His government had already guaranteed a referendum if the transfer of significant new powers to Brussels is proposed. But he went further in his 23 January speech, promising more ‘repatriation’ of powers and a referendum on the UK’s European Union membership in 2017.
However, much can happen between now and 2017; huge events could take place that would throw the EU into great turmoil, such as major debt defaults in Greece and other southern European countries, and even the breakup of the euro zone. Also, if the Labour Party wins the next general election 2015, it may decide not to hold a referendum at all.
Present polls show more people supporting an EU exit than staying in. But it’s not yet possible to predict the fortunes of the pro- and anti-EU campaigns if a referendum is eventually held. Judging by present positions, Lib Dem and Labour leaders would campaign to stay in the EU and in all likelihood majority of the Tory leadership too, but inevitably widespread anger against both the EU and the government would figure strongly. Many workers and many jobless people could vote No to the EU to express outrage at the government, austerity and the EU gravy train.
So while much could change during a referendum campaign, as was the case in the 1975 referendum, Cameron has entered dangerous territory for British capitalism and takes a big gamble- raising the possibility of an EU exit against the intent of the leaders of all three main parties.
How would the British economy be affected if Britain leaves the EU? Many Tory euro sceptics argue that Britain would be fine outside the EU.
However, more than half of British trade is with Europe and the British ruling class has benefited politically and economically in the world arena through being a leading EU player. So while British capitalism would stagger on, much of it could suffer significantly from an EU exit, including the car industry and finance sector.