The UK must also be given ‘control over social and employment laws’

A group of business leaders last night demanded that David Cameron lead the UK out of Europe if he is unable to agree a series of changes with Brussels.

They said he must be able to come back with a deal under which Britain secures a veto over EU laws, wins back control over employment rules and permanently protects the City from eurozone regulations.

In a 1,000-page report, they say that unless the PM can achieve a fundamental change then households and businesses will be better off in a UK outside the EU.

In or out? British business leaders demand that David Cameron make a deal with the EU to secure a veto over EU laws, win back control over employment rules and protect the City from eurozone regulations

The study, called Change or Go, sets out ten major reforms, which the report suggests Mr Cameron must seek from EU leaders before the in/out referendum he has pledged to hold by the end of 2017. It comes just days before he attends a European summit in Brussels where he will set out his renegotiation strategy.

Many Tory MPs are concerned that the changes the PM has so far suggested – which focus on new welfare rules preventing EU migrants accessing benefits for four years – do not go far enough.

The report is written by a group chaired by Jon Moynihan, the former executive chairman at PA Consulting Group. Other members include Helena Morrissey, one of the City’s most prominent fund managers.

The document questions some of the arguments made for EU membership, such as the claim that being inside is good for British businesses.

‘Far from offering every consumer and business the benefits of a wider domestic market, after 40 years of membership, less than 5 per cent of UK companies directly export to the EU yet all are forced to bear the burden of its regulations,’ the study said.

Demands: David Cameron, pictured shaking hands with Slovenia's Prime Minister Miro Cerar in front of an EU flag last week, 'must secure the deal before the 2017 referendum', according to the study

‘The EU is not a free trade area but a customs union, and one which has spectacularly failed to deliver trade deals with rising economic giants like China.’

The report calls for the reintroduction of a national veto to be a priority in Mr Cameron’s renegotiation.

‘Far more effective tools are needed to ensure that the UK could block measures that it fundamentally disagrees with, and these tools must be secured in any renegotiation,’ it concludes. Mr Cameron should also demand that the EU exempts Britain from its commitment to ‘ever closer union’, and ask for ‘mechanisms to reduce the burden of regulation on businesses’.

The UK must also be given ‘control over social and employment laws’. The authors warn that EU laws have become ‘extremely expensive and damaging’ for Britain’s financial sector and ‘must be reversed’.

Crucially, it calls for a ‘permanent, lasting reduction in the EU Budget’. Between 2003 and 2013 the UK’s net contributions to Brussels rose from £3billion to £11billion.