EU exit ‘biggest risk to economy’


Published: Monday 9th February 2015 by The News Editor

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The prospect of a British exit from the European Union is the greatest threat facing the country’s economy in the next decade, Ed Balls will say as he attacks Tory ministers for creating damaging uncertainty for the country’s businesses.

The shadow chancellor will acknowledge the need for reform of the EU but will hit out at David Cameron’s policy of offering an in/out referendum, warning the Tories are”flirting with exit” for narrow political party interests.

Labour frontbenchers Mr Balls and Chuka Umunna will address the British Chambers of Commerce annual conference and stress the party’s pro-business agenda following a string of attacks from senior corporate figures in recent days.

The Opposition views its policy on Europe as one of the major weapons it has in the fight to win the backing of businesses concerned about the prospect of severing ties with major trading partners.

But Mr Balls will signal to bosses that under Labour the approach will be “pro-business, but not business as usual” with an effort to crack down on corporate tax avoidance.

The Prime Minister has committed to renegotiate the UK’s links with Brussels before holding a public vote on EU membership by the end of 2017, although he has hinted the vote may come earlier.

Mr Balls will warn that Britain has succeeded by being an international trading nation and “to walk away from Europe – our biggest trading market – would be a disaster”.

He will tell the business group’s gathering in Westminster: “Britain must lead the debate for reform in the EU. Banging the table for change and for the EU to work better for Britain. But not flirting with exit and putting party interest above the national economic interest.

“Because 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.

“And every comment by senior Cabinet ministers saying they would be happy or relaxed to see us walk out, and every hint that a referendum could happen as early as next year – before any meaningful reform agenda could be achieved – only adds to the uncertainty and risk for British businesses.”

Mr Balls will be speaking from the same platform where the Prime Minister is expected to issue an appeal to business leaders to give workers a pay rise.

But the shadow chancellor will argue that with working people £1,600 a year worse off than in 2010, more needs to be done to ensure rising prosperity for all.

He will say: “This is set to be the first time since the 1920s when working people are worse off at the end of the Parliament than they were at the beginning.

“So at a time when, even as our economy recovers, most people are not yet seeing the benefit in their wages and living standards, this is no time for complacency.

“If we are to win the argument that Britain can succeed in an open global economy, we have to show that our economy can deliver rising prosperity for everyone who works hard and plays by the rules. And that is not what people think is happening in our country at the moment.

“I want an open and competitive tax system that rewards work and supports entrepreneurs and long-term investment and wealth creation.

“But that also means that individuals and companies alike should pay their fair share, and where the international rules are not fit for purpose we have to change them and close loopholes here in the UK too.

“We have to show that our economy can deliver rising prosperity for everyone who works hard and plays by the rules. A Britain open to the global economy and leading on reform in Europe, not threatening to walk away.

“A Britain investing in a high-productivity economy, not ducking reform and hoping business-as-usual will do the trick.

“And a Britain where we see off populist pressures for reaction and isolation by showing that we can deliver prosperity and rising living standards not just for some but for all.

“Pro-business, but not business as usual. Promoting competition, not turning a blind eye to bad practice. Supporting wealth creation, but making sure everyone pays their fair share.”

Shadow business secretary Mr Umunna will tell the conference Labour will “strain every sinew” to support British firms.

“My party was established to build a fairer Britain. And I’ve always argued that if we want a fairer society we need a stronger economy – with more higher skilled, better paid, secure jobs. It is you – our businesses – that will create these jobs.

“Any debate on building a fairer society is academic unless there are businesses creating wealth.

“We need you to succeed: to add to our nation’s bottom line and pay our way in the world. To help fund our public services and drive growth – from Cornwall to Cumbria, East Anglia to Aberdeen. To seize the vast opportunities of the global economy, and create the jobs of the future.

“I can assure you of this. We will work every day, strain every sinew, to make your lives that bit easier: easier to do business; easier to export; easier to create jobs; easier to succeed.”

Published: Monday 9th February 2015 by The News Editor

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