A no-deal hard Brexit could cost the UK half a million jobs and £50 billion less investment, according to a study.
Research for the mayor of London Sadiq Khan warned of a “lost decade” of significantly lower growth.
The country could have 500,000 fewer jobs in the worst-case scenario and nearly £50 billion less investment by 2030.
Brexit will have an impact on the lives and personal finances of everyone in the UK. Londoners, and people across the UK, deserve to know what that impact will be. https://t.co/y2BXDroZYB #BrexitAnalysis pic.twitter.com/Zv7OTSaYRc— Sadiq Khan (@SadiqKhan) January 11, 2018
In London alone, there could be 87,000 fewer jobs and the capital’s economic output could be 2% lower by 2030 than predicted under the status quo, it was warned.
The findings were in an analysis of the potential impact of five different Brexit outcomes on London and the UK, commissioned by the mayor last year from economic analysts Cambridge Econometrics.
Mr Khan said: “This independent analysis reveals the potential economic risks – and human costs – at stake in the negotiations.
“If the Government continue to mishandle the negotiations we could be heading for a lost decade of lower growth and lower employment.
“The analysis concludes that the harder the Brexit we end up with, the bigger the potential impact on jobs, growth and living standards.
“Ministers are fast running out of time to turn the negotiations around.
Mayor of London @SadiqKhan says if the UK leaves the Customs Union and single market with no transitional deal "no sector" will escape a "negative impact". He says it's already happening in some areas #r4today— BBC Radio 4 Today (@BBCr4today) January 11, 2018
“A ‘no-deal’ hard Brexit is still a very real risk – the worst possible scenario.
“I’ve released these impact assessments because the British people and our businesses have a right to know the likely impact of the various options the Government are considering on their lives and personal finances.
“This new analysis shows why the Government should now change its approach and negotiate a deal that enables us to remain in both the single market and the customs union.
“It’s astonishing that the Government has failed to do any proper impact assessments on what Brexit could mean for our economy.
“Their complete lack of preparation is irresponsible, leading to fears that they are putting party politics ahead of the national interest.”
The analysis showed that London’s economy would suffer significantly less from Brexit than the rest of the UK.
Economic output across the rest of the UK could be 3% to 3.3% lower by 2030 than it would be if Britain were to remain in the single market and customs union, compared with between 1.9% and 2.1% down in London, which would widen “geographic inequalities”.
The worst-affected key sector in a no-deal hard Brexit would be financial and professional services, which could have up to 119,000 fewer jobs nationally, said the report.
There could be 92,000 fewer jobs in science and technology, 43,000 in construction and 27,000 across the creative sector, according to the study.
Even a softer Brexit, such as the UK remaining in the single market, but leaving the customs union after a transition period – the so-called Norway option – could result in 176,000 fewer jobs, the report added.
Ben Gardiner, director of Cambridge Econometrics, said: “This is the first time that the various impacts of Brexit – trade, investment and migration – have been comprehensively assessed across a number of key indicators and sectors at sub-national level.
“Our analysis is particularly valuable to local leaders because it indicates the potential impact on employment and output of Brexit under a range of scenarios, which is necessary given the uncertainty surrounding the final outcome of negotiations.”
Jasmine Whitbread, chief executive of business group London First, said: “The economy is stuck between a rock and a hard Brexit.
“Leaving the EU will come at a cost and, with many businesses about to make decisions about where they will invest and grow, it’s time the Government stopped its ministerial reshuffling and internal politicking and instead set out a coherent plan for continued market access and tariff-free trade with Europe.”