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Getting scary? 'Appalling' tactics used in Brexit debate

With a little over two months to go before UK referendum on its membership of the European Union (EU), politicians and business leaders on both sides of the debate are accusing each other of "appalling," "ridiculous" and "absurd" scare tactics to sway voters.

The political debate over whether the U.K. should stay within or leave the 28-member political and economic bloc is becoming increasingly heated and polls suggest a tight race between the Leave and Remain vote.

The referendum has split the country's political establishment with politicians from the main parties joining competing campaign groups "Vote Leave" and "Britain stronger in Europe."

Immigration, EU laws and regulations and the cost of the U.K.'s membership of the EU are all key issues in the debate.

Read More EU Referendum: Official campaigns kick off

Luke Johnson, chairman of Patisserie Valerie and one of several business leaders who are backing a "Brexit" (for the U.K. to leave the EU), told CNBC that he was worried that Brussels – a byword for the EU's institutions – was a threat to the U.K.'s sovereignty.

"Obviously Britain will always remain part of Europe, it is a question of whether we remain part of the EU, which is a large bureaucracy run out of Brussels and Strasbourg," Johnson told CNBC.

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"I worry that it is a growing threat to our democracy, I think that we lack control over our own borders, I worry that with ever closer union we will be forced at some point into the euro zone which is clearly a failed project," he said.

'Absurd' scare tactics

"Vote Leave" is backed by several prominent politicians, including London mayor Boris Johnson and Justice Secretary Michael Gove, both members of the Conservative party whose leader and Prime Minister David Cameron, is campaigning to stay in a reformed EU.

On Monday, Conservative Finance Minister George Osborne issued a 200-page document warning that the U.K. would be "permanently poorer" outside the EU. According to the document, each U.K. household could be the equivalent of £4,300 worse off by 2030 - a 6 percent reduction in the U.K. economy.

Later, Osborne defended the Treasury's latest analysis that after Leave campaigners said the figures were "absurd." Justice Secretary Michael Gove delivered a response to Osborne's document on Tuesday in which he accused Remain campaigners of treating people like "mere children." During his speech in London, he also accused the Stay camp of conjuring up "bogeymen" and making dire predictions about the consequences of leaving the EU.

"The City of London would become a ghost town, our manufacturing industries would be sanctioned more punitively than even communist North Korea, decades would pass before a single British Land Rover or Mr Kipling cake could ever again be sold in France and in the meantime our farmers would have been driven from the land by poverty worse than the potato famine," Gove joked.

Patisserie Valerie's Johnson, who has a variety of business interests in the U.K., said that "scare tactics" were being used by the pro-EU camp and that he believed certain costs of living would decrease rather than rise, as Remain campaigners believe.

"The truth of the matter is actually food costs in this country would almost certainly fall if we left the EU because they create huge barriers so that high-cost producers within the EU have special preference…the idea that if we were no longer part of the single market everything would go up in cost is simply an error."

The pro-EU camp has united some unlikely bedfellows too with Prime Minister Cameron and the opposition Labour leader Jeremy Corbyn both in the Remain camp. Corbyn, a strident detractor of the EU over the years, declared last week that he supports the Remain campaign but critics said his endorsement of staying in the bloc was half-hearted.

'Appalling and ridiculous'

Anthony Watson, the chief executive of fintech startup Uphold and chair of the Labour's Business & Enterprise Council, told CNBC that he believed the scare tactics used by both sides were "appalling" and ridiculous."

"The biggest issue for the British electorate is not necessarily which party is saying what in terms of whether they're in or out, I think the biggest issue is the manner in which they're having the conversation."

"What I mean by that is that the scare tactics are quite appalling. As a voter, I find it quite disgusting that Iain Duncan Smith (a Conservative politician in the Leave camp) will use the terrible atrocities in Paris to justify leaving Europe saying we'll be far more secure as a nation when of course, the individuals who conducted those terrible atrocities were French nationals," he told CNBC Europe's "Squawk Box" on Monday.

Watson, who is in the Remain camp, said some arguments from the Remain campaign were equally "ridiculous" as their rivals in the Leave group.

"I think the "In" campaign are equally ridiculous in their view. We're the fifth largest economy in the world, a member of the Group of 7 (G7) and permanent member of the UN Security Council so the idea that we're going to fall off a cliff tomorrow if we leave Europe (is ridiculous)," he said.

- CNBC's Karen Tso contributed reporting to this story.

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