Heading for the Exit?



Now I'm not in favour of leaving the European Union (EU), but it seems to me that if the UK Government is serious about arguing for a major reform of EU institutions and the way things currently operate, then you have to be willing to leave the club unless future negotiations bring about significant change. 

Because that is the logic of the position that the Tories have got themselves into and Boris Johnson is right, I think, to spell out that a hard-nosed negotiating strategy is required and even that may not be enough to persuade other EU countries that they cannot afford to let the UK to walk away.   

Sadly this seems to be the view of the majority of the electorate in England and Wales who would almost certainly vote to leave the EU if a referendum were held now, and may still do so if one is held in 2017, as the Tories have pledged if they win the next general election.    

Boris warns PM: be ready to leave EU

Only way to win reform, says mayor


Tim Shipman - The Sunday Times
The mayor of London will say the UK should “not be frightened” of quitting the EU

BORIS JOHNSON will warn David Cameron this week that he must be prepared to leave the European Union if he wants to get a better deal from Brussels.

In what will be seen as a throwing down of the gauntlet, the mayor of London will say the UK should “not be frightened” of quitting the EU.

Johnson’s position is in stark contrast to Cameron, who has repeatedly insisted that he wants Britain to stay and is prepared to lead the “in” campaign during the referendum expected in 2017.

With expectation growing in Tory circles that Johnson will announce a return as an MP next year, he will on Wednesday endorse a report by his chief economic adviser, Gerard Lyons, which has concluded that quitting the EU would be much better for Britain than remaining in on the current terms.

Johnson will back Cameron’s plans to renegotiate Britain’s relationship with Brussels before an in-out vote and he will argue that the UK can secure a good deal.

But Tory sources say the mayor has privately told Cameron that he needs to give himself more “ammunition” to get what he wants out of the renegotiation by leaving the door open to an exit from the EU.

In an interview with The Sunday Times, Lyons said: “The UK can only achieve serious reform if it is serious about leaving. It can only be serious about leaving if it believes this is a better outcome than the status quo of staying in an unreformed EU. This report concludes that that is the case.”

Cameron has outlined a five-point plan for renegotiation and says he will not be budged from it by his Eurosceptic critics. It includes a crackdown on benefits tourism and exemption for the UK from “ever-closer union”.

But the report, commissioned by Johnson, will outline eight key reforms Cameron should seek, which go beyond what he has already demanded — something likely to be seen as the mayor attempting to press the prime minister to go further.

A source close to Johnson said the UK must be “bold” in its demands. “Boris favours a renegotiation in which we stay in and complete the common market,” the source said. “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.”

Johnson’s aides stressed that he had commissioned rather than written the report and insisted that he was not seeking to contradict Cameron. But in a 15-minute speech, at Bloomberg’s London headquarters on Wednesday, he will endorse its main findings.

His intervention was hailed by Eurosceptics last night as a breakthrough. They have demanded that the prime minister toughen his stance on withdrawal from the EU.

Sir Gerald Howarth, a former defence minister, said: “This is a subject on which Boris has considerable ex–pertise. We need an open and honest debate and this is a valuable contribution to it.

“The art of negotiation is not to give away your hand but our hand has been given away by announcing that we won’t leave. We’ve got to negotiate but if that fails we should not be scared of leaving. If our options are being further strangled by the EU or to take our chance in the world I think it’s a no brainer.”

Bernard Jenkin added: “The important thing about this paper is that it shows that staying in on anything like the present terms is bad for Britain.”

Johnson has repeatedly irritated Downing Street by speaking out on Europe, most notably at the Conservative party conference in 2009, when he called for an in-out referendum long before it became Cameron’s policy.

The report comes as Johnson’s allies anticipate that he will announce in the next five weeks that he plans to return to Westminster at the next general election. Downing Street has told him to announce his intentions before the party conference season. Tory MPs last night expressed the view that by commissioning the Lyons report, Johnson was seeking to burnish his eurosceptic credentials as a future Tory leader.

Lyons -a former chief economist with both Swiss Bank and Standard Chartered - has concluded that “the best scenario for Britain is to be in a reformed European Union”.

But, he said, a “very, very close second” would be for the UK to leave the EU and strike a new deal along the lines of those enjoyed by countries like Norway and Switzerland. Lyons argues that “Britain is in a much stronger position” than those countries to strike a new deal on advantageous terms outside the EU.

The report, which runs to more than 100 pages, will claim that a reformed EU could generate one million new jobs in London over the next two decades, while leaving the EU and maintaining an outward looking approach to trade with the rest of the world would create 900,000 jobs. By contrast, the status quo in Europe would yield just 200,000 jobs, while the fourth scenario - leaving and retreating into isolation - would cost 1.2m jobs over 20 years.

Lyons said: “What may be the contentious point of this report for some people is that we concluded leaving and having a good relationship with the EU and doing sensible economic policies that are outward looking, is better than the status quo of staying in an unreformed European Union.”

Lyons also challenged businesses to drop their knee-jerk opposition to leaving the EU, pointing out that their fears of instability and uncertainty once made them call for Britain to join the euro.

He said: “There’s often a natural bias towards the status quo and avoiding any unnecessary uncertainty. The City and big business was very pro us joining the euro. In a similar vein, there is now a pro-remaining in the EU stance given the uncertainty and legal complexity of leaving.

“I do talk about the challenges if we were to leave. But the reality of the situation, which comes out of this report very clearly, this is not just about yes or no. You can be in the European Union that turns out to be successful, or you could be in a European Union where you’re basically in a terrible situation.”

One ally said Johnson and Cameron “talk regularly about this. Number 10 are very much aware of the report. They are aware of the publication. They have seen the report.”

Downing Street declined to comment.

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