IoD attacks 'wasteful' Europeans: Business leaders condemn Brussels and urge companies to look east for growth. Mary Fagan reports

BRITAIN'S business leaders have attacked the European Union as a threat to growth and competitiveness and urged companies to look to opportunities in the Far East.

Speakers at the Institute of Directors annual convention in London condemned the EU as wasteful, protectionist and unwilling to accept that business, rather than government, creates wealth and jobs.

Lord Young of Graffham, chairman of Cable & Wireless and president of the IoD, accused the EU of wasting time in argument over lost causes, including single currencies and political union. He urged business to take advantage of growth in Asia, a region where imports are expected to rise by dollars 100bn annually for the next three years.

'The argument about Europe is dividing the country, going to the very heart of our society,' he said. 'Yet so much of this argument is futile. With our obsession with Europe, we see only the stagnation and lack of will of our partners in the union.'

He warned that the intergovernmental conference planned for 1996 was likely to give more power to Brussels bureaucrats, reduce democracy and spread 'equal misery' across the EU.

He also said that despite the opportunities arising in the Far East, protectionism was still rife in Europe and North America and would result in a higher cost of living and in reduced exports.

'With markets of this size to aim for, we should be out there opening doors, not threatening to slam them in their face,' said Lord Young.

Peter Morgan, director general of the IoD, condemned the EU's reluctance to open its markets to former Comecon countries. 'Because the Union has made itself more than a free trade area, it cannot afford to extend its wasteful social, regional, agricultural and industrial policies to Poland and the others,' he said. 'This postpones the adjustment which the Union must make.'

Mr Morgan said Britain was alone in the EU in understanding that enterprise was the key to greater employment. He alleged that state welfare in Europe was killing enterprise. 'You cannot build an economy on capitalism, then overlay it with socialism and expect it to work,' he said.

John Neill, chief executive of Unipart, said that unless care was taken, Britain and the rest of Europe would be losers in the global economic war. He said Europe was the highest cost labour market on earth with the most expensive welfare system and the shortest working hours.

Mr Neill urged businesses to grasp the magnitude of the onslaught of South-east Asia and the Third World. 'Low pay, no welfare costs and a population hungry for a western lifestyle. Many are well educated, coupled with a centuries' long respect for education and learning,' he said.

Mr Neill later called for manufacturers to have a more enlightened attitude to education, putting more time and resources into local schools.

(Photograph omitted)