11 Jan 2013

Could Britain end up leaving the EU? The key questions

The prospect of Britain pulling out of the European Union is now being openly discussed in capitals across the world. Why is this happening now?

Under the Blair and Brown governments, Britain’s future in the EU was assured. No-one in power thought there was any alternative to British membership.

Now, with David Cameron in charge, the mood music has changed, and in a speech this month the prime minister is expected to say that the Conservatives are committed to holding a referendum if they win the 2015 election.

Mr Cameron wants to renegotiate the terms of Britain’s membership and hopes to put what he achieves before the voters. This would amount to an in/out referendum on membership of the EU.

Who is worried?

Other countries are concerned. During a trip to London on Thursday, Gunther Krichbaum – who chairs the Bundestag’s European affairs committee and is a member of Chancellor Angela Merkel’s Christian Democrats – said Britain was trying to “blackmail” EU states.

He argued that by seeking a renegotiation, the British government could open a “Pandora’s box”, with other member states picking and choosing what they liked and disliked.

Mr Krichbaum warned the prime minister that “there is always a risk that the referendum becomes, as Charles de Gaulle put it, less about the question asked and more about the person who’s asking it”.

And he said losing the advantages of the European single market “would be a disaster for the British economy”, while losing Britain “would weaken the European Union”.

His intervention followed similar warnings from US Assistant Secretary of State Philip Gordon, again during a visit to London, that America wanted “to see a strong British voice in that EU”.

Where does David Cameron stand?

So how has it come to this? Although Mr Cameron is a Eurosceptic, he does not want Britain to leave the EU.

He resents what he considers the EU’s unwarranted interference in the affairs of nation states, but recognises the advantages of free trade in the single market.

But many of his backbenchers, also Eurosceptics and, like Mr Cameron, increasingly concerned about the success of Ukip at the ballot box, want to see him taking a hard line within the EU.

They believe Britain will be offered concessions to ensure that it remains a member of the EU, that it can renegotiate from a position of strength.

The Conservatives’ position was made abudantly clear today by George Osborne. In an interview with the German newspaper Die Welt, the chancellor said: “I very much hope that Britain remains a member of the EU, but in order that we can remain in the European Union, the EU must change.”

What does the prime minister want to renegotiate?

The Conservatives hope renegotiation will see Britain exempted from the EU’s labour market rules, in addition to the opt-out from the union’s police and justice policies that is currently being sought.

Mr Cameron is gambling that he will be able to achieve a deal that satisfies the sceptics, neuters the rise of Ukip and keeps Britain in the EU.

Will other EU states agree?

Charles Grant, director of the pro-European Centre for European Reform, argues that EU governments will not grant treaty opt-outs to Britain because of fears that it could gain “an unfair competitive advantage” within the single market and encourage other countries to follow Britain’s pick-and-mix example.

Mr Grant sees a scenario in which Mr Cameron returns from negotiations with a package that fails to placate his Eurosceptics, who embark on a campaign of withdrawal in the referendum campaign.

Could Britain leave the EU?

Although this is not something Mr Cameron wants, and his coalition partner Nick Clegg is horrified at the thought, withdrawal is feasible.

Mr Grant believes that even if the prime minister fails to achieve a breakthrough deal in negotiations after victory at the next election, a pro-EU campaign led by the Labour and Liberal Democrat could succeed.

But he says it could be more difficult for Labour, if it wins the 2015 election, to triumph in a referendum – assuming it follows Mr Cameron’s example and agrees to hold one. This is partly because Labour is not seeking a new deal with the EU.

Opinion polls at the moment show that a majority of voters want to leave the EU, so withdrawal is distinctly possible.

But with Labour, the Lib Dems, businesses and unions, as well as many Conservatives, opposed to an exit, Eurosceptics have a battle on their hands.

Euro-sceptic Conservative voters might not be persuaded by a Labour prime minister to vote yes in a referendum, but YouGov polling shows they would be likely to follow the lead of a Tory prime minister.

What happened the last time there was a referendum?

Britain joined the European Economic Community (EEC) in 1973 when Ted Heath was prime minister. In the run-up to the 1974 elections, Harold Wilson promised the voters they would be given a say on Britain’s membership in a referendum if Labour won.

This was the first ever UK-wide plebiscite. The only other was the alternative vote referendum in 2011.

Labour was deeply split and most voters favoured withdrawal, but with Mr Wilson newly elected and arguing in favour of a yes vote, alongside the Tories, there was a two-thirds majority for staying in.