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UK/EU could drive away investors

Uncertainty over UK/EU relationship 'could drive away investors'

Investors could be deterred from putting money in the UK if uncertainty over its future relationship with the European Union (EU) continues, a government minister has warned.

Prime minister David Cameron has expressed a desire to renegotiate the terms of Britain's membership of the international body, so it can repatriate some powers from Brussels.

He is due to make an important speech on the subject tomorrow (January 18th), in which he is expected to commit to staging a referendum on Britain's relationship with the EU after the next general election.

However, Mr Cameron's business secretary Vince Cable has warned that this could drive investors away from the UK at a time when they are needed to create new jobs.

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

Mr Cable added that economic confidence is "already fragile" as a result of the financial crisis.

Deputy prime minister Nick Clegg has also raised concerns about the possibility of a referendum being staged and the uncertainty this could create.

Speaking to BBC Radio 4's Today programme, he suggested this could have a "chilling effect on jobs and growth" in Britain.

"We should be very careful at a time when the British economy is still haltingly recovering from the worst economic shock in a generation to create a very high degree and prolonged period of uncertainty," Mr Clegg stated.

Eric Pickles, the communities and local government secretary, has acknowledged that the Liberal Democrat side of Britain's coalition government does not share the same views as the Conservative Party on Europe.

Speaking to BBC News, he said they are entitled to their opinion, but stated that the Conservative position is that it wants to see the amount of "interference" from Europe scaled back for the benefit of the British people.

The UK has already come under pressure from Philip Gordon, a senior official in the Obama administration, who said it believes Britain's continued membership of the EU is in the US's best interest, which means any change to the status quo could potentially jeopardise the so-called "special relationship" between the two nations.

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