Brexit: England’s East – All about Shires and the Sherwood Forest
“Golden arrow? And what would we do with a golden arrow? … I could hang it around my neck on a chain, perhaps, and let it stab me in the ribs when I tried to sit.” ― Robin McKinley, The Outlaws of Sherwood
One can argue whether the “golden arrow” stated above is referring to the latest delay of Brexit until Halloween this year, or if it acknowledges the hopes of Brexiteers that the UK will be doing better without the European Union and its single market. Following our principle of number-based fact checking, we focus our analysis of spending power development in the British regions on England’s East and its Midlands, both of which voted between 55% and 60% for leave in the Brexit referendum. World Data Lab’s webtool Market Pro provides subnational data on a NUTS 2 level for consumption power, age, and gender segments. This article will be the conclusion of our examination of Great Britain with regards to Brexit 2.0 which was supposed to have happened on April 12th. However, until Brexit 3.0, Halloween night, we will make use of our model’s ability in implementing the latest IMF World Economic Outlooks and will provide real time changes to our analysis of UK regions' spending power development over the coming months.
Robin Hood from the East Midlands
The East Midlands is not only the site of Nottingham (in wider conurbation almost 800,000 people, population of Derby/Nottingham metropolitan area is twice as big), Derbyshire and Nottinghamshire, but also of the famous Sherwood Forest, where the legendary Robin Hood took from the rich and gave to the poor. Other regions in the East Midlands we cover are Leicestershire; Rutland and Northamptonshire, with Leicester; and Lincolnshire with the town of Lincoln (population of 95,000).
The city of Nottingham voted 50.8% for leave, Derby 57.2%, Newark and Sherwood 60.4%, and Lincoln 56.9%. Leicester voted 51.1% for remain.
In terms of annual per capita spending power, Lincolnshire is at the bottom end of the Eastern Midlands region but will have the highest annual average growth rate of 1.52% between 2016 and 2031, the time horizon for our analysis. This is most likely due to Lincolnshire playing catch-up to the rest of the region. In 2019, a person from Lincolnshire will only have on average $18,741 per year to spend (in 2011 PPP), and $22,820 by 2031. In comparison, Derbyshire and Nottinghamshire have $21,255 in 2019, and Leicestershire, Rutland and Northamptonshire $23,345.
East of England and the Western Midlands
The two other English regions in our comparison analysis are the West Midlands which includes Birmingham, and the East of England. The latter NUTS 1 region consists of East Anglia with its two main towns Cambridge (population of 125,000, of which a fifth are students) and Norwich (population 141,000), the region of Bedfordshire and Hertfordshire, and Essex. Regarding Essex, the majority of the county’s land is being given over to agriculture with industry being largely limited to the south of the county with two unitary authorities Southend-on-sea (58.1% for leave), and Thurrock (72.3% for leave). Cambridge and Norwich on the other hand voted 73.8% and 56.2% respectively for remain. The third political district of East of England on a NUTS 2 level is Bedfordshire and Hertfordshire.
In the latter region, a person will have on average $29,506 to spend throughout 2019, which is rather high. This is expected to increase to $33,256 by 2031. A person from East Anglia can spend $26,072 on average throughout 2019 and $29,346 by 2031. In comparison, Essex, the third administrative area included in the East of England, has a considerably lower consumption budget of $23,311 in 2019, and this is expected to grow to $24,494 by 2031. This shows that there are some structural problems, especially when considering that the average annual growth rate of per capita spending power (2016-2031) is only 0.35% in Essex, and 0.91% and 0.89% for Bedfordshire and Hertfordshire, and for East Anglia respectively.
The West Midlands, including Birmingham and Wolverhampton and the large towns of Sutton and Dudley, which has a combined a population of 2.9 million in 2019, falls somewhat short in terms of per capita consumption abilities per year as well as growth rates. The NUTS 2 region West Midlands, basically the greater metropolitan area of Birmingham (50.4% for leave) has $21,976 to spend in 2019, which will only slightly increase to $25,078 by 2031.
Where to roam?
The West Midlands in general (NUTS 1) will grow on annual average by 1.03%, the East Midlands by 1.33%, and the East of England by 0.79%. According to our forecasts, the East Midlands will overtake the West Midlands by 2029 in terms of per capita spending power which is good news for Robin Hood. On the other hand, if he wants to increase his cost-utility ratio and still stay in the countryside, he should move to the East of England where Bedfordshire and Hertfordshire, as well as East Anglia provide the relatively highest spending power capabilities in our sample of three NUTS 1 regions in England. But, he should avoid Essex, which can only be found at the bottom of our comparison – revealing some structural problems.
The Golden Arrow of the Stronger Towns Fund
During the debates on Brexit in the British parliament, the British government installed the Stronger Towns Fund, which will provide funds for structurally weak regions in England. £110 million within a period of seven years from 2019 to 2026 are set aside for the East Midlands, £212 million for the West Midlands, and £25 million for the East of England. Based on the current exchange rate and 2019 population numbers, and without taking any multiplicator effects or inflation into account, this will translate to $6.9 per person per year for the West Midlands, $4.4 for the East Midlands, and only $0.7 per person per year for the East of England. Assuming that the £25 million from the fund which are earmarked for the East of England will only be spent on Essex (where most of the region’s industry is located), an average person from Essex will get an additional $2.6 per year for the next 7 years. Not much for Robin Hood to take and rather a small “golden arrow”.