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East Herts counts cost of no-deal Brexit for Bishop's Stortford

Brexit sign - flags vector illustration. (6783540)
Brexit sign - flags vector illustration. (6783540)

The stark cost of a no-deal Brexit to Bishop’s Stortford and the rest of East Herts – including a £2.2m black hole in the budget – has been spelled out to the district council.

On Tuesday (Feb 5), members of the council's overview and scrutiny committee will discuss recommendations from the authority’s specially-formed Brexit task and finish group.

It has been evaluating the implications of leaving the European Union since September last year.

Members have concluded that if the UK quits on March 29 on World Trade Organisation terms and a standard schedule of tariffs for goods and services, a 5% loss in business rate income is possible if companies close or quit the area and an increase in unemployment from 2.7% to 5.2% would match national predictions.

The group warns: “Given East Herts retains 40% of the business rate income in the district, a loss could be significant. Any shortfall would have to be made up through reductions in expenditure or increases in income from other sources.

"Last year East Herts collected around £44m in business rates across the whole district and retained 40% of this. A 5% reduction in business rate collection could mean a reduction of £2.2m in income to the council.”

Other potential costs include a 15% hike in hardware expenditure by the council’s shared IT service with Stevenage Borough Council should the decline in the value of sterling continue.

Any disruption to international air travel as a result of crashing out of the EU would hit Bishop's Stortford hard, the group concluded.

It is estimated that 500 jobs are created for every 1m passenger journeys at Stansted Airport and the aviation hub is a major local employer, with 1,500 staff in the town and 1,000 more in the rest of the district.

The group advises: “Plans to develop Bishop’s Stortford are relative to its position next to a major international travel hub. If the area around Stansted were to lose that status, it could essentially undermine the council’s plans for the town’s economy and undermine a significant part of the district plan.”

The knock-on effect could also jeopardise projects such as the cultural quarter planned at Old River Lane by East Herts, including a new arts centre.

While the council has only three EU nationals in its workforce, across the district around 4,000 of a total population of 146,000 are believed to be resident.

The group observes: “It may also be that a drop in population also decreases pressure on council services.”

British nationals returning from abroad post-Brexit will have to pass the Habitual Residence Test before they can ask for housing assistance from the council – and if they own a property abroad, they will be ineligible for help.

Because the Brexit situation is so volatile with divisions in Parliament and no firm decisions on the future, the task and finish group recommends that it should continue to meet to consider new issues as they emerge.

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