Labour talks Europe to woo business support

THE general election campaign has officially begun. Parliament has been dissolved; the Prime Minister has paid a parting visit to the Queen. It seems Labour will continue to focus most on threats to the NHS, the Tories mainly on the economy. The only certainty about the outcome is uncertainty; one poll over the weekend for YouGov puts Labour four points clear; another today for ComRes puts the Tories four points ahead. Both are almost within the statistical margin for error.

Today, however, Labour leader Ed Miliband takes the fight on to Tory territory by claiming boldly that Labour is the party of business. He bases this claim squarely on the grounds that Labour would not hold an in-out referendum on Britain’s EU membership. Indeed, Labour has taken out a full-page advertisement in the Financial Times today to make its case that “the biggest risk to British business is the threat of an EU exit ... we will deliver reform not exit”. In fact, Mr Cameron is also hoping for EU reform, not an exit, even if many of his party are not; he is committed to a referendum to decide the issue finally.

Mr Miliband has indeed identified an issue that matters to business. Companies loathe instability; the uncertainty that would hang over the economy until a referendum would be unhelpful to long-term decisions. Business may well want the EU to be less bureaucratic but the majority of companies, especially large ones, very much want Britain to remain in it. The PM’s approach is to seek reform and then urge voters to support continued membership. Germany may have already ruled out the EU reform that many Tories really seek, restrictions on movement of labour, but the Germans very much want Britain to remain in the EU and may be prepared to meet Mr Cameron halfway on other reforms to make the single market more business-friendly. What the PM can offer is flexibility on the timing of any referendum.

Labour’s greater warmth towards Europe does put it on the side of most big employers. But its policies on a disparate range of issues such as energy price controls, property levies and hikes in higher rate of tax, while not amounting to hostility to business, will certainly win few business votes. That will not decide the election. But Labour still has work to do in convincing voters of its ability to manage the economy successfully.