.uk

Other Visual.ONS articles:
What’s changed in the year since the Brexit vote?
Trading places: UK goods trade with EU partners
Five facts about… the UK service sector

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