What does Ed Balls consider “the biggest economic risk” to the UK right now?

Leaving the EU is the greatest economic risk facing the country, according to Ed Balls. Speaking to the BBC during his trip to Washington DC today, the Shadow Chancellor said that David Cameron’s promise of an EU referendum in 2017 could jeopardise the British economy through lost investment, lost jobs and lost influence.

Balls warned that the Tories’ plans could see the UK “sleepwalking” towards exiting the EU. He said:

“The biggest risk for Britain in the next few years, the biggest economic risk, would be for us to leave the EU and we have a Prime Minister who at the moment is saying that it is on the table.

“In my view, sleepwalking to exit from Europe would mean we would lose investment, we would lose jobs, we would lose big companies going to other parts of the world to invest. And we would lose influence in Europe and in America too. I think we would pay a long term cost.

“I think what David Cameron is proposing, to play fast and loose with Britain’s relationship with Europe is the biggest risk for our economy for the next few years.”

Balls talked up the UK’s ability to trade with both member states of the EU and America, and claimed that pulling out of the European Union would cost us on both fronts.

“Our two biggest trading partners are Europe and America and it is vital that we continue to trade with both. But at the moment a Conservative government, if elected, after the general election would put at risk our relationship with Europe and our influence with America, by putting on the table our relationship with the European Union.”

The message he is receiving over in the states is that people do not understand why Cameron is determined to take the risk.

“When I speak to people here in Washington, and in capitals round the world, people say, ‘Britain leaving Europe? A referendum in a couple of years time? Why is David Cameron proposing to take such big risks with Britain’s economic future?’ I think they’re right.”

Of course, Cameron’s pledge to hold an EU referendum was devised as a way of heading off the threat from UKIP. Since he announced the policy two years ago, however, UKIP’s support has continued to grow, while splits over Europe in his own party have become more pronounced.

In a peculiar development, UKIP’s deputy leader Paul Nuttall told the New Statesman this week that his party had finally started to garner more support was after they decided “to stop banging on about the European Union”. This echoes the phrase David Cameron used in his first conference speech as Tory leader in 2006.