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PM warning on securing EU reform

Britain cannot secure reform of the European Union by just saying it will "stick with whatever we have come what may", David Cameron said.

In what will be seen as his strongest signal yet that he could back exit without significant changes to Britain's relationship with Brussels, Mr Cameron defended his strategy of renegotiating the UK's EU membership before an in/out referendum in 2017, and told the CBI conference in London that by contrast Labour had no plans to reform Europe.

Opposition leader Ed Miliband hit back by warning the same conference that "flirting" with withdrawal was a "betrayal of our national interest ... a clear and present danger to our future prosperity".

Mr Miliband pledged that, as Prime Minister, he would "never risk British businesses, British jobs, British prosperity by playing political games with our membership of the European Union".

Mr Cameron told the CBI: "Britain's future in Europe matters to our country and it isn't working properly at the moment and that is why we need to make changes.

"I agree with what the CBI has said: we should be looking for a reformed European Union.

"Now I am the politician who has the plan for that reform, who wants to see the single market safeguarded and not have us ordered around by the single currency countries, w ho wants to make sure we belong to a Europe that is about a common market and co-operation and not about ever-closer union.

"And I want to be part of a Europe that addresses people's concerns including concerns about immigration."

He added: "I am clear: these things can be done. These things can be negotiated and we can then hold that referendum and give people a proper choice about staying in a reformed European Union or opting not to belong to it."

In a clear dig at Mr Miliband, he went on: "That is a plan. That is a strategy to secure the best future for Britain.

"Simply standing here and just saying 'I will stay in Europe, I will stick with whatever we have come what may' that is not a strategy, that is not a plan and that will not work."

Mr Miliband used his own address to warn : "There are some people in our country who advocate exit from the EU. There are others who flirt with it, thinking they can do so without consequence and perhaps with advantage to Britain.

"In my view both are equally dangerous. It is a betrayal of our national interest. It is a clear and present danger ... to businesses that trade with Europe every single day."

In a clear reference to Mr Cameron, Mr Miliband added: "Giving succour to the argument that the real answer is leaving the EU, or contemplating it, simply drags us closer to exit. And every nod and wink to those who want to leave sends a message to potential investors in our country that we are not open for business, that our country is a dangerous bet."

Mr Cameron's strategy "has simply weakened our influence not strengthened it", he said.

"Making ever-more incoherent demands, ever-more isolated from its partners, all of this puts us on the conveyor belt towards exit with no idea how to get off. I will not be part of it."

A Labour government would "build alliances with others, not burn them, to help bring the necessary change in the way the European Union works," said Mr Miliband.

CBI president Sir Michael Rake said four out of every five CBI members would vote to stay in the European Union in a referendum because it was "overwhelmingly" in the UK's national interest.

"Do not be fooled - by withdrawing from Europe, we do not somehow become more open to trade elsewhere. Instead we turn inwards, going against the grain of an increasingly connected world," he said.

The Prime Minister dismissed concerns that his European strategy was creating uncertainty for business.

He said: "Sometimes people say to me that by raising issues about Europe and European reform, doesn't that make life less predictable? I would argue quite the opposite.

"The worst thing for us to do as a country is to pretend this European debate isn't happening. The best thing to do is to get out there, make the arguments, make the changes and then put that to the British people."

TUC general secretary Frances O'Grady said: "It is time for unions, employers and sensible politicians to expose the dangers of even flirting with leaving the EU. The long-term solution to our living standards crisis includes creating more of the high-skill, well-paid jobs brought to the UK by inward investment - and under threat through talk of exit.

"We should not sacrifice economic growth for a family squabble between Ukip and the Conservatives."

Deputy Prime Minister Nick Clegg said it was "nonsensical" to threaten to leave the EU in an attempt to force through reforms.

The Liberal Democrat leader used his own appearance at the CBI conference to say: "If you believe that Britain should be part of the European Union, you should surely believe that it should be reformed, if you like, in our image.

"But you only win that argument by leading the argument. You don't win the argument by petulantly stamping your foot and saying 'Well, if I don't get what I want I'm going to leave in a huff'.

"My kids do that and I say 'Well, go then'."

Responding to the Labour leader's speech, CBI director-general John Cridland said: "Ed Miliband's commitment to staying in a reformed European Union will be welcomed by business. We believe reform is achievable by working with our European allies to make the EU more open and competitive.

"We've been calling on all political parties to get behind an independent infrastructure commission so we support Labour's plan to back John Armitt's proposals.

"But Labour's tendency to market invention could deter investment. We believe open markets are the best way to deliver growth for all."

Simon Walker, director general of the Institute of Directors, said: " Businesses value our place in Europe, but want our political leaders to take up the cause for a more competitive and enterprise-friendly EU. This means more independence for member states in areas like employment law and crucially the completion on the EU-US trade deal (TTIP), which has such huge potential benefits.

"If Miliband faced down the hysterical misinformation campaign from the trade unions on TTIP he would win applause from the business community.

"Ed Miliband has asked business to work with him, but we would also like him to show willingness to reach out to businesses and understand how he can enable them to create the well paid jobs we all want to see."

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