12:48

Sadiq Khan has warned that the government is ignoring service industries in the Brexit negotiations and risking significant job losses across the United Kingdom.

Speaking to the public administration and constitutional affairs committee today, the Mayor of London said that the government was wrong to only prioritise a deal on goods rather than a deal on services.

It comes amid a debate within the cabinet and Whitehall over the possibility of striking a deal over the “free movement of goods” as the UK moves towards leaving the EU next year.

The government’s recent proposals for a Brexit backstop agreement, to be used if the new UK/EU trading regime is not in place in time, focus solely on goods and make no allowances to protect the UK’s services’ exports.



Khan told MPs that while the prime minister, Theresa May, has recently outlined her commitment to a single market for goods, excluding services from this is evidence that the government has its priorities all wrong. He said:

Forty per cent of UK exports to the EU are in the service industry. Ninety per cent of the economy in London is in the service sector. I welcome the government announcing there should be a backstop agreement in relation to frictionless trade for goods but it needs to be extended for services as well. The City of London who are not bellicose says they are worried about 10,000 jobs being lost. I think that is a conservative estimate. We can’t afford falling off a cliff edge in relation to trade in services.

During the meeting Khan also disclosed that he is meeting the Brexit minister David Davis once every two months to discuss negotiations - more often than Davis meets representatives from devolved governments in Scotland, Wales and Northern Ireland.

Khan said:

My officials meet with his officials last week and will meet him in another six weeks.

Ronnie Cowan, an SNP committee member, replied: “That’s more than Nicola Sturgeon.”

The UK’s backstop proposal is for the whole of the UK to remain in the customs union for a limited period after the end of the transition period – so it would leave the EU in March 2019 and the single market in December 2020, but stay in the customs union for longer.



Brussels has insisted the UK sign up to a legally binding backstop clause, or fallback option, to ensure there is no hard border.