In a speech last night, Mayor of London Sadiq Khan outlined how the UK’s exit from the European Union has damaged the capital’s economy.
This comes following a report, commissioned by City Hall, which showed how London’s economy has shrunk by more than £30 billion as a result of Brexit, with the move costing the wider UK economy around £140 billion.
In a keynote speech to London’s leaders of business and politics, the Mayor said:
“Rather than dodging and ducking this issue, it is incumbent on all of us to have an honest and mature discussion about the best way forward. It’s now obvious that Brexit isn’t working. The hard-line version of Brexit we’ve ended up with is dragging our economy down and pushing up the cost of living. It’s making food more expensive, adding to the acute pressures on households and having an ongoing detrimental impact on industries that are crucial to our success – such as hospitals, construction, and financial services.
“I’d rather not be talking about Brexit again. But part of being the Mayor of London is about standing up for our city. We’ve got to be frank – Brexit is simply not a peripheral concern that we can leave in the past – it’s a key contributor to the cost-of-living crisis right now and it’s resulting in lost opportunities, lost business and lost income at a time when people and companies can least afford it.
“The cost of Brexit crisis can only be solved if we take a mature approach and if we are open to improving our trading arrangements with our European neighbours. I agree with the Shadow Foreign Secretary, who has said we urgently need to build a closer relationship with the EU. Because a new settlement would not only turbocharge our economy and help to raise living standards but help to unlock the growth and prosperity we need.”
The research was undertaken by leading economic analysts Cambridge Econometrics and looked into the potential consequences of different Brexit situations on the economy of both London and the UK. Findings of the report include:
- There are 1.8 million fewer jobs in the UK than if Brexit had not happened, with this including around 290,000 fewer jobs in London across 2023.
- The average citizen is around £2,000 worse off, with this increasing to £3,400 for the average Londoner.
- Under the current Brexit scenario, the UK real GVA is around £140 billion less than in if the UK had chosen to remain in the Customs Union and Single Market. By 2035, this is expected to increase to around £311 billion if the UK retains its current deal with Europe.
- Around 30% of the increases to food prices in the UK can be attributed to Brexit’s impact, with this enhancing the severity of cost-of-living crisis.
Principle Economist at Cambridge Econometrics, Shyamoli Patel, also commented on the report:
“Our study reveals that London’s economy would have grown faster if Brexit hadn’t taken place. Looking ahead, we project that Brexit will continue to have an impact on the UK and London economies in the medium term.”
At the Mansion House event, the Mayor also stated that the UK must “build a closer relationship with the EU” as a matter of urgency.
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