Boris Johnson: what he believed Brexit would mean in 2014

Foreign secretary Boris Johnson, London’s mayor until last May, is sometimes described as an opportunist Brexiter – a man who picked his side in the referendum campaign according to which would best serve his prospects of advancement. A kinder view is that he’s always seen both sides of the In-or-Out debate and made his choice out of carefully measured conviction.

Digging through his back catalogue for my slowly progressing book about his eight years at City Hall, two things increasingly stand out about his views on the European Union: one is his exasperation at what he saw as too much Brussels regulation damagingly eroding UK sovereignty; the other is his powerful belief that if the UK did leave the EU it could thrive in a world of new opportunities.

In August 2014, Johnson delivered a speech at Bloomberg in London to launch a report by his chief economic adviser, Dr Gerard Lyons. Entitled The Europe Report: A Win-Win Situation, it set out four scenarios for London’s economy in 20 years’ time based on different relationships with Europe.

In his speech, Johnson said his favourite outcome would be remaining in the EU but with substantial reforms, including “managed migration”, reformed social and employment law to “minimise costs to all EU businesses” and “a real focus on completing the single market for the benefit of the people and businesses that use it”.

If these changes were made, he said, an “in-out referendum” should then be held in which “I would frankly be happy to campaign for a ‘yes’ to stay in”. It would be “the best option for Britain,” and see London’s economy “almost doubling in size over the next 20 years to £640bn,” Johnson claimed, drawing on Dr Lyons’s report.

But what if those reforms were not secured (and, presumably, any referendum lost)? Johnson said that in that case we should prepare for a new future, one he also found attractive. Here’s what he said about that:

I think we could do that in a friendly way; there is no reason for hostility or rancour on either side. If we got it right, we could negotiate a generous exit, securing EFTA style access to the Common Market – and they would have every motive to do such a deal, given that the balance of trade is very much in their favour. And that combination of a lower regulatory burden and undiminished trade access would cause exports to boom, and the whole thing would be turbo-charged by new trading agreements with major partners such as China, Brazil, Russia, Australia and India. With less red tape for business, and a more competitive tax environment, it has been persuasively argued that British GDP would grow by 1.1 per cent.

Any downsides? Just the one:

Yes, there would be a scratchy period, and yes there would be some short-term uncertainty about FDI [foreign direct investment]. We must accept that.

But, hey:

But they said that before about the Euro, if we didn’t join the whole thing would collapse, that didn’t happen. I believe that over a three to five year period the adjustments would be made; people would realise that London and the UK still offered superb advantages of time zone, language and skills, a massive concentration of talent in financial services.

And just look at that upside:

With our savings in EU budget contributions, there would be £10bn to spend on other things. Parliamentary democracy in this country would have the adrenalin shock of rediscovered importance and for all those who find this sort of talk alarming, I really believe that the whole EU question is no longer as pivotal for Britain as it was. By the time I am 90 it is calculated that the EU will have shrunk from 20 per cent of global GDP to 9%.

So that was the Johnson projection for London and the UK if they came out of the EU: a generous, friendly exit; “EFTA-style” access to the “Common Market”, which remaining EU states would surely favour; less regulation; new trade deals with booming economies elsewhere; £10bn to “spend on other things”. And all for the price of a three-to-five year “scratchy period”.  Two-and-a-half years later, we are going to start discovering if these things will come to pass.

Gerard Lyons’s Europe Report and Johnson’s speech about it can be read via here.

 

 

 

 

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