Double blow for Cameron over EU referendum and £1.7bn demand

David Cameron suffered a double blow on Europe on Tuesday when a parliamentary bill to establish an EU membership referendum by the end of 2017 collapsed and a key UK ally told Britain to accept a demand from Brussels to pay an extra £1.7bn.

The Conservatives attacked the Liberal Democrats for killing off the backbench bill, which would have placed an in/out EU membership referendum by the end of 2017 on the statute book.

Its collapse is a mixed blessing for the prime minister. The lack of a referendum law means the Tories will have to focus the EU section of coalition talks with the Lib Dems on delivering a referendum rather than agreeing a government mandate on the membership renegotiations with the UK’s 27 EU partners.

On the upside for the Tories, the lack of a bill means that Cameron will be able to claim that the Tories are the only party committed to legislating in the new parliament to deliver a vote.

The row over the bill came as Nick Boles, the Tory business minister, broke new ground by admitting that Britain would be unable to fully control its borders as long as it remained a member of the EU.

Boles told Total Politics magazine: “We may never be able to control it entirely, because it’s a fundamental principle of the EU. But it will be very hard for the British people to accept that, for as long as Britain remains the most dynamic economy in the EU, we’re going to be the net recipient of a very large amount of immigration every year. And it’s going to be hard to bring those people back on board. That’s a challenge both to the Labour party and to us almost equally. It’s something we have to respond to, not because of an economic argument. Politics isn’t all about economics.”

But Boles raised concerns that tough measures on non-EU citizens, as part of the government’s failed attempt to bring immigration down to the tens of thousands, were deterring skilled migrants from coming to the UK. “What’s happening, which is a bit troubling, is that quite a lot of people aren’t applying because they think it’s going to be impossibly hard.

“There is a worry that the impression has gone out that you’re never going to get into the UK, and no doubt some of our competitor nations are using that. We would be in a much more healthy position if we were able to say, as I genuinely believe is the truth, that we truly welcome and want people from all over the world who have skills.”

Boles later made clear that he was not suggesting that the prime minister would not be able to limit EU migration when he seeks to change the terms of Britain’s EU membership. Boles said: “I do not believe and did not say that we cannot seek changes to the way immigration works within the EU. Quite the contrary, I think it is essential that we do so. The PM is quite right to put the control of immigration from the EU at the very heart of his negotiation for a better deal for Britain in Europe – and then put that new deal to the British people in an in-out referendum in 2017. The British people want this issue sorted and I am absolutely confident that David Cameron will do just that.”

The remarks by Boles came as Helle Thorning-Schmidt, the prime minister of Denmark, said Britain should accept a demand from the European commission to pay an extra £1.7bn to the EU.

Cameron told MPs that he would refuse to pay the full sum, though he indicated that Britain might agree to pay a smaller amount.

Thorning-Schmidt told Bloomberg: “I respect that the UK wants to discuss this among ministers, but there are rules that must be kept. Countries must follow the rules as they are.”

The collapse of the EU referendum bill came after the Lib Dems had agreed to support a “money resolution” for the private member’s bill – to approve the costs of the referendum – in exchange for an agreement by the Tories to do the same for a Lib Dem backbench bill that would modify the bedroom tax.

The Tories suggested they were prepared to agree to the deal in exchange for a guarantee from the Lib Dems that they would provide government time for the referendum bill that is struggling because its sponsor, the former Tory minister Bob Neill, came third in the ballot for private members’ bill. This was rejected by the Lib Dems as unequitable.

Neill told MailOnline: “The Lib Dems have killed off our chances of putting into law, this side of an election, an in /ut EU referendum by 2017. They didn’t have the guts to vote against an EU referendum in the House of Commons. Instead they have used Westminster tricks to try to deny the British people a say on their membership of the EU.”

Tory sources said they were not prepared to accept a “£1bn blackmail” from the Lib Dems – their estimate of the costs of funding the changes to the bedroom tax. The Lib Dems accused the Tories of lying on two fronts – the official government estimates show the changes would cost £300m-£400m, and they were prepared to countenance funding the bedroom tax in exchange for government time for the referendum bill.

Powered by article was written by Nicholas Watt, chief political correspondent, for The Guardian on Tuesday 28th October 2014 21.55 Europe/London © Guardian News and Media Limited 2010