The French elite needs to take an English lesson

A flexible labour market able to respond to global change is the fairest kind

One of the small parties that fell at the first hurdle in the French elections at the weekend was a group opposed to the elite Ecole Nationale d'Administration. Even so, this training ground for the country's political, Civil Service and business elite still stands accused by its critics of the gravest sin imaginable for a ruling class: incompetence.

The anti-Ena party's manifesto quoted the comic Coluche: "If you put them in charge of the Sahara, within five years they would be buying in sand." The most glaring incompetence of France's elite has been its failure to prevent or reverse the country's rise in unemployment, now among the highest in the developed world. Yet its refusal to draw any lessons from the Anglo-Saxon jobs experience is shared by French voters, who leaned at the weekend towards the Socialist Party's programme of job-sharing and big increases in the minimum wage.

As the first stage of the elections took place, I was attending a wedding in Paris between a French woman and an English man. One of the other guests assured me that there were more and more of these cross-Channel marital alliances, not because of the convenience of the Eurostar but rather because sensible Frenchwomen had an eye on their future financial security. "France shines only at unemployment these days," she said.

The costs of Continental-style capitalism were also uppermost in the minds of ministers meeting in Paris at the Organisation for Economic Cooperation and Development earlier this week. Helen Liddell, the new Economic Secretary to the Treasury, tried to balance cosy chat about economic solidarity and cohesion, which pleased the French enormously, with harsh pragmatism about jobs, which did not.

It is an uncomfortable fence for a shiny new left-of-centre European government to sit on, because the options in economic policy are widely seen - in Britain as well as the Continent - as flexibility or fairness, but not both. This trade-off did not bother the Tories, who reckoned that if they created the flexibility, the fairness could take care of itself. The result was that inequality and the number of working poor increased to an extent that British voters found unacceptable.

The French electorate is just as unhappy about the prospect of increased insecurity and inequality. But the real cross-Channel chasm has been that nobody in French political circles has been prepared to argue that high unemployment is the biggest unfairness of all, or make the case for measures that would start to chip away at unemployment, such as reducing the extraordinarily high minimum wage for young people.

It is hard to blame the French for ignoring the Rosbif message of deregulation, garnished as it was with undisguised triumphalism and a sour dash of Euroscepticism by the Tories. But Labour should learn their French lesson well, and not forget the merits of having flexibility in the jobs market. Because there is a danger in this New Dawn of people concluding that the resounding May Day vote to bring down the curtain on unfettered free markets means that deregulation as such has been proved a failure. A big chunk of Tony Blair's electorate believes that the British economy is in a bad way, that mass unemployment persists and flexibility has achieved nothing but the insecurity and misery of the huddled masses.

The Government will be making a big mistake if it plays along with this defeatist psychology. For it has inherited the healthiest economy in living memory, with joblessness falling rapidly and British business competitive despite the strong pound. Tory policies in the end have worked at getting Britain working. Deregulation has created jobs.

The Government does want to include those excluded by poverty and insecurity, as well as unemployment - to govern for the many - and thank goodness for that. Let's hope it can succeed in getting unemployed young people into jobs, so they can share the general joy in the revolutionary dawn. But it should not forget that the number of unemployed young people was already falling rapidly before the election. In the month before polling day, there were fewer people out of work for more than six months than the 250,000 who were intended to be the first beneficiaries of welfare- to-work policies. Between the campaign and the Queen's speech, the promise had to be broadened to include the short-term young unemployed. It will not be long before it has to be extended to the over-25s too.

The Government has set itself some serious hurdles in the flexibility stakes, the introduction of a minimum wage being the biggest. Will its Low Pay Commission be set up to deliver a figure for the minimum that meets high union demands but would certainly damage jobs growth? Or will it produce a cautiously low figure that will outlaw the worst behaviour by cowboy employers but not make a noticeable difference to income inequality? If it opts for the former, New Labour will have become the first victim of its own rhetoric of fairness.

At a time like ours, when the economy is at the mercy of big global changes, a flexible labour market able to respond to industrial restructuring is in fact the fairest kind. It produces the most opportunities. What we need in Britain is an improvement on Tory policies in order to offset the worst dislocations of economic upheaval, not the complete overthrow of those jobs policies.

The French claim to have a fair jobs market, but it is not; there are too many people without jobs, a worse kind of social exclusion than low pay and lousy conditions. They have a genuine grievance against their political elite, for even people as clever as the graduates of Ena have failed to understand that flexibility is essential for fairness. If the finest blooms of the French educational system cannot accept that, why should the average voter?