CHANCELLOR Osborne has called for an all-out EU-wide War on Welfare, demanding yesterday that the European Union must ‘do more’ to ensure economic competitiveness with ‘rivals’ like India and China.
Addressing a joint meeting of the right-wing Open Europe ‘think tank’ and the Fresh Start group of Tory MPs in London, Osborne warned there is a ‘simple choice for Europe: reform or decline,’ he said.
Too much money is being spent on benefits across the continent, he claimed, saying: ‘As Angela Merkel has pointed out Europe accounts for just over 7% of the world’s population, 25% of its economy and 50% of global social welfare spending . . . We can’t go on like this.’
He continued: ‘There are those who throw their hands up and say “We can’t reform Europe”. To them, I would say that we have already proved that wrong.’
Osborne said: ‘I believe it is in no-one’s interests for Britain to come to face a choice between joining the euro or leaving the European Union.
‘We don’t want to join the euro, but also our withdrawal from a Europe which succeeded in reforming would be bad for Britain. And a country of the size and global reach of Britain leaving would be very bad for the European Union.’
Osborne said: ‘The biggest economic risk facing Europe doesn’t come from those who want reform and renegotiation.
‘It comes from a failure to reform and renegotiate. It is the status quo which condemns the people of Europe to an ongoing economic crisis and continuing decline.’
Osborne talked about how the 2008 financial collapse had exacerbated the EU’s problems, saying: ‘We knew there was a competitiveness problem in Europe before the crisis.
‘But the crisis has dramatically accelerated the shifts in the tectonic economic plates that see power moving eastwards and southwards on our planet.’
In a question-and-answer session following his speech, Osborne said the Tories were ‘having a grown-up conversation’ on Europe, adding: ‘I would rather be in a party that’s addressing these issues for the future than a party that’s burying its head in the sand.’
But, for Labour, shadow foreign secretary Douglas Alexander said: ‘The Conservative leadership seems to be spending more time negotiating with their backbenchers than negotiating with Europe to deliver real reform.’
Meanwhile, Ford, the top-selling car manufacturer in Britain, said on Wednesday it would be forced to reconsider its UK operations if the country voted in favour of leaving the European Union, the latest major foreign investor to sound the same warning.
Steve Odell, chief executive of Ford’s operations in Europe, said: ‘Clearly we wouldn’t be alone in doing that. Would it mean tariffs? Would it mean duties? We’d take a look at what it meant.
‘I would strongly advise against leaving the EU for business purposes, and for employment purposes in the UK.’
Ford’s warning follows a similar message last year from Japanese car giant Nissan which also has substantial operations in the UK, employing thousands of people.