Labour party warns against 'foolish' EU exit

Britain's Shadow Chancellor Ed Balls arrives at the funeral of British Labour politician Tony Benn at St Margaret's Church, Westminster Abbey in London

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Britain's Shadow Chancellor Ed Balls arrives at the funeral of veteran British Labour politician …

LONDON (Reuters) - Britain would be reckless and foolish to walk away from its membership of the European Union, the Labour party's finance spokesman will say on Tuesday, warning of the damage an EU exit would have on jobs and investment.

Britain's future in Europe is in doubt with Prime Minister David Cameron promising an in/out referendum by 2017 if his party wins an election next year. The anti-EU UKIP also has a small but growing share of the popular vote according to opinion polls.

Labour, ahead of the Conservatives in the polls, broke their silence on the subject this month, saying they would only offer a referendum if there was a further transfer of power to Brussels - something they said was unlikely before 2020.

On Tuesday Labour's Ed Balls, the party's top finance spokesman, will ram home Labour's position, telling business leaders that the Conservative offer of a referendum was against the national interest, and creating uncertainty for investors.

"We are clear that there is no future for Britain in walking away from our biggest market," Balls said in extracts of his speech released in advance.

"To walk away from our EU membership would be reckless, foolish and deeply damaging. It would be anti-investment, anti-jobs and anti-business."

A string of multinational employers operating in Britain such as carmakers Ford and Nissan, financial services firms and Airbus have expressed concern at the prospect of Britain withdrawing from the EU.

Both Labour and the Conservatives want to reform the EU to make it more open and competitive. Cameron believes any reforms should be put to a public vote, and if his renegotiation is successful, will campaign for Britain to stay within the bloc.

Cameron is using the referendum promise as a selling point to eurosceptic voters who might otherwise defect to UKIP. The vote is also an important way of keeping his party, many of whom back an EU exit, united ahead of the next election.

(Reporting by William James; Editing by Alison Williams)

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