Sunday

25th Sep 2016

UK exit better than staying in unreformed EU, says report

  • London accounts for over a fifth of the UK's economy (Photo: Adolfo PM)

A UK exit is better than remaning in an un-reformed EU, according to an upcoming report commissioned by London mayor Boris Johnson.

But the report, drafted by Johnson’s chief economic adviser Gerard Lyons, also warns an exit could cost London over a million jobs if the City fails to set up new trade policies.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The report set for publication on Wednesday looks at how the City’s economy could develop in the next twenty years under four different scenarios.

The best option is to stay with the EU if it reforms in line with the UK wishes. The second best is to leave but with new outward looking policies of its own in place to buffer job loss.

“The best economic scenario for Britain over the next 20 years is to be in a significantly reformed European Union,” Lyons told the Sunday Telegraph.

He noted a “very close second” option would be to leave the EU on good terms while “adopting sensible outward-looking trading policies”.

“Our detailed study shows it’s definitely a viable option for the UK to be outside the EU,” said Lyons.

The Sunday Telegraph cites figures in the report which indicate that London, at €440 billion, contributes to around a fifth of the UK’s gross domestic product (GDP).

It says London’s GDP would increase to around €800bn by 2034 should Britain stayed in a reformed EU.

An exit on good terms and outward-looking trade policies would boost it to around €770bn while the status quo would result in around €620bn over the next twenty years.

The worst-case scenario is to leave the EU without adopting any outward looking trade policies.

London’s projected growth by 2034, under this scenario, would be significantly less at around €540bn with over a million people in London possibly losing their jobs, reports The Financial Times.

The conservative mayor is set to back the conclusions in a speech on Wednesday on how to reform the EU to the benefit of London.

Johnson, in an a column in the Sunday Telegraph, noted the “costs of EU social policy, the stagnation of the EU economies, the continuing absurdities of some Brussels regulation” as reasons why the UK should leave the EU if it does not reform.

“As it happens, I have no doubt that we can lead the campaign for reform. But if we are going to succeed, we need to build on our alliances, and to appreciate how our friends on the continent see things,” he wrote.

The report comes ahead of British Prime Minister David Cameron promised 2017 EU referendum should the conservatives win next year’s general election.

Cameron has promised to crackdown on unemployed EU migrants and so-called “benefit tourism”.

Cameron’s cabinet reshuffle last month is also seen by some as another indication the UK is distancing itself from the EU.

The move saw him nominate a junior minister for EU commissioner. His new foreign minister, Philip Hammond, has also advocated withdrawing from an unreformed EU.

Balkan leaders pledge to keep out migrants

Balkan leaders said in New York there would be no repetition of last year's mass influx of refugees, as the EU prepares to launch a new border force to keep people out.

Stakeholders' Highlights

  1. GoogleBringing Education to Refugees in Lebanon With the Clooney Foundation for Justice
  2. HuaweiAn Industry-leading ICT Solution Provider and Building a Better World
  3. World VisionUN Refugees Meeting a Wasted Opportunity to Improve the Lives of Millions of Children
  4. Belgrade Security ForumCan Democracy Survive Global Disorder?
  5. YouthProAktivEntrepreneurship, Proactivity, Innovation - Turn Ideas Into Action #IPS2016
  6. GoogleTrimming the Waste-Line: Weaving Circular Economy Principles Into Our Operations
  7. Crowdsourcing Week EuropeDon't Miss the Mega Conference to Master Crowdsourcing, Crowdfunding and Innovation! 10% Discount Code CSWEU16
  8. Martens CentreFighting Terrorism: Do we have what it takes? 26 September, Brussels
  9. ACCAKaras Report on Access to Finance for SMEs in a Capital Markets Union
  10. Centre Maurits Coppieters"I still believe we can change Europe" Said David Grosclaude
  11. World VisionThe Child Protection Index to be Launched in Brussels on 28 September 2016
  12. HuaweiDigital Transformation: Unleashing Europe’s Potential