EU referendum will play havoc with business, Ed Miliband warns

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Ed Miliband will attempt to win over a reluctant business community on Monday by warning that an EU referendum proposed by David Cameron would trigger a bitter two-year campaign in which a re-elected Tory party would tear itself apart over whether the UK should remain in Europe.

As the Labour leader launches the party’s business manifesto, aides are suggesting the proposed referendum would be a recipe for chaos as would-be successors to Cameron fight for support from an overwhelmingly sceptical party membership.

The attack has been launched as Cameron prepares to see the Queen on Monday afternoon to seek the dissolution of parliament, signalling the official start of the general election campaign.

Following a flat start to the Tories’ campaign, the prime minister will launch a fresh offensive on Miliband’s economic credibility, claiming that Labour’s policies will cost over £3,000 in higher taxes for working families.

Conservative sources say this will be the spearhead for attacks on what party officials believe is Labour’s major weakness with the electorate.

But Labour sources pointed to remarks by the work and pensions secretary, Iain Duncan Smith, on Sunday that Cameron will have to stand down before the next general election to give the party time to elect a new leader. The welfare secretary told the BBC’s Andrew Marr Show there would “of course” be a leadership contest at some point during the next parliament. This will mean potential Tory leadership candidates in the referendum campaign will already be jostling to woo the sceptical Tory membership that will decide the next leader.

Tory sources have confirmed that Duncan Smith’s words have strayed from Cameron’s official line – repeated in Thursday’s TV interview with Jeremy Paxman – that he will serve every day of the next parliament.

Cameron has not yet set out what he would regard as a success in any negotiations with the rest of the EU over the UK’s relationship with Europe. He has also left it open as to whether Conservative ministers will be required to campaign for a yes vote if Cameron judges he has secured an acceptable deal.

Labour hopes to use fears about this uncertainty as a lever to urge companies to look again at some of Miliband’s pro-business policies.

The party also plans to highlight the UK’s falling productivity ahead of figures due to be published this week.

Business leaders have expressed fears about Miliband’s approach to failed markets and his apparent opposition to the role of the private sector in public services. Some have also expressed concern about a possible Labour tie-up with the Scottish Nationalists, fearing the SNP will push Labour’s stance on economic management to the left.

But the business sector will also be taking Miliband more seriously in the light of a YouGov opinion poll on Sunday showing Labour enjoying a four-point lead over the Tories in the wake of last week’s TV interviews. One Labour source said: “The polls are going to go in many directions, but this challenges the Tory claim that there is an inevitability to the polls crossing over and the Tories going ahead”.

In a bid to persuade businesses that Cameron is not in control of events inside his own party on Europe, they claim Cameron is leading a party where support for a British exit is growing amongst MPs, candidates and a majority of activists.

Labour has also unearthed a recording of Laura Sandys, the Tory MP for South Thanet, telling a meeting this month that the coalition has a clear policy of trying to reduce its influence in Europe.

She is recorded as saying: “I don’t think it is really since Elizabeth I refused to sleep with a continental king that this country has really had an absolutely clear policy to reduce its influence in Europe. I think it is a remarkable idea that we would like to reduce our impact, our voice with our neighbours. Extraordinary.”

At an event at Bloomberg on Monday, Miliband will say: “There could be nothing worse for our country or for our great exporting businesses than playing political games with our membership in Europe. David Cameron used to understand that. Perhaps he still does. But in the past five years our place in the European Union has become less and less secure.

“He used to oppose a referendum on Europe. But the next year, under pressure from rebels in his own party, he gave in. He used to say he would campaign to keep Britain in Europe. But now he won’t rule out campaigning to leave. He used to say he would be able to negotiate treaty change in Europe. But now he prefers to keep quiet about that too.

“He came to power promising to stop his party ‘banging on about Europe’. Now if he carries on this way, he’ll have us inside Europe banging on the door to leave or, even worse, outside Europe – banging on the door to be let back in,” he will say.

In a theme which will be repeated over the next 38 days, Cameron will say today that Britain faces a stark choice: “You can choose an economy that grows, that creates jobs, that generates the money to ensure a properly funded and improving NHS ... and a government that will cut taxes for 30 million hardworking people…

“Or you can choose the economic chaos of Ed Miliband’s Britain — over £3000 in higher taxes for every working family to pay for more welfare and out of control spending. Debt will rise and jobs will be lost as a result,” he will say.

The Tories claim to have arrived at this figure because Labour has committed to a 50/50 balance of spending cuts to tax rises to cut the deficit.

Labour came under pressure on Sunday over how it would reduce the deficit after Lucy Powell, the party’s campaign coordinator, clashed with Andrew Neil on the BBC’s Sunday Politics show. She said Labour’s plans to eliminate the deficit rested on a cut of unprotected areas of Whitehall spending and and a boost of tax revenues by supporting the incomes of “ordinary working people”. But critics question whether that would be enough to reduce a £30bn deficit by 2020 under Labour.

The party was dealt a further blow when a wealthy Labour donor said last night that Cameron’s economic policies were better. Dr Assem Allam, the owner of Hull City football club, who has given £400,000 to Labour, told the Daily Telegraph the Labour leader needed to stop demonising the wealthy and entrepreneurial.

Cameron and Nick Clegg will both have separate private meetings with the Queen on Monday, with the deputy prime minister expected to exit the front door of No 10 Downing Street and travel by car to Buckingham Palace a few hours before the prime minister does the same.

Powered by Guardian.co.ukThis article was written by Patrick Wintour and Rajeev Syal, for The Guardian on Monday 30th March 2015 00.01 Europe/London

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