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5 Feb 2008 : Column 827

Mr. Davey: Of course people will refer to the document, but then they are forced to explain the underlying sources of the rights contained within it. People can refer either to the charter, which is an easy reference document, or to the actual source—they can take their pick. However, before the charter becomes legally binding, they can still refer to the underlying directive, national law or provision in the European convention on human rights so, again, I do not see a problem.

We should be proud of the role that Britain has played in the development of human rights in Europe and across the world. We should continue to push the EU hard to develop its role on human rights. We should not gainsay the progress that has been made, but keep arguing. My only concern about the Government’s position is that it is sometimes too defensive. I think there is a great story to tell about the EU’s role in human rights, and I hope that the Government will join us in telling it loud and clear.

5.39 pm

Colin Burgon (Elmet) (Lab): Although the debate has been fairly wide-ranging, one issue that I do not think we have covered in the necessary detail is the place of working people in Europe. The Lord Chancellor devoted about five minutes of his 45-minute speech to it, and there has been only fragmentary mention of working people in the context of the rights that they can enjoy, but the issue is tremendously important. Europe cannot be a construct of the bureaucrats, no matter how much Peter Mandelson and others like him wish that it were. Unless it puts down roots among the people of Europe, as an institution it has no future.

I am interested in the drift of policy dictating the treatment of workers throughout Europe. It could be said that in the 1960s, 1970s and 1980s a strong dose of Keynsian politics informed EU policy, but in my opinion and that of other Labour Back Benchers—there may be only a few of us, but that does not mean we are wrong—there is no doubt that the EU is increasingly taking a neo-liberal direction. In that connection, I want to refer to two important recent rulings from the European Court of Justice: the Laval case—nothing to do with the Vichy traitor—and the Viking Line case. I shall deal with them in some detail. At least they will then be on the record, and can form part of the debate about whether trade union rights in Europe have been undermined or are becoming stronger.

Mr. MacShane: Will my hon. Friend give way?

Colin Burgon: Not at this stage.

Viking Line is a Finnish ferry company. In 2003, it decided to re-flag its vessel the Rosella in order to register it in Estonia and employ an Estonian crew on Estonian pay and conditions, thus cutting its wage costs by 60 per cent. The Finnish shipping union appealed to the International Transport Workers Federation in London, which sent a circular to all affiliates telling them not to enter into negotiations with Viking. The shipping union called for Viking to maintain existing pay and conditions, and then threatened to strike.

Once Estonia joined the EU in 2004, Viking sued the ITWF in the High Court for restricting its “freedom of establishment”. The case was referred to the European
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Court of Justice, which ruled that in future any strike action affecting that freedom would have to meet stringent legal tests that the Court itself could assess. At that point, a danger light went on.

Although the Court did not, on the face of it, rule against the employer, I would argue that the ruling is excellent news for corporate lawyers in the long term. They will be able to threaten trade unions with long and expensive court cases in order to discourage the unions—which do not possess the same resources as big business—from taking collective action against outsourcing or similar corporate behaviour. It also has very alarming implications for basic trade union rights and freedoms. Our right to industrial action has always come from the democratic mandate of the union through its members, according to laws determined by this Parliament. Now it will also need to meet criteria imposed and assessed by unelected European judges.

Even more serious is the Laval judgment. Although most Members will know exactly what I am talking about, one or two will not, so I shall help them out. Laval is a Latvian company which, in 2004, posted workers from Latvia to work on building sites in Sweden, including the now infamous site at Vaxholm. The Swedish construction union asked the company to agree to the existing collective agreement in the building sector. It refused, instead operating under a Latvian agreement with lower pay scales that undercut the Swedish workers’ wages. The Swedish union quite correctly went on strike, and as a consequence Laval's Swedish subsidiary went bust.

Laval then sued the union for its losses and the case was referred to the European Court of Justice. The Court ruled that the company’s freedom to provide services in any member state should not be restricted by having to comply with a non-statutory collective bargaining agreement. In a particularly alarming section of the judgment, the Court argued that, because the EU posted workers directive set out minimum rights, it was unreasonable to force the company to comply with further agreements at local or national level. So instead of EU legislation setting minimum standards of rights at work, we now seem to be in danger of those standards being seen as a maximum.

Mr. MacShane: Will my hon. Friend give way?

Colin Burgon: My right hon. Friend is so persistent that I shall do so.

Mr. MacShane: I think that the clock that is timing my hon. Friend’s speech has been paused. My hon. Friend is making a powerful point, especially on the Viking case. The Laval case would have been solved had there been a national minimum wage, which Sweden does not have; the company coming in would have had to abide by that. I accept the criticisms my hon. Friend is making, but does he accept that last week the ECJ gave a ruling on employees who have to look after handicapped people at home, which could help 6 million people in this country? It has also helped us with getting pensions for steelworkers and with— [Interruption.] I am sorry, but if my hon. Friend cannot take an intervention, I will sit down.

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Colin Burgon: Thank you. I would welcome the chance to debate the matter; I will come to Rotherham, and we might discuss it in a closed meeting of trade unionists and Labour party members.

On the Latvia case, the Court also argued that the Swedish union had to recognise the agreement reached in Latvia. It referred the case back to the Swedish courts. One reason why it did so was that the charter of fundamental rights was not legally binding at that stage. Under the treaty, it becomes so.

I am glad that my right hon. Friend thinks that the argument we are beginning to construct is powerful. The two cases I mention show how the EU has in too many instances become a factor in accelerating a race to the bottom on labour standards across Europe. John Monks is always seen as a big supporter of Europe, but he has said the following in the light of those two cases:

Coming from John Monks, that is a powerful statement.

Jon Cruddas: My right hon. Friend the Member for Rotherham (Mr. MacShane) mentioned that, where robust legal frameworks are in place, some of this case law can be circumvented. The problem is that in our country these matters are premised on the history of autonomous collective bargaining where the state has minimal legal regulations, so the dangers my hon. Friend has outlined are even more acute for us.

Colin Burgon: That is an excellent point. These cases show that the EU is moving towards a policy of undermining workers’ terms and conditions. I am sure that other Members will make that case today.

Another aspect of the charter is also of concern to me: that the freedoms of capital seem to have become fundamental rights of the EU. Title II of the charter contains rights such as the freedom to conduct a business, the right to property, freedom of establishment and the freedom to provide services in any member state. Unlike the workers’ rights under title IV, they do not appear to be covered by the provisions of article 1, paragraph 2 of the protocol, which states only that title IV cannot create new rights except in so far as they already exist in UK law. The right to provide services and freedom of establishment, which were the key points in the Laval and Viking cases, are not so restrictive. Article 15, which contains them, does not contain the proviso that they exist only in so far as they are already in law. That is one reason why the unequal status of the different titles in the protocol is of particular concern.

I hope that the Government can reassure us that this is not as significant as it appears to be, because there are concerns that the situation could be made worse still if future EU legislation or Court rulings were to apply those principles even further. For example, the services directive had at its core the principle of freedom of establishment. The directive was intended to liberalise services on free-market principles. In its original form,
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the directive included areas that we would consider to be public services, such as health. Even more alarmingly, it enshrined the country of origin principle. That principle provided that where services are provided by a company based in a different country, the legislation of the home country would apply, with a few minimal exceptions, such as basic health and safety standards.

Thankfully, those elements were removed from the directive as a result of pressure from some member states and, eventually, a majority in the European Parliament. The Commission has never fully accepted that, and seems to be finding imaginative ways of bringing those elements back, such as in the recent health directive. In that light, I hope that the Minister can reassure me on a few points.

First, is there any danger that by making the freedom of establishment and the right to provide services fundamental EU rights they could become even more powerful tools for big business? Can he assure us that the Court will not give them greater consideration or overrule EU legislation that does not give them sufficient weight? Secondly, will the Minister assure this House that the Government will do their utmost to resist any attempt to revive the country of origin principle or any similar measure?

Several other hon. Members are waiting to take part in this debate, so I shall simply say that if the EU’s direction of travel is increasingly market-oriented and neo-liberal, Ministers may rest assured that many Labour Members will begin to doubt the so-called construct of a social Europe, and that Europe will never engage the hearts and minds of millions of working people across the continent. That needs to be borne in mind as we discuss the European Union’s future.

5.51 pm

Sir Malcolm Rifkind (Kensington and Chelsea) (Con): The hon. Member for Elmet (Colin Burgon) made a thoughtful speech. He pointed out the significance of judge-made law, which is very relevant to some of the points that I would like to share with the House.

This debate is meant to be about human rights, but actually it is not about that, because, despite some of the political arguments that are occasionally used, there is an equal commitment to human rights on both sides of the House, from all Members of Parliament. The issue is how we decide what those human rights should be and how we are accountable to the wider electorate whom we serve both in this country and in the other countries of Europe.

The significance of the protocol that was negotiated by the Government—if it is watertight—is twofold. First, it is important because it is a further step towards the kind of la carte Europe that I wish to see. I believe that model will enable not only Britain but many European Union countries that have concerns about excessive integration to reconcile their membership of the European Union. The protocol curbing the power of the European Court is important in that respect. Secondly, it is about the wider issue of the European Union’s accountability to the electorate.

Let me comment briefly on both those fundamental issues. If the protocol works, it will curb, for the first time, the European Court’s ability to make law in
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substantive areas for the United Kingdom. We should realise that this kind of la carte Europe, which Britain has pioneered, but in which other countries have participated, has several implications. First, it is not designed just for the United Kingdom. Poland has this protocol, and other European countries, such as Sweden, Denmark and a number of other states of that kind, have also opted out in various areas.

The second implication of an la carte Europe is that it does not just give us the right not to participate in certain kinds of integration; we should also respect the right of other member states that may wish to go further. That right should be equally important. It should not have to be haggled about or negotiated, because it should be implicit in how we operate.

The Schengen agreement, the single currency, the protocol and the justice and home affairs provisions contain opt-outs for some countries, and not only for the United Kingdom. We must also take into account the hugely long transition periods for all the new member states from central and eastern Europe. Even if they want to join the euro, they may have to wait nine or 10 years in order to do so. That is not simply a transition; it means that for a generation there will be a European Union of the kind that we in this House should be much more comfortable about. That is an important point.

The second aspect to this matter is the wider issue of accountability to the electorate in respect of how our laws are made. Most of the dispute in this area in recent years has been not about the Court, but about qualified majority voting—it has been about the ability to take decisions that are not made unanimously. That covers very important issues, because inevitably when a minority of Governments do not vote for a proposition and it nevertheless takes effect in their nation states, there is no way that the electorates of those countries can hold their Governments accountable, because those Governments themselves were opposed to the measure imposed upon them. That is an argument as to why any decision to move to QMV should be taken carefully. I hope that such a move will take place in as few cases as possible.

I come to the issue of the Court, because that is what we are really discussing today. The situation is much more dangerous and disturbing than QMV, because a decision made by the European Court is different from a judgment made by a national court. If a United Kingdom court makes a judgment that embarrasses the Government or leads to a law that Parliament never thought it intended, Parliament has the power, if a sufficient majority exists, to reverse that court’s decision by making new law. The Supreme Court of the United States has enormous power to determine new law and develop the law in a fundamental and often controversial way. If a consensus existed in Congress—it does not always—and the President and Congress agreed that the Supreme Court had created a situation with which they did not want to live, even the United States has it within its own power to reverse that situation, although that rightly involves a complicated and difficult measure.

Dealing with the European Court, rather than our national courts, represents a new situation. There is no way in which the decision of that Court can be reversed in a democratic fashion by those upon whom its judgment has an impact. The United Kingdom cannot
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reverse such a decision by itself, unless it has an enforceable protocol that can prevent the situation from arising in the first place. If the protocol does not apply, or it acts in other areas, a difficult situation arises. In theory, the only way in which a judgment of the European Court, however controversial, could be overturned would be if the Council of Ministers as a whole decided to reverse it. That would require not just a majority but a decision by all 27 member states, because any one state could veto such a change.

Mr. MacShane: I follow the right hon. and learned Gentleman’s argument. How is this different in any way from the way in which the World Trade Organisation’s adjudication panel imposes its rulings on countries, irrespective of the will of Parliaments and sovereign Governments? Those rulings have to be accepted.

Sir Malcolm Rifkind: I am grateful to the right hon. Gentleman for that point, because there is a fundamental distinction between the two situations. When one is dealing with the WTO or any international treaty that concerns itself with the relations between states, of course one encounters curbs of the kind that he mentions. We are increasingly seeing the European Union move into domestic law and into the rights of individual citizens in respect of their health, housing, education or personal rights in a way that has no relevance to the WTO situation.

Mr. MacShane: Let us consider the case of genetically modified organisms. The WTO is moving towards insisting that those should be freely traded. For many, although not for me, that has a huge impact on health considerations. Trade cannot be divorced from the health, social and other aspects.

Sir Malcolm Rifkind: I do not doubt that a choice will have to be made in some areas and that occasionally, with a great lack of enthusiasm, we will have to acknowledge that an international court may need to be the body that makes law that imposes itself on us, as it does on all other countries. The right hon. Gentleman should not get carried away with enthusiasm. I am saying that the onus will be on those who want such a situation to prove that this country’s citizens have an enormous interest in sacrificing their own control over how decisions are made in order to achieve certain objectives. Sometimes that test may be met, but such occasions will rightly be relatively rare. If the European Court is able to reach judgments that cannot be overturned, however controversial, unless there is unanimity in the Council of Ministers, it in effect has the last word and is all powerful. That really is power without responsibility.

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