The Mayor of London, Sadiq Khan, announced this morning that he has commissioned independent economic analysis of the impact of different Brexit scenarios on Londoners’ jobs and prosperity. The studies — to be published next month — come amid growing confusion over the Government’s own economic analysis of Brexit.
The Mayor has commissioned analysis from independent economic experts Cambridge Econometrics into the impact that different Brexit scenarios will have on nine different sectors of the economy in London and across the UK.
These include financial and professional services, the construction and the hospitality sectors, and science and technology.
The analysis will specifically look at the Brexit impact for key indicators such as economic output and employment for London and the UK. It will also pay attention to the fact that many people working in other towns and cities across Britain are employed by companies that anchor themselves in London in order to do business globally.
In total, five scenarios will be modelled that illustrate the range of possible outcomes of the UK’s future relationship with the EU. These are:
- A ‘status quo’ scenario where the UK remains part of both of the single market and customs union.
- A soft Brexit scenario where the UK remains part of the single market, but not the customs union.
- Another soft Brexit scenario where the UK remains part of the customs union, but not the single market.
- A hard Brexit scenario in which trade between the UK and the EU falls under World Trade Organisation (WTO) rules with a two-year transition period from March 2019; and
- The same hard Brexit scenario but without a two-year transition period.
The Mayor intends to publish the analysis in full in January, and will use it as the basis for a plan to put to Government to mitigate the worst impacts of Brexit on London’s economy.
I am pleased for two reasons. First, this clearly needs to be done. Second, as a non-executive director of Cambridge Econometrics I am proud we have won the work. As Ben Gardiner, Director of Cambridge Econometrics, said:
We are pleased to have been commissioned to undertake the Brexit impact analysis. We firmly believe that modelling exercises such as ours serve a useful purpose by providing a structure to aid thinking and debate, providing some degree of clarity on what is otherwise a very complex issue.
I should add, I have no involvement in the supply of the services.