The EU and the Union flags fly outside The European
Commission Representation in the United Kingdom in central
London. REUTERS/Stefan Wermuth
Prime Minister David Cameron has promised Britons a vote
on whether the country should stay in the European Union or
leave, rattling London's biggest allies and some investors by
raising the prospect of uncertainty and upheaval.
Cameron announced the referendum would be held by the end of
2017, provided he wins the next election, and said that while
Britain did not want to retreat from the world, public
disillusionment with the EU was at "an all-time high".
"It is time for the British people to have their say. It is
time for us to settle this question about Britain and
Europe," Cameron said in a speech, adding that his
Conservative party would campaign for the 2015 election on a
promise to renegotiate the terms of Britain's EU membership.
"When we have negotiated that new settlement, we will give
the British people a referendum with a very simple in or out
choice to stay in the European Union on these new terms; or
come out altogether. It will be an in-out referendum."
A referendum would mark the second time Britons have voted on
the issue. In 1975, they decided by a wide margin to stay in
the EU's predecessor, two years after the country had joined.
Domestically, Cameron stands on relatively firm ground. Most
recent opinion polls have shown a slim majority would vote to
leave the EU amid often bitter disenchantment about its
influence on the British way of life. However, a poll this
week showed a majority wanted to stay.
Cameron's position is fraught with uncertainty. He must come
from behind to win the next election, secure support from the
EU's 26 other states for a new British role, and hope those
countries can persuade their voters to back the changes.
Critics say that in the long run-up to a vote, Britain would
slip into a dangerous and damaging limbo that could leave the
country adrift or pushed out of the EU.
The United States, a close ally, is also uneasy about the
plan, believing it will dilute Britain's international clout.
President Barack Obama told Cameron by phone last week that
Washington valued "a strong UK in a strong European Union".
Some of Britain's European partners were also anxious and
told Cameron on Wednesday his strategy reflected a selfish
and ignorant attitude. However, Angela Merkel, the leader of
EU paymaster Germany, was quick to say she was ready to
discuss Cameron's ideas.
French Foreign Minister Laurent Fabius was less diplomatic,
quipping: "If Britain wants to leave Europe we will roll out
the red carpet for you," echoing Cameron, who once used the
same words to invite rich Frenchmen alienated by high taxes
to move to Britain.
Billed by commentators as the most important speech of
Cameron's career, his referendum promise ties him firmly to
an issue that has bedevilled a generation of Conservative
In the past, he has been careful to avoid bruising partisan
fights over Europe, an issue that undid the last two
Conservative prime ministers, John Major and Margaret
His speech appeared to pacify a powerful Eurosceptic wing
inside his own party, but deepen rifts with the Liberal
Democrats, the junior partners in his coalition. Their
leader, Deputy Prime Minister Nick Clegg, said the plan would
undermine a fragile economic recovery.
Sterling fell to its lowest in nearly five months against the
dollar on Wednesday as Cameron was speaking.
Cameron said he would seek to claw back powers from Brussels,
saying later in parliament that when it came to employment,
social and environmental legislation "Europe has gone far too
But such a claw back - the subject of an internal audit to
identify which powers he should target for repatriation - is
likely to be easier said than done.
If Cameron wins the election but then fails to renegotiate
Britain's membership of the EU, a 'Brexit' could loom.
Business leaders have warned that years of doubt over
Britain's EU membership would damage the $2.5 trillion
economy and cool the investment climate.
"Having a referendum creates more uncertainty and we don't
need that," Martin Sorrell, chief executive of advertising
giant WPP, told the World Economic Forum in Davos. "This is a
political decision. This is not an economic decision. This
isn't good news. You added another reason why people will
postpone investment decisions."
Cameron has been pushed into taking such a strong position
partly by the rise of the UK Independence Party, which
favours complete withdrawal from the EU and has climbed to
third in the opinion polls, mainly at the expense of the
"All he's trying to do is to kick the can down the road and
to try and get UKIP off his back," said UKIP leader Nigel
Eurosceptics in Cameron's party, who have threatened to stir
up trouble for the premier, were thrilled by the speech.
Conservative lawmaker Peter Bone called it "a terrific
victory" that would unify 98 percent of the party. "He's the
first prime minister to say he wants to bring back powers
from Brussels," Bone told Reuters. "It's pretty powerful
Whether Cameron holds the referendum remains as uncertain as
the Conservatives' chances of winning the election. They
trail the opposition Labour party in opinion polls, and the
coalition is grappling with a stagnating economy as it pushes
through unpopular public spending cuts to reduce a large
Labour leader Ed Miliband said on Wednesday his party did not
want an in/out referendum.
Cameron said he would campaign for Britain to stay in the EU
"with all my heart and soul", provided he secured the reforms
he wants. He made clear the EU must become less bureaucratic
and focus more on trade deals. It was riskier to maintain the
status quo than to change, he said.
"The biggest danger to the European Union comes not from
those who advocate change, but from those who denounce new
thinking as heresy," he said.
Cameron said the euro zone debt crisis was forcing the bloc
to change and that Britain would fight to make sure new rules
were fair to the 10 countries that don't use the common
currency, of which Britain is the largest.
Democratic consent for the EU in Britain was now "wafer
thin", he said. "Some people say that to point this out is
irresponsible, creates uncertainty for business and puts a
question mark over Britain's place in the European Union,"
said Cameron. "But the question mark is already there:
ignoring it won't make it go away."
A YouGov opinion poll on Monday showed that more people
wanted to stay in the EU than leave it, the first such result
in many months. But it was unclear whether that result was a
Paul Chipperfield, a 53-year-old management consultant, said
he liked the strategy. "Cameron's making the right move
because I don't think we've had enough debate in this
country," he told Reuters. "We should be part of the EU but
the EU needs to recognise that not everybody's going to jump
on the same bandwagon."
Asked after the speech whether other EU countries would agree
to renegotiate Britain's membership, Cameron said he was an
optimist and that there was "every chance of success".
"I don't want Britain to leave the EU," he told parliament
later. "I want Britain to reform the EU."
In the 1975 referendum, just over 67 percent voted to stay
inside with nearly 33 percent against.