The capital’s workforce could be “significantly diminished” and its exports to the European Union reduced as a result of the government’s approach to Brexit, according to a leading cross-party think tank.
London is identified as one of the parts of the UK most vulnerable to the risks of the “hard Brexit” approach implied by prime minister Theresa May’s stated bjectives for the negotiations for leaving the EU, a process she triggers today.
Entitled Making The Most of Brexit, the report from Demos says that 17% of London’s workers come from other EU nations and that London exports just over 40% of its goods to those nations.
Only Wales and Northern Ireland are thought more susceptible to a “hard Brexit” than London, due largely to their high dependency on EU funding, with the North-East of England, a big exporter to the EU, joining London in the second rank.
The report argues that the government’s Brexit approach may be hindered by a failure to adopt a broad negotiating strategy that fully recognises “both the opportunities and risks involved” and that enables a “co-operative and flexible approach” drawing on the expertise of stakeholders such as devolved national administrations and city regions.
London Mayor Sadiq Khan has called repeatedly for London to play a substantial role in the Brexit process since last June’s referendum result, in which the capital voted to remain by 60% to 40%.
He has stressed the need to protect London’s status as centre for global finance and, in partnership with London business groups, explored options for a bespoke London work visa, which would help the capital’s employers to continue recruiting from EU nations after Brexit.
In a speech in Brussels on Tuesday, Khan asked citizens of fellow EU nations to urge their leaders to avoid a “hard Brexit” and said that London would always consider itself “part of the European family”.
Khan is said to enjoy a good personal relationship with Brexit minister David Davis, though other Remainers have expressed fears that a closed, “hard Brexit” government line preoccupied with lessening immigration will not serve London well.
The Demos report follows work by the cross-party London Assembly economy committee published last month which concluded that there is “a significant risk to the London and the UK economy” if employers heavily dependent on EU workers from outside the UK, notably in construction, hospitality and health and social care, lose access to them post-Brexit.
Read the Demos report here and a summary of it here.