Senior Lib Dems warned on Saturday night of disastrous consequences if a Tory-led government is allowed to stage an in/out referendum on Britain’s EU membership, as signs grew that Nick Clegg could split his party if he tries to form a second coalition with the Conservatives.
Both business secretary Vince Cable and former party president Tim Farron, the spokesman on foreign policy, said David Cameron’s plan for a referendum by the end of 2017 would cause deep uncertainty among investors, with potential loss of business and jobs.
Their comments suggest the two men – both seen as possible leadership contenders – would be reluctant to see their party change policy and back the Tory referendum.
Many Lib Dems believe that Clegg will be willing to open talks with Cameron on the issue in the event of a hung parliament, a move that could trigger civil war among Lib Dems.
Because Cameron has said the in/out referendum will be a “red line” for the Conservatives in any negotiations, a Lib Dem refusal to come in behind the idea would spell the end of hopes for a second Con-Lib coalition deal.
Cable and Farron spoke out after former Liberal party leader David Steel said he did not believe most Lib Dems would want a second coalition with the Tories.
Steel’s remarks were echoed by the biggest grouping of grassroots Lib Dem activists, the Social Liberal Forum, which warned the leadership against trading “values for government jobs” on Europe.
In some of his strongest language on the issue to date, Cable said an in/out referendum had “potentially horrendous” implications, causing “years of uncertainty” for businesses. If, after the election, the Tories set their plans for the vote in motion, Cable said he was “pretty sure it would have a damaging effect on big manufacturers, a lot of inward investors, the financial services sector, and quite a lot of others”.
And if the eventual vote was to stay in, it would not be the end of the matter if it was close. “Then you get the Scottish problem of not accepting ‘no’ for an answer: the neverendum rather than a referendum,” Cable said.
Farron argued that the Tory plan to insist on a referendum by the end of 2017 would “damage the national interest, compromise our negotiating position and be bad for the economy and jobs”.
The current Lib Dem policy is that there should be a referendum in the event of proposals from Brussels to transfer substantial new powers to the EU. Cameron has promised, however, that he will hold an in/out referendum in any event by the end of 2017, having tried to renegotiate UK membership.
Sources close to Clegg, a fervent pro-European, said he, too, thought that the Tory plan would be bad for the economy and was a “ridiculous” idea. But they refused to rule out the possibility that policy might change in coalition talks, saying that they would not spell out their red lines in advance.
“Our policy on a referendum is clear and has been for some time – we want an in/out referendum when the rules in Europe change and we are asked to cede more powers to Brussels,” one source said. “The Conservatives have their own position, which is to have a referendum by 2017, regardless of the circumstances. It’s now for the British people to decide which party they wish to support. Once the election is over, we will know the lay of the land.”
Many Lib Dems believe that Clegg may be willing to back Cameron over the referendum in return for substantial paybacks – perhaps including proportional representation for local government, reform of the House of Lords, and changes to party funding rules. But he may have trouble getting such a plan past his own party.
The former Liberal Democrat leader, Sir Menzies Campbell, said that Clegg was right to keep all his options open, but added: “On the question of an in/out referendum, for my part I see no indication in the party at large of any will to depart from its opposition to the Tory policy.
“This is particularly the case when you consider the anxiety there is within the business community about staging a referendum and the adverse consequences of potential withdrawal.”
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