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Saturday, 25 October 2014

Chamber boss fears impact of EU referendum debate

David Cameron’s commitment to a referendum on EU membership after the next election could have a detrimental effect on the UK  economy, Rob Johnston, Chief Executive of Cumbria Chamber of Commerce has warned.

In a speech today welcomed by many Conservative MPs, Mr Cameron pledged to hold a referendum during the early part of the next parliament - by the end of 2017 at the latest - if the Conservatives win the next general election.

But business leaders have raised concerns that the EU debate will create years of uncertainty that could impact on inward investments to the UK. France has already piled on the pressure by saying that it would roll out the red carpet for any firms looking to relocate to stay within the EU.

Mr Johnston said he felt the uncertainty would be ‘damaging’ for businesses.

He said: “It’s to be hoped that the Prime Minister is doing this for the right reasons – i.e. the cost of Europe - and not because he’s under pressure from his party to be firm on Europe.

“It’s worth remembering that the vast majority of foreign investment into the UK since the 1980s has been based on access to European markets, with investors seeing the UK as an attractive gateway to Europe. This is particularly so in the north of England, where many traditional manufacturing businesses were based and where there’s been significant change.

“Clearly we should be concerned at the impact of any decision but also of the uncertainty for in the intervening period business and the consequences of this on investment between now and any referendum on Europe. And remember that given that it’s beyond the next election it might or might not happen, adding further to the uncertainty.”

“Whether to go for a referendum or not is a political decision and we’re not commenting on that, but the uncertainty is damaging and we have to be aware of the consequences for business of both the referendum announcement and any eventual decision. And the impact on businesses will be felt by individuals as employees,” he added.

But Mr Johnston said he agreed with Mr Cameron that the UK should use its bargaining power to try and change the EU into a less beurocratic and more competitive region.

“Although the UK is the most vocal, while we may appear isolated a number of commentators are now beginning to question whether UK is as isolated as it might appear. If we stand tough and take a strong line moving forward then we should be able to influence Europe for the better,” he said.

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