Wednesday 25 November 2020 4:36 pm

Editorial: No-deal Brexit and London lockdown would compound economic catastrophe

City A.M. believes in London, its people, and its businesses.

It is hard to shake the suspicion that Rishi Sunak’s spending review is a political response to an economic catastrophe. 

Cutting foreign aid because of these exceptional circumstances makes sense. Time to tighten the belts, as they say. But then taking the saving and putting it into a pork barrel levelling-up fund? Those are political choices, not economic ones.

It is now beholden on the Government not to pile on even more economic gloom by failing to agree a trade deal with the EU, or by battering London with too-stringent restrictions. 

Read more: London cannot be kept under lock and key a moment longer

No Deal would not be a disaster, but as today’s official OBR forecasts show, it would have a drastic impact.

GDP would collapse further by 2 per cent on top of the already baked-in Brexit, and the damage would be worst in financial services. 

None of this is wildly new. 

What is new is that the clock is ticking, with less than fifty days to go, and the Government is still arguing with Brussels about fishing – for no obvious reason other than the political optics. 

But political optics seem to be the guiding force behind much of this Government’s work, despite its safe 80-seat majority. 

We remain utterly baffled by noises-off that London could be plunged into Tier 3 restrictions tomorrow. The data doesn’t support such a move, and our hospitality businesses would suffer an almost-fatal blow.

The only reason we can possibly ascertain for London being shut for another month is that the Tory Government wishes not to annoy the Northern voters that put them into office. That isn’t a grown-up way to govern. 

Two political choices have the power to mitigate some of the economic catastrophe that we’re in. Allow London to thrive, and do a deal. Enough politics. Time for pragmatism. 

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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