Business leaders have demanded that Britain must remain part of the European Union and warned that even speculation that the UK might leave would damage the region’s economy.
But some Midland MPs said that a dramatic change in the UK’s relationship with the EU was inevitable, and this meant there should be a referendum.
Employers and politicians spoke out as David Cameron prepared to deliver his long-awaited speech on the European Union.
For Mr Cameron, the focus on Europe was a far cry from the comments he made to the Conservative conference in 2006, when he warned that the party had spent “too long” ignoring the concerns of voters.
He said: “Instead of talking about the things that most people care about, we talked about what we cared about most. While parents worried about childcare, getting the kids to school, balancing work and family life – we were banging on about Europe.”
But a number of MPs – and not just Conservatives – argue that a debate about Europe cannot be avoided because the financial crisis in the eurozone is leading to dramatic changes in the EU’s structures which will affect the UK even though it is not part of the single currency.
For some employers, the fear is that this debate could lead to the UK leaving the EU entirely, or to speculation that an exit is possible.
Even if the Conservative general election manifesto includes a pledge to hold a referendum to endorse new terms of membership – rather than a referendum on staying in or leaving the EU – there might still be a belief that a “no” vote would lead to Britain’s eventual exit.
Jerry Blackett, chief executive of Birmingham Chamber Group, said employers would be very concerned about any suggestion that the UK might pull out.
He said: “I think business people would like to hear that we are going to seek improvements with out relationship with Europe.
“For example, employers would like to see a better regulatory environment. They want Europe to be more competitive.
“But it would be very destabilising if the political issues around the eurozone were to create uncertainty around our trading relationship.”
The Society of Motor Manufacturers and Traders also said it was important that the UK remains in the EU.
Chief executive, Paul Everitt said: “The UK automotive industry is global, exporting to European markets and selling high value products into key markets around the world. It is important that the UK government plays an active and constructive role shaping European industrial, regulatory and trade policy.
“These are difficult times for all European economies and there needs to be sustained collective effort to relaunch growth and promote industrial competitiveness.”
But many Conservative MPs argue that the Prime Minister had no choice but to hold a referendum – and that this should be an “in-out” ballot.
Michael Fabricant (Con Lichfield) said: “Whether people are Eurosceptic or Europhile, most people accept that if the single currency is going to survive then the eurozone will have to become federal. Inevitably, there will be a two-speed Europe, with countries like the United Kingdom not being in the eurozone.
“The Prime Minister has an opportunity to state clearly what changes he would like to see made to those countries in the eurozone to strengthen the euro, and what competencies can be reclaimed by countries like the UK, which are not in the eurozone.”
He added: “It is all change in Europe, so now is the chance for the UK to seize our opportunity and once we have done so, promise an in-out referendum on Europe once the negotiations are complete.”
“All being well, we could end up with the best of both worlds – membership of the single market but without powers being surrendered to Brussels.”
And Chris Kelly (Lab Dudley South) said: “I want to hear the PM spelling out how the Government will use this unique period in Europe’s history and development to repatriate more powers, negotiate a better deal with the European Union and offer the British people a final say on the proposed new settlement with the EU with an opportunity to either approve or reject both it and membership of the EU. As a member of the generation born after the 1975 common market referendum I, like millions of other Britons, have never had a say on our continued membership of what is now the EU.
“I fully expect the Prime Minister to negotiate hard for a preferential arrangement for Britain in the EU and I expect my party leader to be successful in securing that preferential arrangement. I then look forward to a nationwide debate over whether we should accept the new preferential arrangement or seek withdrawal.”
Mr Kelly also said he accepted the need to abide by the Coalition agreement with the Liberal Democrats – which would mean a referendum would have to wait until after the next election, assuming Conservatives won a majority.
For their part, Liberal Democrats did not regard the promise of a referendum as threatening the Coalition, as long as it was clear that it was a Conservative manifesto pledge.
Lorely Burt (Lib Dem Solihull) said: “We are two separate and very different parties. What the Conservatives choose to out in their manifesto for the general election is entirely up to them.”
By the same token, Lib Dems would have their own policy on the issue, she said.
“The situation in the European Union is in a state of flux at the moment. It is slightly premature to try to renegotiate our terms of membership now, when we don’t know what the eurozone is going to look like.”
Nick Clegg, the Deputy Prime Minister and Liberal Democrat leader, warned this week that uncertainty over the UK’s membership of the EU could have a “chilling effect” on the economy.
And many Labour MPs are critical of Mr Cameron for allowing speculation to grow that there could be a vote which in some way resulted in Britain leaving the EU.
Jack Dromey (Lab Erdington) argued that this uncertainty would damage the West Midlands economy, in a Commons debate.
He said: “In a global marketplace in which we need to export on the one hand and attract inward investment on the other – particularly in the automotive industry – prolonged uncertainty for years to come as to whether our country will remain in the European Union could deeply damage investment decision.”