Leafy Solihull Benefitting From COVID-19 Lifestyle Shift
Solihull and Warrington will have the UK’s fastest growing local economies by the end of this year as a result of changing lifestyle preferences caused by the COVID-19 pandemic, says a new report.
The latest UK Powerhouse study by law firm Irwin Mitchell and the Centre for Economic and Business Research (Cebr), has revealed mixed fortunes in terms of GVA* and employment levels for the 50 largest towns and cities in the UK** due to coronavirus and Brexit uncertainty.
“This report shows the huge challenges faced by UK businesses as result of Brexit uncertainty and COVID-19 lockdowns,” said Vicky Brackett, CEO of Irwin Mitchell’s Business Legal Services division.
According to the report, Solihull will have the fastest GVA growth in Q4 2021 with a 7.7% annual increase.
The leafy West Midlands town has always benefitted from its proximity to Birmingham, but this is being boosted by the pandemic which has made living in large cities less attractive to many households. The report says instead of commuting to Central Birmingham every day, many residents of Solihull will continue to work from home and increasingly engage in activity in their local area.
Warrington, which sits between Liverpool and Manchester, is expected to benefit similarly from a shift in lifestyle that many households have chosen since the coronavirus pandemic.
The in-depth economic report also examined the impact of Brexit - in particular the localities that will be hit hardest by the EU-UK Trade and Cooperation Agreements (TCA) which ended the free movement of services.
The report highlights that London is being hardest hit by the uncertainty in relation to the export of services in the TCA and new non-tariff barriers, including extra customs checks and forms.
London has the highest share of any region for exporting services with £23bn worth of exports at risk.
In addition, the end of furlough, which will impact the capital’s significant leisure and tourism sector, is expected to contribute to London losing 151,900 jobs between Q4 2020 and Q4 2021.
The report says that the three least exposed regions to the impacts of the Brexit deal are Yorkshire, the West Midlands and Wales.
Although all economic restrictions are expected to be lifted by October 2021, UK Powerhouse expects only 36% of the towns and cities in the report to increase employment levels during 2021.
Following the report’s analysis, it makes a series of recommendations to tackle the current difficulties faced by businesses. In summary, these are:
- Businesses need to take advantage of policies to encourage investment and improve skills.
- Local governments should have bespoke plans in place to support job creation heading out of the COVID-19 crisis, when the furlough scheme ends.
- The UK Government needs to prioritise the implementation of the UK-EU Trade and Cooperation Agreement with as little disruption as possible to businesses and negotiate where possible to reach a smoother trading relationship with the EU.
Commenting on the findings in relation to Brexit, Vicky Brackett at Irwin Mitchell said:
Expert Opinion“This report has shown that a large volume of UK businesses has revenues stemming from services exports, which are not covered by the free trade agreement with the EU. Furthermore, there is a significant proportion of businesses which trade with the EU specifically either in goods or services, which has been disrupted by Brexit border frictions. Therefore, further negotiations between the UK and EU are crucial for sustaining business activity across all UK regions.” Victoria Brackett - CEO of Business Legal Services & Partner
Josie Dent, Managing Economist at Cebr and report author, said: “The impacts of the pandemic have not been equal across the country. Cities with large hospitality and entertainment industries have been hit hard by forced closures amid lockdowns and could face additional difficulties with the end of the furlough scheme in September. Meanwhile, the UK leaving the EU has caused further disruption in 2021, with London being particularly badly affected due to the city’s large services sector which is not covered by the trade deal signed in December.”