Uncertainty over the UK's membership of the EU could have a 'chilling effect' on the economy, warns Nick Clegg

Uncertainty over the UK's membership of the European Union could have a “chilling effect” on the economy, Nick Clegg said in a stark warning over calls for a referendum.

The Deputy Prime Minister said the public should only get a say if there was a transfer of powers to Brussels - and denied breaking a pre-election promise of a popular vote.

In a long-awaited speech on Friday, Prime Minister David Cameron is expected to announce plans for a referendum on a new settlement with Brussels after the 2015 general election.

He has rejected calls for an immediate in/out referendum on British membership, which he said would present voters with a "false choice".

But he said it would be right to seek the "fresh consent" of the British people after negotiating a new settlement for the UK.

Mr Cameron has been caught in an increasingly ill-tempered row within his party, with some Tory backbenchers calling for a public vote on the EU, while business leaders and grandees including Lord Heseltine have warned of the dangers of UK withdrawal.

The issue is also straining relations with the Tories' strongly pro-EU Liberal Democrat coalition colleagues.

Lib Dem leader Mr Clegg joined the warnings of business leaders over the impact of exit or the threatened prospect of it.

"I do not think we should do anything to jeopardise our leadership (in Europe) and we certainly should not do anything which would have a chilling effect on jobs in this country," he said.

"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 a prolonged period of uncertainty because in my view uncertainty is the enemy of growth and jobs and our priority, in this Government and in the national duty, has got to be to foster growth and jobs.

"If you are an investor investing in the United Kingdom to create jobs here it is unnecessary to create a high degree of uncertainty which might actually chase away that investment and might diminish the number of jobs in this country."

He went on: "I obviously do not agree with the premise that we can, on our own, unilaterally, simply rewrite the terms of our membership of this European club.

"We do not know yet how the rules are going to be rewritten within the eurozone. We don't know when that will happen, in what way and crucially we do not know what that will ask of the United Kingdom.

"We need to give the people of the United Kingdom the reassurance that if there is a new treaty... and if that new treaty asks new things of the United Kingdom - in other words a transfer of powers from Westminster to Brussels - then of course we should have a referendum at that point."

The coalition had legislated to promise a referendum in that instance, he said.

In tetchy exchanges, he repeatedly denied going back on a 2010 election manifesto promise to offer voters a say on Britain's membership of the EU.

"We have done in Government what we said in the manifesto," he said, that there should be a vote "if there is a set of circumstances and a new treaty which asks new things of the United Kingdom involving a transfer of powers".

During the election campaign Mr Clegg declared that he remained "unambiguously committed" to having a plebiscite on the question of Britain's membership of the EU when the issue next arose.

"When that comes back on the agenda then I think the only honest question to ask is the fundamental question: are you in or are you out?" he said in April 2010.

"I would argue fervently that we should be in there to lead."

Mr Clegg warned an "arcane debate" was at risk of being put before Britain's national interests.

The 2010 Liberal Democrat manifesto noted that the EU had "evolved significantly since the last public vote" in 1975.

"Liberal Democrats therefore remain committed to an in/out referendum the next time a British government signs up for fundamental change in the relationship between the UK and the EU," it said.

Pressed on the pledge, Mr Clegg said the party had in fact gone further by enshrining a referendum on any further transfer of powers to Brussels in law.

"Given that we have given that clarity, we have provided that certainty... I don't think it is wise to add to that with a degree of uncertainty which I believe will have a chilling effect on jobs and growth in this country," he said.

"For me the priority remains jobs and growth, not an arcane debate which will go on for years and years."

Mr Clegg said he had not seen Mr Cameron's speech - the text of which the Prime Minister disclosed yesterday was ready to deliver in the Netherlands on Friday.

"The Prime Minister if I understand it, but I haven't seen the speech and nor have you, is also linking a future renegotiation of the terms of British membership and a subsequent referendum to a treaty," he said.

"So in that sense everybody is actually saying that when the treaty becomes a reality that is when we have a question to answer."

No-one was asking for "a referendum out of nowhere", he added.

PA