In a world in which there is way too much pandering to “red wall” voters in the north of England, it was a great relief to hear simple economic truths and common sense on Brexit from Mayor of London Sadiq Khan last week.

Mr Khan, in a speech to the London government dinner last Thursday at the Mansion House, highlighted the damage already caused by the Conservatives’ hard Brexit while also laying out easy and obvious ways to address the situation.

In so doing, the Labour Mayor put himself at loggerheads with party leader Sir Keir Starmer, thus delivering a breath of fresh air.

Mr Khan declared: “We need greater alignment with our European neighbours – a shift from this extreme, hard Brexit we have now to a workable version that serves our economy and people. That includes having a pragmatic debate about the benefits of being a part of the customs union and the single market.”

It most certainly should involve such a debate.


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The Conservatives decided in the immediate wake of the Brexit vote – even though the public had not been asked for a view on the specifics of leaving the European Union – that exiting the single market and customs union was somehow “the will of the British people”.

And Sir Keir, who long seemed to be an ardent opponent of such a view, now appears to have embraced it utterly, in what has looked like a truly remarkable unforced error from any kind of rational economic standpoint.

The Labour leader, sadly, showed absolutely no sign of changing his tune in the wake of Mr Khan’s speech.

Sir Keir said of the UK Government’s Brexit deal: “Of course we will need to repair that.”

However, speaking on the BBC’s Sunday With Laura Kuenssberg programme, he added: “There’s no going back into the EU. There’s no going back into the single market. But I do think there is a case for a closer trading relationship with Europe.”

He also flew in the face of the view of economic experts by expressing a belief that the UK would not always be worse off by being outside the single market.

Asked whether the UK would “always be poorer” outside the single market, Sir Keir replied: “No, so long as we improve on the deal we’ve got, I don’t accept that.”

That is a most interesting take on the situation. After all, the loss of frictionless trade with the world’s largest free trade bloc and ending of free movement of people between the European Economic Area and the UK have already caused enormous damage to the British economy.

This damage was highlighted by Mr Khan in his speech.

The Mayor of London said: “Brexit has already reduced our GDP (gross domestic product) by 5.5 per cent, reduced investment by 11% and reduced goods and services trade by 7%. The hard and extreme Brexit we have is a drag on growth, investment, and trade. It’s holding Britain back. Fixing it would mean the recession would be less painful and less prolonged.

“All told, the estimated cost to the Treasury in lost tax revenues due to Brexit is £40 billion. We simply cannot forgo £40 billion of potential investment in our health service. So, repairing our relationship with Europe would mean we can better support the NHS.”

The reference to the NHS is interesting. Remember that Brexit bus message that seemed to hoodwink quite a few people?


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The figures highlighted by Mr Khan on the effect of Brexit on GDP, investment, trade and tax revenues come from research by John Springford, deputy director of the Centre for European Reform think-tank.

It is worth noting that the estimated lost tax as a result of Brexit is a per annum figure.

Amid all the nonsense that has been talked about Brexit by the Conservative Government, and in more recent times sadly also by Leader of the Opposition Sir Keir, it is notable that Scotland and London are to the fore when it comes to sensible viewpoints on the issue.

This is perhaps no surprise, given the clear view expressed by significant majorities in London and Scotland in the 2016 referendum that Brexit should not happen. Not to mention the huge damage done to London and Scotland in the wake of the Brexit vote, in terms of the hit to trade and a skills and labour shortage crisis fuelled by the end of free movement of people.

Mr Khan criticised the Conservative Government for taking a “vow of silence” on Brexit’s damaging effect and declared that “trying to will Brexit into a success, or simply ignoring its impact, is not a strategy that will deliver prosperity for London or a brighter future for Britain”.

He is absolutely right.

HeraldScotland:

It was also interesting to hear Mr Khan call for London to be given the power to tackle its skill shortages in the wake of Brexit by having some kind of control over immigration. This chimes in broad terms with calls made by the Scottish Government for immigration powers to address needs north of the Border on this front.

Mr Khan said: “The number of businesses in our city experiencing at least one skills shortage has now risen to almost seven in 10. Meanwhile, the number of jobs in our city held by EU-born workers has fallen by over 80,000 – putting huge strain on crucial sectors such as hospitality and construction.

“Devolving powers to London and allowing us to create a regional shortage occupation list would be one way to give businesses the ability to attract and retain talent in the areas they need it most.”

Mr Khan noted the UK’s relationship with the rest of Europe “was, is and will remain our most important” but declared it was in “desperate and urgent need of repair”.


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He added: “Let 2023 be the year we summon up the political courage to rebuild those essential bridges and tear down those needless walls standing in the way of our businesses and our people.”

This, like everything else Mr Khan said on Brexit last week, is eminently sensible. Sadly it looks as if chance would be a fine thing in terms of his wishes being fulfilled given that denial – mainly by the Conservative Government but also to a not-insignificant extent these days from Sir Keir – looks to be the order of the day.

 

HeraldScotland: