Ken Clarke joins forces with Danny Alexander and Lord Mandelson to warn against EU exit

The intervention came as the cross-party British Influence group launches a manifesto titled Better off in a Better Europe

Ken Clarke has joined forces with Liberal Democrat Danny Alexander and Labour's Lord Mandelson to warn that leaving the EU would be an “historical error”.

The politicians insisted the UK should work to reform the organisation from within rather than walking away, with their intervention following the launch of a manifesto titled Better off in a Better Europe by the cross-party British Influence group.

After David Cameron pledged an in-out referendum on membership by 2017, the document warns against threatening "unilateral repatriation of powers".

But it also concedes that the EU must be "rebooted for the 21st century" and Treaty change is "inevitable", arguing that control should be returned to member states in some areas.

Mr Clarke, regarded as the sole Conservative europhile in the Cabinet, said: "This is a compelling and practical manifesto for a reformed Europe focused on growth and competitiveness. David Cameron has already shown what can be achieved in Europe through strong, determined leadership.

"This document brings out the huge further rewards the British can reap by remaining doggedly engaged in Europe, and determined to help set the agenda.

"We earn our living in a globalised economy and a world in which nations are interdependent in tackling global and regional problems.

"We can help to promote our own interests best by reinforcing our role as a leading nation in the EU."

Treasury minister Mr Alexander said the EU was "one of the central pillars of British prosperity and security".

"Membership of the EU gives market access to British firms, makes us more attractive to overseas investors, and underpins more than three million British jobs.

"EU trade deals with the US, India, Canada and Japan will be worth billions to the UK economy but could not be won by the UK alone."

"Britain must work with our allies for change from within to ensure the EU continues to take reform seriously.

"The isolationists are reckless with our prosperity and security. We cannot let them succeed."

Former business secretary Lord Mandelson said: "If Britain quit the EU amongst the losers would be businesses foregoing trade and investment opportunities, their employees whose jobs and workplace rights would be at risk, the police and security agencies who would sacrifice vital collaboration and the British people who would lose the freedom to travel, live and work as they wish across Europe.

"In return we would get the dubious satisfaction of standing alone in the world."

The manifesto states: "By creating alliances with those who share our belief in boosting growth and jobs, we can actively reboot the EU for the 21st century and project our economic and political reform agenda in and through Europe to the wider world.

"It would be a historical error to abandon this task now, just when Britain's clout is more than ever needed.

"At the same time, it should be recognised by EU leaders that the time of an 'ever closer union' in every possible policy area lies in the past."

The document calls for the EU to become "leaner and meaner", saying it must "focus only on essential tasks and not be diverted, do better in getting value from its budget and eliminate fraud and be more transparent with its decision making processes which often appear opaque and distant from voters".

At the same time the Houses of Parliament has to "radically improve" its oversight of Europe.

"Britain should lead the EU reform campaign from within, not threaten unilateral repatriation of powers. A number of areas should better be left to member states rather than the EU," the manifesto said. "The UK's Review of the Balance of Competences should be used as a factual backdrop to push for change in the EU for all its members and not just a special deal for Britain.

"Much can change in the EU without changing the treaties and there are lots of reforms we can be getting on with along with partners in Europe.

"But at some point Treaty change will also be inevitable."

Additional reporting Press Association

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