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Mr. Howard: I beg to move amendment No. 3, in page 1, line 13, after '2', insert '(except paragraph 19)'.
The First Deputy Chairman: With this, it will be convenient to discuss the following amendments: No. 4, in page 1, line 13, after '9', insert
'(except Article 2 paragraph 22)'.
No. 59, in page 1, line 13, at end insert 'except Article 2(3)(c)'.
No. 34, in page 1, line 13, at end insert
No. 36, in page 1, line 13, at end insert
New clause 21--Appointments to Employment Committee--
New clause 27--Social Chapter: Report to Parliament--
Mr. Howard:
The amendments deal with European social policy, in particular the scrapping of Britain's opt-out from the social chapter, and the new employment chapter agreed at Amsterdam. Let me make it clear at the outset that the Conservative party is opposed to both. We believe that they will lead to more regulation, less flexibility and lost jobs. They are bad for Britain and bad for Europe.
In 1992, my right hon. Friend the Member for Huntingdon (Mr. Major) negotiated an opt-out for Britain from the social chapter. That was no mean achievement. It was a hard-won gain which was warmly welcomed by British business. Even Jacques Delors acknowledged that it was an excellent deal for Britain. The United Kingdom would, he said, become
Let us consider the facts. The United Kingdom is the No. 1 destination for inward investment. In 1995-96, Britain attracted a third of all inward investment into the European Union. That included more than 40 per cent. of all Japanese and American investment and more than half of all Korean and Taiwanese investment. With this investment have come jobs--British jobs.
The UK has a higher proportion of its working population in work than any other major European Union country and, unlike France, Germany or Belgium, our unemployment rate is well below the European Union average. The truth is that because we have a flexible labour market, excellent industrial relations and low overheads, Britain is a good place in which to do business.
Our strike rate has been lower than the European average for the past nine years and we have the lowest labour overheads of any member of the European Union. For every £100 paid in wages, employers must add non-wage costs--such as social security contributions and health insurance--of £32 in Germany, £41 in France and only £18 in the United Kingdom. It is those non-wage costs, not the level of the wages themselves, that do such damage to a company's ability to compete. By signing up to the social chapter, the Government risk having those burdens imposed on British business--burdens that will chip away at our competitiveness, destroying British jobs.
Ministers talk endlessly of the importance of job creation. The trouble is that they fail to understand how jobs are created. As the chairman of the German equivalent of the Confederation of British Industry has said:
I understand that the Labour party has different views on these matters from Opposition Members. No one who saw the Minister of State, Department of Trade and Industry reply to yesterday's debate on burdens on business could be in any doubt that old Labour is still alive and kicking. The Government have a large majority. If they take the view that further social legislation is desirable, they can introduce such legislation in the House. There is no need to make--and no justification for making--our economy vulnerable to measures imposed on us against our will by the European Commission and other member states.
The Prime Minister once pretended that such an imposition could not happen. He once claimed that we could pick and choose the elements that we wanted to accept. The Prime Minister and the Government would be powerless to prevent damaging measures being imposed on the United Kingdom against our will because, under the social chapter, so many subjects are decided on the basis of qualified majority voting.
The Government are keen, when it suits them, to pray in aid the views of the director-general of the CBI. They would do well to listen to him on this subject.
Under the social chapter, legislation in any of the following areas can be adopted by qualified majority vote: working conditions, informing and consulting workers, equality between men and women in relation to work opportunities and treatment at work, the integration of people excluded from the labour market, and health and safety at work. The social chapter allows burdens to be imposed on business in virtually all areas of social and employment policy.
Already, two pieces of legislation have been introduced under the social chapter: the European works councils directive and the parental leave directive. The more profound danger of the social chapter, however, lies in the potential it provides for more far-reaching social legislation, such as the European Commission's proposal for national works councils. The existing works councils directive affects only large, multinational companies, but Commissioner Flynn has suggested that companies with as few as 50 employees should be forced to set up works councils. What is to be gained from agreeing to provisions that would enable British firms to be forced to do that? The Government are opposed to the proposal. A raft of further social legislation is currently under review.
The treaty also contains a new employment chapter. It makes member states' employment policies a matter of common concern and requires member states to co-ordinate their action in that respect within the Council. The European Council will consider the employment situation each year and adopt conclusions. On the basis of the European Council's conclusions,
What repercussions could such a chapter have? What guarantees can the Minister give us that it cannot be used to impose on this country an employment policy that we oppose and which would destroy, not create, jobs? What assurances can be given that a British Government will not find themselves having to support and implement employment policies that may be wholly inappropriate or unrealistic? Is it not the case that the European Court of Justice could interpret the employment chapter as placing a duty on the British Government to pursue employment policies dictated by other European states--policies that could well be against Britain's national interest?
Under the new employment chapter introduced at Amsterdam, we can expect yet more interference and regulation. In particular, the treaty introduces a mechanism for so-called "incentive measures" which will be adopted by qualified majority vote. That is a potential source of expensive employment programmes for which we would have no need, but for which the United Kingdom would be expected to pay. Will the Minister explain the scope of the "incentive measures" that can be agreed by qualified majority voting under the employment chapter? Is it not the case that moneys could be voted under those provisions to finance worthless schemes in other countries despite the opposition of the British Government?
The future of our country and of all our fellow citizens depends on our ability to earn our way in a world that is more fiercely competitive than ever. In that competitive world, all the crucial decisions are made at the margin. Marginal differences in price, in quality and in delivery can make all the difference between winning orders and losing them, between creating jobs and destroying them and between building prosperity and undermining it. Over the years, Conservative policies have given this country a critical competitive advantage that has enabled the British people to win orders, to create jobs and to build prosperity.
'other than in Article 2, paragraph 19)'.
'other than in Article 2, paragraph 22)'.
'.--Pursuant to Article 2 of the Treaty of Amsterdam, Paragraph 19 (Cmd. 3780, page 31), Her Majesty's Government shall make appointments to the Employment Committee in consultation with employers' and workers' organisations.'.
'.--Her Majesty's Government shall make a half-yearly report to Parliament on the implementation of Article 2, paragraph 22 of the Treaty setting out the United Kingdom legislation and employment implications arising from the new Employment Chapter and Social Chapter as agreed in the Amsterdam Treaty which shall be subject to resolution by each House of Parliament.'.
"a paradise for Japanese investment".
That prediction has been amply justified.
"Excessively high German labour costs are costing more and more German jobs."
On another occasion, he said:
"we have too rigid labour laws. We have too high social costs and taxes. We have the shortest working week in Europe. The German Government spends 50 per cent. of GDP as opposed to 42 per cent. in Britain. No wonder we have a problem."
The chairman's assessment is backed up by The Wall Street Journal, which pointed out that
"Britain imposes a much lower burden of social charges on employers than any other European country. British social taxes were less than half those in Switzerland, 40 per cent. of those in Germany and 29 per cent. of those in France."
The French newspaper Le Monde has explained that
"if unemployment is dropping in Britain it is because they have done everything to deserve it. For several years, considerable efforts have been made to improve the workings of the labour market, thereby boosting job and new company creations".
What, then, are the benefits that our opt-out from the social chapter has denied us? What is the pressing need that has not been met since that opt-out was won? What is the injury, the damage and the detriment that the opt-in agreed at Amsterdam is supposed to remedy? The Government have never answered those questions. Why? Because there are no such benefits and no such need. There is no injury, damage or detriment. If there were, it would be perfectly possible for this Parliament to remedy it.
9.30 pm
"If you sign up to the social chapter,"
he warned,
"you can't actually be sure that you'll have your way, because some directives will be covered by qualified majority voting. There is, however, a way to pick and choose, and that is available to the Labour party if it wants to have it as its policy. The way to pick and choose is actually not to sign up to the social chapter."
2 Dec 1997 : Column 250
The President of the Board of Trade has already come up against the problem. As my hon. Friend the Member for Sevenoaks (Mr. Fallon) pointed out in yesterday's debate, when the President of the Board of Trade--having told BBC television's "On the Record" that she did not support Commissioner Flynn's proposals for national works councils--was asked how the Government could prevent the proposals becoming law, as they would be introduced under qualified majority voting, there was a long pause and then she said:
"Well, er, we shall see how things go."
That is the clarion call of the President of the Board of Trade to British business.
"the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament, the Economic and Social Committee, the Committee of the Regions and the Employment Committee . . . shall each year draw up guidelines which the Member States shall take into account in their employment policies."
Member states will also be required to submit an annual employment report to the Commission. Once again, the Council,
"acting by a qualified majority on a recommendation from the Commission, may, if it considers it appropriate in the light of that examination, make recommendations to Member States."
Employment policy will cease to be a matter for individual member states. Britain's employment policy will become a matter for all European Union members. Guidelines which "shall"--not "can" or even "should"--direct employment policy will be determined by qualified majority vote in the Council. If the Commission and the Council are not happy with a member state's efforts to harmonise employment policy, they can, again on the basis of qualified majority voting, make recommendations to that member state.
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