Minister tells unions to stop boosting the BNP

Labour officials fear rise of far-right in North-west, Yorkshire and Humber regions

A minister has warned Labour MPs and trade unions they will play into the hands of the British National Party if they continue their campaign against companies they claim recruit "foreign workers" to undercut pay levels.

Caroline Flint, the minister for Europe, has told parliamentarians and unions that they risk giving an "unintentional boost" to the BNP's prospects at the European Parliament elections in June. Labour officials fear the far-right party could land seats in the North-west and Yorkshire and Humber under the proportional voting system.

Unions and many Labour MPs are convinced that engineering contracts are being handed to firms which hire foreign workers because they can be paid less than under industry-wide agreements covering British employees. A strike over the issue at Total's refinery at Lindsey, Lincolnshire, last month was followed by walkouts around Britain.

Ms Flint said: "After the debate in recent weeks about foreign workers and EU law, the danger is that it will be misused at every opportunity by those who don't share our progressive values. And no amount of campaigning by anti-fascist groups, however important, will undo the damage if we unintentionally boost the BNP's campaign in Labour heartlands by feeding a climate of intolerance."

Writing in the Labour modernisers' journal Progress, she said: "If in Britain we make EU workers into scapegoats, or open the door to the BNP to stir up that feeling, what message does it send to the other EU member states where thousands of British people work?"

The issue is highly sensitive in Labour circles because the unions are demanding that Gordon Brown honours his 2007 pledge to create "British jobs for British workers." He insists he meant ensuring these workers had the skills to land the jobs available – not curbing "foreign" job-hunters.

In an attempt to head off further protests from unions, ministers are launching a campaign to stress the benefits of working abroad. "Europe's open market – freedom to live and work anywhere in the EU – is not a one-way street to our constant disadvantage," Ms Flint said.

Some 10 per cent of all the 3.5 million jobs in the UK were as a result of trade with the EU, she said. Non-British EU citizens made up less than one in 20 of the workforce in Britain, while 1.6 million Britons lived in other EU countries – more than 200,000 of them in work. "The difference is that EU residents in Britain are younger and have higher skills," she said.

Ms Flint added: "EU membership, including free movement of workers, has been good for British families and companies and we must vocally support it."