Election Briefing: Unemployment: is Major right?

Over-regulation doesn't work. And, as a result, nor do millions of Europeans. Thus said John Major in Brussels last week: signing the social chapter, he added, would put 500,000 Britons out of work.

The Prime Minister has decided to make the links between unemployment, Europe and "socialist" legislation the centrepiece of his election strategy. He believes that social protection for Continental workers has bogged down the Continent's ability to compete.

It is difficult and expensive to fire and hire. Holiday and sick pay entitlements, pension deals and the tax system, plus strong trade unions make it difficult for Europe to create large numbers of new jobs. The fact that the European Union has no Bill Gates types, and lacks the energy and entrepreneurial spirit of the United States or the emerging Asian countries is therefore a political failure.

"It may sound responsible and caring. But the European social model is, in fact, fundamentally flawed," Mr Major argues. As unemployment continues to rise in Germany and other heartland EU nations, it is an argument which Europe's business leaders and politicians increasingly accept. It was the common talk of the World Economic Forum in Davos, Switzerland, a week ago and even Chancellor Helmut Kohl admitted at the weekend that things would have to change.

But not here, perhaps? Mr Major argues that Britain, because of its flexible labour market, has escaped this economic trap, creating 900,000 jobs in the past four years.

Over the next couple of months, the political moral will be rammed home: the Labour Party would sign the social chapter, introduce its own minimum wage, and condemn Britain to much higher unemployment rates. So vote Tory to save the enterprise capital of Europe.

Labour brushes this aside as ridiculous - and unpopular - scaremongering. The social chapter legislation Britain would sign comprises only two significant measures - on parental leave and works councils - whose effect on overall employment would be minimal.

It is precisely because Continental leaders are so worried about unemployment that other social measures, like the 48-hour limit on weekly working, are being postponed or quietly dropped. The Prime Minister's case, in other words, sounds strong in principle but is out of date: the European Union has already moved on.

Labour argues that the Tories are sliding away from the EU and that their anti-single currency beliefs will repel investment by companies like Toyota and so, in time, destroy more real jobs than a relatively weak social chapter ever would. They believe that the British, whatever their moans, will always feel it safer to stay European.

By May, we will know whose political judgement was the shrewder. But who is right on the substance? Here, in our occasional series of electoral briefings, Independent writers sort the wheat from the chaff.