Bloomberg News

Cameron’s EU Speech Puts U.K. Economy at Risk, Cable Says

January 16, 2013

Business Secretary Vince Cable will say Prime Minister David Cameron would put the U.K. economy at risk if he raises the prospect of a British exit from the European Union.

Cable, a Liberal Democrat member of Cameron’s Conservative- led coalition, will say in a speech today that while there’s a case for a referendum on the EU, announcing it years in advance will create uncertainty and discourage businesses from investing. At the same time, Douglas Alexander, foreign affairs spokesman for the Labour opposition, will say Cameron’s hand has been forced by his own lawmakers.

Cameron will tomorrow give a speech in the Netherlands in which he’ll call for the U.K. to get powers back from the EU. He’s signaled he wants to put any renegotiation of Britain’s membership to a popular vote after the 2015 general election, a process critics warn could lead to Britain leaving the 27-nation bloc altogether.

“This is a terrible time to have the diversion and uncertainty which a buildup to a referendum would entail,” Cable will say in a speech in central England, according to his office. “At a time of extreme fragility in business confidence, such uncertainty would add to the sense of unresolved crisis.”

Cable’s words echo Liberal Democrat leader and deputy prime Minister Nick Clegg, who said Jan. 15 that talk of Britain quitting the EU could have a “chilling effect” on the economy.

The business secretary will also question the premise of Tory calls for a renegotiation of membership. “The euroskeptic calculation is that British permission is necessary for closer integration and that this permission can be traded for the negotiating objectives,” he’ll say. “That seems to me a dangerous gamble to make. There are many in Europe, notably in France, who would be happy to see the back of the U.K.”

Alexander, too, will say that talk of a referendum now will damage business confidence.

“The real tragedy of tomorrow’s speech is that David Cameron’s party won’t let him address the undoubted need for change in the EU in a sensible way,” Alexander will say. “For many in his party, getting David Cameron to commit now to an in- out referendum is not about securing consent. It is about securing exit.”

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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