London flexes its muscles to gain a seat at the Brexit table

As the UK regions take stock after the EU referendum, Julian Francis, looks at London's agenda to remain at the forefront of the global economy and remain a global city.

A developing shibboleth of the results of the European referendum says that there is a significant divide in the United Kingdom between the haves and the have nots, reflected by the level of regional support for the EU. This divide has the potential to further destabilise the country’s political institutions and could lead to the eventual dissolution of the United Kingdom. 

Within all of this, London must not be forgotten.

In both Scotland and Northern Ireland a majority voted to remain, while in England and Wales the vote was to leave. This has led to calls for referendums in those regions for independence from the UK. So concerned is the new prime minister about this possibility that she has already talked to devolved leaders about the implications of Brexit for their nations. 

On 15 July she met Nicola Sturgeon to discuss Scotland's role in the Brexit talks. She told the first minister that she would not trigger the article 50 process until she had agreed a ‘UK approach’; but this would not amount to a Scottish veto. Yet many reports still seem to think Scotland could block triggering the formal process of notification.

On 18 July the PM met the first minister of Wales, Carwyn Jones, in Cardiff. She said she wants the Welsh government to be "involved and engaged" in Brexit negotiations.

On 25 July Mrs May held talks in Belfast with Northern Ireland’s first minister, Arlene Foster, and deputy first minister, Martin McGuinness. She reassured them about the continuation of the ‘common travel area’ between the UK and the Republic of Ireland, saying “nobody wants to return to the borders of the past”.

You could be forgiven for thinking that this is a London versus the regions issue if not for the fact that the capital also voted to remain in the EU by 60%, a figure only slightly behind Scotland’s vote. 

So it should come as no surprise that Sadiq Khan is making it known that London wants a seat at the Brexit table as well. Brexit has strengthened the national case for London enjoying more autonomy, and the mayor is assembling his team to make that case. 

Sadiq Khan knows a truth that could make his goal a reality and that the key role London plays in Theresa May’s government’s success. The new mayor and the newer prime minister, therefore, both have a common interest in ensuring that the capital’s economy survives Brexit. Which is why Sadiq’s banging of the drum for greater London autonomy cannot be ignored by Mrs May. 

Central to this political equation is the fact that London produces nearly a quarter of UK economic output. Although this may not be a pleasant reality to other parts of the country, it remains an economic fact. 

Here’s another one that is just as important. The London economy now generates 30% of the UK’s taxes, according to the Centre for Cities. That may be an unhealthy, unbalanced, unfair, and undesirable situation to many in the country and the government but when the mayor says that a thriving London means a thriving UK he’s not far wrong. 

It is, therefore, with interest that I noted that the mayor has asked LSE professor Tony Travers to reactivate the London Finance Commission to put intellectual muscle on these political facts. 

The London Finance Commission was a Boris Johnson project that, in 2013, produced proposals for allowing London government - both the mayor and the boroughs - to retain and make direct use of more of the property taxes raised in the capital. Its reactivation marks a continuation of previous attempts at getting greater devolution for the capital. 

Sadiq, however, is thinking bigger than Johnson did. He wants Travers and his colleagues to explore London being granted greater autonomy over skills training, housing, business rates, policing, health, and air quality control as well. 

Meanwhile, in the background, arguments are being aired for enabling the Square Mile to keep trading with EU nations as before and for finding a way for London, the heartland of ‘remain’ sentiment, to secure its own special arrangements to allow EU workers to continue to freely come and go.

All of which shows that London, far from being the forgotten child of the remain family, is in fact pursuing a strong agenda to ensure that the city remains at the forefront of the global economy and remains a global city. 

The mayor is determined to loudly make the case but only time will tell if the prime minister is listening.

Julian Francis is director of policy and external affairs at the Association for Consultancy and Engineering.


A comment I feel must be made in relation to this article is to remind people that London is the leading global city of the 21st Century (financially, socially, and culturally). Whilst the article is supportive of that status, what I do find depressing is the aspect where we are tip toeing around the English ‘leave’ vote. It is amazing to find that many people in England who voted ‘leave’ did so out of resentful pique at London’s success. This is not just a question of financial services and trade, it is a jealousy of our confidence, attitude and openness to the world in cultural and social terms. The Brexit vote has had a weird chilling affect on day to day life, which a month later we are starting to get over. Obviously Brexit puts many aspects of London’s economy at risk, notably the impacts on financial services. Potentially there are two scenarios at extremities from each other, one where London gets hit by a ‘hard Brexit’ and ends up hugely diminished on the world stage. The other is an arrangement where the best of our connections with the EU are retained (financial passporting, freedom of movement for people, goods, and services), and we further expand our links with the rest of the world. Those of us in London work very hard, and the dynamism and resiliance of the city is built on that ethic. If the rest of England doesn’t want to be supportive of London’s efforts, and can bring nothing to the table except resentment, then really and truly it may be time to have a parting of the ways (at the least maximum devolution possible) so we can get on with engaging with the rest of the world in the way in which we have been, and continue to wish to do.