EU Referendum and Business uncertainty – Labour have a point

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April 1, 2015 by Paul Goldsmith

The Labour party made an interesting, and brave decision on Monday. They opened their election campaign proper, on the day that Parliament was dissolved, by focusing on an area of perceived weakness – their relationship with the business community. The reason they chose to do it now could be because they had to address it sometime so as far out from polling day as possible. But they also did it in a very effective way, which is to remind the business community of a major difference between them and the Conservatives – whether or not to hold an EU referendum.

Now, some would regard Labour’s refusal to hold an IN/OUT referendum on the EU as a weakness of theirs. Why are they denying the UK population their choice in whether to be in this large, unaccountable bureaucracy that tramples over the sovereignty of our Parliament and has resulted in our country being swamped with immigrants? Others would regard it as a strength – they are saying to the UK population that the gains from being in the EU, in terms of what we gain from co-operation, free trade, access to markets, and the freedom of movement of labour both ways, are just as important.

More significantly, they don’t want to put at risk those benefits by decoupling from Europe, or even threatening to do so. We are in the position at the moment where the prospect of a referendum on the EU could be discouraging overseas firms from investing in the UK. We are attractive to large firms from countries such as the USA and Australia due to our language and our unencumbered access to EU Markets. Firms don’t like to invest and take risks if they can’t be sure of outcomes. The referendum that will take place if the Conservatives win creates that uncertainty.

This doesn’t mean the referendum shouldn’t take place. It is the nature of referendums TO cause uncertainty, and it is a risk that comes with that sort of direct democracy. But by not offering one, Labour can say that voting for them is the way to not have the uncertainty.

Hence the full-page advert in the Financial Times today – which is printed below and is worth a read. Yes, they may have wanted to ask permission of the people quoted before they did so – but Labour are using previously published quotes and are not claiming endorsement of their policy. What is true is that it will give the business community something to think about. It’s certainly got them talking

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