Brexit 'could affect London transport infrastructure'

City of London skyline Image copyright Getty Images
Image caption Future restrictions on migration could see a "haemorrhage" of EU-origin workers

Investment in London's transport system could suffer from the impact of Brexit if a slump in the property market continues, a think tank has claimed.

Centre for London said commercial property prices in the capital were already falling and a slow-down in the residential sector was predicted.

It said infrastructure works like Crossrail 2 were often dependent on property development.

A City Hall spokesperson said the mayor was "committed" to the projects.

In its report, Centre for London said: "Planned schemes like Crossrail 2 and the Bakerloo line extension are premised on developer contributions.

"On a smaller scale, parks, playgrounds and affordable homes are also funded by private developers as planning obligations, rather than being funded through government grants or borrowing."

There should be guaranteed investment in London's infrastructure "perhaps through government borrowing secured against future tax revenues," the report said.

A spokesperson for Sadiq Khan said the mayor was "committed to building a modern, world-class and affordable transport system, including pushing ahead with exciting schemes like Crossrail 2".

'London-only' work permit

The report Strange Days: London after the EU referendum arose from discussions between a panel of industry experts, academics and researchers shortly after the 23 June referendum.

There are also warnings about the threat to London's economy from future restrictions on migration which might lead to a "haemorrhage" of 600,000 EU-origin workers.

"Mainland Europe does not just supply London's waiters and construction workers, but also many of our bankers, architects, designers, and lawyers."

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Image caption Schemes like Crossrail 2 could be affected by Brexit, Centre for London claimed

The impact was being felt immediately, it is claimed.

"Anecdotal evidence suggested international candidates were already turning down job offers because of uncertainty, and there was a real danger that current EU workers would begin to look for opportunities elsewhere, voting with their feet before Brexit negotiations have brought any clarity to the situation."

The panel said there were strong arguments to explore special arrangements for the capital, including a "London-only" work permit, and more powers for London to meet its own skills and training needs.

"A global city's economy will always require immigrants as well as local skills, but devolution could enable the two to be better linked, through initiatives like matching permits for high skilled immigrants with a requirement for apprenticeships for Londoners."

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Image caption The first Crossrail project is due to come into service in 2018

While London voted 60:40 in favour of remaining in the EU, the proportion voting against indicated a strong sense of "exclusion" which raised concerns about social cohesion.

There was a "worrying poverty gap" in the capital, the report said.

"The city may create wealth, but many Londoners see little of it.

"London is a city where the implicit contract of modern social security is frayed - the city's employment levels are high, but one in five people in working families is poor, compared to 15% in the rest of England."

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