LONDON - London Mayor Sadiq Khan blames Brexit for costing the UK economy £140 billion ($178 billion), and is calling on the government to “urgently” rebuild relations with the European Union to stem the decline.
Britain’s divorce from the EU has also meant there are 2 million fewer jobs nationwide than there otherwise would have been, including 290,000 lost positions in London, according to research by Cambridge Econometrics.
Half of those job losses are in financial services and construction, said the study commissioned by City Hall.
“The hard-line version of Brexit we’ve ended up with is dragging our economy down and pushing up the cost of living,” says the text of a speech released by the mayor’s office on Thursday. Khan, a Labour Party member, was scheduled to deliver the speech later in the day.
“The cost of the 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.”
While Khan’s excoriation of Brexit is in tune with the sentiment in the mainly Remain-voting capital city, it’s at odds with the more cautious line Labour leader Keir Starmer is trying to tread ahead of a general election expected in the second half of this year. A remainer himself, Starmer is nevertheless seeking to win back the votes of Brexit-supporting former Labour voters in the north of England and the Midlands who switched to the Conservatives in the 2019 election.
Starmer said in September there is “no case for rejoining the EU” or its single market and customs union.
While Starmer has also said he wants a closer relationship with the EU, he has steered clear of overemphasising the negative effects of Brexit, which was backed by 52% of voters in the 2016 referendum that triggered Britain’s exit from the bloc.
Britain’s economic output would have hit £2.34 trillion in 2023 if the country had remained inside the EU, 6% more than the £2.2 trillion the Cambridge Econometrics study referenced.
Cambridge Econometrics predicted the impact will worsen, shaving £311 billion off projected output in 2035 compared to a non-Brexit scenario, equivalent to a 10.1% hit. The analysis uses historical data to predict how the economy of a non-Brexit “counterfactual UK” would have performed.
The report also suggests London’s economy was £30 billion smaller than it would have been without Brexit. The average Londoner was £3,400 worse off in 2023 because of the vote to leave the bloc, compared to the £2,000 estimate for the average Briton.
Khan is expected to use the report to make the case for addressing London’s post-Brexit labour shortages with an approach to migration that is “informed by evidence, not prejudice”, as well as pushing for new arrangements with the EU.
“We urgently need to build a closer relationship with the EU,” his speech says. “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.”