UNCERTAINTY over the UK's position in Europe is being used against firms by its competitors, a business leader has warned.

Nigel Stein, chief executive of engineering giant GKN, spoke of the importance of the European Union to British industry.

He told the national conference of the EEF manufacturers organisation in London: "The prospect of the UK talking itself into an exit would be deeply harmful to our industry.

"Much of the output from our car plants goes to the EU. Competition for investment is intense. Uncertainty over the UK's position in Europe is being used against us by our competitors.

"If we don't like aspects of the EU, let us try to change them from within - and not in a British, gold-plated way.

"Make Europe work for us - don't walk away from it."

Mr Stein said an independent Scotland would not make any difference to GKN, but warned that any uncertainty was bad for businesses.

Mr Stein said the Government was not helping industry by constantly bringing out new policies, "diverting" resources. "Sometimes the best policy is not to take any action," he said.