Clegg and Cameron Clash on Plan for British Referendum on EU

Prime Minister David Cameron and his Liberal Democrat deputy, Nick Clegg, clashed on whether the possibility of Britain leaving the European Union within five years risked putting off investors and damaging the economy.

Clegg, who leads the pro-EU Liberal Democrats, distanced himself from his Conservative coalition partner’s plans to repatriate powers from the EU. Cameron yesterday promised voters a referendum by late 2017 on whether to remain in the EU on new terms or leave the 27-nation bloc, saying he’ll make the case for staying in.

“Where, of course, David Cameron and I part company is I simply don’t understand the point of spending years and years and years tying yourself up in knots first, so-called renegotiating the terms of Britain’s membership in ways that at the moment at least are completely vague,” Clegg told London’s LBC radio station today during his weekly phone-in show. “And I think that discourages investment and inhibits growth and jobs which has to remain our absolute priority.”

Cameron defended his position in a question-and-answer session after his speech today to the World Economic Forum in Davos, Switzerland.

“We’re going to resolve this issue in a way that is actually going to benefit business because we’ll end up with a more competitive, more open European Union,” Cameron said. “They say this is a sensible approach.”

“I would argue the riskiest thing of all would be to do nothing, would be to sit back, see all the changes taking place in Europe with the euro zone, and just say ‘this is nothing to do with us,’” he said. “And see all the debate in Britain and say, ‘I’m going to stay back from it.’”

Business Backing

A letter to the Times newspaper signed by 55 leaders of industry and London’s financial district welcomed the referendum proposals as “good for business and good for jobs in Britain.”

The opposition Labour Party argued that Cameron’s position on the EU will make Britain less attractive to foreign investors.

“We have traditionally said, ’come to Britain because it is a favorable climate and you will have access to his huge market,’” a former Europe minister, Peter Hain, told BBC Radio 5 today. “Now we are on a road which could lead us out of Europe and out of that market and that is a decision which is going to affect investment.”

Clegg indicated that Cameron’s referendum pledge wouldn’t prevent a renewed coalition after the 2015 general election. If a “coalition is necessary following the votes of the British people, then we will play our part,” he said.

Not Afraid

He said he is not afraid of holding a referendum, pointing to the fact that the Liberal Democrats had already provided for a vote in the case of more powers being transferred to the EU.

“There should be a referendum when the United Kingdom is asked to give new powers to the European Union, when there’s a new treaty in the European Union -- that’s what we’ve always said as a party, it’s what we’ve legislated for, funnily enough with the Conservatives, just recently,” Clegg said.

“To be honest I think whatever question you put on the ballot paper, the underlying issue is still the same,” he said. “It’s ‘do you believe Britain should lead in Europe, or should we be somehow marginalized from it.’”

Clegg said Cameron had chosen the timing of the speech because of party management necessities due to the “intense internal discussions” going on among euroskeptic Tory lawmakers.

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.

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