..as Labour’s Mayor of London puts a cost on the catastrophe
A HARD Brexit would cost 500,000 jobs in the UK, a £50billion loss to the economy and increase inequality between London and the rest of the UK, a forecast commissioned by London’s mayor warned.
Inequality caused by a no-deal Brexit would be “noticeably more severe” in Scotland, it added.
The report, for mayor Sadiq Khan, models five possible scenarios for leaving the EU, from a near status quo situation to leaving on World Trade Organisation terms without any transition agreement.
Under the worst option, favoured by many Tories, the UK could see a “lost decade” economic slump.
The report, published by Cambridge Econometrics on behalf of the mayor, states that leaving the single market and the customs union would be “noticeably more severe for the rest of the UK than for London, which implies that the rest of the UK will be much worse off than London following Brexit.”
Ian Murray, Labour MP for Edinburgh South and supporter of anti-Brexit group Open Britain, said: “This report shows exactly how damaging an extreme hard Brexit will be to the whole UK economy, but it also describes how in Scotland it could be a lot worse than in London.
“It says that the economic damage done by leaving the single market and the customs union will be noticeably more severe in Scotland and in the rest of the UK outside London.
“Brexit will make regional inequalities across the UK much worse, and could lead to London sucking in even more regional growth.
“This could cost Scotland investment, good jobs and opportunities.”
Murray added: “To avoid the most destructive effects in Scotland, staying in the single market and the customs union is an absolute necessity.”
Stephen Gethins MP, the
SNP’s Europe spokesman, said: “Sadiq Khan’s impact assessments bring to light the very real hit Brexit will have on the UK’s economy, jobs and livelihoods.
“Every analysis that has been produced shows the importance, if the UK is determined to leave the EU, of staying in the single market and it is time the UK Government recognised that before it is too late.”
The report says that even a softer option, such as the UK remaining in the single market but leaving the customs union after a transition period, could end up with 176,000 fewer jobs by 2030 and a loss of £20billion in investment.
Khan stressed that the figures were indicative, and that a huge number of factors could affect what happens, but that it was the first time such an analysis had been undertaken.
The former Labour MP added: “London does least worst, because we have a higher concentration of high value jobs.
“We are more resilient, more able to recover from economic shock, which could lead to inequalities between London and the country getting worse.
“Whatever scenario we look at, the inequalities between London and the south-east and the country widen, not narrow.”
Khan commissioned the report after the Brexit Secretary, David Davis, told MPs he had not, as had long been believed, ordered central government impact assessments into the potential economic effects of Brexit.
Gethins said: “It is a dereliction of the UK Government’s basic duty that it has been left to those outwith the UK Government to set out bluntly the impact of Brexit.
“The Fraser of Allander institute have already warned that leaving the single market would risk up to 80,000 jobs and £2000 per person in Scotland every year. The Scottish Government will publish their assessment shortly.”