The Mayor of London, Sadiq Khan, will tonight use a keynote speech to City business leaders to deliver his strongest warning yet about the potential impact of Brexit on Britain’s economy.
Speaking at the City of London Corporation dinner, the Mayor will warn that Britain’s decision to leave the European Union could have the biggest impact on the City of London since the reforms of the 1980s.
He will accuse the Government of being ‘blasé’ towards the impact of Brexit on the City and of ‘shrugging off’ concerns over the ability to attract the best talent from around the world, access to the single market and passporting rights.
Criticising the Government’s current approach to Brexit, he will say:
“Yes, the country voted for Brexit. And of course, that means we’ll be leaving the European Union. But that doesn’t mean unnecessary economic self-sabotage. The Government doesn’t have a mandate to jeopardise our economy or the prosperity of millions of people in London and across the country.
“If the Government continues with a reckless hard-headed, hard-nosed, hard Brexit approach - and we end up losing access to the single market that helps make our financial services industry a world leader – the impact would ripple out far and wide.
He will also make it clear that “for Britain to continue to prosper, we need our financial services industry to continue to prosper too.”
He will say: “If the proper agreements aren’t negotiated, there will be serious knock-on impacts with jobs and billions of revenue lost – something that would hit the entire country, not just London. My motivation is not about protecting old City institutions just for the sake of it or presenting a London-centric approach. It’s about protecting our country’s economy - protecting jobs, promoting growth and safe-guarding prosperity for the next generation.”
The Mayor will use the speech to call on City of London business leaders to join him in stepping up efforts in stressing to the Government and the public the importance of the financial services sector.
He will say: “It’s frustrating - to say the least – that much of what we are saying seems to be falling on deaf ears. So I believe we need to step up our efforts to ensure that the financial industry’s unmatched contribution to our continuing success – and the success of everyone in Britain – is more widely understood and celebrated. Not just by the Government, but by the public too.”
The Mayor will stress the importance of getting a “unique deal” that not only works for London, but Britain and Europe, pointing to the fact that in 2014, banking, finance and professional services contributed £190bn to the economy – nearly 12 per cent of total economic output.
He will say: “I’m confident there’s a deal to be done - a unique deal that works in the interests of London, Britain and Europe. I’ll be putting pressure on the Government to make the case for a proper, sensible solution to this complicated challenge - a solution that ends in an exit from the EU, whilst maintaining the aspects that add strength to our economy. It’s not too late for the Government to take note and set a new tone – a new direction. Going forward, we need to see a more pragmatic position, not the dogmatic political approach we’ve seen from some.
"If we fail to get a good Brexit deal, businesses are more likely to move to New York, Singapore and Hong Kong than to other cities in Europe. Something that would not just be bad for us, but for our European neighbours too. Hard Brexit really is a zero-sum game for Europe. So now it’s time to stop the bluster and to start working towards a deal that can work for everyone - for Britain and for Europe.”
The Mayor is calling for a seat at the Brexit negotiating table and for the UK to retain access to the both the single market and the best talent from around the world.
More than 10 per cent of City workers are from other EU countries and Sadiq is determined to ensure that businesses will be able to retain and attract the very best talent from around the globe, and is urging the Government to reform the system.
The Mayor will also call for the Government to follow his lead by investing in infrastructure projects that will “not only help to reassure investors and stimulate growth, but protect us from the potential economic bumps from Brexit”.
He will say: “The Government will not only be judged on the Brexit deal that is finally negotiated, but on how this delicate period leading up to Brexit is handled. And so far, it has to be said – they are scoring poorly. Because it’s clear that the uncertainty created by the lack of clarity on the Brexit negotiations is making it more difficult for businesses to make important investment decisions.”
He will urge the Chancellor to use the Autumn Statement to boost confidence with a number of measures, such as improving the proposed reforms to business rates and providing a cast-iron commitment to delivering Crossrail 2, the Bakerloo Line extension and improvements to suburban rail services.
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