'EU plan will weigh down Britain'

Mr Howard says the constitution could compound decline

The new EU constitution will be a giant "ball and chain" for British business, Tory leader Michael Howard has said.

Tony Blair and fellow European leaders are due to sign the historic document in Rome on Friday.

In a speech in London, Mr Howard said the EU currently hampers competitiveness and the constitution held "untold" effects for business.

Labour says there will be a referendum on the issue and accuses Mr Howard of wanting to leave the EU completely.

'Recipe for decline'

The constitution signing has increased attention on the issue even though ministers say the referendum is unlikely to happen until after the next British general election.

The government says the document is needed to ensure effective decision making in an EU which now includes 25 states.

And it insists its "red lines" have been secured so Britain decides its policy in areas such as taxation, defence, foreign policy and immigration.

Michael Howard has committed the Tories to an agenda of disengagement and isolationism Alan Milburn Labour election coordinator

In a speech at investment bank Goldman Sachs, Mr Howard said that instead of liberating markets, the EU had burdened them with extra costs and regulations.

Retaining the status quo in Europe was a recipe for economic decline, he argued.

"Far from addressing these problems, the European constitution will compound them," he said.

"It will be a giant ball and chain round the ankle of British business."

'Chance lost'

Mr Howard said the constitution incorporated the "loosely drafted" charter of fundamental rights, covering issues like collective bargaining and working conditions.

"In other words, unaccountable European judges will have a pretty blank sheet of paper on which to start rewriting UK employment and trade union legislation," he said.

Mr Howard argued the constitution talks could have been the best chance in a generation to reform the EU.

He again pushed his call for those countries who wanted to integrate further to be allowed to do so but not take Britain with them.

The Tories rejected the constitution and wanted to return more powers from Brussels to Westminster, he said.

Renegotiation?

Mr Howard continued: "It's not a question of in or out - it's a question of change or decline."

But ahead of the speech, Labour election coordinator Alan Milburn said: "The Tories' agenda of disengagement and withdrawal would put British jobs, British trade and British prosperity at risk.

"Michael Howard is now so desperate to appeal to the UKIP vote that he has committed the Tories to an agenda of disengagement and isolationism that is completely incompatible with EU membership."

Liberal Democrat foreign affairs spokesman Sir Menzies Campbell called the constitution a "sensible rationalisation" of existing EU treaties.

"It is in the interests of the people of the UK, and we have nothing to fear from it," he said. "No one should be deceived by Tory party scare-mongering."

'Dark day'

Green Party MEP Caroline Lucas argued the constitution would make the EU less democratic.

Speaking about Friday's signing of the constitution, she said: "This ceremony is a dark day for the EU...

"This constitution will take the EU further down the road of economic neo-liberalism and require member states to increase their military spending and continue to promote the nuclear energy industry."

The UK Independence Party are meanwhile claiming the European Parliament has approved an "unlimited" budget for promoting the constitution, which it calls "brainwashing".

That claim was denied by a European Parliament spokesman.

He said a "budget heading" had been created so MEPs could decide to spend money on promoting the constitution but no money, rather than unlimited funds, had been allocated so far.