This is what Brexit could mean for the vital Yorkshire industries of farming, fishing and financial services

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It was the outcome that more than 1.5 million people in Yorkshire and the Humber voted for in the 2016 referendum and at 11pm yesterday it came to pass.

Following more than three years of Parliamentary wrangling and painstaking negotiations with Brussels which have dominated the news agenda, the UK left the European Union and broke free from its political structures after nearly half a century.

As part of the Article 50 process the UK will no longer be represented in the European Parliament - with Yorkshire's six MEPs returning home - and the Prime Minister will cease attending Brussels summits to help set the bloc's priorities.

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But once the bunting has been packed away, what does the UK's status as an independent nation mean for Yorkshire, the people living here and the industries that are vital for its economic prosperity?

Brexiteers mark the UK's departure from the EU last night. Pic: PA

Brexiteers mark the UK's departure from the EU last night. Pic: PA

In the short-term, very little will change. A transition period has now kicked in and will last until December 31, meaning travel arrangements to Europe will remain the same and the UK will remain subject to EU rules.

In the meantime, Boris Johnson and his government will be negotiating with Brussels on what our relationship with the European Union will be in the future. Until this is decided, much of what the future holds remains uncertain.

All the signs so far suggest the PM will opt for a looser trade agreement with Europe than what currently exists, prioritising the setting of its own rules and freedom from institutions like the European Court of Justice over frictionless trade access to mainland Europe.

It means that in areas crucial to the Yorkshire economy, such as agriculture, manufactured goods and environmental standards, the UK will not have to adhere to European regulations and can go its own way.

Yorkshire's diverse economy faces a range of threats and opportunities from Brexit. Stock pic.

Yorkshire's diverse economy faces a range of threats and opportunities from Brexit. Stock pic.

Doing so, in theory, makes the UK a more attractive partner for a lucrative trade deal with other countries such as the US, already the biggest export market for Yorkshire firms.

But this deviation from European rules could mean that, even if there are no extra taxes on goods and services, traders seeking to operate on the continent could face the worrying prospect of extra border checks and paperwork on goods and services coming in and out.

Some of these problems could be mitigated for certain important sectors of the economy, such as financial services and the City of London, when free trade agreements are drawn up, but this could be at the expense of other industries.

As Dr Victoria Honeyman, a politics lecturer at the University of Leeds, notes: "We have a lot of big industries in Yorkshire. Fishing is a big concern but Leeds is the second biggest financial centre in the country.

"Access to markets in the European Union, Japan and the US will be hanging in the balance. That makes these industries a bargaining tool that could be used by other countries.

"Something like fishing which has cultural importance but in terms of its financial clout is a smaller industry, they will feel vulnerable because they are more likely to lose out in negotiations.

"If you think about some of these communities along the coast, they are big Brexit stalwarts and were told 'we are going to get your rights back', that might not be accurate, if that is the case it will cause a lot of upset in that industry."

Research by think-tank IPPR North shows that northern regions are more dependent upon trade with the EU than those in the South.

This has been backed up by the Government’s own regional impact assessments of the consequences of a free trade agreement with the EU.

Around 10.6 per cent of the population of the North work in manufacturing, rising to 11.3 per cent in Yorkshire and the Humber, while the figure for England as a whole is nine per cent.

According to IPPR North About 10.2 per cent of the North’s gross domestic product, which measures the value of output of goods and services, is dependent on the EU, compared with 9.5 per cent nationally.

New trade barriers are likely to reduce levels of trade with the EU, which will have consequences for economic growth in the North.

The diverse nature of Yorkshire and its economy means some areas are likely to be more affected by Brexit than others. South Yorkshire's export market is heavily dependent on the EU, meaning it is exposed to the negative effects of delays and tariffs, while in rural North Yorkshire the importance of farming and food production means migrant workers are vital to the economy.

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"The big thing for North Yorkshire is because we depend so much on farming and agri-food in our region, we really need more clarity on what food imports will look like in this post-Brexit world", says David Kerfoot, Chairman of the York, North Yorkshire & East Riding Local Enterprise Partnership.

"There some questions which need answering in relation to food standards, will they remain or be maintained at the same level, it is important to us."

The end of freedom of movement, one of the main pillars of European Union membership, means the UK will have a chance to draw up a new system for deciding who enters the country.

The government favours a "points-based system" which can take different factors like skills and language into account when awarding visas.

Around 31,900 migrant workers arrived in Yorkshire and the Humber in 2018, with the decrease of 3,960 compared with the previous year mostly attributable to fewer people arriving from Eastern Europe.

And according to Dave Brown, the head of Migration Yorkshire, a local authority-led migration partnership, the new system will likely see fewer Europeans and more non-Europeans arriving in the region.

But he said that despite immigration being a central element of the Brexit debate, the new reality may not feel very different to what was in place before.

Sectors such as social care could be hit by a shortage of workers at the low-income end of the spectrum, while the UK could become less attractive for high-skilled employees.

EU nationals already living in Yorkshire have to register with a government settlement scheme to continue living in the UK after 30 June 2021, and Mr Brown said their status was a concern. He said: "We now need to focus on supporting the most vulnerable people who could be left without status.”

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Speaking on a visit to Leeds this week, Treasury Minister and Middlesbrough MP Simon Clarke said Brexit would give the UK a chance to better support its industries due to freedom from EU state aid rules.

Freeports, a special kind of port where normal tax and customs rules do not apply, could boost the economy in Humberside and the Tees Valley.

"We also clearly have the chance to set our own immigration rules, the chance to set our own environmental, farming rules, these are all big core priorities which goes to the heart of the priorities of the people of Yorkshire.

"In the end we always said Brexit was about taking back control, and that's what it is. That's a huge opportunity, it's also a big challenge to government because in the end we now own fully the consequences of the decisions that we make.

"There's no overarching authority now over our heads, the UK will be truly sovereign and that's something we should be excited about."

Farming:

The departure from the European Union signals a dramatic shift for the nation’s farming industry.

The biggest change is the phasing out of the Basic Payment Scheme (BPS) and the introduction of the Environment Land Management Scheme (ELMS).

The BPS, which sees British farmers paid subsidies in line with the Common Agricultural Policy, will be replaced by the much talked-about “public money for public goods” ELMS scheme.

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It is not a change which will happen overnight after the long drawn-out Brexit stalemate. Farmers and landowners have petitioned heavily for stability and clarity on how the transition process will take place.

The Government published the Farm Payments Bill last month, pledging to maintain the UK’s current levels of funding for agriculture from the EU – about £3.4bn – for this Parliament.

It has also issued its long-awaited Agriculture Bill with the aim of providing a firm foundation for the industry.

This has laid out the structure for ELMS and the seven-year transition period to bring it fully into practice.

Both have been broadly welcomed by farming organisations, although the biggest issue yet to be resolved is a trade deal. For British farmers this is crucial.

The UK leads the way on animal welfare and food production standards, and any trade deal must safeguard these if British farmers are not to be priced out of the market by cheap imports.

Environment Minister Theresa Villiers has sought to reassure farmers that the Government will stand firm and not allow this to happen.

Fishing:

“Taking back control of waters” was one of the most powerful rallying calls for Brexit.

And fishing – specifically access to the UK’s waters – will be a crucial part of negotiations between the Government and the European Union over the coming months and years.

The new Fisheries Bill, which was introduced in Parliament this week, delivers a legal guarantee that the UK will leave the Common Fisheries Policy (CFP) in December 2020, allowing the UK to control who may fish in its waters and on what terms for the first time since 1973. However, the EU wants to make access for its fleet to UK waters a condition of a trade deal.

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“Either the UK will have to concede access or the EU will have to give up its call for access,” said Professor Richard Barnes, from the University of Hull. “If the EU doesn’t get access it may not be willing to negotiate a trade deal. It will be an acid test of the way negotiations go over the next few years.”

Politicians including Labour’s Shadow Minister for Fisheries, Luke Pollard, have claimed fishing could be “sold out” for financial services, cars or aerospace.

Changes to catch allowances will not affect shellfish landing in Bridlington, known as the Lobster Capital of Europe, because lobster and crabs are not ‘quota species’ like cod or haddock.

However, “low cost and frictionless” access to its largest markets in France and Spain will be vital, says Prof Barnes, particularly for small businesses.

He believes there may be more fishing opportunities for UK boats, particularly the bigger operators, as a result of leaving the CFP, but nowhere near as high as suggested.

Financial services:

Financial services represents a significant part of Yorkshire’s economy and is responsible for 40,000 jobs in Leeds alone.

The end of the Brexit transition period could see major changes in the way firms in this vital sector operate outside the UK.

Thanks to rules governing the European single market, which creates a single territory for the free movement of goods and services, Yorkshire’s financial businesses operate freely across the European Economic Area in a system known as passporting. But the UK will not necessarily be sticking to these rules from 2021 onwards as a result of Boris Johnson’s Brexit deal.

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Research from King’s College suggests all financial centres will feel “a marked decline” in employment in the first year following a departure from the single market. However, there is also a strong possibility that Yorkshire could benefit from increased choice and lower prices as the country prepares to build its own trade policy for the first time in nearly 50 years.

The CBI’s director for Yorkshire, Beckie Hart, called for a Chief Business Trade Envoy to help promote the UK’s enterprise overseas.

She said: “What will be the vital first step for government is to understand what businesses on the ground need and can offer in support for the trade talks ahead.

“The key for the Government to unlock that success is simple – make the best use of the wealth of expertise business that our region has to offer. It has firms that trade most goods and services, are at the front line of market access barriers, and strike deals every day the world over.”

Dr Adam Marshall, the Director General of the British Chambers of Commerce, said that investment in infrastructure across the North would help bolster business confidence during the transition period.

He added: “Businesses are likely to face significant changes in the way they trade, both in Europe and across the world. The Government must clearly communicate what those changes will be – and provide timely guidance and support to help firms adapt.”

Additional reporting by Mark Casci, Sophie McCandlish and Alex Wood