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What a ‘no deal’ Brexit could mean for Cardiff

Labour shortages, disruption to supply chains, increased pressure on advice services and funding arrangement reforms are some of the potential implications of a‘No Deal’ Brexit for Cardiff.

Amid the ongoing uncertainty surrounding the terms of Britain’s departure from the European Union, Cabinet will consider the potential impact on Cardiff of the UK Government failing to reach an agreement with the EU at its next meeting on October 11.
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Work to ensure Cardiff’s readiness for Brexit has been ongoing over the past two years since the 2016 EU referendum result and the position has been closely monitored in terms of possible repercussions for Cardiff’s economy and public service provision.

But with the prospect of no formal relationship between the UK and EU being in place after March 2019, the Council must plan for the consequences of a ‘No Deal’ scenario for Cardiff.

Leader of Cardiff Council, Cllr Huw Thomas, said:

“There’s no doubt that a no-deal Brexit will have a catastrophic impact on Cardiff and the implications for us to consider are far-reaching.

“With the continued lack of agreement surrounding exit terms, it is imperative we consider the potential fallout of no deal being secured – what it will mean for the local economy and our services and how we respond to those potential challenges.”

Earlier this year, Cllr Thomas was joined by Leaders of the Core Cities UK in a meeting with the EU’s chief negotiater for Brexit, Michel Barnier, to outline the impact on Cardiff and other UKcities. He has also given evidence to the Parliamentary Select Committee on the issue.

With analysis suggesting slower economic growth as a result of the UK leaving the EU, the Cabinet report outlines that further reductions in public finances and continued austerity are on the horizon post-Brexit. This is at a time when the Council is already facing severe financial pressures and a £91m budget gap over three years from 2019.

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With more than 6,600 people working in the city from EU countries, there are also concerns about the local labour market and how certain sectors, particularly construction and adult social care, would be able to recruit and retain their workforce if Brexit creates a less favourable environment for EU workers here.

Image credit: Cardiff Council

Changes to structural, investment and regional funding are expected to affect Cardiff as well while capital projects and trade and inward investment are also likely to be impacted.

Cllr Thomas said: “Wales trades more with Europe than the rest of the world and Cardiff is currently in the top five British cities most reliant on EU markets with 61% of the city’s exports going to EU countries.

“We are an open, welcoming and outward-looking city, with around 18,000 non-UK EU nationals living in Cardiff andthat must continue post Brexit. So, in the absence of any clarity on access to the single market, it’s essential that we develop greater international trade and investment opportunities, particularly with emerging markets and we have already begun this approach of positioning Cardiff in the post-Brexit trade landscape on a recent visit to China, Qatar and Romania.”

Further potential consequences of a ‘no deal’ outlined in next week’s report include increased  demand for advice services in relation to the settlement process of non-UK EU citizens, possible disruption to supply chains and the ability to deliver Council services.

Cllr Thomas said: “At the moment, we are in the difficult position of not knowing what the coming months hold but by considering the potential implications for Cardiff, we can plan effectively and implement any remedial measures necessary to mitigate the impact of a ‘No Deal’ Brexit.

“We’ll continue to work with local public service providers through the Public Service Board and engage with other key partners in the city to respond to the challenges ahead and ensure we are prepared for the impact of the UK leaving the EU.”

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