Brexit is causing uncertainty over the future of infrastructure investment in the North of England, the CBI’s regional head has said.
Damien Waters, North West regional director of the CBI, said much of the region’s infrastructure and assets are supported by investment from outside the EU, but that investors were delaying decisions because of the uncertainty Brexit is causing.
“I’ve seen companies over the last couple of months who are just holding back on investment into the UK at the moment because, come March 2019, they’re not sure what’s going to happen,” he said.
Waters added the North received a lot of investment from EU institutions, and it was unclear how or if this money would be replaced after the UK breaks away.
“If you’re from Mersyside you’ll know ESF well, the European Social Fund, it’s been a huge boon for the city. €3bn ha been invested in Northern regions of the UK though both [the European Regional Development Fund] and ESF funding,” he said.
Waters also said the European Investment Bank was the single largest investor in the region’s water and sewage infrastructure. “If we no longer have access to the European Investment bank – where do you get the backfill?” he said.
Speaking at a CIPS Manchester branch event at the Malmaison hotel yesterday, Waters said it was unclear how Britain’s exit from the EU would affect the Northern Powerhouse (NPH), the government project to boost the economy of the North and reduce regional inequality.
All of NPH’s priorities – advanced manufacturing, energy, health innovation, and the digital economy – could potentially be impacted by the outcomes of Brexit negotiations, he said.
“One of the things we’re trying to do with [NPH], is offset some of those damaging effects of Brexit. But that’s with the caveat that we’ve no idea yet what Brexit is going to look like.”
Another Brexit uncertainty unique to the North is the future of trade with the Republic of Ireland. Waters said there had been a lot of talk about the hard border between Ireland and Northern Ireland, but that not much has been said about the large amount trade that crosses the Irish Sea.
“Ships every day are sent between the Republic of Ireland and Birkenhead, and from Liverpool, and from Heysham. All the focus is on the hard border, but actually, what’s the border look like for ships coming in and out of Liverpool and other ports in the North West?”
In some ways, however, the North is slightly less dependent on the EU for trade, said Waters. Exports are more focused on North American markets, and investment to allow larger ships to dock at Liverpool will also expand access to South America. “So we’re a little bit protected because we’re not as reliant on the EU trade as our counterparts south of the Watford Gap,” he said.
There is one way business in the North and elsewhere could potentially benefit from Brexit. “Ever since I joined the CBI organisations have talked about the burden of red tape and the burden of regulations from the EU,” said Waters. “The great repeal bill is an opportunity to look at how we can make ourselves more competitive.”
☛ Want to stay up to date with the news? Sign up to our daily bulletin.