Foreign Secretary warns that EU will punish Britain for leaving
Britain will be punished by the EU for leaving because other countries will not want to see it "succeed" alone, Philip Hammond has warned.
The Foreign Secretary delivered the stark message as he insisted negotiations over membership reforms will run "right to the wire" of a crunch summit in Brussels this week.
The comments, in an interview on the BBC's Andrew Marr Show, came as the sides began ramping up their campaigns with just four months to go until the likely referendum date.
Two senior travel industry figures have cautioned that flight prices could rise and tourist safety could be compromised by Brexit.
Mr Hammond said there were still "a lot of moving parts" in the draft deal tabled by European Council president Donald Tusk, but UK had already secured an exemption from "ever-closer union" and a "major breakthrough" on restricting migrant benefits.
Other EU states recognised that Britain needed a "robust deal" in order to stay in.
"Until a few weeks ago people were telling us it was impossible to have any kind of period in which we treated newly arrived migrants differently from people who were already here," Mr Hammond said.
"But the text that is on the table recognises that there can be a period of four years in which people are treated differently. That is a major step forward.
"What we have still got to discuss is what that difference in treatment precisely is ... I don't think that is going to get resolved before Thursday."
Mr Hammond said the negotiations would go "right to the wire, with some of these things only being able to be decided by the heads of state and government on Thursday when they sit down in that room together".
"If we can't get the deal we will carry on talking."
Challenged that the proposals on the table fell short of the Tory manifesto pledge of a four-year ban on migrants claiming in-work benefits, Mr Hammond said: "Let's look at it in the round. There may be areas where we get more than we expected to get and areas where we get slightly less than we expected to get. But it would be absurd not to look at the package in the round.
"Look at all the pluses, all the minuses and weigh the balance."
Asked whether a one-year ban on in-work benefits for migrants would be enough to satisfy his party, Mr Hammond said: "A one-year period would not, definitely not, but we've got four years, a recognition that there can be different treatment for four years.
"Getting agreement that we can treat new arrivals differently for a period of four years is a major breakthrough in challenging, as we have done, one of the sacred cows of European ideology."
Mr Hammond said he feared that if the UK left it would have to forge new relationships with a very different EU.
"What I think I fear and many people in Europe fear is that without Britain Europe would lurch in very much the wrong direction," he said.
"Britain has been an enormously important influence in Europe, an influence for open markets for free trade ...
"I think we would be dealing with a Europe that looked very much less in our image. I think the thing we have to remember is that there is a real fear in Europe that if Britain leaves the contagion will spread.
"People who say we would do a great deal if we left forget that the countries remaining in the EU will be looking over their shoulder at people in their own countries saying, 'Well, if the Brits can do it, why can't we'.
"They will not have an interest in demonstrating that we can succeed outside the EU."
Mr Hammond also refused to be drawn on whether he thought Justice Secretary Michael Gove or London Mayor Boris Johnson would campaign to stay.
"People want to wait and see what the deal is, and clearly there are one or two people whose minds probably are made up but I hope that there are others who are genuinely open to the deal that come back and considering their position on it," he said.
"You will have to ask them. I can't speak for others."
Writing in the Sunday Times, easyJet chief Carolyn McCall suggested Brexit could herald a return to the days when flying was "reserved for the elite".
"The EU has brought huge benefits for UK travellers and businesses. Staying in the EU will ensure that they, and all of us, continue to receive them," she wrote.
"How much you pay for your holiday really does depend on how much influence Britain has in Europe."
Peter Long, former boss of the Tui travel group that owns Thomson and First Choice, insisted close co-operation with other EU states was essential to "protect the security of our holidaymakers".
Mr Long, who was in charge of Tui when 33 of its customers were massacred by an Islamist gunman in Tunisia last year, said the atrocity had given him "many first-hand experiences of seeing how European governments, through their foreign offices, collaborate and work together in a crisis".
Five previously Eurosceptic Labour figures, including shadow foreign secretary Hilary Benn, ex-leader Lord Kinnock, Jack Straw and Margaret Beckett, have thrown their weight behind Mr Cameron's deal.
In an open letter, they said the EU was "not perfect" but leaving would be a "huge risk".
All five campaigned against remaining in Europe in the 1975 referendum.
But Liam Fox, the Eurosceptic former cabinet minister, hit out at "scaremongering" by the In campaign.
"Those that wish to remain in the EU should make the positive case for the supranational European project rather than frightening people," he said.
Vote Leave spokesman Robert Oxley said: "It's such a shame to see pro-EU voices resorting to negative campaigning tactics based on little more than fear and falsehoods.
"Those who want us to stay in at all costs are re-writing history by wrongly attributing the hard-won successes of business and successive governments to our political membership of the EU.
"It's also deeply regrettable to try to invoke the terrible events in Tunisia in an attempt to scare people into sticking with Brussels. The safe option is to Vote Leave. "
The peer Mr Cameron tasked with taking the referendum legislation through the House of Lords has also announced that he will be voting to Leave.
Lord Dobbs, creator of House Of Cards, dismissed the premier's renegotiation as "a mouse that barely squeaks, let alone roars".
Graham Brady, chair of the influential Tory backbench 1922 Committee, warned Mr Cameron against trying to restrain sceptical ministers from speaking out immediately after a deal.
If an agreement is reached at the summit, the PM is expected to start making the case for it at a press conference in Brussels and then in TV interviews.
Mr Brady insisted there should be a Cabinet meeting to discuss the issue on Saturday or even Friday night.
"I think that is absolutely essential," he told Sky News' Murnaghan programme.
"It is in everybody's interests to do this as quickly as possible and if it were to appear that David Cameron was seeking to have the whole weekend to himself to put one side of the argument, I think that would look bad for the Remain campaign.
"People want an honest, fair debate, they want an honest, fair campaign, so I think it is in the interests of both sides to have an early cabinet meeting and to make sure that people who want to speak out, people who want to exploit the freedom of conscience that has rightly been agreed, can do so as soon as possible."