Prime minister treads fine line between reassuring CBI he wants to stay in EU, and appeasing Eurosceptics over union reform

David Cameron has steered a careful line between pro-Europe business people and his Eurosceptic backbenchers, saying Britain cannot remain in the EU “come what may”.

His remarks at a day-long CBI conference in London were aimed at the Labour leader, Ed Miliband, who is due to tell the same conference that he will keep Britain in the EU, a pledge aimed at easing business fears over his plans to raise taxes.

The president of the Confederation of British Industry used his opening address to repeatedly make clear that it regards EU membership as being beneficial to the UK economy and warn against ending the principle of free movement of labour, as opposed to free movement of benefits.

Miliband is planning to tell the business lobby group later on Monday that the Conservative proposals are a “clear and present danger” to Britain’s prosperity.

“Every nod and wink to those who want to leave [the EU] sends a message to potential investors in our country that we are not open for business,” the Labour leader will say.

But Cameron told business delegates on Monday morning that the UK could not afford to turn away from the need to change how the EU works. “That is not a strategy, that is not a plan and that won’t work,” the prime minister said.

He also rejected the charge that the uncertainty caused by an in/out referendum had put off business.

“The worst thing for us to do as a country is to pretend this European debate isn’t happening … If there has been uncertainty, why is it that this has been such an extraordinary period of investment into this country?”

He said he wanted to stay inside a reformed EU based on cooperation and a common market, not ever-closer union.

“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,” he said. “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.”

Cameron’s comments came as Labour’s business spokesman, Chuka Umunna, warned that a referendum on British membership of the EU would be dangerous for the economy.

Asked on BBC Radio 4’s Today programme whether it would be dangerous to hold such a poll, he said: “I do think it is dangerous because people want us to concentrate on ensuring we get our economy going; we reform it so it is delivering better jobs and growth. A reformed Europe is absolutely a central part of that.”

Umunna attacked hardline Conservative and Ukip Eurosceptics for trying to claim that all of Britain’s problems are caused by the EU.

“If you listen to some in the Tory right and in Ukip they will have you believe that all of the problems in our country – stagnating wages, increasing waiting times when you go to the NHS – are down to Europe. That is a complete and utter con. We know Europe is our nearest and biggest market. That is why it is essential we remain part of the EU and it is the key that unlocks the door to the emerging-market economies.”

Nigel Farage, the Ukip leader, said: “To describe a referendum as dangerous is extraordinary. What he is saying is that he doesn’t trust the electorate. Mr Umunna’s comments get right to the heart of the debate about politics in Britain today. We in Ukip do not blame the EU or migrants for our ills. We blame the political establishment of the legacy parties which he, with his over-polished sheen, so perfectly exemplifies.

“The modern Labour party has become so in hock to the big multinational corporations that it is frightened of democracy, in the shape of an EU referendum, something promised by [former prime minister Tony] Blair if he remembers. His and his party’s contempt for the ordinary men and women of this country goes a long way to explain Labour’s dismal position in the polls. It is no surprise to anybody who has crossed the M25, but is obviously shocking to him.”

Earlier, the CBI president, Sir Michael Rake, said four out of five CBI members would vote to stay in the EU because it was overwhelmingly in the national interest.

“Do not be fooled,” he said, “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.”

Responding to Cameron’s comments, the CBI director general, John Cridland, told the BBC: “He said he agreed with the CBI, and 80% of CBI members want to see us remain in a reformed EU that does more of what Europe does well and less of what Europe does badly.

“Let them stop telling us about the bendiness of our bananas, stop telling us how many hours we should work in a week, and concentrate on the big-ticket issues like climate change, like making sure that the lights stay on in the European energy market.

“And perhaps most importantly, complete that single market – particularly in the internet arena, where Britain and Britain’s people trade so well – and a global trading arrangement. Let’s have a free trade deal with the United States, so that instead of a single market of 500 million, we have a single market of 800 million.”

The bulk of Cameron’s speech was devoted to his plan to bring the deficit under control, to improve the skills of British people and to ensure a capital investment programme devoted to road building. He also promised a period of stability in education, saying the programme of reform was now complete.