London Could Gain £2.9 Billion by Rejoining the EU, Sadiq Khan Calls for Stronger Collaboration with Andy Burnham

Calls for Closer Ties with the EU

The Mayor of London has implored the new Prime Minister to cultivate stronger connections with the European Union following a recent study indicating that rejoining the bloc could enhance the capital’s economy by £2.9 billion each year. An independent analysis, commissioned by Best for Britain and reviewed by the Local Democracy Reporting Service, reveals that renewed EU membership may result in significant economic advantages stemming from increased trade, investment opportunities, and protection against tariffs imposed by the United States.

Sir Sadiq Khan described the findings as “further evidence” that the entire United Kingdom should aim for “closer alignment” with the EU. However, government representatives have reiterated that the established boundaries regarding rejoining the EU, customs union, or single market remain firm.

Economic Implications of EU Membership

The study, conducted by Frontier Economics, assessed the potential benefits of various scenarios by estimating changes in Gross Value Added (GVA), a metric that quantifies the value of goods and services produced within a specific sector or region. The research suggests that EU membership could lead to a GVA increase of 0.52 per cent for London. In contrast, a standalone customs union would result in a mere 0.12 per cent gain, while a food and drink agreement would contribute only 0.08 per cent.

This analysis emerges amidst the backdrop of US President Donald Trump announcing the implementation of tariffs on 60 trading partners, including both the UK and the EU. Notably, the EU has a comprehensive 10 per cent tariff agreement for its goods, whereas the UK faces a universal 10 per cent tariff, compounded by additional duties on specific products.

Brexit’s Impact on London’s Economy

A spokesperson for the Mayor expressed: “This serves as further proof—if any was needed—that Brexit has hampered growth, increased the cost of living, and left the economies of London and the UK diminished compared to their potential. It has been a substantial act of economic self-harm for the UK.”

While London continues to be the strongest economic region in the UK, Brexit has limited its capacity to generate additional growth, jobs, and productivity, which are essential for the capital. The Mayor advocates for a significant re-evaluation of the relationship with the EU, emphasising the need to move towards closer alignment, including rejoining the customs union and single market, and enabling the public to have a say on the long-term relationship with Europe during the next general election. A more robust partnership with the EU, he argues, could unlock growth, elevate living standards, and bolster the industries that sustain both the city and the country.

Political Support for Rejoining the EU

Naomi Smith, Chief Executive of Best for Britain, remarked: “As a global cultural hotspot, vibrant trade centre, and financial powerhouse, London is undeniably a thriving metropolis and a crucial engine for growth across the UK. Yet, it is still underperforming relative to its capabilities. With a new Prime Minister, Andy Burnham has the opportunity to reshape London’s future, restore financial wellbeing for residents, and foster a flourishing business environment.”

London’s Members of Parliament have also rallied behind the call to rejoin the EU, a decade after the Brexit referendum. Labour’s Marsha de Cordova highlighted that close cooperation represents a “practical route to the growth and security that this country requires.” Similarly, Munira Wilson, the Liberal Democrat MP for Twickenham, commented that London’s “world-leading sectors” are suffering significantly due to a fractured relationship with Europe. She added, “It’s time to mend those connections, reduce bureaucracy, and reignite London’s economy.”

Public Sentiment on EU Membership

In the 2016 referendum, Londoners overwhelmingly voted to remain in the EU, with 59.9 per cent supporting continued membership against 40.1 per cent in favour of leaving. Recent polling conducted by YouGov indicates that 61 per cent of voters currently support UK membership in the EU, while only 26 per cent oppose it. Additionally, fewer than three in ten respondents endorse maintaining the current UK-EU relationship.

In response, a government spokesperson stated: “We are working to establish a closer and more ambitious relationship with our largest trading partner in preparation for the upcoming UK-EU Summit. Our position remains clear: we will not rejoin the European Union, and there will be no return to the customs union, the single market, or the freedom of movement.”