Britain out of step at G7 jobs summit

BRITAIN faces isolation at a summit this week when American ministers press for government action to create jobs, and a programme for training people throughout their working lives.

Drafts of a paper setting out the US government's position for tommorrow's G7 jobs summit in Detroit show a marked contrast with Britain's minimalist policy document issued last week.

The Clinton administration will call for a strategy which highlights the role of governments both in the creation of economic growth and in extensive training for those both in and out of work.

The paper argues: 'It is as unproductive to train workers for jobs that do not exist as it is to try to create jobs when workers lack the skills to do them.' It adds: 'Countries that pursue these structural improvements without taking steps to increase aggregate demand will see little return on their efforts.'

Real growth of 4 per cent a year appears necessary to reduce unemployment by 1 per cent over a year, it adds.

Lloyd Bentsen, the US Treasury Secretary, will discuss government's role in 'boosting private sector job creation without endangering the social safety net'.

The US also calls for investment in the 'skills of all workers so that they can participate in economic change', and the prevention of long-term unemployment by early intervention to move the newly-unemployed into jobs.

That contrasts sharply with Britain's paper, produced by David Hunt, the Secretary of State for Employment, and the Chancellor, Kenneth Clarke, which emphasises the need for labour market flexibility and training for those coming into the labour market. Both men will be in Detroit tomorrow.

Gordon Brown, the Shadow Chancellor, said after talks with Mr Bentsen in Washington on Friday: 'The Government is out on a limb. Its deregulation dogma is not embraced in the US. The argument has gone far beyond the simplistic ideology of government ministers.'

The Labour leader, John Smith, yesterday called for a European fund to promote public and private infrastructure projects in times of recession. He asked the G7 to stimulate demand for imports from eastern Europe, through the International Monetary Fund, and for lowering of interest rates throughout the region.