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Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, with the leave of the House, I shall now repeat a Statement on the Working Time Directive which is being made in another place by my right honourable friend the President of the Board of Trade. The Statement is as follows:
"The directive was adopted by the Council at a meeting on 23rd November 1993 and was forced on the United Kingdom through the use of the qualified majority voting procedure by being adopted by the European Council under Article 118a of the Treaty Establishing the European Community, which relates to the health and safety of workers. It is due to be implemented on the 23rd of this month.
"A common position on the proposals for the directive had been reached by Ministers of Social and Labour Affairs at a meeting on 1st June 1993. At that meeting, the United Kingdom announced its intention to challenge the directive's legal base. Our legal challenge was mounted in March 1994.
"The directive's main provisions include limiting the working week to an average of 48 hours; putting various restrictions on the length of night work; giving employees entitlements to minimum daily and weekly rest periods and to a period of paid annual leave. Our case before the Court was essentially that these are matters relating to terms and conditions of employment which should be settled by employers and employees and not truly health and safety at work matters.
"The Court has in essence confirmed the Advocate General's earlier opinion that the directive was properly adopted under Article 118a of the Treaty. This is not what was envisaged when we agreed to Article 118a as a health and safety provision. We shall therefore insist that the intergovernmental conference (IGC) addresses the issues which this ECJ judgment raises. That means both ensuring that the Working Time Directive no longer affects the United Kingdom and securing measures to prevent any other social engineering directives being forced on the United Kingdom by similar manoeuvres. The use of Article 118a in this fashion wholly undermines the spirit of our opt-out from the social chapter agreed at Maastricht. As he has already told the House, my right honourable friend the Prime Minister has today written to President Jacques Santer making clear in the most unequivocal terms our proposals to correct the position. A copy of the letter has been placed in the Library.
"In his letter, my right honourable friend makes clear that the broad interpretation of Article 118a implied by the ECJ judgment, 'goes directly counter to the spirit of what we agreed at Maastricht. It is unacceptable and must be remedied'.
"The Government have made clear that, as my right honourable friend also said in his letter, we attach, 'the utmost importance to these amendments, and [will] insist that they form part of the outcome of the Intergovernmental Conference'.
"In the meantime of course we have no option but to obey the law until we secure the necessary treaty changes. But we will legislate to implement the directive only after carrying out proper and necessary public consultation on the issues and options. In doing so, we will aim to take advantage of the valuable derogations already secured during our negotiation on the directive. We are determined to preserve the flexibility in labour matters that has been such an important element in the revival of our economy over recent years. British industry would expect us to do no less.
"The use of qualified majority voting was agreed by member states before the Maastricht negotiations for genuine matters concerning health and safety at work. Never for a moment was it envisaged that those arrangements could properly be applied to what we would always regard as social measures--including the general regulation of working time, rest periods and holidays.
"We have always been fully committed to protections needed to ensure good health and safety standards for British and other European workers. But employers and employees should also be free to agree terms and conditions, including arrangements for working time, rest breaks and holidays, that meet their particular circumstances and needs. We reject the imposition on industry of unnecessary requirements which can only damage competitiveness and jobs and we consider that this directive would be the thin end of a wedge that would lead to more such burdens.
"Because the Working Time Directive is incompatible with these principles, and because of what appeared to be the improper use of procedures to force it through, we had no option but to bring these proceedings to have it annulled. Avoiding unnecessary burdens on British businesses remains at the top of the Government's agenda. So we firmly intend to close the loophole which allowed the Working Time Directive through and to restore the rights of British companies and their employees to reach agreement on such matters, reflecting the requirements of their particular circumstances.
I also find it very strange that the Statement summarises the directive's main provision but leaves out something in which I would have thought everybody would be interested; namely, that almost every provision is optional. Would it not at least have been worth while for whoever drafted the Statement--being anxious to help your Lordships or Members in another place to understand what it said--to have put in its central tenet? That is not the way to issue Statements.
Having said that, let me lean over backwards to be helpful to the Government. It is arguable that the Working Time Directive is about employment rather than about health. That is certainly arguable, though it does not necessarily mean that it is correct. The Government believed that it was correct that it was about employment and Ministers and officials put the case as well as they could. There is no doubt about that and I do not doubt it. In fact, I understand that Ministers and officials did not do too badly. From its original proposal, the directive was watered down in the directions in which we wanted, in almost every way. So much so that Mr. Hunt, the Minister, said that it was toothless. I believe he said, but I do not have the quotation to hand, that it was a victory for us at the time. Certainly--I return to the use of the word "forced"--our country did not vote against it. That is worth bearing in mind.
However, now suddenly the Prime Minister, for reasons that I dare not think about, has decided that the directive is extremely important and dangerous to the interests of the country. He has decided that it was devised solely to undermine our opt-out from the provisions of the social chapter and therefore the question was put as a legal challenge to the Court of Justice of the European Communities, a body which we are solemnly committed to respect and which we do respect in general. It examined the case and found against us. The Court has confirmed that the directive was properly set out and arrived at.
The Prime Minister and his friends may be sad about that. The Prime Minister may not care for that decision or that adjudication. But that is the decision and that is the adjudication. In my judgment, if one belongs to such bodies, when they make adjudications and decisions one responds to them in a proper way. So the question that we must ask ourselves is what is the rational response to this Statement on the directive and the European Court's adjudication.
I find it extraordinary, in a matter on which the Government feel that they have a good case, that they should use language of such kind on a matter which I should regard as not of overwhelming importance. I happen to favour it but there are many things I favour which are not of overwhelming importance.
I strongly believe that the attempt to threaten the European Union is mistaken. We all agree, and the Statement confirms, that we must of course obey the law. We also agree--here I do not disagree with the Minister--that we must continue to argue our case and convince our friends (assuming that we have some friends) that we have a case and that we are right in general. I also agree with the Prime Minister--much as I favour the social chapter and noble Lords opposite do not--that we have an opt-out and I recognise that the Prime Minister wishes to exercise it.
Let me lean over backwards again and say that he is right to scrutinise what the Community does, if it is the case that it seeks to undermine our actions. But he must not do it by misunderstanding what has happened. He must not do it by bluster and he must certainly not do it by empty threats.
I return to what I believe is the central question anyway. I asked whether this is a health related matter or employment related social legislation and therefore pertinent to the opt-out. At least one of the distinguished figures in this matter, Professor Harrington, says categorically, having examined the evidence, that excessive working time is a health matter. Others who have looked at this field say that it is a health matter. I must admit that, using my common sense, it seems to me to be a health matter. I do not say that those gentlemen are necessarily right. I do not say, to quote another of the papers that we all read, that we may not need more research. I do say that it is reasonable to argue on the basis of available evidence that it is a health
That seems to me to be the central question. In other words, if we examine the question and obviously it is a health matter and we find that many experts tell us that it is a health matter, it seems to me that the Government's whole position is undermined right from the beginning. It is also further damaging to us in the future when we have to confront matters of this kind and wish to argue with the Community. In order words, to put it as correctly as I can, I believe that it is better to fight a battle on territory that one can win, with a cause that one can win and not this.
Nearly in conclusion, let me refer to the last paragraph, again to put this matter into perspective, where the Statement refers to the importance of competitiveness and all that. I suppose that I have bored your Lordships as much as any noble Lord with the importance of competitiveness, productivity, efficiency and all that kind of thing. I never hesitate to argue that our future depends on that and nothing else. But, again, that only brings out the triviality of the Government's position and the way they exaggerate the importance of the matter before us.
Our economic future depends on competitiveness. In the context of the real and monetary forces that determine that competitiveness, this working time directive is of no significance whatever. Its effects could not fall within our ability to measure. And despite the arguments of noble Lords opposite, I would take a similar view in regard to the social chapter; that it will not determine whether or not this country is rich or poor in the future. Quite other forces do that. For example, as I pointed out to the Minister yesterday, the rise by 10 per cent. in the value of sterling over the past two or three days has a much more powerful effect on the ability of British industry to compete overseas than the working time directive, as does the seeming rise in the price of raw materials that go into our industry. Those are the important matters.
I conclude by asking myself and other noble Lords to reflect on what this is all about. It is certainly not about economics as I understand the subject; it is not even about social policy. It is surely only about politics and especially the internal politics of the party of noble Lords opposite.
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