The mayor of London, Sadiq Khan, has issued a stark warning that the economic progress made in the capital since he came to office could be put under threat due to Brexit. London has fared well over the last two and a half years, with a growing economy, more jobs, higher employment and rising pay.
But Sadiq has warned that leaving the European Single Market could put our growing prosperity at risk, damaging London and the UK ‘for decades to come’, resulting in tens of thousands fewer jobs.
He also believes that even if a Customs Union arrangement is agreed as part of a Brexit deal, the UK’s national competitiveness will be permanently damaged without the UK remaining part of the Single Market.
Last year the Mayor published detailed analysis on the impact of five potential Brexit scenarios on London and the whole of the UK, commissioned from leading economic analysts Cambridge Econometrics. Among its findings, the analysis said there could be as many as 87,000 fewer jobs in London alone by 2030.
A number of key indicators underline London’s economic resilience over the last two and a half years since the beginning of the Mayor’s time in office:
- Economic output: London’s real gross value added (GVA), the value of goods and services produced in the capital has grown by 3.1 per cent on average between quarter two 2016 and quarter three 2018 (compared to 1.8 per cent for the rest of the UK). According to the most recent data available, London’s GVA was above £425bn in 2017 and accounted for nearly a quarter of the UK’s total economic output.
- Jobs and employment: There were a total of 5.98m workforce jobs in London in September 2018, up by 207,000 from 5.78m in the second quarter of 2016. The rate of jobs growth in London (3.6 per cent) was far above that for the UK as a whole (1.6 per cent) during this period. The Office for National Statistics’ Labour Force Survey shows there were an estimated 4.76m London residents in work in September to November 2018, 244,000 more than April to June 2016. For the last quarter of 2018, the unemployment rate in London was 4.5 per cent – the lowest since this data set started being collected.
- Pay: in April 2018, median gross weekly earnings for full-time employees in London were £713, up 6.3 per cent from £671 in 2016 (which is higher than the UK as a whole, at 5.6 per cent).
The mayor of London, Sadiq Khan said, “London remains the UK’s economic powerhouse and one of the world’s most dynamic cities, and whatever happens with Britain’s departure from the European Union, that will always be the case.
“I’m proud of the progress that has been made. Over the last two and half years a number of key indicators show that the capital continues to make progress thanks to the hard work and talent of Londoners, which in turns attracts investment from both inside the UK and around the world.
“But a bad deal or no deal Brexit poses a serious threat to that progress. That’s why it’s vital that the public is given a say on the final Brexit deal, and that if we want to protect jobs and growth, any deal struck needs to include membership of the customs union and Single Market.”
The Mayor outlined his concerns while speaking at the inaugural London Business Awards, organised by his official promotional agency, London & Partners which also compiled the economic data on the Mayor’s behalf.
Other economic indicators show that, since May 2016, London:
- attracted nearly 1,200 FDI projects, creating nearly 55,000 jobs and representing almost £20 billion in capital expenditure
- continued to be the leading European destination for venture capital (VC) investment, with companies based in the capital attracting more than £10bn in VC (including £5.2bn for tech companies)
- welcomed a new record number of international visitors for a calendar year, while in 2017 19.8 million visitors spent £13.5bn with London businesses.
Recent data also shows that for financial services, London attracted 55 inbound FDI projects in 2017 alone – more than double the number of Dublin (26), Paris (26), Frankfurt (24) and New York (20).