The Mayor of London, Sadiq Khan, will use a speech at Mansion House in the City of London tonight to reveal that the cost of Brexit to the UK’s economy is £140 billion, according to new independent analysis.
The new report, by Cambridge Econometrics commissioned by City Hall, also shows that London’s economy has shrunk by more than £30billion.
The average Briton was nearly £2,000 worse off in 2023, while the average Londoner was nearly £3,400 worse off last year as a result of Brexit, the report reveals. It also calculates that there are nearly two million fewer jobs overall in the UK due to Brexit – with almost 300,000 fewer jobs in the capital alone.
The Mayor will tell the prestigious London Government Dinner that the UK “urgently needs to build a closer relationship with the EU” to help arrest the decline.
According to the new research, the economic damage is only going to get worse – with more than £300bn set to be wiped off the value of the UK’s economy by 2035 if no action is taken, and more than £60 billion wiped off the value of London’s economy alone.
In the keynote address to London’s political and business leaders this evening, the Mayor is expected to say, “Rather than dodging and ducking this issue, it’s 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 hospitality, 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 Mayor will also use his speech to say the Government needs to start mitigating the impact of Brexit by tackling London’s labour shortage, taking an approach to migration that is “informed by evidence, not prejudice”. He is expected to say, “For too long, we’ve seen a race to the bottom in rhetoric and policy, with politicians blaming “the other” for our problems – playing on people’s fears, rather than addressing them. This has resulted in significant damage to our economy, society and community cohesion. It’s time for politicians to be straight with the public: immigration isn’t part of the problem, it’s part of the solution.
“I’m certainly not in favour of open borders or uncontrolled immigration. But with severe worker shortages, we must be honest about what’s best for our city. We need both British and foreign-born workers to support our public services, power our companies and drive our capital and country forward.
“Immigration is a difficult, contentious issue. But the economic benefits – not to mention the social and cultural advantages – mean we have a duty to craft an approach that’s guided by facts, not fearmongering.”
The Mayor will also talk about the importance of defending London’s values. He’s expected to say, “We can’t let small-minded politics threaten our precious values and what makes London so special. I’m talking about our values of openness and co-operation. Of internationalism and global engagement. Of respect for one another. Of seeing diversity as a strength, not a weakness. And of fighting for equality for all – regardless of race, background, religion, sexuality or disability.
“These are tenets that have enabled London to thrive for hundreds of years: economically, culturally and socially. To scale new heights and to become the incredible city it is today – the greatest in the world.
“We should be worried about the threat to the very values that underpin our success and our ability to withstand adversity. More and more, we see the politics of “us” versus “them” seeping into our national discourse, and into the politics of the US and countries across Europe. We cannot allow it to take hold here in London. So, for as long as I’m Mayor, I promise to work to protect London as a city that’s inclusive and outward-looking. A city that’s open to new opportunities to increase trade, investment and access to talent. And a city where we keep the promise of opportunity alive for the next generation – so that we can continue building better, fairer London for everyone.”