Cameron, re-elected on May 7, has pledged to reshape Britain's ties with the European Union before holding an in-out EU membership referendum by the end of 2017.

He is under growing pressure to cut immigration. Official data released hours before he spoke showed net annual migration hit a near record high of 318,000 in 2014, despite his pledges to cut it to less than 100,000, much of it from the EU and fueled by Britain's strong economy.

"I and many others believe it is right for us to reduce the incentives for people who want to come here," Cameron told an audience in London before flying to an EU Eastern Partnership Summit in Latvia, his first foreign trip since his re-election.

"Changes to welfare to cut EU migration will be an absolute requirement in my renegotiation."

The focus of Cameron's speech was largely domestic, but its timing will be seen as a message to EU leaders about how important the issue is to him. He said he supported the EU's freedom of movement rules but was not alone in wanting to ensure welfare benefits were not a driver of that movement.

"The freedom of movement was always supposed to be the freedom of movement to go and take a job and that is the freedom of movement I support," he said.

German support?

German Finance Minister Wolfgang Schaeuble said he had invited Cameron's closest ally, George Osborne, to Berlin to discuss possible reform. Germany wants reform of euro zone rules, something that could be done at the same time as Britain's renegotiation. It has also said it might support changes to crack down on abuses of welfare systems.

Osborne, Cameron's finance minister, accused the EU on Wednesday of sleepwalking out of the global economy. Such rhetoric has alarmed some firms worried Britain might stumble out of the EU, and Airbus became the latest to say a British EU exit would involve huge risks.

New measures Cameron unveiled on Thursday included making working illegally a criminal offense and giving authorities the power to seize illegal earnings. Critics pointed out they would do little to reduce EU immigration, which is legal.

"Today’s government announcement on illegal migration is a smoke screen to mask today’s appalling immigration statistics," the anti-EU UK Independence Party (UKIP) said in a statement.

"In almost every area, net migration, overall UK immigration, EU immigration, non-EU immigration, sham marriages, bogus students, overstayers; the government has failed catastrophically."

Cameron wants to force EU migrants to wait four years before accessing a range of welfare benefits and to win the power to deport out of work EU jobseekers after six months.

If the renegotiation is completed early, Cameron has made clear he might hold the referendum before 2017. But he is under pressure from some of his own Eurosceptic lawmakers to take his time getting what they consider to be a meaningful settlement.

Some EU countries, such as France, have ruled out the prospect of the bloc changing its founding treaties to suit Britain.

Source:  REUTERS