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18 February 2014

Balls’s pitch to business: Labour can save the UK from EU withdrawal

Shadow chancellor's comments suggest mood in the party is hardening against an in/out referendum.

By George Eaton

Ed Balls’s interview with Progress, in which he says of the Lib Dems: “I’m not going to let them off the hook”, is being presented by some as a retreat from his recent comments on Nick Clegg in my NS interview. But a close reading shows nothing has changed: while remaining fiercely critical of the Lib Dems’ record in government (as he was last month), Balls is still no longer making Clegg’s head the price of any future coalition agreement. As he says: “He made some remarks over Christmas about personalities. I’m not going to get involved in playing personality politics, I have no personal animosity to Nick Clegg.”

Rather than Balls’s comments on the Lib Dems, it’s his remarks on the EU that are most striking. In the course of rejecting the claim that Labour is “anti-business”, he says: 

The most pro-business thing about Labour at the moment is that we are the only pro-European party of government. What the Conservatives have done by putting party interest before national interest is deeply dangerous and actually if you sat around with a group of businesspeople and ask ‘what are you most worried about?’, they’re worried about a Conservative party allowing us to sleepwalk and drift away from Europe. It’s a massively dangerous proposition. Only Labour can save the country from that Conservative anti-Europeanism.

Balls is certainly right that many businesses are far more worried about the threat of EU withdrawal (as a result of the in/out referendum promised by the Tories in 2017) than they are about Labour’s proposed energy price freeze or the reintroduction of the 50p tax rate. Martin Sorrell recently revealed that he and others had told Cameron that “if he were to drop the referendum he would be a shoo-in”. That’s almost certainly not the case (as Sorrell appeared to forget, most voters support a referendum) but it shows how desperate businesses are for Britain to remain in the EU. 

That Balls has chosen to point out as much is significant. The shadow chancellor is one of the senior Labour figures who has come closest to promising a referendum, warning in 2013 that “if we allow ourselves either to be the ‘status quo party’ on Europe, or the ‘anti-referendum party’ on Europe, then we’ve got a problem…I think we would be pretty stupid to allow ourselves to get into either of those positions”. But his latest remarks suggest that he believes the national interest demands that Labour unambiguously commit to EU membership.

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This shift in tone reflects a wider hardening of the mood against an in/out referendum. As I revealed last week, Labour will almost certainly avoid promising a public vote in its general election manifesto, with one senior strategist suggesting that the position would likely be identical to that offered at the European elections in May. 

Separately, one shadow cabinet minister told me that Ed Miliband was “instinctively opposed” to a referendum whenever the issue was discussed. This is not least because he recognises that he has a good chance of being in power after the next election and does not want the opening years of his premiership to be dominated by an unpredictable vote. A public decision to leave the EU in 2017, against Miliband’s wishes, would badly damage his authority. 

Far from being a clever ruse to enhance the party’s standing, a Labour pledge would shift the debate back onto Tory territory and allow Cameron to claim that a “weak” Miliband is dancing to his tune. As the Labour leader himself said when James Wharton’s EU referendum bill was being debated in the Commons: “I think what we see today is the Conservative Party talking to itself about Europe when actually what they should be doing is talking to the country about the most important issue that people are facing, which is the cost of living crisis. That’s what Labour’s talking about; that’s the right priority for the country.” 

Balls’s comments are further evidence that Labour will hold this line through the general election campaign.