Clegg denounces premier’s decision

Reuters/London

Prime Minister David Cameron’s pledge to reform Britain’s role in the European Union and seek voters’ backing in a referendum before the end of 2017 will undermine the fragile UK economic recovery, his pro-EU deputy Nick Clegg said yesterday.

“Years and years of uncertainty because of a protracted, ill-defined renegotiation of our place in Europe is not in the national interest because it hits growth and jobs,” the deputy prime minister told BBC television after Cameron gave a long-awaited speech on EU policy in London.

“The overwhelming priority of the British people is jobs, is growth, is a strong economy,” Clegg added.

Clegg, who leads the junior coalition partner, the centre-left Liberal Democrats, has previously attacked Cameron’s goal of clawing back powers from Brussels, describing it as a “false promise wrapped in a Union Jack”.

Meanwhile, the leader of the main opposition Labour Party said Cameron was taking a “huge gamble” with the economy by pledging to renegotiate Britain’s role in the European Union and then call a referendum on any changes.

“He is going to put Britain through years of uncertainty and take a huge gamble with our economy,” Labour leader Ed Miliband told parliament.

“He is running scared of UKIP (the anti-EU UK Independence Party), he has given in to his party and he can’t deliver for Britain.”

Cameron was putting party political interests before the national interest, he added.

Earlier the leader of a British anti-European Union party said Cameron’s promise to give Britons a vote on leaving the European Union was letting “the genie out of the bottle.”

“All he’s trying to do is to kick the can down the road and to try and get UKIP off his back,” said UKIP leader Nigel Farage.

Gamble could strangle economy: business chiefs

Reuters/London

Leading British business figures warned Prime Minister David Cameron yesterday that his plan for an in-out referendum on the European Union membership was a risky gamble that could damage the economy and throttle foreign investment.

Speaking after Cameron’s call for a vote by 2017, business leaders in London and at the World Economic Forum in Davos said Britain’s $2.5tn economy would face uncertainty now that its future position in the 27 country-bloc was in question.

“Having a referendum sometime between 2015 and 2018 creates more uncertainty and we don’t need that,” Martin Sorrell, the chief executive of the world’s largest advertising group WPP, said in Davos.

“If I’m looking at it from the point of WPP, it is not good news,” he said, of the group that employs 162,000 people across 110 countries. “This is a political decision. This is not an economic decision. You added another reason why people will postpone investment decisions.”

Investors and CEOs worry that Cameron could fail to secure a new settlement with the European Union, and that whether he does or not, he is tied to a referendum that could see voters demand an EU exit that would wreak havoc on trade ties.

“It’s an extremely high risk strategy,” said Phillip Souta, director of Business for New Europe (BNE), a group formed by companies to make the case for Britain to staying in the EU. “If you have a full in-out referendum in 2017, then it is impossible to ignore the uncertainty.

“You can’t have your cake and eat it. You can’t have this full in-out referendum without risking potentially quite severe damage to the British economy and people losing their jobs if investment decisions aren’t made in our favour.”

In an attempt to counter rising anti-European sentiment in Britain, leading business figures from Sorrell to Virgin Group’s Richard Branson have started to speak out about the ramifications of Britain slipping out of the EU.

“I am deeply disturbed,” Peter Sutherland, a former chairman of BP, WTO director general and European Commissioner for Ireland, said. “It’s an appalling speech in my view.”

“Seeking a new settlement for Britain is bound to create a great deal of uncertainty, which is not good for business. It will take years to negotiate, if there is one at all.”

Some business groups such as the Confederation of British Industry, which speaks for some 240,000 businesses, and the British Chambers of Commerce, which represents firms that employ over 5mn people, said the threat of withdrawal would give Cameron a strong hand in talks.

But they accept that the five-year wait would increase uncertainty and undermine investment in a Britain whose economy is stagnating.