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Retailers Mum on U.K. Plan for Europe

British businesses keep mum following David Cameron’s EU speech.

LONDON — U.S. Vice President Joe Biden met British Prime Minister David Cameron Tuesday on a brief tour of Europe, and while the two discussed a variety of topics, they steered clear of an elephant in the room: Britain’s future in the European Union.

Biden’s meeting at Number 10 Downing Street marked the end of a five-day tour of Germany, France and the U.K. to meet with key leaders to discuss a full range of bilateral, regional and global issues, according to the American Embassy in London.

He met Britain’s deputy prime minister, Nick Clegg, to discuss the possibility of a free-trade agreement between Europe and the U.S. and took part in a meeting of the National Security Council that was chaired by Cameron.

However, the British papers said that none of the leaders mentioned — at least publicly — the referendum that could see Britain quit the EU and that has been proposed by Cameron before the end of 2017. Last month Biden went on the record saying that the U.K. and the EU were stronger together than apart.

Late last month Cameron bowed to pressures from a faction inside his own Conservative party, from an anti-EU political party, and from a general feeling among much of the population that everyday life in the U.K. is being eroded by the debts, the red tape and the sometimes nonsensical rules that come with being a member of the EU.

“There is a growing frustration that the EU is seen as something that is done to people rather than acting on their behalf,” Cameron said in a much-anticipated speech in London. If reelected in 2015, he promised, he would negotiate a new settlement with the EU with the “single market at its heart.”

Cameron has also proposed drawing up a referendum — the first on Europe since 1975 — that would allow the British people to decide whether they want to remain inside — or bail out of — the EU. If the people vote to exit, it would be a game changer for Britain, which relies on the joint pulling power of the EU nations for lucrative trade agreements worldwide.

In a silence that speaks volumes, British fashion retailers large and small are keeping their lips zipped on the matter — despite the uncertainty it has created.

A variety of major British retailers, including Marks & Spencer, Primark, Burberry and Arcadia, declined to comment on Cameron’s speech, the impact of a renegotiated pact with the EU and the potential consequences of a British exit.

“The silence may well be an eloquent one,” said Nick Hood, head of external affairs at Company Watch, the London-based firm that analyzes the financial health of businesses.

“There are an awful lot of British retailers that are talking up plans for international expansion — Debenhams, Marks & Spencer, Topshop and Reiss, to name a few — and Cameron’s speech poses serious questions because of the uncertainty it creates.

“How will the negotiations with the EU turn out? What will happen to the exchange rate of the pound? If Britain leaves the EU, how powerful will it be to negotiate bilateral agreements on its own? Will Britain go the route of Switzerland and Norway? Business leaders are working hard to be as neutral as possible on the subject,” Hood added.

In a statement following the speech, the British Retail Consortium, the country’s biggest retail lobby, directly addressed the new mood of uncertainty: “We note that the prime minister’s high-level outline of a program of legislation, negotiations and ultimately a referendum contains many uncertainties. What is important for U.K. retailers is that levels of uncertainty are minimized to ensure retailers continue to be able to make important decisions on investment and job creation — either here, elsewhere in Europe or, indeed, globally — that continue to benefit the U.K. economy.”

John Miln, chief executive officer of the U.K. Fashion and Textile Association, said the organization’s key members “are clearly concerned that the U.K. should remain part of Europe, and that the original principle of the common European market is maintained.” He said a potential exit would have a negative impact on business. “The U.K. is not an island and is entirely reliant on its close neighbors for its pulling share in the market,” said Miln.

Last month in Davos, Cameron and German Chancellor Angela Merkel were pushing for the launch of negotiations on a EU-U.S. free-trade agreement at the World Economic Forum. Cameron said a deal between the two regions could add more than 50 billion pounds to the EU economy alone.

There are those who believe that speculation about Britain quitting the EU will remain just that.

“We are not facing commercial Armageddon,” said George Wallace, ceo of MHE Retail, a pan-European consultancy. “Britain needs the EU, and the EU needs Britain as well.”

Wallace also pointed out that Cameron has an election to win in 2015, and the speech was, in many senses, an appeal for votes.

“Cameron genuinely thinks the treaty with the EU needs to be renegotiated, but he also needs the Eurosceptic back benchers [parliamentarians who do not hold ministerial posts] from his own party on board, and he needs to head off the threat from UKIP [the U.K. Independence Party, which campaigns for withdrawal from the EU], who could take votes from the Conservatives in the next election.

“Never say never, but I think if it comes to a referendum, we’ll end up roughly with the status quo,” said Wallace.