Brexit Could Cost UK £50 Billion, 500,000 Jobs Warns London Mayor

Sylvain Sonnet/Getty Images

View of Big Ben from the Westminster Bridge in London.

Financial and professional services would be the hardest hit sector with around 120,000 job losses, but the creative, cultural and music industry might also suffer.

Up to 500,000 jobs and £50 billion ($68 billion) in investment could be lost in the United Kingdom, if the country fails to strike a trade deal with the European Union during Brexit negotiations, warns a report commissioned by London Mayor Sadiq Khan.

Financial and professional services would be the hardest hit sector with around 120,000 job losses, but the creative, cultural and music industry would also potentially suffer from a so-called 'hard Brexit' (where the U.K. leaves both the EU single market and customs union), the report claims.

In London, where the majority of the British music industry is based, 87,000 jobs could be lost by 2030. Across the creative and cultural industries as a whole, there would be 27,000 fewer jobs. Meanwhile, the financial impact of a hard Brexit would be the loss of nearly £50 billion in U.K.-wide investment over the next 12 years.  

Softer Brexit scenarios, such as the U.K. remaining in the Single Market (preserving free movement of goods, services and people between EU member states), but leaving the Customs Union could possibly result in around 175,000 job losses across the country.

If no trade deal is agreed, the U.K. would be required to operate under World Trade Organization rules, which raise the possibility of customs restrictions and tariffs on goods, as well as longer border checks for travelers.

Khan said he had commissioned and published the "Preparing for Brexit" report "because the British people and our businesses have a right to know the likely impact on their lives and personal finances."

"This new analysis shows why the Government should now change its approach and negotiate a deal that enables us to remain in both the Single Market and the Customs Union," said the London mayor.

Responding to the findings, Britain's Creative Industries Federation said the report "acknowledges the major danger Brexit poses to our creative and cultural industries and the special challenge London faces in tackling it."

Citing the importance of EU workers and funding programs to the U.K.'s creative sector, the Federation said it was vital to "ensure our future relationship with the EU allows the very best talent to work both here and abroad."

According to umbrella organization UK Music, over 140,000 people are currently working in the British music business.    

In December, a deal protecting the rights of EU citizens living in the U.K. post-Brexit was agreed with the EU, but the future is less certain when it comes to temporary workers or touring musicians.

Leaving the single market -- as Prime Minister Theresa May has vowed to do -- raises the possibility of tariffs and taxes being introduced for British companies trading with Europe (and vice versa), as well as restrictions on the movement of people and staff throughout the EU.

For touring acts that could mean separate and cost-prohibitive working visas for every European country that they visit, as well as tighter border controls and the mooted reintroduction of 'carnets' -- customs documents that require the listing of every piece of equipment included in a touring production.

With the vast majority of vinyl and CDs sold in the U.K. manufactured in European countries, wholesale prices for physical product could also rise, with any increase in import levies likely to cut into record company's profits.

The British government has until October to reach a future trade agreement with the EU, ahead of the U.K. leaving the Union in March 2019