Taken from the Evening Standard 5 August 2014, Gerald Lyons, Mayor’s Office advisor and economist, stated that’ the time frame over which business looks ahead can only be a few years… in that business model, there is bias towards the status quo, or avoiding unnecessary uncertainty.’ Mr Lyons also quoted from the new ‘Europe Report’, published in Aug 2014 with an analysis looking 20 years ahead and prepared with the help of Volterra economic consultancy. The report stated:
The current size of the London economy is £350B per yr, about a quarter of that in the UK.
1 The Report concludes that the best outlook for the UK and London over the next 20 years would be in a reformed EU. In that scenario, London’s economy could grow to £640B per yr, omitting inflation, so is real growth. This could generate 1M extra jobs in London to 2034.
sleicest comment: The probability of the UK exerting enough influence to achieve a substantially reformed EU is likely to be low, so the probability of this likely benefit value is therefore low. Nick Clegg favours the UK staying in the UK and David Cameron to date favours being seen to ‘go through the motions’ to look like is working to achieve this goal. German & French leaders will likely counter UK influence to achieve reform, if it means any loss in their relative power, or financial cost to their countries ie them having to pay the restructuring cost to help weaker members reform.
2 If UK remained in an unreformed EU, London might only see 200,000 more jobs created to 2034.
sleicest comment: Labour’s default plan? If so, hardly a vote winner.
3 If the UK left the EU, maintained good relations with the EU and adopted outward-looking policies, the London economy would grow to £615B and see 900,000 jobs created by 2034.
sleicest comment: Challenging to achieve over the next 20 years, but with reasonable planning and execution, its probably fairly high, so much of the benefit then becomes realised. Likely to be Boris’s plan, if became Tory leader and PM.
4 Worst scenario is where UK leaves the EU and does so on bad terms with our European neighbours, and does not produce a growth-focused policy. The London economy would only grow to £430B by 2034 and shed about 1.2M jobs.
sleicest comment: The UK abruptly leaving the EU (UKIP’s proposed approach) would achieve this, as EU members likely close ranks to penalise the UK and set an example to deter other EU nations doing similar.