Britain is committed to making the most of Europe’s single market, for now, and still holds dear its “special relationship” with the U.S., Britain’s foreign minister William Hague told CNBC on Wednesday.
Speaking to CNBC’s Beccy Meehan from the Conservative party conference in the city of Birmingham, the foreign secretary as he’s known, however didn’t back down on Prime Minister David Cameron’s suggestion that the country would need a referendum over a new settlement within the European Union.
“We will come to a point where the fresh consent of the people is required on these matters. It’s nearly 40 years since we had a referendum over the European Economic Community,” Hague said.
“But we are conscious that big changes are happening in Europe, there is amajor crisis in the euro zone and this is likely to lead to changes in the relationship between countries in the euro zone and countries out of the euro zone.”
Britain’s ruling party has faced growing pressure from its ‘euroskeptic’ wing as region’s debt crisis has worsened. Prime minister David Cameron said on Tuesday that a referendum would be “the cleanest, neatest and most sensible way” of deciding Britain’s future in or outside the EU.
Hague told CNBC that the British people would be given the opportunity to decide when the euro zone’s future became clearer.
Dismissing the idea that Britain’s ambivalent stance towards membership of the European Union was deterring business from investing in the U.K., Hague said that Britain remained “very strongly committed to making the most of the single market” and the European Union, and that Britain was still a “great place” to invest.
“We’re doing that through advocating free trade agreements with other parts of the world, trying to push forward the single market within the EU.”
“The United Kingdom remains a great place to invest for access to the European market, we’re bringing down our tax rate, already down to 24 percent, so for businesses looking for certainty about the tax system and about a good place to invest, the U.K. remains the excellent place to come.”
Hague refused to speculate on the “market sensitive matter” of the possible $45 billion merger of British defense firm BAE Systems and Franco-German aerospace company EADS that has been put into doubt by German concerns over the deal. The companies have until 5 p.m. London time to decide on whether to proceed with the merger or to request an extension to the deadline.
“I can’t speculate…there are certain things that we want to see in place. We’re working on this very hard but I’m not going to say anything that will move those markets.”
Hague said that the U.K.’s defense relationship with both Europe and the U.S. was important, and any deal with EADS would not affect the so-called “special relationship” with either.
“Our relationship with the United States and our strategic and technological relationship is indispensable to us.”
“It’s crucial for us to be able to continue [to forge defense relationships] in both directions simultaneously,” he added.
Despite the International Monetary Fund urging the U.K. government on Tuesday to slow down its budget cuts in order to protect the economy from further weakening, Britain’s prime minister remains defiant that the country’s austerity program should stay.
Before the Conservative party conference concludes on Wednesday, the prime minister is expected to tell the audience of party members and officials that Britain faces a “swim or sink” moment and that his austerity plan is the only way forward.
"Unless we act, unless we take difficult, painful decisions, unless we show determination and imagination, Britain may not be in the future what it has been in the past," Cameron will say in a speech to conclude the conference, according to Reuters.