The Mayor of London pointed to new research that says re-entering the bloc could boost London’s economy by £2.9 Billion a year reports Kumail Jaffer, Local Democracy Reporter
The Mayor of London has urged the new prime minister to forge closer relations with the European Union after new research showed that re-entry could boost the capital’s economy by £2.9billion annually.
A new independent study, commissioned by Best for Britain and seen by the Local Democracy Reporting Service (LDRS), suggests reinstated EU membership could deliver a major economic boost due to gains in trade, investment and protection against US tariffs.
Sir Sadiq Khan said the research was “yet more proof” that the whole UK should be “moving towards closer alignment” with the bloc – though government sources made clear that red lines over rejoining the EU, customs union, or single market remain in place.
The study, carried out by Frontier Economics, calculated the benefits of different scenarios by estimating the change in Gross Value Added (GVA), which measures the value of goods and services produced in an industry, sector, or region.
EU membership would see a GVA boost of 0.52 per cent for London, compared to a stand alone customs union, which would see a change of 0.12 per cent, or a food and drink deal, which would only see an addition of 0.08 per cent.
The research comes as US President Donald Trump announced the imposition of tariffs – import taxes – on 60 trading partners, including the UK and EU. However, the EU has a 10 per cent all-inclusive deal for tariffs on its goods, while the UK is facing 10 per cent universal tariffs on top of any duties imposed on individual goods.
A spokesperson for the Mayor of London told the LDRS: “This is yet more proof – as if it was needed – that Brexit has weakened growth, pushed up the cost of living, and left the London and UK economy smaller than it would otherwise have been. It has been an act of enormous economic self-harm for the UK.
“While London remains the UK’s strongest economic region, Brexit has constrained our ability to deliver the additional growth, jobs and productivity that the capital city should be driving.
“The mayor is clear that we need a serious reset in our relationship with the European Union. We should be moving towards closer alignment, including re-joining the customs union and single market and giving the public a say on our long-term future with Europe at the next general election. A closer partnership with the EU would help unlock growth, raise living standards, and support the industries that keep our city and country moving.”
Naomi Smith, chief executive of Best for Britain, added: “A global cultural hotspot, bustling trade hub and financial centre, London is unquestionably a thriving world city and a vital engine of UK-wide growth, but it’s still punching far below its weight. As a new prime minister, Andy Burnham now has a chance to transform London’s fortunes, put money back into people’s pockets and help business flourish.
“Both the public and the data are clear: as this research sets out, EU membership is the quickest and the most popular way to supercharge our capital to reach its full potential.”
London’s MPs also threw their weight behind the campaign to rejoin the EU a decade after the Brexit vote, with Labour’s Marsha de Cordova saying close cooperation was a “practical route to the growth and security that this country needs”.
Liberal Democrat MP for Twickenham Munira Wilson said London’s “world-leading sectors” were “paying a devastating price for a broken relationship with Europe”, adding: “It’s time to repair those ties, slash the bureaucracy, and get London’s economy firing on all cylinders again.”
London’s voters overwhelmingly opted to remain in the EU in 2016 by a margin of 59.9 per cent to 40.1 per cent who wanted to leave.
Recent polling from YouGov has found that 61 per cent of voters still support UK membership of the EU, with just 26 per cent now opposed. Less than three in 10 support keeping the UK-EU membership as it is now.
A government spokesperson told the LDRS: “We are building a closer and ambitious relationship with our largest trading partner as we work towards the next UK-EU Summit.
“Our red lines remain clear: we are not rejoining the European Union, and there will be no return to the customs union, the single market or freedom of movement.”
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