Nearly 500,000 jobs under threat from ‘no deal’ hard Brexit

New analysis shows that Brexit could lead to a lost decade of lower employment and economic growth, and in the worst case a no deal Brexit scenario could mean 87,000 fewer jobs in London alone by 2030.

According to expert independent economic analysis commissioned by the Mayor of London, Sadiq Khan, a no deal hard Brexit could lead to a lost decade, or even longer, of significantly lower growth, with the country potentially having 500,000 fewer jobs in the worst-case scenario and nearly £50 billion less investment by 2030 than would otherwise have been the case.

In London alone, there could be as many as 87,000 fewer jobs and the capital’s economic output could be two per cent lower by 2030 than predicted under the status quo.

The findings are in an analysis of the potential impact off five different Brexit scenarios on London and the whole of the UK from Cambridge Econometrics. The document also looks at the impact each Brexit scenario could have on nine key sectors of the economy.

The research shows that every Brexit outcome analysed would e bad for British economy, but that the harder the Brexit, the more severe the economic damage.

It also shows that London’s economy would suffer significant less from Brexit than the rest of the UK. For example, economic output across the rest of the UK could be on average between three per cent and 3.3 per cent lower by 2030 than it would if Britain were to remain within the Single Market and Customs Union compared with between 1.9 per cent and 2.1 per cent down in London. This would widen geographic inequalities across the UK.

If the UK leaves the European Union in March 2019 with no deal on the single market, customs union or transition arrangements, there could be 482,000 fewer jobs across the entire UK, together with 15 per cent - or £46.8 billion - less investment than with a continuation of the status quo.

The UK’s economic output could fall by three per cent by 2030 - the equivalent of £54.5 billion.

There could be 92,000 fewer jobs in science and technology, 43,000 fewer jobs in construction and 27,000 fewer jobs across the UK’s creative sector.

Even much softer Brexit scenarios could result in 176,000 fewer jobs than there otherwise would have been UK-wide.

The Mayor warned that time is fast running out on negotiations, as a final deal including the full details of a transitional deal and detailed agreement on the outline of a future trade relationship must be agreed between the UK government and the EU 27 by October this year in order to receive ratification from all EU members.

Sadiq reiterated his call of the government to change course in the negotiations. He wants ministers to abandon their hard Brexit approach and instead to push for continued British membership of the single market and customs union.

Sadiq Khan, Mayor of London, said: “This independent analysis reveals the potential economic risks – and human costs – at stake in the negotiations. It should help guide the government to the best outcome for London and the UK.

“If the government continue to mishandle the negotiations we could be heading for a lost decade of lower growth and lower employment.

“The analysis concludes that the harder the Brexit we end up with, the bigger the potential impact on jobs, growth and living standards.

“Ministers are fast running out of time to turn the negotiations around. A ‘no deal’ hard Brexit is still a very real risk – the worst possible scenario.

“I’ve released these impact assessments because the British people and our businesses have a right to know the likely impact of the various options the government are considering on their lives and personal finances. This new analysis shows why the government should now change its approach and negotiate a deal that enables us to remain in both the single market and the customs union.

“It’s astonishing that the government has failed to do any proper impact assessments on what Brexit could mean for our economy. Their complete lack of preparation is irresponsible leading to fears that they are putting party politics ahead of the national interest.”

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