Shadow Chancellor Ed Balls kicked off Labour's Euro election campaign on a visit to a small business in Lordswood yesterday.

Mr Balls dropped in Nick Whatley's family-run gas and renewables company where he was treated to cupcakes and chatted to his 13-year-old daughter Alyssa about school.

Mr Whatley, who runs Prestige Solar and Heating from his home in Savage Road, told him how he had rode through the recession by "being upfront and honest" with customers.

But he said the high cost of the business had prevented him from his dream of expanding into his own showroom.

Mr Balls gave him an assurance that under a Labour government the tax would be cut and frozen for small businesses.

Mr Balls then went on the campaign trail with Cllr Tristan Osborne, Labour's prospective parliamentary candidate for Chatham and Aylesford and the party's MEP hopeful John Howarth.

He met neighbours of the Whatley family Janet and Frank Bailey who told him of their recent experiences of being treated at Medway Maritime Hospital.

Mrs Bailey,76, said : "What we needed to hear from him that there will be no more cuts in the NHS."

The party is hoping to improve its performance on 2009 when its share of the vote in the south east collapsed and it lost one of its two MEPs. Peter Skinner has represented the south, east, including Medway, for the last 20 years.

During the visit Mr Balls defended his party's position on an 'in-out' referendum on whether the UK should stay in the EU, saying it is more important to focus on the economic recovery.

He said that having a referendum "come what may" in 2017 would undermine the recovery, cost jobs and destabilise the economy.

Mr Balls said: "The biggest priority is to get people benefitting from the recovery because most people are saying the recovery is not working for them.

"We would pay a big price if we walked away from the biggest single market which is right on our doorstep." - Ed Balls

"Our big focus is on jobs and living standards but we have said that if there is any transfer to Brussels in the next Parliament, then we will have an in-out referendum - that is a clear pledge from Labour."

He added: "We don't think it is sensible to say that, come what may, we will have a referendum in 2017.

"We think that will cost business jobs and investment; it is very destabilising. We think that if we can get the reforms we need to immigration rules, benefit rules and the Common Agricultural Policy, Britain is better off staying in than leaving.

"We would pay a big price if we walked away from the biggest single market which is right on our doorstep."

He dismissed the threat posed by UKIP but acknowledged it was attracting disaffected voters.

"UKIP is voicing concerns that some people have that the Conservatives are not tackling the cost of living crisis we have."

He rejected complaints that its latest poster campaign was racist.

"I think it is clear from what we have seen in the last few weeks from comments made by some members that there are racist members but I do not think that an advert that says people are concerned about their jobs is racist."

On the party's prospects at the Euro election for the south east, he said he hoped for "two, maybe three, seats."