George Osborne has branded anti-Semitism in the Labour Party “a cancer that needs to be dealt with”.

Speaking at a World Jewish Relief business dinner, the chancellor said the Opposition had opted for “the simple but wrong answer” in electing Jeremy Corbyn as leader.

He added: “Labour went to the far left. It abandoned the middle ground of British politics, much to the dismay of their MPs. The truth is the Labour Party is very different to what it was even five years ago. The membership at the grassroots is pretty far to the left. The idea that it’s just Jeremy Corbyn is a mistake.”

Speaking about Labour’s anti-Semitism scandal, Osborne said it was a “genuine problem and I’m yet to see any evidence that they’ve got a really convincing answer to it”.

Osborne said the problem was “borne out of the accommodations made with people whose views they should have never have accommodated”.

He added: “You see it at every level: the MPs, the councillors, the activists and so on. We should work with those in the Labour Party that are trying to fight this and stop it. I don’t take any great pleasure from this at all. This is a cancer that needs to be dealt with.”

Turning to Europe, asked by interviewer Lord Daniel Finkelstein whether it was a mistake to hold a referendum, Osborne said: “It’s never a mistake in a democracy to ask the people what they think and to make sure that the public are engaged.”

Before making his case to remain in the European Union, he said: “What would be a mistake is for people to sit it out or for people to think they don’t need to vote. It’s going to be a hard fought referendum of enormous significance. I doubt anyone in this room is going to take part in a civic decision that is more important than this one. No general election, no other election is like this one.”

The event saw over 300 people help raise £215,000, which will go towards supporting vulnerable Jewish people in Moldova and Ukraine including helping the younger generation break the cycle of poverty forever by getting a job and lifting their own family out of poverty.