No-deal Brexit 'could cost North West England £20bn'

A no-deal Brexit could cost the North West economy £20bn over the next 15 years, the Confederation of British Industry's director has said.

Carolyn Fairbairn warned the region could face costs of nearly 10% of the total product of the region - by 2034.

The CBI's estimate of £20bn equates to double the region's health and education budgets combined but she denied claims of "scaremongering".

The government said it had stepped up preparations for leaving the EU.

Ms Fairbairn said there were "very high stakes" for a no-deal Brexit, but said it was important to have an honest conversation.

She was visiting Manchester where she spoke to 25 businesses from industries including retail, mining and manufacturing.

It follows the publication of a new CBI report which makes 200 recommendations to help with no-deal preparations.

The chief executive of Mersey Maritime, which represents hundreds of maritime businesses on Merseyside, said it was really important "at this sensitive time" to avoid a lot of scaremongering.

Chris Shirling-Rooke, said "Our sector desperately wants to see a deal but if we don't manage it we have complete faith in the energy, dynamism and expertise of our maritime industry to keep goods moving and to minimise any short term disruption."

The maritime sector accounts for £4bn of the Liverpool City Region economy and employs more than 30,000 people.

Ms Fairbairn insisted there was still "a lot of concern" in the private sector about what a no-deal Brexit would mean for businesses in the North West.

She said many feel they have "done all they can" to be prepared for day one.

But she added: "What came out very strongly is the impact on the longer term" and how tariffs and currency depreciation "will affect their long-term competitiveness."

Andrew Whiting from Beech's Fine Chocolates, which employs about 60 workers in Preston, said he was expecting a 15% rise in costs next year due to a drop in the pound.

He said the firm, which has been making chocolates for 99 years, has been stockpiling ingredients and packaging in case there are problems at the ports in the event of a no-deal Brexit.

The British Chamber of Commerce found in August last year that if there was no deal, 22% of businesses would cut investment, 18% would cut recruitment and 20% would move part or all of their business to the EU.

Ms Fairbairn said there was a feeling among businesses that the risk of a no-deal Brexit had risen compared to six months ago.

"They have to be responsible and prepare for it but they are still very much hoping there will be a deal - that is the strongest message that came out."

She added that the government "absolutely has to try" to secure a new deal before the 31 October deadline.

A government spokesman said the UK's preparations for Brexit had been "significantly stepped up".

"We will continue to work flat out to make sure that we are fully ready and our departure from the EU is as smooth as possible - whatever the circumstances."