November 17, 2019
Business

Can the City survive Brexit? Sadiq Khan and Priti Patel go head-to-head

Ever since the EU referendum, one of my most important jobs has been to make sure Londons voice is heard and to fight for a Brexit deal that is in the best interests of all Londoners.

Ive been doing this for more than two years now and its what Im continuing to do day in, day out because jobs, livelihoods and our future prosperity is on the line.

It beggars belief that only now has the government finally started to listen to businesses across the country and acknowledge the need to maintain frictionless trade in goods with the EU after Brexit.

Sadly, the proposals to protect this trade in goods – put forward by the Prime Minister in the governments most recent white paper – are complex, untested and needlessly expensive for our businesses. But even more concerning is the fact that the governments latest approach completely fails to meet the needs of our leading service sectors – a concern shared by business leaders in London and around the country.

When you consider how integral these industries are to our economy – and how many jobs they support – this isnt simply reckless, its a total dereliction of duty.

Read more: City of London cuts Brexit job loss estimate

The kind of Brexit now being proposed by the government risks new trade barriers that would damage the ability of our world-leading creative, technology, legal, professional and financial services to do business across the EU. Service industries account for 92 per cent of Londons economy, but they are also vitally important to towns and cities across Britain. They account for around 82 per cent of Birminghams economy, 83 per cent in Leeds, 92 per cent in Manchester and 91 per cent in Edinburgh.

So the governments current plans for Brexit would cause huge economic harm not only here in London, but up and down the country. Increasing the UKs international trade around the world in services is difficult to accomplish. Barriers relating to regulation, the recognition of qualifications and the movement of workers from one country to another are hard to break down.

The Single Market, however, eliminates these barriers for much of UK services exports across Europe – a huge advantage for our services-orientated economy. While the UK has a large trade deficit with the EU in goods, by contrast we presently enjoy a £28bn surplus in services.

The government now risks effectively surrendering the UKs dominance in services trade, with no coherent strategy for how it intends to secure agreement on our future access. This is beyond shameful.

Cities such as Paris, Amsterdam and Frankfurt are working hard to persuade businesses in the financial and professional services to move tens of thousands of jobs – and potentially hundreds of millions of pounds of investment – out of London and the rest of the UK.

Any failure to protect our trade in services would be bad, but its clear there is now a grave risk Britain could crash out of the EU with no deal at all.

Thats why Ive instructed my officials to step up preparations to help manage the potential chaos of a no deal.

The responsibility for a lot of these preparations rests with government. But I will take action where necessary and ensure the needs of London are appropriately addressed.

Read more: Brexiters slam Single Market for goods suggestion

Ill continue to put pressure on the government, for example, to make sure that Londons businesses are properly informed and prepared for Brexit. The government must increase its dialogue with business as a matter of urgency, and I am working with companies to press for this to happen more quickly.

But above all else I urge the Prime Minister to start putting the national interest ahead of her own narrow political interests, and her country ahead of her party. Were now running out of time and nearing the cliff edge.

The government must change course immediately and accept that staying within the Single Market and the customs union is the only way to protect jobs and growth in London and across the UK.

The counter view: Tory MP Priti Patel responds

The British public voted to take back control of our laws, borders and money and any attempt to keep Britain bound to EU rules and controls would defy the democratic will of the people. That means leaving the Single Market and the customs union. As well as ignoring democracy, the doom-mongers re-running Project Fear are talking down our country, economy, businesses and people. Leaving the EU gives our country a fresh start and an opportunity for national renewal. Outside of the controls of the EU, SM and CU we can pursue new trade deals with fast-growing economies across the globe rather than be bound to the EU whose economic power is in decline.

No longer threatened or burdened by the risks entailed by EU membership, the City – with all its brilliance and ingenuity – will thrive as a centre of global capitalism. Access and mutual recognition to financial services with our European friends and neighbours can be secured as we negotiate from a position of strength. With the City of London being the financial lifeblood for so many businesses on the Continent they would not want to face the risks of rewiring their structures.

The government must believe in Britain and our prospects as we seek a level competitive playing field and market access for our strong services sector with mutual recognition. Not being run by remote control by Brussels and with no EU rulebook, Britain can have an economic plan based on prosperity and opportunity with full trade freedom, which will show the world how open markets and pro-competitive regulation is the route to economic freedom and success.

Read more: UK tells Brussels it can control market access after Brexit

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