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It applies to working conditions, information and consultation of workers on the basis of qualified majority voting. It applies also to social security, protection from dismissal, collective bargaining, employment conditions and job creation, but on the basis of unanimity.

The social chapter includes the novel provisions drafted by unions and employers, including the TUC and the CBI, enabling flexibility to be built in by collective agreements, replacing or complementing legislation. As we have all pointed out again and again, pay, the right to strike or impose lock-outs are explicitly excluded from legislation agreed under the social chapter.

As yet there is not even an action programme of legislation for the social chapter. The Commission is currently putting together a Green Paper on the future of social policy. All Governments are invited to make submissions. Perhaps the most interesting question will be how far the legislative route will be used and how much use will be made of the more flexible procedure, leaving those involved--unions and employers--to reach agreement on common standards.

What is clear is that the British Government will be excluded from those deliberations. British Commissioners, Members of the European Parliament, trade unionists and employers, as members of the economic and social committee, will have a formal role, but Britain's Government will be excluded from all the deliberations.

The only people who oppose the social chapter are the British Conservatives and the French neo-fascists : by their friends shall ye know them. Try as they might to dupe the British people or garner support for their reactionary views, the Government have totally failed. The European summit in Edinburgh at the end of the British presidency reaffirmed the commitment to the social chapter and urged Britain to join.Britain want Europe to be simply a big business club. We want a Europe with a continuously developing social dimension in the interests of greater efficiency and social cohesion. Our view is supported by industrialists such as Mr. Peter Wickens and others at Nissan who gave evidence to the Select Committee on Employment earlier this year. In March, he said :

"all I know is that any company that seeks to pay low wages ends up receiving low-quality, low-calibre employees. What we have got to do, in this country is to be high-wage with a high-quality workforce, achieving high productivity and high quality products ; that is the equation that we need, not low wage, low quality, low productivity. That is the route that is doomed to failure and disaster". The House should also know that, when taking evidence in Japan, the Select Committee received exactly the same opinion from Aiwa, Fujitsu, Komatsu, Nissan, NSK and the Sony Corporation.

Another myth is that small businesses would be hit by the social chapter, yet article 2.2 of the social chapter specifically says : "To this end, the Council may adopt, by means of directives, minimum requirements for gradual implementation, having regard to the conditions and technical rules obtaining in each of the Member States. Such directives shall avoid imposing administrative, financial and legal constraints in a way which would hold back the creation and development of small and medium-sized undertakings." The social chapter specifically recognises

"the need to maintain the competitiveness of the Community" ; and Labour certainly wants to see a successful, efficient, productive Community.

The truth is that the Government do not want, as the Prime Minister claims, a nation at ease with itself. Unlike us, the Government do not want more equalities in British society. They want to return to an era where there was little social protection for millions of British workers, but they are not supported by Britain's best employers in that aim. My hon. Friend the Member for Stockton, North (Mr. Cook) in particular exploded the myth that British companies such as ICI would be badly affected if the social chapter was implemented.

The Government want a labour market that exploits young people, women and ethnic communities in particular--in short, a deregulated labour market. But Britain can never succeed on that basis. Hong Kong has labour costs only 25 per cent. of those in Britain, and the figure for Taiwan is 35 per cent. and for Korea 35 per cent. They will always undercut our labour costs. Our failure is on unit labour costs compared with the United States of America, Japan, Germany and France. Our failing is because of low skills, low investment and low productivity.

As ever, the Tory party emerges from these debates as what it always has been--the party of exploitation of ordinary people. It is the party that always wants to pay those at the top more, to to give those at the top more power and more security to make them perform better, but those at the bottom are denied support and protection : they must be paid less, trained less, protected less and made less secure to make them perform better.

So we ask the House to join us in the Lobby tonight to give British people the advantages, the support, of the social chapter and to ensure the British people the support of a House of Commons that protects them, upholds its decisions and requires Governments to act upon them.

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9.32 pm

The Secretary of State for Employment (Mr. David Hunt) : This has been a debate without precedent. It is not a debate about the European Communities (Amendment) Bill, which is now an Act. It is a debate about the fundamental aspect of the Maastricht treaty, which was signed by my right hon. Friend the Prime Minister. In doing so, he secured an opt out from a protocol relating to an agreement for social policy.

Several hon. Members have misunderstood the differences between the social protocol, the social agreement, the social chapter and the social charter. Fortunately, my right hon. Friend the Member for Guildford (Mr. Howell) spelt out exactly what we are talking about. This debate is about the effect that the protocol would have on jobs in the United Kingdom and indeed, were it to come into effect, the very damaging impact that it would have on business.

I took the side of the right hon. and learned Member for Monklands, East (Mr. Smith)--if he is paying attention to the debate. When he is ready, I will, if I may, refer to his speech. I wanted to reply to a point that he made. The right hon. and learned Member depicted the social contract that he described between employers and unions, in the form of the protocol relating to social policy, as a matter of considerable importance. He was not in the House to listen to his right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), who described the social protocol as a matter of comparatively little importance. My hon. Friend the Member for Southend, East (Sir T. Taylor) also described the social protocol as something that did not really matter. I must therefore return the debate to the words of my right hon. Friend the Prime Minister at the outset, when he set the agenda by describing the damaging effect that the social protocol would have upon business and jobs.

I do not have to do anything other than to refer the hon. Member for Kingston upon Hull, West (Mr. Randall) to the words of the president of the Confederation of British Industry. The hon. Member said a few moments ago that the social protocol was something of which no business man should be afraid. The president of the CBI said :

"Community interference in such social policies is far more likely to destroy jobs than enhance their quality".

There are about 18 million unemployed people in the Community. The president of the CBI went on to say on behalf of the CBI : "A Common vote tonight, leading to the inclusion of the social chapter in the ratified Maastricht treaty would set back the cause of common sense and competitiveness in Europe by several years". I refer my hon. Friends to the following comment :

"Members of Parliament should bear that in mind as they wrestle with their consciences today".

A statement issued a short time ago by the Institute of Directors says that the social chapter is

"a job destruction machine which will kill jobs by piling up the costs of employment,"

The director general of the IOD, Mr. Morgan, has said : "The Maastricht Treaty has already become law. It would be folly now to add the Social Chapter to it."

I say that particularly in answer to the points made by my hon. Friend the Member for Southend, East. Mr. Morgan continued : "What the European Community needs now is not a charter for the destruction of jobs by pricing them out of the

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market but forward looking policies which would enable firms to create more jobs and for people to establish new companies".

Mr. Carttiss : Can the Secretary of State explain, and understand, how Conservatives who have campaigned to deregulate British industry to enable us to compete in world markets, and who are totally opposed to increasing the Brussels bureaucracy's shackles on this country, can vote for the social protocol tonight?

Mr. Hunt : My hon. Friend the Member for Great Yarmouth (Mr. Carttiss) is absolutely right.

The right hon. and learned Member for Monklands, East earlier sought to quote UNICE in favour of the social protocol. The right hon. and learned Gentleman should reflect on the words of the president of UNICE, who said to Employment Ministers :

"Please, stop taking measures which unnecessarily destroy jobs." One has only to look at what has been said in Japan recently. The right hon. Member for Yeovil (Mr. Ashdown) quoted the Toyota company, but the director of the Japanese equivalent of the Confederation of British Industry, Mr. Ota, has expressed his concern about the consequences of the social chapter on labour flexibility and wage costs. He made it clear that the Japanese would take that factor into account in future investment decisions.

Anyone who knows what is happening in Japan today knows that any Japanese firm considering firm considering further investment in the European Community will be watching our debate carefully to see if any message comes from the House of Commons to show that we shall have any truck with the social protocol.

Mr. Nigel Spearing (Newham, South) : The Minister has referred to the social agreement and the social charter. My understanding is that the agreement puts into effect that charter's terms. If it is so damaging, why have Her Majesty's Government not published it, as they have admitted in a written answer today?

Mr. Hunt : I will answer the hon. Gentleman. I hope that hon. Members on both sides of the House will read the protocol carefully to see what is contains. [Hon. Members :-- "Answer the question."] Yes, I will.

The preamble to the protocol states that 11 member states "wish to continue along the path laid down in the 1989 Social Charter".

The protocol continues to authorise those 11 member states to have recourse to all the procedures and mechanisms of the treaty for the purpose of taking, among themselves, decisions relating to the social chapter referred to in the preamble. The protocol contains a clear statement that Acts adopted by the Council and any financial consequences shall not be applicable to the United Kingdom of Great Britain and Northern Ireland-- that is explicitly excluded. The right hon. and learned Member for Monklands, East omitted to mention in his description of the agreement that article 2 applies to working conditions. I do not know whether it was a slip of the tongue, but the right hon. and learned Member forgot to mention those conditions. The sort of question raised by the hon. Member for Newham, South (Mr. Spearing) is directly relevant when we consider the topics that could come under working conditions.

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To my hon. Friends who do not fear the effect of that article, I must say that a document has come into my hands from the European Trades Union Congress. Let us consider what they mean by "working conditions"--precisely the sort of danger that many of my right hon. and hon. Friends, including my hon. Friend the Member for Luton, South (Mr. Bright) and many others, have given as the reason why they cannot support the social protocol. The document is in French, but I shall endeavour to give a translation.

Mr. Richard Ottaway (Croydon, South) : A few minutes ago, my right hon. Friend referred to the position adopted by the Liberals and their attitude to the social chapter. Is he aware that while the leader of the Liberals, the right hon. Member for Yeovil (Mr. Ashdown), was extolling the merits of the social chapter this afternoon, a spokesman for Westland Helicopters, the largest employer in his Yeovil constituency, issued a statement saying :

"We support the CBI's opposition to the social chapter because we want to be competitive in Europe and in the world."

That is the approach of any business, whether or not it supports the Conservatives.

Mr. Hunt : The right hon. Member for Yeovil was wrong about Toyota, as I have just explained. He is now wrong about Westland and about the effect of the social chapter on British business.

Mr. Richard Spring (Bury St. Edmunds) : My right hon. Friend knows that during the late 1980s employment grew rapidly and that 70 per cent. of that growth in employment was in the small business sector. Can my right hon. Friend speculate on the appalling damage that would be done to the revival of small businesses, which have been helped by the Budget proposals, by the imposition of the social charter?

Mr. Hunt : Yes. That is why the European TUC would like to introduce the following measures, which come under working conditions. First, it would like the inclusion of social clauses in public contracts. I dread to think what that would mean. Secondly, it wants equality of treatment for all third-country nationals dwelling legally in the Community. Thirdly it wants harmonisation of certain social protection objectives and policies. Next, it wants psychological and stress problems associated with working conditions and surroundings to be addressed. It also wants work performed at home and night work to come under working conditions.

Opposition Members should be made aware of the fact that under the protocol on social policy it is possible to bring forward a measure that would ban all overtime throughout the European Community, as well as all night work. That is what we are talking about when we say that we do not accept the social charter.

We know why Opposition Members want the social charter. Jacques Delors explained to the TUC that what it could not get through the front door of British politics it could get through the back door of Brussels. It was such an overwhelming speech that Mr. Willis made the memorable phrase, "Delors is my shepherd." We on this side are not part of the Delors flock.

Sir Jim Spice (Dorset, West) : My right hon. Friend knows that a quarter of all the people who work at Westland live in my constituency and that there are 50

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sub-contractors for Westland in the south of England, including seven in Christchurch. Not one of the people who work at Westland--the right hon. Member for Yeovil (Mr. Ashdown) does not want to listen to to this because he has no answer to it--and who know how competitive Westland must be against all other competitors would vote for the social chapter. I do not believe that the right hon. Member for Yeovil has spoken to anyone in Westland about that.

Mr. Hunt : I am very glad that my hon. Friend has raised that point as we are giving examples of the type of damaging directives that could come into effect under the social protocol. On only Monday of this week Brussels presented us with a new proposal for a directive on parental leave. It would allow a man or woman to take up to nine and a half months' leave in a single year. In addition, the working time directive provides for one month's leave, which means a total of ten and a half months' leave out of 12. If the Opposition believe that any business or any economy could operate on that basis, they do not understand economics.

If my hon. Friends read article 4, they must be convinced of the dangers of what I have read out. Under article 4, it is perfectly possible for the European TUC to introduce a measure which is then an agreement concluded at Community level. That agreement would come into force without ever coming anywhere near the House of Commons. Is that the type of measure that we should be accepting? I warn the Opposition that we should not play dangerous games with the future economic life of this country.

To reassure my right hon. and hon. Friends, some of whom have a very long- standing commitment to oppose Europe and what it stands for, I confirm that I respect what they have said in the past and what they have said today. The Prime Minister made it very clear earlier today that our present plans are exactly as he said, but for the avoidance of doubt I repeat them.

It is not the Government's present intention to re-enter the exchange rate mechanism or to move to a single currency. We negotiated an opt-out at Maastricht as the Government considered it to be in the interests of the United Kingdom to do so. It is the Government's policy that any matters involving foreign affairs or defence and security should remain subject to unanimity. I know that that will do much to reassure several of my right hon. and hon. Friends, but the important issue that we now face

Mr. John Sykes (Scarborough) : My right hon. Friend knows that I speak as a northern manufacturer. Does he agree that many Opposition Members would not know a business if it jumped up and slapped them in the face? Does he also agree that the provisions of the social chapter would throw hundreds of thousands of people in this country out of work?

Mr. Hunt : I agree. What the House must understand is that there are very serious dangers in sending out the wrong message from the House.

Mr. Graham Riddick (Colne Valley) : Will my right hon. Friend confirm that, whatever happens tonight, the Government will continue to fight the so-called social--in

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reality job-destroying--legislation emanating from Brussels, just as he is fighting the working time directive through the European Court at the moment?

Mr. Hunt : I can tell my hon. Friend the Member for Colne Valley (Mr. Riddick) that I have here the legal case that we propose to put before the European Court when fighting the working time directive. However, if we accept the Opposition's amendment tonight, I might as well tear up-- [Interruption.]

Madam Speaker : Order. [Interruption.] Order. Mr. Banks! [Interruption.] Order. The House will settle down for the last few minutes.

Mr. Hunt : You are right, Madam Speaker, to stress that this debate is one of historical importance. When the House votes tonight we shall be sending a clear message about the sort of Europe, and the sort of United Kingdom, that we want to see. Whatever the motives--

Mr. Nick Hawkins (Blackpool, South) : Does my right hon. Friend agree that any Member of the House who votes for the social chapter tonight will have to explain to hundreds of his or her constituents why that vote is costing them their jobs? Such hon. Members will have that on their conscience for ever.

Mr. Hunt : I agree with my hon. Friend.

Whatever the motives for Members' voting decisions tonight, the message must be clear. I want the House to vote for the sort of Europe where entrepreneurs and individuals can make their own choices--a Europe of diversity, enterprise, and personal freedom. If Conservative Members consider voting with the Opposition they are playing into the hands of those who would destroy the livelihoods of the people of this country.

Who would applaud most loudly if the proposed social chapter were ever to be forced upon us? It would be those who have lost their power over 14 years of Conservative government, and who yearn for the bad old days. And we know who they are. They are the militants who called strikes at the drop of a hat without thought of a ballot, the shop steward brigade who cared not a jot for the companies that they bargained over, and the armchair reformers who were prepared to tolerate anything but the idea of companies making profits. Those are the people who would smile if the Opposition amendment were passed. The electorate has rejected the Labour party at four successive general elections. The front door to power has slammed firmly shut. No wonder they are slinking round to the back door. It used to be beer and sandwiches at No. 10. Now they want claret and croissants with the Commission.

If hon. Members wish to vote for the Opposition amendment, let them be clear what they will be voting for. They will be voting to overturn the reforms that we have fought so hard for over the past 14 years. They will be voting to put the trade unions back into the driving seat, not just here but in Europe. If, on the other hand, hon. Members share our vision of a Europe in which power moves increasingly away from Brussels bureaucrats to ordinary men and women--the very people whom we in the House represent--if they want a Europe of free trade, competition and open markets ; if they want a Europe in

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which free people create jobs through individual effort and enterprise, they will support the Government tonight, both in rejecting the Opposition amendment and in supporting the Government resolution.

I recognise that some Members of my own party have real and genuine doubts about many aspects of the European Community. They have been consistent in fighting for their views and they have fought conscientiously and determinedly against the Maastricht Bill. But that Bill is now an Act. My hon. Friends have been motivated by a determination to see the United Kingdom play the right role in Europe, but surely that is a role based on the principles that brought us together as members of the Conservative and Unionist party--principles that we have refreshed and renewed in the light of changes in our social and economic reality.

I, and everyone on the Conservative Benches, share a concern about the future of this country. There is only one place for the United Kingdom to be in the Europe of the next century and that is leading from the front in the Europe of freedom, enterprise and initiative. I urge the House to throw out the Opposition amendment.

Question put, That the amendment be made :--

The House divided : Ayes 317, Noes 317.

Division No. 358] [10 pm

AYES

Abbott, Ms Diane

Adams, Mrs Irene

Ainger, Nick

Ainsworth, Robert (Cov'try NE)

Allen, Graham

Alton, David

Anderson, Donald (Swansea E)

Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary

Ashdown, Rt Hon Paddy

Ashton, Joe

Austin-Walker, John

Banks, Tony (Newham NW)

Barnes, Harry

Barron, Kevin

Battle, John

Bayley, Hugh

Beckett, Rt Hon Margaret

Beith, Rt Hon A. J.

Bell, Stuart

Benn, Rt Hon Tony

Bennett, Andrew F.

Benton, Joe

Bermingham, Gerald

Berry, Dr. Roger

Betts, Clive

Blair, Tony

Blunkett, David

Boateng, Paul

Body, Sir Richard

Boyce, Jimmy

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Brown, Gordon (Dunfermline E)

Brown, N. (N'c'tle upon Tyne E)

Bruce, Malcolm (Gordon)

Burden, Richard

Butcher, John

Byers, Stephen

Caborn, Richard

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Menzies (Fife NE)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D. N.

Canavan, Dennis

Cann, Jamie

Carlile, Alexander (Montgomry)

Cash, William

Chisholm, Malcolm

Clapham, Michael

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Coffey, Ann

Cohen, Harry

Connarty, Michael

Cook, Frank (Stockton N)

Cook, Robin (Livingston)

Corbett, Robin

Corbyn, Jeremy

Corston, Ms Jean

Cousins, Jim

Cox, Tom

Cryer, Bob

Cummings, John

Cunliffe, Lawrence

Cunningham, Jim (Covy SE)

Cunningham, Rt Hon Dr John

Dafis, Cynog

Dalyell, Tam

Darling, Alistair

Davidson, Ian

Davies, Bryan (Oldham C'tral)

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Davis, Terry (B'ham, H'dge H'l)

Denham, John

Dewar, Donald

Dixon, Don

Dobson, Frank

Donohoe, Brian H.

Dowd, Jim

Dunnachie, Jimmy

Dunwoody, Mrs Gwyneth

Eagle, Ms Angela

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