It is estimated that there would 43,000 fewer jobs in UK construction if negotiations for the country’s departure from the Europe (Brexit) ended up with a no-deal scenario – what is being called hard Brexit.
Independent economic analysis commissioned by Mayor of London Sadiq Khan looked at five Brexit scenarios, and is said to have shown that Brexit could lead to a lost decade of lower employment and economic growth.
If the UK leaves the European Union in March 2019 with no deal on the single market, customs union or transition arrangements – which Khan said remained a real possibility “given the short amount of time left to secure a deal and the government’s mishandling of the negotiations to date” – there could be 482,000 fewer jobs in all across the entire UK, together with 15%, or £46.8 billion (€52.66 billion), less investment than if things remained the way they were.
The independent analysis found that there could be 43,000 fewer jobs in construction as a result of a hard Brexit.
It added that even much softer Brexit scenarios, such as the UK remaining in the Single Market but leaving the Customs Union after a transition period – the so-called Norway option – could still result in 18,000 fewer jobs in construction.
In this scenario, there could also be a loss of £18.6 billion (€20.93 billion) of economic output and £20 billion in investment (€22.51 billion).
The Mayor warned that time was fast running out on the negotiations, as a final deal including the full details of a transitional deal and detailed agreement on the outline of a future trade relationship had to be agreed between the UK government and the EU27 by October this year, in order to be ratified by all EU members.
The analysis of the potential impact of the different Brexit scenarios on London and the whole of the UK was commissioned by the Mayor last year from economic analysts Cambridge Econometrics.
Bad for economy
Khan said the independent research showed that every Brexit outcome analysed would be bad for the British economy, but that the harder the Brexit, the more severe the economic damage could be.
He added that the analysis showed that London’s economy would suffer significantly less from Brexit than the rest of the UK.
For London, a no-deal hard Brexit could lead to 5,000 fewer jobs in construction, the research suggested.
Khan reiterated his call for the government to change course in the negotiations. He wants ministers to abandon their hard Brexit approach and instead to push for continued British membership of the single market and customs union.
He said, “This independent analysis reveals the potential economic risks – and human costs – at stake in the negotiations. It should help guide the government to the best outcome for London and the UK.
“The analysis concludes that the harder the Brexit we end up with, the bigger the potential impact on jobs, growth and living standards.”
The Mayor and Cambridge Econometrics pointed out that this analysis was not a precise forecast of what would happen, saying that there were a large number of factors that could impact on these scenarios – not least the details of any final deal with the EU or trade deals struck with any countries.