Brown's plan to boost jobs in EU

The Chancellor, Gordon Brown, said yesterday that Britain would lead Europe by making the reduction of unemployment the priority in proposals for welfare reforms and a job-creation plan to reduce Europe's 18-million jobless total.

The Chancellor will raise the three-point action plan at a meeting of European finance ministers on Monday and Tony Blair, the Prime Minister, has already secured the approval of United States President Bill Clinton for putting it on the table of the G8 group of industrialised countries.

The announcement came as the European Commission proposed new social chapter rules which would oblige British companies to set up councils to consult their workers on redundancies and strategic management decisions.

The move puts Brussels on a collision course with the government in light of Mr Blair's stated opposition to social chapter laws which threaten to burden British industry with added costs and red tape. Government reticence on the social chapter looks set to be further exposed within days when two other proposals reach crucial stages on their way to the statute books.

Tomorrow the commission will announce it is to start drafting a directive extending the pay and holiday entitlements of part time workers. And next Thursday ministers will be asked to sign up to a directive making it easier for employees to sue for discrimination on the grounds of sex.

Yesterday, the commission formally asked both sides of industry to deliver an opinion on the worker-consultation proposals amid mounting concern that Labour in government has little intention of matching its rhetoric on the social chapter with action.

There is already resistance to calls for a fast-track procedure so that the social chapter can be applied in Britain by the end of this year. "All the messages we are getting from London suggest they are prepared to sign it but don't actually want to apply it," one European Union official said.

Britain's decision to make cutting European unemployment the priority in its own presidency of the union next year will be seen as a further signal, after the French election, that the January 1999 start date for the single currency is likely to be delayed.

The Chancellor, who is pressing for unemployment to be one of the key tests of the progress towards a single currency, denied Conservative criticism that the decision to sign up to the social chapter and introduce the minimum wage would cost jobs and fly in the face of his job-creation campaign. "We support the employment chapter but also support labour market flexibility," he said.