The report entitled 'a win-win situation' outlines four economic scenarios, with the best seen as staying in a reformed EU and the a close second being leaving the EU on good terms with growth-focussed policies towards Europe and the rest of the world:
The key reforms - which draw heavily from Open Europe's work - proposed in the report are: addressing the relationship between euro ins and outs, liberalising the single market in services, safeguards on the single market in financial services and the position of the City of London, EU budget reform, reducing the burden of social and employment law, and halting over-regulation. The reforms go well beyond what David Cameron has set out so far.
- The best scenario is UK membership of a reformed EU, which could see London’s economy grow in size from £350 billion now to £640 billion over the next 20 years.
- The worst scenario would be where the UK leaves the EU on bad terms and does not produce a growth-focused policy. The report suggests the London economy would only grow to £430 billion by 2034 in this scenario, and see a shedding of about 1.2 million jobs.
- If the UK left the EU, maintained good relations with the EU and adopted outward-looking policies, then the London economy would grow to £615 billion and see an additional 900,000 jobs created over the next 20 years. This is despite the near-term uncertainty that would follow from leaving.
- Being in an unreformed EU, London might see only an extra 200,000 jobs created and growth to £495 billion over two decades.
If reform is not sufficient, the report concedes that withdrawal would create immediate economic uncertainty but this could be mitigated in the longer term if the right policies are pursued. The report suggests that the terms of a Brexit could be defined by the referendum result itself - a close result could prompt a re-re-negotiation rather than an immediate reach for the Article 50 exit clause - you can read the outcome of our 'wargaming' of Brexit here (which the report also references).
The report notes that financial services and insurance are key London industries, comprising 19.8% of GVA, the single biggest sector measured in these terms – how will this be affected in Brexit? The report notes that London has many attributes other than acting as a springboard for access to EU markets but adds that this market access is valuable and could face some extra barriers following withdrawal.
In summary, the report concludes that reform is the best option, but there is little to fear from Brexit.That last point - in addition, to the various reform proposals set out - will no doubt serve to put additional pressure on David Cameron to be more ambitious in his push.
8 comments:
You don't need to be a prophet to work out what is going on.
1. Following the election of Juncker, Cameron has moved from pro-EU to fairly EU-neutral.
2. There is a very large cohort of ex-Tory voters who have switched to UKIP because of Cameron's position on the EU. For them, ‘EU-neutral’ and a 2017 referendum isn’t good enough. Cameron has lost any credibility with EU-sceptics.
3. So UKIP will probably stop Cameron from winning the general election. Cameron might desperately try to secure a deal, but he is toxic to Farage, so no deal will be done.
4. Seeing the opening, Johnson has moved from EU-neutral to EU-sceptic. Farage and Johnson can probably do business together and come to a deal.
It is hard to not be amused by Boris, even if you are aware that his entire life is just a performance. This is just another Act in that performance.
I just wish that this horse trading, manoeuvring and shenanigans would yield something, but I don’t trust any of them anymore.
Cameron is playing a game with the EU. He will say either you make the reforms that I want, or the UK leaves the EUSSR. The EU will not like being blackmailed like that, so they might call his bluff. If they don't play ball, then we leave. If we do leave, can the rest of the EU afford to have a sour grapes attitude, or do they need to trade with us? I think they do need to trade with us. We should be out to trade with them, but without the vast outpouring of red tape which hampers everything that we do, at the present time. This is costing millions if not billions of pounds, and is money down the drain. The EU is a drain on our resources. We don't even know what they do with the money because they don't have the accounts audited. I wonder why that is?
Cameron and Clegg are jumping on UKIP's bandwagon, and it is now on a roll, because at last they can see what the British public really wants: Halt immigration.
Immigration immigration immigration(to paraphrase Tony Blair) has backfired spectacularly. At last people realise that the infrastructure cannot cope. The 'lifeboat' of the United Kingdom is in danger of capsizing.
Another option was forgotten to mention:
Britain to leave a reformed EU, (which would be no big catastrophy either).
EU reform is not the same as pandering to British wishes. Britain may not like every reform, it did not like the election reform (parliamentary power grab) which made Juncker the next EC president. It may not like some reforms in the eurozone which might be necessary. So what?
The EU should not give in to any UK blackmail or threat, but just judge any reform proposals on their merits. If the UK were to rejoin EFTA, no big deal, short of relationships like with Russia, there always will be trade with the UK.
At the end of the day it is very simple the added value of the EU is in the common market (freetradezone). The other stuff imho is at best neutral but more likely a value destroyer.
Which means the more red tape is generated and the more valuedestroying projects (like Euro, Ukraine etc) are started the less the added value will be.
Anyway the UK would be well served to try to move to other places than Europe. Europe is roughly a no growth zone. The less a region you do business with grows the more difficult it will be to grow yourself. It is simply crap relying for 50% for your export on an economic zombie. Too dependent anyway on one partner but even worse when it is the worst partner (growwise) available.
A reformed EU being a good thing for the UK whether it will remain a member or not.
Boris getting back in national politics is very likley good news for the Conservatives. Looks like a more credible Euro-sceptic than Cameron and is simply a popular guy in general. Will take very likely a considerable part of the IP vote back.
We know that Cameron is a liar, even when he makes a 'cast iron pledge'. But will Boris be better? Obviously he could not be worse, but his stance seems finely balanced, not making any pledge either way. Some twerp will fly back from the continent waving a bit of paper and saying 'peace in our time' and pretend to have forced reform; but there will be no reform other than making things worse. Remember Blair's promised reform of the CAP when he gave away billions of our rebate?
@David Horton
Sadly, I can only but agree with you David. Experience has taught me that one just cannot be too cynical when it comes to assessing the behaviour of UK politicians. Boris sees an opportunity and is off to grab it.
@Peter van Leeuwen
I also agree with you Peter to some extent, in that the EUSSR Commissars will definitely see any attempt by the UK to change the status quo in Brussels and the principle of 'Ever Closer Union' as blackmail and an existentialist threat they cannot agree to, rather than a reasonable request for change that might just benefit all the countries of Europe. So, the choice for all concerned is really either a few alterations around the edges here and there to try and allow Dave to save face but generally keep things as they are or a major falling out that could well involve the UK going back to basic EFTA status (hoorah!). Well the UK voters will not let Dave get away with the first option and stay in power (or Ed for that matter); so my bet's on the second and the sooner the better, with Boris's help or otherwise.
@Rik
I also agree that the UK always only wanted the Common Market and no more. The baggage that goes with it increases every day and the effect of unlimited immigration is the big issue that is changing the balance of opinion in the UK against the EUSSR. However Rik, if Dave and/or Boris do not do anything about that (and they cannot without being classed as blackmailers by Brussels) then they will lose power and UKIP will only grow stronger.
@OE
Yes guys, you have been campaigning for certain reforms and the EUSSR badly needs them, with or without the UK staying in harness. However, they are just not enough to do what is required. The EUSSR needs a complete workover with a heavy injection of real democracy. And the UK voter wants control of his/her country back; especially control of its borders. Nothing less will do.
So Boris, off you go mate but do not forget, no half measures will suffice. The Average Englishman will take careful note of what you do and not what you say. We've had enough of snake oil salesmen.
The UK has got to leave. Full stop.
Should we renegotiate then there will come another time soon when we don't like what is going on OR the EU has overstepped its mandate OR we suffer from QMV or whatever.
Personally, I have NO CONFIDENCE whatsoever in our politicians and their ability to tell us the truth or properly manage our Best Interest within the EU.
I have even less confidence and NO trust whatsoever in the bungling idiots in the EU who have brought Europe to its knees and all of us to the brink of war. Undemocratic and unaccountable.
As stated above. No more snake oil salesman.
SC
Interesting, article, but the focus is all wrong. Rather than analyse the balance sheet benefits/negatives, assets/liabilities of Brexit, we must look at what is going to happen; and what will not.
Your options.
1. UK membership of a reformed EU
It matters not whether this is a good option, a stellar option or the best option. It is a ‘not gonna happen’ option. The EU is unidirectional, blinkered but focused. It isn’t that it can’t change; it is simply that it won’t. It’s a matter of self-preservation. It must keep moving towards it ultimate not-so-secret final evolution. Like an oceanic shark, if it sleeps, it sinks.
2. UK leaves the EU on bad terms
As net importers, with EU member states as our biggest trading partner, this option would not be allowed to happen. Business would simply skirt EU rules and bridges would be swiftly built by finance and trade. Pragmatism will reign and EU anti-UK acrimony would be swallowed by mammon. Essentially, there is nothing to be feared by an angry EU after we depart. Mainly because there is no alternative, see 3. below.
3. UK left the EU & maintained good relations
I initially thought that this will become the default position. Now I can’t see it even happening. I doubt that Britons are capable of factoring in the affront of the EU that someone could turn their back on it. Later still, the UK will be hated for what must happen over the succeeding five to eight years.
Here’s why. Despite 2. above, after Brexit, other nations will realise that the unidirectionality of the EU is not in their best interests. Brexit will fuel the feeling of no longer being trapped. The clamour of dissatisfaction will increase, probably from Germany, Sweden, Netherlands & Denmark. A heightened sense of separate identity will resurge in Vlaanderen, Catalunya, Euskal Herria, Breton, Veneta, etc. This sort of national identity is detested by the EU. However, to combat it, and against every instinct for its self-perpetuation, the EU will force itself to reform. The very same reform that might have been enough to keep Britain in the EU.
The effect of this will be to absolutely alienate the UK as the catalyst of this enforced reform. I hasten to add, this it will not alienate us from the EU nations or their trade, but with the Brussels hegemony itself.
So, we have to face facts that we will not have any form of cordiality with the EU.
I’d say; best not worry about it! The EU isn’t a trading partner. The EU member states are.
4. Remaining in an unreformed EU
And salute the blue, 28 starred flag? The EU has an aim of political and monetary union across all member states. It has stealthily gathered powers and statute. The methodology is clever. It begins with interest & support. It then graduates to an advisory role. Moving towards committee recommendation, until finally it passes a law.
There is no democracy there, so what terminology should be levied against a body that gathers and secures power, without formally asking whether it can? Can’t find my thesaurus, but fascist and dictatorship seem to fit the bill.
So remaining in an unreformed EU is not an option.
What does that leave us?
Well, option 5 if you like.
5. Leave the EU, accept that it is livid with us, politely disregard it and let business dictate our relationship with EU members & worldwide.
Nuff said.
This isn’t a crossroad with choices over which we have influence. Circumstances will indicate very clearly that far from being presented with choices, there is only one road. We should plan accordingly, but one thing is certain. We leave the EU and we will never win a popularity contest in Europe again, and even if we had the love child of John Lennon & Lily Allen on vocals, we are destined for nil points at Eurovision for ever.
Because it is what will happen and we will just have to deal with it.
And frankly, it is worth it to be free of Brussels.
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