Britain could lose £5bn rebate if it voted remain in second EU referendum

IF BRITAIN had a second vote and chose to remain in the EU, the European Commission could strip it of its existing opt-outs and its budget rebate, The Daily Telegraph has learnt.

The UK has opt-outs on EU asylum policy, membership of the single currency and the passport-free Schengen zone, an exemption from the EU’S Charter of Fundamental Human Rights as well as some justice and crime policies.

Margaret Thatcher’s hard-won EU rebate, worth two thirds of Britain’s annual net contribution from the previous year, would also come into the Commission’s sights. According to the Treasury, the rebate was worth £4.9 billion in 2015.

The prospects of a second referendum appeared to move closer on Thursday when Nigel Farage said he thought another vote was necessary to end the Brexit debate once and for all.

While the former Ukip leader’s com- ments reignited discussion over the rights and wrongs of a second referendum in Britain, they were met with weary exasperation in Brussels.

One EU diplomat told The Telegraph the British could “Do what the f--- you want, but stop dicking around. We’re moving forward and would appreciate some clarity.”

Sources warned that if a second referendum was held after March 29, 2019, Britain would have to renegotiate its EU membership from scratch.

“Many in the EU will be less inclined to offer the UK as favourable membership terms as the ones it currently enjoys,” said Petros Fassoulas, secretary general of the European Movement International lobbying organisation, “But there is genuine desire in Brussels for the UK to remain a member of the EU.”

Even if a referendum was rushed through before the legal deadline, EU sources said, the opt-outs and rebates could still be up for grabs in negotiations. “Imagine, hypothetically, there is a renegotiation before withdrawal,” an EU source said. “Why do you think there would be a guarantee of opt-outs in that case?”

The EC insists that Article 50, the legal process taking Britain out of the EU, cannot be reversed by the UK alone. The decision would have to be made collectively and could lead to Britain losing its special status.

“It would be a huge coup for the EU if the UK changed its mind,” said John Springford, deputy director at the Centre for European Reform, who said the EU would demand commitments that Britain would not trigger Article 50 again.

“The EU would say: ‘We won’t make you join the euro or Schengen – that will cause us all sorts of headaches that we don’t need and we realise that would turn UK public opinion against Remain. But don’t expect to keep your rebate,” he added.

“My sense is the EU27 would insist on ending the rebate if there was a rethink on the UK’S part – but not Schengen and certainly not the euro,” said Michiel van Hulton, a former Dutch MEP.

“There’s no appetite for another 40 years of what is seen by many as UK exceptionalism and obstructionism,” he added, “but on balance I think most people in Brussels would welcome a rethink.”

But Andrew Duff, a former MEP and president of the federalist Spinelli Group, thought a second referendum would go down “extremely badly” in Brussels.

“Nobody I know in Brussels thinks that the UK can reach a settled state of mind with regard to EU membership. This continual turbulence and volatility are not welcome,” he said.

One EU diplomat said Britain’s status as a net contributor would hand it some leverage. The EU faces an annual shortfall to its finances of up to €15billion after Brexit.

Pieter Cleppe, of the Open Europe think tank, said: “Brussels would obviously like a second referendum, given their own track record of ignoring ‘no’ votes in referendums,” but he warned removing Britain’s opt-outs and rebate would backfire on the EU.

A British government source said any such “jiggery-pokery” would only win more votes for Leave in a second referendum. Theresa May has been adamant there will be no second vote. A commission spokesman said that talk of a second referendum was speculation and that the EU executive’s working hypothesis was that Brexit would happen on March 29 2019.