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Europe: Cable Warns Cameron Over 'Gamble'

(c) Sky News 2013

David Cameron is being bombarded from all sides as he prepares to deliver his speech on Britain's place in the European Union.

Tory factions, coalition ministers and business leaders have heaped pressure on the Prime Minister ahead of his key address in Amsterdam on Friday.

The Lib Dem Business Secretary Vince Cable will later warn Mr Cameron not to take a "dangerous gamble" with the national interest.

Meanwhile, Tory MPs on both sides of the debate are pressing their case - with one group warning Britain is better off in the EU but a second publishing a paper questioning whether it is worth it.

Former defence secretary Liam Fox upped the ante by suggesting that Mr Cameron had the chance to settle the "European question in Britain for a generation".

"Clarity, courage and conviction will be needed and the road will not be easy, but the rewards could be truly historic," he wrote on the ConservativeHome website.

A third group of Conservative backbenchers has already released a blueprint for a renegotiated membership, which was backed by Foreign Secretary William Hague.

Eurosceptics in the City have also weighed in, calling on Mr Cameron to offer Britain a "clear choice" over its membership.

Labour leader Ed Miliband claimed that the Prime Minister risks taking the country to "the edge of an economic cliff" by creating uncertainty.

Mr Cameron has already dismissed calls for an immediate in/out popular vote but is expected to announce plans for a referendum on a "fresh settlement" with Brussels in the next parliament.

But Mr Cable says any effort to negotiate large-scale exits from existing EU powers would make it "next to impossible" to safeguard Britain's best interests in the single market.

And he will draw a direct link between the present debate and the surge in popularity for the UK Independence Party (UKIP) with immigration and the risks of 1930s-style nationalism.

Addressing businessmen in Oxfordshire, he will say: "Any reopening of the whole question of British membership creates additional uncertainty at a time when there is already fragile economic confidence in the wake of the financial crisis.

"This is a terrible time to have the diversion and uncertainty which the build up to a referendum would entail.

"At a time of extreme fragility in business confidence, such uncertainty would add to the sense of unresolved crisis and weaken Britain's ability to deliver more reform inside the EU."

Mr Cable will recognise the scope for "far-reaching reform" in Brussels and the need to address a "democratic deficit of popular disenchantment" about EU membership.

And he will accept there is an argument for a referendum to "lance the boil" of misconceptions about the EU - arguing the Government has already legislated for one in set circumstances.

But he will add: "It will be difficult enough to safeguard UK national interests in the single market in an environment where the UK stands aside from closer economic and political integration in the eurozone.

"It could become next to impossible if the UK is simultaneously seeking to disengage from substantial existing commitments, especially if we are perceived to be blocking closer integration in projects we are not part of.

"The eurosceptic calculation is that British permission is necessary for closer integration - via treaty change - and that this permission can be traded for the negotiating objectives.

"That seems to me a dangerous gamble to make. There are many in Europe, notably in France, who would be happy to see the back of the UK - whatever that may mean in practice - and even the UK's allies on market reform - notably Germany - have limited political capital to spend getting a more favourable arrangement for the UK.

"Others are understandably concerned that special treatment for Britain could lead to a host of other demands by member states with specific problems and risk paralysis."

Mr Cable will say it is right for the Government to look at the balance of power but will insist this process if not helped "by threats to walk out when we don't get our way".

The Business Secretary will appeal to Tory coalition colleagues, most of whom he says are part of the "pragmatic, semi-detached, majority" on the issue.

Some Tory concern centres on the threat posed by Ukip attracting away eurosceptic voters from the party as it seeks an overall majority at the 2015 general election.

"The EU arguments are also linked in the public mind - and support for the Ukip - with a separate but related issue: immigration," Mr Cable will say.

"Our historical experience of economic that the distress triggers nationalism and other expressions of identity.

"We are a long way from the destructive conflicts of the 1930s but much damage could still be done."

Mr Miliband, speaking on Thursday morning, warned: "Putting up a big flag saying 'Exit, Britain's about to get out' - is that a good negotiating strategy? I have to say that I think it is a hopeless negotiating strategy."

But the Labour leader repeatedly refused to rule out staging a referendum if he won power and made clear he would not repeal the lock requiring any fresh transfer of power is put to the vote.

And he too suggested he would try to repatriate some powers from Brussels on issues like regional and industrial policy.

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