How will leaving the EU without a deal affect local people?
What will it mean for ordinary people in Scarborough and Whitby if the UK is allowed to crash out of the EU without any deal in place? Here we look at just three topics – so this is by no means a full picture, but these are all important issues. Our information is recent and comes from reputable sources, including the government’s own spending watchdog, the Office for Budget Responsibility (OBR).
Our findings must be of great concern to everyone. This area already faces very many challenges, and it’s not clear how the shortfalls left by a No-Deal Brexit can be made up. Worst of all, it will be the worse-off who take the biggest hit – the same people whose opportunities are already very limited.
For older people
Scarborough and Whitby has a high proportion of older people – it’s projected that around 28% of the population living here in 2021 will be over 65.
What does a no-deal Brexit mean for people who are retired, or coming up to retirement? The Daily Telegraph concludes that without a deal in place, the outlook for pensions is not rosy. Pension funds invest globally, and no one knows what will happen when the UK exits European trade deals with nothing else in place. Meanwhile, the British economy is shrinking as a direct result of the No Deal threat. Investors are already deterred, and returns on savings and dividends will fall.
So older people are likely to see pensions adversely affected, and if some of their income comes from savings and investments they will lose out there too. Because the elderly are major users of health and social care, they will most disadvantaged when vital public services are further slashed. Philip Hammond, who recently stood down as Chancellor of the Exchequer, told Reuters in July (commenting on the OBR report) that it showed “that even in the most benign version of a no-deal exit there would be a very significant hit to the UK economy, a very significant reduction in tax revenues and a big increase in our national debt – a recession caused by a no-deal Brexit”. This is deeply worrying for older people with health and care needs.
(Sources: Daily Telegraph, Telegraph Money, 13 August 2019; The Guardian, 18 July 2019.)
For jobs and pay
Job opportunities in Scarborough and Whitby are already poor. People face an uphill struggle to find secure employment with a liveable wage. Average pay levels here are the lowest in the country, while poor transport links hit our coastal and rural communities hard. Unsurprisingly, Scarborough is a hotspot for personal insolvency – its level of debt relief orders (DROs) are the second highest in England and Wales.
The government’s own Office for Budget Responsibility predicted that the No-Deal Brexit planned for 31 October would trigger a year-long UK recession, starting this autumn. The pound, they said, will immediately lose 10% of its value, and unemployment rise by more than a quarter. The OBR bases its prediction on a stress test which it describes as ‘by no means a worst-case scenario’.
Poverty and lack of opportunity in Scarborough and Whitby already affect the lives of thousands of people. People are trapped in a cycle of deprivation, which however hard they work is almost impossible to escape. Very many of the local people who live in great need are at work. Three in four children in poverty have a working parent.
A group of influential charities appealed to the government this year to protect struggling families from the financial calamity of Brexit – even based on a smooth exit from the EU, they predicted that 200,000 more people would be pushed into hardship. The price to be paid by the poorest if the UK crashes out without a deal will be severe.
(Sources: Guardian, 18 July 2019, ‘Coastal towns hit hardest by soaring level of insolvencies’; ‘No-deal Brexit would plunge Britain into a recession, says OBR’.
Joseph Rowntree Foundation reports: ‘Families in the North locked out of jobs market by ‘unaffordable and unreliable’ local transport’, Aug 2018; ‘It’s wrong that so many working families are trapped in poverty – it’s time for action’, March 2019; ‘People in poverty must not pay the price for Brexit’, Feb. 2019)
Loss of EU funding for vital projects
EU grants have supported many essential projects in Scarbrough and Whitby.
- Whitby Piers Coast Protection Scheme is currently receiving £2.7 million from the European Structural and Investment Funds Growth Programme.
- The European Social Fund helps many local community enterprises like the Rainbow Centre (Scarborough food-bank which also supports homeless people), Yorkshire Coast Enterprise, and Northern Regeneration CIC.
- Advantage Coast, a community-led local development programme, successfully bid for £6.9 million from the European Structural Investment Fund towards community development, business growth and enterprise along the Yorkshire Coast (2017-20).
- The North York Moors National Park promotes rural businesses, farming, tourism, and significant environmental, educational and heritage projects with support from the European Union. The £1.5 million a year NYMNP has raised through EU funds has helped compensate for its government grant being slashed by 20 per cent.
These are just a few examples of how much our area has benefitted from EU funds. Needless to say, access to future EU grants will stop instantly with a No-Deal Brexit.
Published 11 Sept 2019