With the UK government set to decide what Brexit looks like and what our future trading relationship with the EU is to be, Coversure Hull – Hull’s business insurance specialists – looks at what this could all mean for Hull. With 66% of the local population voting leave, Hull was one of the greatest advocates for leaving the EU. This in spite of its reliance on the Port Of Hull and 2014’s decision by German firm Siemens to base its wind turbine manufacturing plant in Hull. To many the decision to vote leave was a typically spirited response to a long-term problem, for others it was a decision to make matters worse. Who is right? Let’s look at the evidence.
Why Did Hull Vote Leave?
The reasons why the people of Hull voted to leave – against the urgings of local business leaders and MPs – are complex and rooted in economic history. As one of the poorest local authorities in the country – with wards such as Orchard Park and Greenward ranking as the fifth most deprived in the UK – there was a widespread sense of having been left behind economically and socially. The region’s decline started with the ending of the Cod Wars with Iceland in the 1970s – an event that effectively ended Hull’s role as a long-distance fishing port. Since then a rise in immigration and the talk of billions of pounds going to the EU with little or no discernible return for locals galvanised them, as it did many across the north of England to vote leave in order to regain control of their future.
Prior to the referendum Siemens, in association with Associated British Ports – the owners of the Port of Hull – had invested £310m in re-developing the derelict Green Port site to create their turbine factory. Such was Siemens’ faith in their investment that in 2015 they announced they would expand its operations to build turbines for export to the rest of Europe. A month after the referendum, the chief executive of Siemens UK, Juergen Maier said in a statement that plans for exporting turbine blades from Hull were now on hold. ‘Those plans were only beginning to happen, and I expect that they will stall until we can work out exactly what the plan is for how we can participate in EU research programmes, and until all the issues around tariffs and trade have been sorted out.’
Potentially devastating as this news was to the local economy, many were quick to point out that by leaving the EU and looking out to a global market that Hull could thrive and there has already been some evidence of an upturn. Hull’s position as UK’s City of Culture gave it a chance to show the world how it was a city of opportunity and it is an accolade that has thought to have driven an extra £60m into the city’s economy. House price rises in Hull have proved to be amongst the strongest in the UK over the past few years, with demand for housing rising by 28% as Hull becomes a property hot spot. And the City Plan, a partnership between the city council and private investors is aiming to capitalise on this reawakening of interest in the city and see its position as the UK’s largest port complex exploited. And there is great excitement around Hull as a centre of off-shore windfarm technology.
The port is undoubtedly a huge asset. It is equipped to handle everything from container vessels, ferry traffic and roll-on, roll-off ships and is home to the UK’s first fully-enclosed cargo-handling facility for weather-sensitive cargoes such as steel. With a specialism in handling timber and forest products as well as other bulk cargo, it is a hive of import-export activity. If the UK and the EU can agree a free trade deal the existing and proposed plans for the port could put the port at the centre of the economic renaissance that everyone is plainly keen to see happen.
‘What Happens If’ The Multi-Billion Pound Question
Whichever side of the Brexit debate you are on, there was one thing that neither side could say with certainty: what happens if… If we leave we may see global powers beating a path to our door with trade deals… If we leave we may see global powers beating a path to our door with trade deals but those deals may take years to agree and will be done of the basis of the UK needing them more than we do so they will be on their terms… Both sides produced passionate arguments that were built on speculation and optimism. The one thing Brexit was, was a step in to the unknown and it remains just that. Neither side can say with certainty, even now 18 months after the vote, what will happen and what the relationship will be and that is unsettling for all.
If we get a deal then the Siemens investment will probably come off hold and Hull will be in for another round of investment and job creation. If we don’t get a deal with the EU then Hull could look to new markets, to attracting goods from countries that don’t have trading relations with the EU such as the US. There is even speculation that Hull could become a free port – a tariff-free zone such as operate in the US but which are prohibited under EU rules. The think tank Policy North has called on the government to look into the idea for free ports across the north of England, highlighting how the 250 in the US handle over $750bn of cargo and employ over 40,000 people. Such a move would be a great boost to the whole Northern Powerhouse objective.
Hull: A Bright Future?
If the year as being the UK’s City of Culture has taught us anything it’s that Hull has an awful lot to offer. Between the port, it’s traffic network, it’s cultural history and its burgeoning start-up businesses and its renaissance as an agricultural centre, it’s a city made of stern stuff, one whose future will be bright and which I will be proud to be a part of.
Update: Siemens have just announced plans for a £200m rail factory near Hull which will create up to 200 new jobs. Hull: a bright future? You bet!