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15 January 2015updated 20 Aug 2021 9:21am

Balls challenges Cameron with warning of US anxiety over EU withdrawal

Shadow chancellor uses his own US trip to warn that Washington is asking "Why is David Cameron proposing to take such big risks with Britain's economic future?"

By George Eaton

It’s not just David Cameron who has headed stateswards – his great nemesis Ed Balls is also in Washington D.C. today. The shadow chancellor’s visit is coincidental, but it is helpful for Labour to use it as a spoiling device. 

In an interview with the BBC, Balls has warned that the threat of EU withdrawal is “the biggest economic risk” to the UK and has spoken of the anxiety among the US political establishment: “When I speak to people here in Washington, and in capitals round the world, people say, ‘Britain leaving Europe? A referendum in a couple of years time? Why is David Cameron proposing to take such big risks with Britain’s economic future?’ I think they’re right.” 

Asked what his view was of “the special relationship” between the US and Britain, Balls, a long-standing Americophile, said: 

I think we have a common challenge not just to meet issues of international security but also to make sure that our economies not only grow but deliver rising living standards and we’ve been seeing stagnating living standards in Britain and America.

And I think there’s another issue that is very striking to me. The biggest risk for Britain in the next few years, the biggest economic risk, would be for us to leave the EU and we have a Prime Minister who at the moment is saying that it is on the table.

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In my view, sleepwalking to exit from Europe would mean we would lose investment, we would lose jobs, we would lose big companies going to other parts of the world to invest. And we would lose influence in Europe and in America too. I think we would pay a long term cost.

I think what David Cameron is proposing, to play fast and loose with Britain’s relationship with Europe is the biggest risk for our economy for the next few years…

Our two biggest trading partners are Europe and America and it is vital that we continue to trade with both. But at the moment a Conservative government, if elected, after the general election would put at risk our relationship with Europe and our influence with America, by putting on the table our relationship with the European Union.

I think we would lose investment, we would lose jobs and we would lose influence. It would be a very, very risky proposition. I don’t think David Cameron has got a grip on the European debate in his party, I think he is sleepwalking Britain to exit.

And when I speak to people here in Washington, and in capitals round the world, people say, ‘Britain leaving Europe? A referendum in a couple of years time? Why is David Cameron proposing to take such big risks with Britain’s economic future?’ I think they’re right.

Obama has previously declared that it is “hard to imagine” how it would be “advantageous” for Britain to leave the EU and reporters will be looking to tease out tensions between the two men during Cameron’s visit. In common with his predecessors, the US president believes that a strong EU, with the UK at its heart, is essential in a multilateral world. 

The chief purpose of Balls’s visit is to launch the report of the transatlantic Commission on Inclusive Prosperity, which he co-chaired with his former Harvard tutor Larry Summers, who served as treasury secretary to Bill Clinton and as director of Barack Obama’s National Economic Council. Balls also met US Federal Reserve chair Janet Yellen yesterday and will meet current Treasury Secretary Jack Lew today. 

As the Tories brief that Obama’s invitation to Cameron is an effective endorsement of his re-election, Balls’s visit is a reminder that Labour isn’t short of friends in the US either.