Growth in the East of England was 1.2% in the year to June 2019, which ranked the region tenth (out of twelve UK ‘regions’) according to estimates from ESCoE. The drop from the previous quarter’s growth of 1.6% suggests the region’s economy is contracting. At 2.3%, London had the best performance with Northern Ireland at 1% the worst. The national growth rate for the same period was 1.5%. With the UK economy contracting by 0.2% in the quarter, falling growth in the East of England reflects this and is similar to other regional economies which have also shrunk.
Unemployment in the East of England increased by 1,000 to 95,000 between April and June, leaving the rate unchanged at 2.9%, the joint second lowest rate in the UK. The South West had the lowest unemployment rate at 2.7%, the North East had the highest at 5.3% with the UK rate at 3.9%. The South West also had the highest employment rate at 80.5% which compared with the East of England at 79.2%, UK rate of 76.1% is the joint highest since comparative records began in 1971.
In June, the East of England was one of only three regions to see a drop in average earnings; from £674 to £653 per week. London had the highest average earnings of £831; the North East had the lowest at £537. In the UK average earnings grew by 3.7% or by 1.8% after inflation.
The East of England’s average property price ticked up during the month, the 0.5% rise to £291,370 meant annually prices increased by 0.7%. In comparison UK prices grew by 0.7% to £230,292 during June which left the annual growth rate unchanged at 0.9%.
On transport, Uttlesford District Council has voted to revisit plans approved by the previous Conservative administration to increase Stansted’s passenger volume to 43m per year from 38m. In June, the government published a Tourism Sector Deal including the opportunity for regions to bid to become one of five Tourism Zones. The zones would focus on increasing productivity in the visitor economy by investing in skills and extending the tourism season. Visit East of England said thousands of jobs could be put in jeopardy by the new delay to expand passenger numbers at the airport.
Four hundred jobs have been lost at 2 Sisters Food Group’s site in Witham, Essex, with 102 staff redeployed to other sites in Norfolk and Suffolk. 2 Sisters supplies chickens to most of the UK’s major supermarkets.
On infrastructure, regional transport body, England’s Economic Heartland, has recommended that the Government invests in 11 road schemes from Swindon to Cambridge at a cost of more than £700m. The road schemes include, widening the Bedford western bypass, the Aylesbury Eastern Link Road and the A10, Ely to Cambridge. Also recommended are junction changes on the A10, Ely to Cambridge and a new junction at the A1139 University Centre, Peterborough. The recommendations form part of the Oxford to Cambridge arc strategy – as outlined by the National Infrastructure Commission – which also includes the re-opening of the previously closed Oxford to Cambridge railway and building 1m new homes.
A report by an All-Party Parliamentary Group (‘APPG’) of MPs which looks at Post-Brexit Funding for the nations and regions has found that the UK would receive additional EU funding in the 2021-27 spending round. Three additional sub-regions, Lincolnshire, South Yorkshire and Tees Valley & Durham are likely to slip below the threshold of 75% EU average GDP per head that would qualify them for ‘less developed region’ status, but no region of the East of England has yet fallen below this level.
Additionally, the EU has proposed that ‘transition region’ status should be extended to cover all regions with a GDP per head between 75-100 per cent of the EU average, compared to 75-90 per cent at present. Seven additional sub-regions are likely to slip below the threshold of 100% EU average GDP per head, qualifying them for ‘transition region’ status. East Anglia falls into this category, as well as East Wales, Greater Manchester, Leicestershire, Rutland & Northamptonshire, Outer London South, North Yorkshire and South Western Scotland. It is not clear how much extra funding these areas would have received from the EU, but €50 per head over the next EU spending round would equate to £560m.
The UK government has promised to replace EU funding to the regions with a new UK Shared Prosperity Fund. If the new sub regions are added, the APPG calculates this amounts to c£1.8bn pa, on top of the c£2.2bn pa already committed as part of Local Growth Fund. Integrating the Local Growth Fund into the UK Shared Prosperity Fund could be problematic. The Local Growth Fund allocates funding to LEPs via competitive bidding whereas the allocation of EU funds uses a fixed formula. How the Shared Prosperity Fund will mesh with other pots like the City Deals is yet to be determined.