Andrew Dismore

Following on the Prime Minister’s announcement that next Wednesday she will give the EU notice under Article 50, that Britain is to leave the EU, at Mayor’s Question Time today, Labour London Assembly member for Barnet and Camden Andrew Dismore AM questioned the Mayor on the impact this will have on London. (See clip here)

After asking the Mayor to outline the immediate Brexit challenges for London, Mr Dismore continued by raising the problems for small businesses that would be caused by leaving the single market; and demonstrated how the small print of the Conservatives’ recent budget actually proves they will keep high levels of immigration, despite their election promise to reduce it to the’ tens of thousands’.

In response the Mayor said that the Prime Minister’s statement, that ‘no deal is better than a bad deal’ would mean we end up on World Trade Organisation rules and tariffs, with serious implications for London.

Mr Dismore added:

‘The Prime Minister says the UK is leaving the single market. Is it unsurprising, therefore, that without the single market, SMEs in particular are faced with increased costs and bureaucracy: they told the Economy Committee the worry is that if “they had to do 33 different Value Added Tax (VAT) returns and things like that”; and with the pound falling 17% against the Dollar and 11% against the Euro, making  it one of the worst-performing currencies in the world, is it also unsurprising that the Federation of Small Businesses told the Economy Committee that:  “We have members on long-term contracts that are now selling at less than they are paying for the goods if they add it all up”.

‘Only yesterday, the FSB published a report that the top priority market for small firms is still the EU single market. Do you agree that the loss of the single market, the collapsing value of the pound, and the economic uncertainty all due to Brexit are bad for London’s businesses?

‘It is the case, isn’t  it, that the Conservatives’ obsession with cutting immigration is at odds with the needs not just of London’s economy, but also their own economic forecasts? Chancellor Hammond failed to mention in his Budget speech that the Office for Budget Responsibility’s projections are based on the assumption that Brexit will not reduce immigration to the Tories’ desired ‘tens of thousands’ but that at best from the Brexiteer’s viewpoint, net immigration will fall to 185,000 by 2021.

‘As the OBR clearly seems to accept, even if leavers don’t, it is the overwhelming case, isn’t it, that London needs the talents of migrant workers, in the City, in tech, in construction, in our NHS, in our care homes, our hospitality industry, in virtually every sector, and if the Government doesn’t recognise this, then they will kill off the golden goose that drives not just London’s economy, but the nation’s economy too?’

The Mayor said that City businesses were already planning to move jobs. Loss of the single market is potentially catastrophic for London businesses and no one voted to make us poorer. SMEs are experts in their own businesses, and their concern over the consequences of tariff and non-tariff barriers should be heard. The FSB, CBI and Chamber of Commerce all have expressed real concern about the Government’s tactics.

The Mayor also added that If cuts in immigration turn off economic growth, we will all suffer. On the Government’s migration target, London’s share would be 38%, at best 38,000 workers. Construction alone has 50% of workers born outside the UK, with 10-15% of UK born workers retiring in the next 5 years, meaning that with that number we couldn’t fill construction vacancies, never mind adding in all the other sectors. It is not realistic and he is lobbying Government on it. London was the only English region to vote to remain and London needs and wants migration. If London is not successful, the rest of the country will suffer; we account for ⅓ of the country’s growth and ¼ of all taxes.