London and the EUMay 15, 2014
The UK needs to be at the heart of the EU if London is to flourish in the future, according our new report, published today.
‘London and the EU’ has found that the UK cannot hope to use Europe as an ‘a la carte’ menu and must accept the four freedoms of the single market. This includes the free movement of people, which the report has concluded has been overwhelmingly positive for the capital, driving talent and investment.
The study driven by a working group of London First members*, including heads of some the capital’s largest companies across a range of sectors, from financial, legal and profession services, to manufacturing and tech.
It has found that access to the single market – particularly for services – while maintaining a position of maximum influence within the EU was the most potent combination for London.
It concludes that:
– London’s heavy reliance on the European single market meant the UK needed to have as strong a hand as possible in Europe;
– Breaking down barriers to the free movement of services (around 800 activities are currently regulated) was key to London’s future development and most likely to happen if the UK was part of the EU;
– Unlike New York or Hong Kong, London does not have a large domestic economy to take advantage of, making effective access to the Single Market all the more important;
– The free movement of people had been a vital part of London’s success, driving talent and investment to the capital.
The report notes that immigration had increased competition for jobs, put pressure on real wages and increased demand on public services and housing.
However, it concludes that the solution is not for the UK to try to secure a highly unlikely opt-out from the free movement of people or leave the EU altogether, but to vigorously implement a programme to mitigate the adverse distributional and social effects of immigration.
Baroness Jo Valentine, Chief Executive of London First, said:
“One of the main reasons companies come to London is because the city is a springboard to Europe – the biggest economy in the world.
“If we are left outside the EU after a referendum we would no longer be able to offer that prize to businesses and London would suffer because of it.
“Take the service sector where London is particularly strong. There about 800 different services which are regulated in the EU, but only a handful of qualifications are automatically recognised in other EU countries.
“Breaking down these barriers will benefit London businesses by opening up new markets and creating job opportunities in a range services from architects and photographers, to barmen and chambermaids.”