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British EU exit better than status quo: London report

A report commissioned by London Mayor Boris Johnson has concluded that a British exit from the European Union would be better for the city than remaining in an unreformed EU
A report commissioned by London Mayor Boris Johnson has concluded that a British exit from the European Union would be better for the city than remaining in an unreformed EU

A report commissioned by London Mayor Boris Johnson has concluded that a British exit from the European Union would be better for the city than remaining in an unreformed EU.

Johnson is likely to give his backing to the report in a speech this week to launch the document, The Sunday Telegraph and The Sunday Times newspapers said.

The Conservative mayor is to address a business audience on Wednesday.

The report, by banker Gerard Lyons, contains eight demands for reform that go beyond the ambitions set out by Prime Minister David Cameron.

If the Conservative leader remains in Downing Street after the May general election, he intends to renegotiate London's relationship with Brussels then hold a referendum by the end of 2017 on whether Britain should remain in the EU.

"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.

"But if, as an alternative, the UK leaves the EU on good terms, while adopting sensible outward-looking trading policies, that comes a very close second.

"Britain can only achieve meaningful EU reform if it's serious about leaving," he added.

"Our detailed study shows it's definitely a viable option for the UK to be outside the EU."

The Sunday Times quoted an unnamed source close to Johnson as saying: "Boris favours a renegotiation in which we stay in and complete the common market.

"He believes that is achievable by being bold about that renegotiation and not having that fear about leaving. If voters say that's not enough and we leave, the longer-term aspects of that are not as damaging as people might imagine."

The Sunday Telegraph said Lyons' report found that London had a gross domestic product (GDP) of £350 billion ($590 billion, 440 billion euros) -- around a fifth of the British economy.

It said that could be expected to rise to £640 billion by 2034 if Britain stayed within a reformed EU oriented towards trade with growing markets outside the 28-member bloc.

It would still expand to £614 billion if Britain left to pursue its own trade-friendly policies, the report said.

But if Britain stayed in an unreformed EU, London's GDP could be expected to grow to just £495 billion over the same period, while leaving the EU but failing to adopt a more outward-looking trade policy would limit it to £430 billion.

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