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Sadiq Khan warns of ‘cost of Brexit crisis’, claims average Londoner faces £3,400 financial blow

Sadiq Khan will warn tonight of a ‘cost of Brexit crisis’, as City Hall claimed that the average Londoner was £3,400 worse off last year because of the UK’s departure from the European Union.

In a speech to the London Government Dinner at Mansion House, the mayor will call for a “new settlement” with the EU to “turbocharge our economy and help raise living standards”.

Research commissioned by City Hall and conducted by Cambridge Econometrics has found that in 2023 the capital’s Gross Value Added (GVA) was £30bn lower as a result of leaving the EU. Across the UK the figure was estimated at £140bn.

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City Hall said that this suggested the average Londoner was £3,400 worse off last year due to Brexit, compared with the average Briton being £2,000 worse off.

In his speech, Mr Khan is expected to say: “It’s now obvious that Brexit isn’t working.

“The hard-line version of Brexit we’ve ended up with is dragging our economy down and pushing up the cost of living.

“It’s making food more expensive, adding to the acute pressures on households and having an ongoing detrimental impact on industries that are crucial to our success – such as hospitality, construction and financial services.”

In addition, the report found that the UK in 2023 had 1.8m fewer jobs compared with a projected scenario in which Brexit did not happen. Within that figure, 290,000 jobs were in London.

The research separately concluded however that Brexit will further widen the productivity gap between London and the rest of the UK over the next decade, due to a larger projected slowdown in GVA growth in the rest of the UK relative to London.

Mr Khan will say that Brexit is “not a peripheral concern that we can leave in the past”, adding that he agrees with Shadow Foreign Secretary David Lammy on the need to build “a closer relationship” with the EU.

A Government spokesperson told the Guardian newspaper three weeks ago that the UK economy has “grown faster than Germany, France, and many European countries” since the departure from the EU.

“We acknowledge there remain some issues and we are listening to businesses and acting on their concerns by working closely with the EU on solutions,” they said.

In December, Chancellor Jeremy Hunt signed a financial services deal with Switzerland, with the Treasury saying the agreement was “only possible due to new freedoms granted to the UK” following Brexit.

But Mr Khan will warn in his speech that London continues to be badly affected by “severe worker shortages” and requires an approach to immigration “guided by facts, not fearmongering”. He made similar remarks at last year’s London Government Dinner.

The mayor will also say that “small-minded politics” threatens the capital’s “precious values and what makes London so special”.

In a passage about the rise of populism, he will add: “More and more, we see the politics of ‘us’ versus ‘them’ seeping into our national discourse, and into the politics of the US and countries across Europe. We cannot allow it to take hold here in London.”

The last line appears to be a reference to Susan Hall, Mr Khan’s Conservative opponent in May’s London mayoral election.

At the start of the year, Mr Khan claimed she was part of the “extreme right”, likening her to Donald Trump and the Dutch politician Geert Wilders – and calling her “someone who has repeatedly promoted divisive and racist content on social media, while attacking women and the Black community”.

A spokesperson for Ms Hall said in response to those remarks: “Susan won’t take lectures on misogyny from Sadiq Khan, nor will Londoners be fooled by these desperate smear tactics after eight years of failure under his mayoralty.

“Londoners deserve so much better in 2024, with less crime and an end to his unfair Ulez expansion, and Susan is determined to deliver it.”

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