Blair 'dishonest' over social chapter opt-in

Tony Blair's claim that Britain could safely opt in to the European social chapter was "at best disingenuous, at worst dishonest", Malcolm Rifkind, the Foreign Secretary, told top industrialists.

In an attempt to counter Labour's charm offensive with big business, he said that accepting the social chapter would damage industry and threaten Britain's prosperity.

However, a spokesman for the Labour leader later said Mr Rifkind's portrayal of the effect of signing up to the social chapter was misleading and wrong.

The dispute erupted after Mr Rifkind took Mr Blair to task for a speech he made last year to the Confederation of British Industry's conference.

The Labour leader used the occasion to argue that the Social Chapter was a set of principles, rather than detailed legislation, and that he had no intention of agreeing to "anything and everything that emerges from the EU".

Addressing the CBI Council, Mr Rifkind said that this argument was fallacious. Britain's "opt-out" from the social chapter, won at Maastricht in 1991, was a source of competitive advantage.

By signing up to the Social Chapter, Britain could subsequently be overruled by other European countries, under the system of qualified majority voting, in a number of key social policies such as health and safety and working conditions.

If Mr Blair did not know that, said Mr Rifkind: "then he has not done his homework. If he does know it, he should have admitted it." Furthermore, said the Foreign Secretary, Labour was committed to removing the right of veto in areas of social policy, including social security and redundancy, where unanimous voting was currently stipulated.

On another front, Mr Rifkind's public scepticism about the likelihood of monetary union going ahead secured powerful backing from his predecessor, Douglas Hurd. In an article in yesterday's Financial Times, Mr Hurd in effect called for a postponement of moves to a single currency.

Mr Hurd, though a pro-European, took a line apparently at odds with that of Kenneth Clarke, the Chancellor, who has persistently suggested that despite the strains imposed by the timetable for monetary union on Germany and France, EMU is still a possibility for 1999.

The former Foreign Secretary wrote: "Someone has to face reality. All have tactical and political difficulties. But the Germans are best placed without humiliation to suggest postponement." While he said that pro-Europeans had hesitated up to now to attack the EMU project on the grounds that they would fuel xenophobic opposition to Europe, he concluded that the present EMU timetable could cause damage to the EU.

A spokesman for Mr Blair said that he stood by his speech. The social chapter was not a predetermined list of costly provisions but a mechanism for determining European wide legislation.

By signing up to it, Britain had the chance to influence proposals rather than simply have them imposed by multi-nationals. Labour had specifically ruled out extending qualified majority voting to social security. To date, the only significant directive to have emerged from the Social Chapter is the legislation for European trans- nationals to set up consultative works councils.

Embarrassingly for the Government, a number of British firms, including Coats Viyella, BP Oil and United Biscuits, have elected to implement this directive in the Britain.

A spokesman for the European Commission said a further extension of qualified majority voting to areas currently covered by unanimity would require a change to the treaty.