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Lord Howard and George Osborne at odds over EU exit Lord Howard and George Osborne at odds over EU exit
(35 minutes later)
Former Conservative leader Michael Howard is backing a UK exit from an "outdated, flawed and failing EU".Former Conservative leader Michael Howard is backing a UK exit from an "outdated, flawed and failing EU".
He told the BBC the UK should have the "national self confidence" to go its own way, arguing that it could prosper economically by doing so. He told the BBC the UK should have the "national self confidence" to go its own way, arguing that it had the clout to negotiate trade deals with anyone.
He said David Cameron should stay on as PM even if the UK voted to leave in order to negotiate the terms of exit.He said David Cameron should stay on as PM even if the UK voted to leave in order to negotiate the terms of exit.
But Chancellor George Osborne has said if Britain voted to leave the EU it would have a profound economic shock.But Chancellor George Osborne has said if Britain voted to leave the EU it would have a profound economic shock.
Mr Osborne said the economy faces more risks of uncertainty than at any point since the financial crisis in 2008, so it would be the 'very worst time' for Britain to take the "enormous economic gamble". Speaking in Shanghai, where he is attending a meeting of G20 finance ministers, Mr Osborne told BBC political editor Laura Kuenssberg that the economy faces more risks of uncertainty than at any point since the financial crisis in 2008.
The UK will hold a referendum on whether to retain its EU membership or to leave on 23 June. As a result, he said it would be the "very worst time" for Britain to take the "enormous economic gamble".
Lord Howard, Mr Cameron's former political mentor and predecessor as Conservative leader, said it was not the PM's fault that "fundamental and far-reaching reform" had not been achieved, blaming EU leaders for imposing a "rigid straightjacket of uniformity" across the continent. The UK will hold a referendum on on 23 June on whether to retain its EU membership or to leave.
He told Radio 4's Today programme that, as the world's fifth largest country, the UK would prosper outside the European Union, arguing that "the Germans would still want to sell us their BMWs and the French would still want to sell us their wine". Lord Howard, who led the Tories between 2003 and 2005, when he was a close political ally and mentor of Mr Osborne and Mr Cameron, said it was not the PM's fault he had not been able to secure "fundamental and far-reaching reform" of the EU.
However, he suggested if the UK voted to leave, it could force EU leaders into negotiating a "different" kind of agreement with the UK, which could then be put to voters in a second referendum. He blamed EU leaders for imposing a "rigid straightjacket of uniformity" across the continent.
'Mesmerised' He told Radio 4's Today programme that, as the world's fifth largest economy, the UK would prosper outside the European Union, arguing that "the Germans would still want to carry on selling us their BMWs and the French would still want to carry on selling us their wine".
In a Daily Telegraph article, Lord Howard questioned whether the "emergency brake" agreed to limit EU migrants' entitlement to welfare payments, would "actually work". 'Market access'
And he suggested a vote to leave would persuade EU leaders to offer further concessions - a prospect dismissed by Mr Cameron as "for the birds". "So it is in everyone's interest to want to have an agreement that allows each of us to have access to each other's markets."
"If the UK voted to leave, there would be a significant chance that they would ask us to think again," Lord Howard said. Lord Howard rejected suggestions that negotiating a trade-based relationship with the EU, similar to that which Norway and Switzerland have, would leave the UK with the "worst of all worlds" - with reduced access to the single market but still bound by a lot of EU rules and regulations.
"When Ireland and Denmark voted to reject EU proposals, the EU offered them more concessions and, second time round, got the result they wanted." "Norway is a country of five million people. We are a country of 65 million people. We won't have Norwegian-style agreement with the EU, we will have a British style agreement.
He said he had hoped Mr Cameron's negotiations would create an EU which allowed member states "room to breathe" instead of imposing a "rigid straitjacket of uniformity" on different countries. "We need a bit of self-belief and national self confidence. We are a great country - everyone wants access to our market. We won't be supplicants."
"It is not his fault that those efforts met with failure," he said. If the UK voted to leave, he suggested it could force EU leaders into negotiating a "different" kind of agreement with the UK, which could then be put to voters in a second referendum - a sequence of events that has been rejected by Mr Cameron as "for the birds".
"It is the fault of those leaders of the European Union who are so mesmerised by their outdated ambition to create a country called Europe that they cannot contemplate any loosening of the ties which bind its member states together." 'Not parlour game'
Lord Howard of Lympne Lord Howard also said there was no reason why Mr Cameron should have to step down if the UK voted to leave, arguing that a leadership contest would be a "distraction" in such circumstances.
BBC political correspondent Eleanor Garnier said Lord Howard was "well respected in the Tory party" and was "a Eurosceptic who could certainly carry sway". "I am absolutely confident that David Cameron could stay on and I think he should stay on. I think he would accept the verdict of the country. If there were to to be a second negotiation, I hope be very happy for him to be in charge of it and if we had to negotiate departure, I would be very happy for him to negotiate that too."
In 1975, he campaigned for the UK to stay in what was then called the European Economic Community - but said it had "morphed into a European Union that is flawed and failing". Mr Osborne said talk of leaving the EU was "not some political parlour game", highlighting the recent fall in the value of the sterling to illustrate his point,
"There is only one thing that just might shake Europe's leaders out of their complacency: the shock of a vote by the British people to leave," he added. "This is about people's jobs and their livelihoods and their living standards, and in my judgement as chancellor leaving the EU would represent a profound economic shock for our country, for all of us and I'm going to do everything I can to prevent that happening."
'No utopia' Mr Cameron will highlight the economic case for membership on a visit to Wales as he continues to tour the UK campaigning to stay in the 28-member bloc.
He said he had not reached the decision "without much heart searching" and suggested the EU might offer further reforms, which could make him change his mind, including giving countries full control over immigration levels. He will tell voters that nearly half of Welsh trade is with the EU and the nation will be "better off" if the UK remains in.
But speaking on the BBC's Question Time, Environment Secretary Liz Truss said membership of the EU single market would come "hand in hand" with the principle of free movement.
"There's no utopia where we can simply close the borders and say our economy will remain intact," she added.