Conservative leader Michael Howard has insisted he wants Britain to play a "positive" role in the European Union.

He also repeated his demand for the Government to allow a referendum on the proposed European Constitution.

Interviewed on BBC 1's Breakfast with Frost, Mr Howard maintained that a Tory government would take a constructive approach to Britain's membership of the EU. "We are not going to leave the European Union. I want the UK to remain an important and positive member of the EU," said Mr Howard.

The Tory leader was reluctant to speculate about the approach a Tory government would take to the EU constitution if it was already in place.

"We don't know where we will be. I think it is highly speculative to assume that it would all be done and dusted by the time of the next election.

"There will have to be agreement in the EU, there will have to be ratifying legislation, we don't know whether that is going to get through without a referendum. There are all sorts of imponderables and hypothetical aspects to that question."

Mr Howard criticised the Government for its insistence that there will not be a referendum on the constitution.

"They are supposed to be engaged in a Big Conservation to find out what people think. On this issue we know what people think. People want a say, people want a referendum on that constitution.

"And if this Government was even a quarter way serious about wanting to do what the people of this country want, it would give our people a say in a referendum on the Constitution."

Mr Howard was asked whether he thought the Conservatives can win the next election. He said: "I certainly do ... I'm not saying we are going to, or we are certain to, that is something the people of our country will decide. But we can, and we have got to make the most of that opportunity."
 

 
Oliver Letwin, the shadow chancellor, has said that Tony Blair "has the answer" on public sector reform and has pledged to adopt Gordon Brown’s economic rules if the Conservatives win the next election.

Mr Letwin also said the UK economy is in reasonably good health under Gordon Brown and is unlikely to dominate the election campaign. He pledged to respect Mr Brown's "golden rule" if Labour lost.

He also disclosed that he has ditched his share options in NM Rothschild -- losing an estimated  100,000, in addition to giving up his lucrative directorships. He said he is now a "poor man, but a free man".

In a briefing with Scottish newspapers ahead of next week's pre-Budget report, Mr Letwin -- who took up his post three weeks ago -- said he would happily give his job to Mr Blair if he could be confident that the prime minister understood numbers.

While Mr Blair could be admired, he said, "Blair is the government you see. Brown is the government you get" -- adding that the Chancellor's manoeuvring has effectively neutered the Prime Minister's ambitions.

"My analysis is that Blair does have the answer," Mr Letwin said yesterday. "But Blair actually recommends broadly the policies we recommend and tries to introduce some degree of choice and consumer responses. Brown won't let him."

Mr Letwin praised Mr Blair for deducing that public services cannot be run on a "top-down, command-state basis", and is trying to empower patients and parents with choice, but has been frustrated at every turn by the Chancellor.

When asked if he believed that Mr Blair would make a good Conservative under Michael Howard's new Tory party, he said: "Yes, that's what he is. Tony Blair is somebody who would be far better off having come to the Tory party where he did not have to contend with the rest of his party."

There would not only be a place for Mr Blair in the party, he said, but one on Mr Howard's front bench. "I would be very happy to offer my job to him. In fact ... I'm not sure numbers are quite his thing. But he could do marvellous work as chairman of the Conservative Party."

The Chancellor, Mr Letwin said, "has become a Thatcherite in macro-economics, which is excellent" -- but has not, like Mr Blair, been converted to the logic of introducing the market in public services.

"Brown's view of New Labour is that a market economy pays the bill, so you can run public services on a command-socialist basis. And that's what he wants to persuade the Labour Party it's all about," he said.

"The Prime Minister disagrees about that. The Prime Minister is right, the Chancellor is wrong, but Brown is running the country and the Prime Minister isn't. The Prime Minister is running the world."

He conceded that the worst he can say about Mr Brown is that he is heading in the wrong direction in four areas: savings, productivity, tax and borrowing.

"I don't think he's doing anything which is going to cause an immediate crisis. But if we go on in this way -- it could be three, five or ten years -- we will all look back and say, 'Christ, how did we allow this to happen?'," he said.

But he argued that by the election, expected in May 2005, there would be few economic arguments to make -- and, meanwhile, he would adopt Mr Brown's golden rules in the same way that the Chancellor adopted the spending limits set by John Major's government.

"The rules are sensible things to have. If I am his successor in 18 months I would want to preserve the golden rule and the sustainable investment rule, and perhaps tighten them."

Mr Letwin decided on Wednesday night to resign from NM Rothschild, the merchant bank -- only hours after a lunchtime interview where he said he would stay on. He said his mind had been changed when he gave that interview.

"What I decided is that I wasn't going to answer any more of those questions, so I resigned instead," he said.