THE European Parliament’s decision to force the UK to limit employees’ working hours will be a "hammer blow" to the local economy, according to the Institute of Directors.

The organisation’s Kent branch believes signing up for the Working Time Directive, which means employees cannot work more than 48 hours a week on average, will have a dramatic effect on competitiveness.

Alyson Howard, chairman of the Kent branch, said: “With Europe facing massive economic challenges from China and India, we should be looking to make our labour markets more flexible, not less.

"Business is trying to face up to the problems of the 21st century, but MEPs have voted for a policy straight out of the 1970s."

The decision to abolish the opt-out clause came as the IoD published research showing more than 40 per cent of UK firms had made use of extra working hours.

The survey carried out among IoD members showed the directive would particularly hurt key industrial sectors. Eight-five per cent of businesses in construction, mining and transport said management would become more difficult.

Mrs Howard added: "It is deeply regrettable the Government's MEPs again ignored ministers' advice and voted against the interests of the British economy.

"It is now essential the Government maintains a blocking alliance in the Council of Ministers. They will have our strong support in doing so."