Brown to put labour markets centre stage at G7 summit

Click to follow
The Independent Online
Gordon Brown, the Chancellor of the Exchequer, will seek to make improved employability and reduced joblessness a main theme of the economic summit between the Group of Seven countries and Russia in Denver later this week.

The discussion will be a prelude to a special jobs summit to be held in the UK early next year. In an emphasis that will chime entirely with the views of the Clinton administration, the Labour Government wants the meeting to focus on equipping people with the skills they need to succeed in a flexible labour market, and on removing barriers to job creation.

Announcing the summit, likely to be held in February, Mr Brown said: "Employability is the key to a cohesive society which offers opportunity to all its citizens. Better education and higher skills, combined with reduced burdens on business, are the way to guarantee high and stable levels of growth and employment."

This week's summit of world leaders and finance ministers is likely to commission new research to be presented in February. A series of summits since 1994 has led to a developing consensus that jobs can not be created by extra government spending, although the new Socialist government in France might yet need to be brought round to this point of view.

The economic summit in Denver on Friday and Saturday will also include a discussion of trade tensions between the US and Japan as a result of the latter's rising bilateral trade surplus with America. But the summit is unlikely to mark another turning point in the dollar's exchange rate against the yen because central bank governors will not be present.

The dollar has fallen from above 125 to 114 since the G7's February summit produced a statement that its earlier rise had gone far enough. "They might paper over the cracks at this week's summit, but if that trade surplus continues going up there will be serious exchange rate pressures by the autumn," said Ian Harwood, international economist at Dresdner Kleinwort Benson.

A third item on the agenda will be a further push for improved international co-operation over financial regulation and international financial crime. Progress on this has been slow, and the G7 would like to extend it to include Russia.

However, a new paper due to be published at the weekend will report on progress made since the initiative was launched at the Lyon summit last year and set the agenda for progress during the next 12 months.