Hard Brexit 'would cost London more than £100bn'

A hard Brexit would cost London over £100bn, while a softer option would cost £58bn.
Jeremy Selwyn
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London boroughs from the suburbs to the City stand to lose billions of pounds from Brexit, new research revealed today.

The impact of a “hard” exit without a trade deal would cost the capital’s economy over £100 billion over five years, while a softer departure could cost some £58 billion.

The impact would be heaviest in the City of London which would lose £22 billion from a 9.5 per cent drop in output in a hard Brexit, according to an analysis of London School of Economics studies by the Liberal Democrats.

But nearby Tower Hamlets, which contains some of the capital’s deepest pockets of poverty, would be next hardest hit, losing some eight per cent of output worth £11 billion.

Even suburban boroughs such as Kingston-upon-Thames, Harrow and Brentwood would be major losers, with output declining six per cent in each, costing up to £1.6 billion to their local areas.

Lib-Dem leader Vince Cable said: “It is not just bankers who will lose out, but Londoners struggling to pay the rent.

Key players: Chancellor Angela Merkel, Theresa May and President Emmanuel Macron laugh together at the EU Summit.
Getty Images

“The government must guarantee our membership of the single market and customs union.”

Mayor of London Sadiq Khan warned that businesses were already making contingency plans to leave the capital because of the lack of clarity over future UK-EU trade.

Responding to the tweet by Goldman Sachs boss Lloyd Blankfein praising Frankfurt as a place to do business, Mr Khan told LBC: “He is articulating publicly what many CEOs, investors and people who love working in London have been saying privately.”

Five major business organisations have called for a Brexit transition deal to be agreed “as soon as possible” in a draft letter for Brexit Secretary David Davis which leaked ahead of schedule.

The letter was reportedly signed by the CBI, British Chambers of Commerce, manufacturing trade body EEF, the Institute of Directors and the Federation of Small Businesses.

It said: “Agreement is needed as soon as possible, as companies are preparing to make serious decisions at the start of 2018, which will have consequences for jobs and investment in the UK.”

Labour MP Chuka Umunna said: “Business groups are understandably alarmed by the Government’s lack of progress. No deal would be devastating for business, for people’s jobs and wages and for national security.”

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