In-out EU referendum could have ‘chilling effect’ on economy, Nick Clegg warns Tories

NICK Clegg has issued a clear warning to his Conservative coalition allies over their calls for an in-out EU referendum, saying uncertainty over the outcome could have a “chilling effect” on the British economy.

• Clegg said it would not be ‘wise’ to pile doubt over Britain’s EU membership with a public vote

• Cameron set to make keynote speech on the EU this Friday, and is expected to lay out plans to forge a ‘fresh relationship’ with the EU

Speaking on the BBC this morning, the Deputy Prime Minister said it would not be “wise” to pile fresh doubt over Britain’s EU membership with a public vote on the issue.

It comes with David Cameron preparing to make a keynote speech on the EU on Friday, when he is expected to set out plans to forge a “fresh relationship” with the European Union.

Mr Clegg - who supported the law to have a referendum in Britain if more powers are transferred to Brussels - said he did not back having a public a vote on EU membership if they are being repatriated, as is being suggested by Mr Cameron.

He told BBC’s Radio 4 Today programme: “I don’t agree with the premise that we can unilaterally re-write the rules of the club. In the meantime, we need to give people assurance that...if there is a transfer of powers to Brussels, we should have a referendum. We have legislated for that.”

He added: “We are the only government to give people that clarity in law about when a referendum will take place...I believe that it would not be wise to add to that with a vote which would have a chilling effect on the economy.”

Major uncertainty

He said such a vote could cause major uncertainty for businesses which would question whether or not Britain was to remain a member of the EU.

He went on: “The eurozone is changing, that is obvious. We do not know when that will manifest itself in a new treaty, and we don’t know if there is a new treaty. Some significant states in the eurozone do not want any treaty change at all.”

“We should be very careful at a time when the British economy is still haltingly recovering from the worst economic shock in a generation to create a very high degree and prolonged period of uncertainty, because in my view uncertainty is the enemy of growth and jobs.”

Mr Clegg’s warning follows similar comments by Lord Heseltine last week who said a drawn-out referendum build up would leave a question mark over Britain’s status within Europe.

Business leaders such as Sir Richard Branson have also warned about the potential for uncertainty. However, Mr Cameron said yesterday that the debate was “happening anyway”, and that the Government therefore needed to lead on the issue.

Mr Cameron will now give his keynote speech in Holland on Friday, having brought it forward from next week after objections from German chancellor Angela Merkel.

Next Tuesday - the original date for the speeech - is the 50th anniversary of the Franco-German Elysée treaty, which is being marked by huge commemorations in Germany.