We have a European model of production and society, and what we are trying to do is to preserve it. It is under attack from within and without.

I have taken the opportunity over the last 18 months to analyse the models that are in competition with us, so to speak. The American model - low wage, low skill and little or no social protection - is not the way forward in the European context, because the European model always valued job security and a high level of social protection. That is the model that I wish to see continuing.

But because of the reduced number in employment and because of the huge dependency situation, the transfer of social welfare in the social welfare account in national budgets has increased quite dramatically, and unless we do something to check that, then it is not going to be possible to sustain our model on a cost basis in the next century. The way to relieve the situation, of course, is to get more people back to work so that they are paying their taxes and are no longer dependent. That is the reason for the whole thrust and top priority being given to job creation. What we wish to do is to have the right level of social protection applied in a situation of security for the workforce. We are not suggesting in any situation that there would be a reduction of standards or a diminishing of workers' rights. No, on the contrary, what we are saying is that in the next phase of social policy we would set out a more general framework of objectives and we would set the minimum standards there. But that is not to s

ay that any country that already has a standard, or wishes to do better, should not do so. In fact, we encourage the lifting of the standard, but we want to put in place a minimum below which nobody will go and thereby leave no scope for the alleged social dumping that has been so prevalent recently. In doing that we would seek to use the existing legal base for a very simple reason: to try and keep the Twelve on line together without any huge divide or corpus of law building up between the Eleven and the United Kingdom. That is the reason why I say that we would use the existing legal base in such areas as health and safety.