A new reportfrom
London First, the capital’s business voice, found the UK could not hope to use Europe as an ‘a la carte’ menu and had to accept the four freedoms of the single market.
The report comes ahead of the elections for the European Parliament next week, where the Conservatives are promising an in/out referendum on EU membership in 2017.
The report, London and the EU, concluded that the free movement of people “had been overwhelmingly positive for the capital, driving talent and investment”.
The study by London First was driven by a group of influential business leaders, 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 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.
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.”
The report found that London’s heavy reliance on the European single market meant the UK needed to have as strong a hand as possible in Europe.
It also said breaking down barriers to the free movement of services was key to London’s future development and most likely to happen if the UK was part of the EU.
The report noted that immigration had increased competition for jobs, put pressure on real wages and increased demand on public services and housing.
However, it concluded the solution was 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”.