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10 February 2015updated 24 Jul 2021 11:17am

Ed Balls: “EU exit is the biggest risk to our economy in the next decade“

The shadow chancellor is forthright in his pro-EU membership stance, but how do British businesses feel about this?

By Anoosh Chakelian

I fear that Britain walking out of the EU is the biggest risk to our economy in the next decade. EU exit risks British jobs, trade and investment and the future prosperity of the UK. That is the message I hear from businesses across the country week in week out.

This was Ed Balls’ message in his speech to the BCC (British Chambers of Commerce) conference today.

His firm stance against an EU referendum came in spite of calls from John Longworth – director general of the organisation that represents 92,000 businesses of all sizes across the country – to bring an EU referendum forward to 2016.

Longworth’s urge for government to call the Tories’ promised 2017 referendum a year early is a blow to Labour during a period when it is being attacked from all sides for being anti-enterprise. Its refusal to promise an EU referendum is its key trump card when appealing to British businesses.

To have high-profile business leaders backing an EU referendum – albeit an early one – undermines its unique selling point as the only main party to stand against a vote on our EU membership.

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Yet Balls today stood firm in his stance, insisting “we shouldn’t flirt with an exit”, and warning against “setting an arbitrary timetable for a quick referendum”.

He cautioned that, “businesses are deferring and delaying big decisions because of these uncertainties [caused by the prospect of an EU referendum]”, when questioned about the lack of a drop in inward investment since David Cameron promised a referendum. During the Q+A following his speech, he added, “the threat of leaving the EU is the biggest risk” to jobs and investment in Britain this decade.

His announcements provoked a mixed reaction in the audience of business leaders and representatives.

“There was nothing new,” one medium business employer tells me. “We’ve seen it all before, it’s pretty much the same as everything we’ve heard from him before.”

His colleague adds, “It’s all about uncertainty. Without promising a referendum there is still uncertainty, so it’s still uncertain whether they’ll have one or not.”

A group of businesspeople running a small enterprise in the north of England praise the priority Balls is giving to apprenticeships, but are unsure whether his stance against an EU referendum is constructive:

 “You shouldn’t have a referendum if you’re fearful that we’ll be voted out, but I think the English public will vote to stay in. It will be like Scotland; Joe Public will value being part of the EU, you’ve got to trust the public.”

Yet his colleague adds, “I think we need a longer-term view, I think it’s too quick to say let’s call a vote, stay in, sort it out – it’s far too quick.”

One man who runs a small accountancy practice in London is cautiously optimistic about Balls’ commitment to the EU, though is critical of Labour’s communication of this message:

“The dedication to Europe is important. Our clients all have to have Britain in the EU; it would be suicidal for small businesses for agreeing to leave the EU. It’s the only way people will invest.

“Balls’ comments on Europe were good, but not very concrete. His speech wasn’t particularly inspiration, he trotted out a few mediocre well-worn lines, we’ve heard a few of them before. So the support for Europe is there, but they’re not in power, and it’s early days.”

A couple of policy advisers to a big UK firm tell me, “Balls’ message seemed OK, but it’s exactly what you’d expect to hear from him. We have mixed views in our company in that if you call a referendum there is a risk it might go the wrong way, particularly when the newspapers start picking up all the nonsense. Ultimately it’s probably the best approach to oppose a referendum.”

The overriding atmosphere seems to be respect for the shadow chancellor sticking to his opposition to an EU referendum, but an insistence that he conveys that message in a fresh, passionate way, in order to cut through to the public.

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