EU referendum to cost taxpayers over £100m

The UK Prime Minister has vowed to hold a straight in-out referendum on Europe in 2017 which will cost the UK public a sum of £100m.

The last referendum that was held in the UK was the implementation of the AV voting system which got rejected. That referendum cost £75m, adjusting for inflation the cost to do something similar in 2017 would hit the £100m mark.

The call for a referendum by the Prime Minister David Cameron has changed the focus in the World Economic Forum, held in Davos from a “Grexit” last year to a “Brixit” this year.

The UK Prime Minister is confident that the referendum warning will make it easier to re-negotiate Britain’s membership terms in the European bloc.

Manuel Sarrazin of the German Green party has said: “Cameron is using EU membership as a tactical tool for domestic politics.”

In his speech to the forum, Cameron said: “Countries in Europe have their histories, their traditions, their institutions, want their own sovereignty, their ability to make their own choices, and to try and shoehorn countries into a centralised political union would be a great mistake for Europe, and Britain wouldn’t be part of it.“

To risk finding Britain outside of the European single market creates more uncertainty, in an already uncertain market, until the referendum is held. It is a high risk political tact to play in order for Cameron to create more serious conversation about the European terms for Britain.

“The single market is the EU’s greatest asset and is of crucial importance to the banking and financial services industry in the UK,” said British Bankers Association (BBA) Chief Executive Anthony Browne.

The calling of the referendum now in 2013 leaves a context of uncertainty up until its action in 2017. Foreign investors will be cautious to start up a project in the UK if there is a risk that the UK will leave the single market union.

UK business leaders in the World Economic Forum, held in Davos have warned the Prime Minister that the UK economy would face foreign business uncertainty as its place in the 27-nation bloc is questioned.

Martin Sorrell, Chief Executive of WPP, echoed this point stating: “having a referendum sometime between 2015 and 2018 creates more uncertainty and we don’t need that,” and that “this is a political decision, not economic.”

The Chairman of Business for New Europe, Roland Rudd has estimated that the uncertainty caused by the call for referendum could cost the UK upwards of £30bn in foreign investment each year until the vote is held.

Political tensions surrounding the threat to leave can already be seen, with French Foreign Minister Laurent Fabius stating: “If Britain wants to leave Europe we will roll out the red carpet for you.”

Patrick Corby