A new paper by Centre for London has suggested that London urgently needs control over skills, taxes and migration policies so that it can tackle the challenges arising from Brexit.

The paper, Strange Days – London after the EU Referendum, comes exactly one month after the country voted to leave the European Union. In it Centre for London argues that giving London more power over skills and migration policies, infrastructure and taxes would enable the capital to maintain and strengthen its contribution to the rest of the UK.

Skills and Migration

The paper stresses London needs to act now to prevent the loss of its skilled workers to other European cities. Centre for London recommends that:

• Government should immediately make clear the status of existing EU-born residents and those who arrive before the terms of Brexit have been implemented.
• London should fight back against negative international coverage, emphasizing that London is ‘open for business’ through formal campaigns and soft diplomacy of plays, festivals, restaurants and fashion shows.
• The potential for a ‘London only’ work permit should be explored, to enable London to mimic as closely as possible the conditions of freedom of movement.
• London should be able to invest in training its own talent pool, with power to set the skills strategy that the capital needs, and to provide innovative training and employability programmes.

Development and infrastructure

Development and infrastructure are a combined issue; failure to put in place new infrastructure might hasten developers’ decisions to delay new schemes. The paper recommends that London leaders should:

• Work with UK Government to find ways of maintaining investment in London infrastructure, perhaps through government borrowing secured against future tax revenues, through giving guarantees, through direct grants, or through special purpose vehicles to attract the international investment that is currently flowing into property.

Social Cohesion

The paper highlights challenges for social cohesion in a city where 40 per cent of Londoners voted to leave.  There is a sharp contrast between different Londoners, and the challenge of social cohesion has been made more urgent by recent reports of an increase in hate crimes in the city.  Centre for London argues that more should be done to ensure that residents of outer London can share in the opportunities that London has to offer:

• The localisation of local government taxation could be used to cement a new social contract within London.
• In agreeing the distribution of funds, London government could set social cohesion as an explicit objective, and use funding to create a better quality of life for those who have seen only downsides from London’s growth.

Richard Brown, Research Director at Centre for London said:

“A month after the shock referendum result, there is still a lot that remains uncertain.

“London urgently needs control over skills, taxes and migration policies so that it can tackle the challenges arising from Brexit.

“The vote to leave the EU has highlighted the widening gap between those who are doing well from the capital’s global status and those who are not.  Whatever the future holds for London, its success will depend on its ability to create an environment where all citizens can benefit from its growth.”