City grandees at war with Vince Cable over EU referendum

Senior City allies of Chancellor George Osborne will go to war with Vince Cable today over a referendum on Britain’s place in the EU.
In a provocative intervention the day before David Cameron’s key speech on our future relations with Europe, Business Secretary Mr Cable will warn it is a ‘terrible time’ for the ‘diversion and uncertainty’ that will be caused to businesses by a referendum pledge.
‘Any reopening the question of British membership creates additional uncertainty when there is already fragile economic confidence in the wake of the financial crisis,’ the Lib Dem minister will say.

 

Leading figures in the City are demanding an in/out referendum, insisting the financial sector is worth more to Britain than ties with Brussels

But his warnings of a chilling effect on investment will be rejected by a group of City heavyweights, who are launching what is expected to be a concerted campaign to demonstrate business support for Mr Cameron’s stance.
In an open letter, they insist voters must be trusted to decide whether to sever ties with Brussels, saying: ‘Pressure is growing from all sides for a referendum.’

 

Signatories include Lord Vinson, former Barclays deputy chairman, Daniel Hodson, former chief executive of London’s derivatives exchange Liffe, Jon Moulton, chairman of investment firm Better Capital, and Tory peer Lord Flight.
Mr Moulton said: ‘If we stay in the EU it will tend to be more regulated, in favour of more employment legislation and in favour of more restrictions on trade.

 

 

David Cameron was forced to defend his approach to Europe in the Commons today, but a City campaign lead by Daniel Hodson will back his plan to stage a referendum

‘Renegotiation would give the UK a chance of having a competitive advantage rather than being dragged down, arms linked with our European neighbours.’
Lord Wolfson, chief executive of Next, and the British Chambers of Commerce (BCC) backs the idea of a new deal based on free trade.
He said: ‘Britain should stay in Europe, but only on the right terms.’
In a survey of members, the BCC found just 26 per cent of businesses wanted to keep the status quo, while 59 per cent wanted looser ties with the EU or to leave altogether.
In Amsterdam tomorrow, Mr Cameron is expected to promise to renegotiate a looser,trade-based relationship if the Tories win the next election.

 

Downing Street has launched a charm offensive to win over Eurosceptic Tory MPs ahead of the PM's big speech. Among those seen leaving No.10 today were (left to right) Edward Leigh, Peter Bone and John Baron

 

Voters would then approve or reject it in a public vote. However, aides warned last night that his visit to the Netherlands may have to be postponed so he can deal with the Algerian hostage crisis.
Labour said yesterday it would not support a referendum. Leader Ed Miliband claimed it would result in ‘a closed-for-business sign hanging around Britain’ for five years.

But Mr Cameron said: ‘When there is change in Europe... isn’t it in Britain’s national interest to argue for changes that will make the European Union more competitive and more flexible, that will strengthen and sort out Britain’s relationship... and then ask the British people for their consent?’
However, Mr Cable will tell businessmen in Oxfordshire today that a referendum is a ‘dangerous gamble’ with the national interest, citing the surge in popularity for the UK Independence Party.

He will also say he has never met a major exporter who backs the UK’s exit.
‘We simply do not know what structures and governance will emerge from the eurozone crisis or what it means for the UK,’ he will add.
Meanwhile, there was confusion last night over the PM’s stance on ministers’ freedom to campaign as they chose over a referendum.

In an apparent reversal, No10 said it expected collective responsibility.