EU Referendum Backed By Labour In U-Turn, Party Pledges To Campaign Against Brexit

Labour has dropped its opposition to an in/out referendum on EU membership, after rejecting the idea under Ed Miliband's leadership during the general election campaign.

Acting leader Harriet Harman said the party would now support David Cameron's planned referendum bill, clearing a path for a UK-wide ballot by the end of 2017.

She wrote that the party had "conversations on the doorstep" during the election campaign.

It follows Andy Burnham, favourite to be the next party's next leader, calling for the EU referendum to be held next year rather than 2017.

Writing in the Sunday Times, Harman and the shadow foreign secretary Hilary Benn admitted voters wanted a say on membership but warned against a "Brexit".

They said: "We have now had a general election and reflected on the conversations we had on doorsteps throughout the country. The British people want to have a say on the UK's membership of the European Union.

"Labour will therefore now support the EU referendum bill when it comes before the House of Commons.

"The Labour Party doesn't want to see the UK stumble inadvertently towards EU exit. We will make the case for our continued membership.

"The notion that Britain's future and prosperity and security lies shutting itself off from this market and a world that is increasingly interdependent makes no sense.

"And in an age of powerful trade blocs, with the growing economies or Asia and Africa, we have more power by being in the EU than we could ever hope to have by acting alone.

"That is the argument we will make in this referendum, as the British people make their decision."

The announcement follows a leak to The Guardian about the Bank of England's project to assess the economic risks to Britain if the country votes to leave the EU.

Last week, Cameron, who met European counterparts for the first time since his general election victory, admitted he was "not met with a wall of love" as he began diplomatic negotiations aimed at securing changes to the UK's relationship with Brussels.

At a summit in the Latvian capital Riga he conceded that securing a deal would take "patience and tenacity" and refused to ruled out campaigning for Britain to leave the EU if his renegotiation efforts failed.

He said: "I'm confident, I've set out a series of changes which I think address the main concerns which the British people have, that I have about Europe and the way it works and I'm confident of getting those changes.

"But I've always said that if I don't get what I think I need, I rule nothing out."

David Cameron on Riga on Friday

Labour said it also supported efforts to reform the union, including freedom of movement rules.

"Like many people and businesses, we want reform in Europe - on benefits and the way the EU works - and transitional controls on the free movement of citizens from any new member state wanting to work in Britain," Harman and Benn wrote.

"We will hold the Prime Minister to account on these. But the EU itself needs to recognise the growing demand from countries across Europe that want more devolution of power and a recognition that the EU must work for those countries that are and will remain outside the euro."

The pair said nearly half of investment in the UK was from within the EU and it remained the country's largest export market, citing Confederation of British Industry estimates of a net benefit from membership of 4% to 5% of GDP.

A number of large UK employers, including Deutsche Bank and Airbus, have confirmed they are reviewing the consequences of a Brexit for their businesses.

Pascal Lamy, head of the Notre Europe think-tank, said he felt Cameron should be positive about the union during the referendum campaign.

The former director general of the World Trade Organisation told the BBC: "Most European leaders, including myself, feel David Cameron needs to be able to make a good case for Europe in the referendum.

"He himself must make a pro-EU case in the UK, which frankly hasn't been done for the last 15 years. There has to be some change to the UK narrative, which will probably be the price for a compromise."