Cameron to Promise Referendum by 2017 on U.K. Leaving EU

Prime Minister David Cameron will tomorrow promise a referendum on whether Britain should leave the European Union, allowing U.K. voters to decide on breaking up the 27-nation bloc.

Promising to make the case to remain in the EU once he has negotiated a return of some powers to Britain, Cameron will say the democratic consent for the status quo in Europe is “wafer thin.” He will pledge to put the question to a popular vote by the end of 2017, if re-elected in two years.

“It is time for the British people to have their say,” Cameron will say in a speech in central London, according to extracts released by his office “It is time to settle this European question in British politics.”

Cameron is responding to pressure from lawmakers in his Conservative Party for looser ties with the EU or an outright departure from the political union. European leaders have rejected his calls to renegotiate membership terms. His Liberal Democrat coalition partners and the opposition Labour Party also reject the plans and the U.S. has expressed concern.

The 2015 election remains his biggest obstacle. Opinion polls show the Tories losing support to the anti-EU U.K. Independence Party and trailing the Labour Party by around 10 percentage points in opinion polls.

Three Decades

Tomorrow’s speech, which he was forced to postpone after planning to give it in Amsterdam on Jan. 18 because of the hostage crisis in Algeria, marks an attempt to solve a three- decade predicament that has haunted Conservative premiers. Cameron has ceded to the demands of all but a handful of the most euroskeptic lawmakers by raising the specter of an exit from the EU. He’s stopping short of meeting demands for an immediate plebiscite sought by some in his party.

“A vote today between the status quo and leaving would be an entirely false choice,” Cameron will say. “It is wrong to ask people whether to stay or go before we have had a chance to put the relationship right.”

Cameron’s comments on the prospect of leaving the union contrast with a celebrated speech by his Tory predecessor, Margaret Thatcher, in Bruges, Belgium, in 1988, in which she said “our destiny is in Europe.”

Britain, the EU’s third-biggest economy, first applied to join the then European Economic Community in 1960. That step was vetoed by French President Charles De Gaulle. Tory Prime Minister Edward Heath restarted negotiations, and Britain joined in 1973. His successor, Labour’s Harold Wilson, staged and won a referendum in 1975 on staying in, with his Cabinet split.

Budget Rebate

Thatcher won an agreement in 1984 that the U.K. should get a rebate on its budget contributions that it still receives to compensate for its low level of farm subsidies. Labour Prime Minister Tony Blair’s plan to join the European single currency after 1997 was blocked by his finance minister, Gordon Brown.

The Liberal Democrats and Labour say Cameron’s push to loosen ties with Europe put investor confidence and London’s role as a financial center at risk.

A YouGov Plc poll for the latest Sunday Times newspaper found 40 percent of respondents saying they would vote to stay in the EU compared with 34 percent who say they would vote to leave. YouGov polled 1,912 adults on Jan. 17 and Jan. 18.

The company found at the start of the month that 46 percent would vote to leave compared with 31 percent who would vote to stay in, in line with surveys throughout 2012, YouGov’s Anthony Wells said on his U.K. Polling Report website.

Planned Legislation

Cameron said that legislation will be drafted before the 2015 election and introduced immediately after the vote if the Tories win a majority. The bill allowing a vote to be held would then be passed by the end of that year.

“We will complete this negotiation and hold this referendum within the first half of the next Parliament,” Cameron will say.

Such commitments show how far Cameron has been pushed by his own allies. He has said he didn’t expect Europe to be a significant issue in his first term.

Views within the Conservative Party range from the Better Off Out group, which wants exit from the EU, to the Fresh Start group, which has called for the U.K. to reclaim some powers while staying in the single market, to the Center For British Influence, which says Cameron’s stance risked undermining Britain’s position.

EU View

“European interests should always be the most important,” EU President Herman Van Rompuy said last week. “The European Union doesn’t just mean taking account of national concerns.”

Cameron will say the deepening integration of the 17 euro countries, which don’t include Britain, and the demands of global competition raise “fundamental questions” about the nature of the U.K.’s relationship with the EU.

“If we don’t address these challenges, the danger is that Europe will fail and the British people will drift towards the exit,” Cameron will say. “I do not want that to happen. I want the European Union to be a success. And I want a relationship between Britain and the EU that keeps us in it.”

Leaders from other EU countries say Cameron’s approach is fraught with danger. Austrian Chancellor Werner Faymann said Cameron risks pitting all 26 other EU nations against Britain.

“We need to succeed in moving him,” Faymann told reporters in Strasbourg, France, on Jan. 15. “It will be important to convince David Cameron that, first, we are a common family and not separate groups, and, second, we need results that perhaps in domestic politics are tougher to explain but that are urgently necessary for the common European endeavor.”

U.S. President Barack Obama told Cameron last week that “the United States values a strong U.K. in a strong European Union,” according to a White House readout of the call between the two leaders.

To contact the reporters on this story: Gonzalo Vina in London at gvina@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net; Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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