Tirade seen as election propaganda

`Is he saying it is the reason for 18 million unemployed?'

Brussels - John Major's Brussels speech received little attention in the continental press, and was unlikely to attract much interest in other European capitals, writes Sarah Helm.

His themes of job creation and deregulation are on the agenda of every member state, as governments battle with unemployment and welfare reform. Other European leaders admit that there are lessons to be learned from Britain about flexible labour markets and lowering social costs. Germany, in particular, is aware its high tax and social costs are deterring inward investment.

However, Mr Major's combative approach to European integration, and the growing frustration in Brussels with the "British problem", mean the Prime Minister's ability to influence his partners is at an all-time low.

The speech was viewed as domestic political propaganda, not as an attempt to promote a positive European debate. More interest might have been sparked had Mr Major chosen to address monetary union or institutional reform.

Instead, the Prime Minister congratulated the Government on its success as the "enterprise capital" of Europe. But he did not say Britain comes ninth out of 15 in terms of productivity. Britain's good employment record, compared to Germany or France, can in large part be explained by the fact that Britain is now at a different stage of the economic cycle, say partners on the continent.

Other governments accept the value of Britain's flexible labour markets, but they point out that Britain's education and training standards for those in work are often lower.

Mr Major was widely viewed to have damaged his argument for radical deregulation by levelling a dishonest attack on the social chapter and its effect on European employment.

Legislation under the social chapter has been limited to new rules governing workers' councils and legislation on parental leave - hardly the job-destroying demons Mr Major claims.

"Mr Major's description of the social chapter bears no relation to what we know as the social chapter. Is he seriously saying the provisions we have introduced under the social chapter are the reason for Europe's 18 million unemployed?" asked one Commission official.

Neither the European Commission or the member states wish to bring in any major new changes under social chapter, recognising that industry and businesses could not bare the cost. The Commission has recently delayed the publication of a White Paper which would extend the 48-hour maximum working week rules.

In his speech, Mr Major insists that Britain has succeeded because it has avoided the "European social model". But other member states are not following the British model of total deregulation. The Dutch, in particular, believe good social provision helps stimulates economic activity and prosperity.