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Lord Willoughby de Broke: I rise to support the amendment. Article 137 has nothing to do with enlargement; most of the treaty has nothing to do with enlargement. It is contrary to what has been repeatedly stated elsewhere that it will help businesses. It will not help the applicant countries. As my noble friend said, this is a centralising part of the treaty: working conditions, social security, social protection, protection of workers, information and consultation of workers. No one has anything against the consultation of workers, but surely that is a matter for subsidiarity and a matter for the firms involved, and certainly not for the Council of Ministers or the Commission.

Perhaps I can draw the Committees' attention to paragraph 2(b) of Article 137, which states:

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    "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".

As we know, small and medium-sized undertakings create the most employment and they are the engine of commercial success. It appears to me that what is stated here is the direct opposite of what happens. A recent example was the European Parliament amending a proposal that affected businesses of 50 employees or more. Such businesses had to have employee consultation on all kinds of matters that could have been commercially sensitive and that has been changed to businesses employing 20 or more people. That will affect a whole raft of businesses. They will have to operate like ICI or Marconi, with a single department to deal with co-operation and information with the employees. That really is not suitable for small firms with 20 employees.

The rhetoric is that those directives will not affect the creation and the development of the small and medium-sized undertakings, but I am afraid that they will. To say that they do not is rubbish. The way in which this article is phrased directly affects small and medium-sized enterprises to their extreme detriment. Many of the provisions are anti-business and anti-enterprise.

The applicant countries will ask, "Why is this provision here? Why are we being challenged like this? Why is it becoming more difficult, rather than easier for us to join in the joys of the single market?". There is a whole raft of measures, one of which has 12 sub-headings and so on. It does not appear to be helpful to enlargement and it is certainly not helpful in making small and medium-sized enterprises more competitive, which is part of the objective.

I hope that my noble friend will decide to divide on the amendment but if he does not perhaps he will return to it at a later stage. I support his amendment.

7.30 p.m.

Lord Biffen: The noble Lord, Lord Willoughby de Broke, made a powerful argument about some of the detailed implications of the provision. I want to consider it in the broader sense in which it was introduced by my noble friend on the Front Bench. Particular emphasis was placed on the general terms of social exclusion. Most of us who have been in politics have lived with social exclusion. We know of the tremendous challenges it lays down and that often the fashions of one decade are replaced by subsequent experiences. It is not an easy subject but, none the less, it is a challenging and continuing one.

What worries me about such legislation is that it contains no implication of the policies which might be designed to counter social exclusion. It merely places social exclusion on the statute book. I believe other circumstances are to be prayed in aid; for instance, the circumstances of the Community budget. As a result of enlargement—and, after all, all these topics should be considered in that context—we shall see an increasing demand in both regional and social expenditure upon the budget. I believe that with economies so disparate within the disciplines of the single currency, there will

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be great demands within the various countries as they encounter some of the disadvantages within those disciplines.

Therefore, in this debate we have the opportunity to place on record—or not to do so—the general term "social exclusion" which will be prayed in aid by all those who want to drive the enlarged European Union into a greater and greater spending authority; and by implication, although concealed by the methods of tax raising, a tax-raising authority.

I believe that that is precisely the wrong way in which we should be seeking to direct an enlarged European Union. It should be an argument for decentralisation and disaggregation of government involvement rather than its accentuation.

Lord Stoddart of Swindon: I shall speak first to Amendment No. 15 and then to my Amendment No. 17. I support the amendment. Bearing in mind the differences in working practices, in history and in many other areas, I find it difficult to understand how 27 countries will be able to harmonise their social provision. In any event, I do not believe that it is desirable. The nation states, whether Britain, France or whichever, which have been built up over a long period of time have arrangements which suit them and one way or the other they have a form of government which gives them the consent of the people for what they are doing or intend to do. My fear is that what we have here is "entryism"; that although there are provisions which give protection to the nation states to do what they want in basic terms, eventually that will grow and grow and the powers will be further increased to the detriment of the power of the nation states.

Let us take as an example our own country. We now have a Labour Government with a huge majority. They are able in social provision to do virtually what they like. I believe that that is the proper way forward. The Government have been elected with a good majority on a manifesto which made it clear to the people of this country what they wanted to do, what they intended to do and the limits of what they would do if they were entrusted with that term of office.

That is the way it should be. That is the way politics and the provision of social and other services works in this country. I do not want it altered. There is a danger—and people must be warned of it—that provisions of this kind will prevent elected governments and parliaments in this country from doing what they and their electors want to do. That is what concerns me.

There are safeguards in place but eventually they may well be removed. We would then find ourselves either making more social provision than we thought we could afford or less provision than we could afford because we were constrained by other countries whose leaders and parliaments derived no power from our people and were not responsible to them in any way.

It is increasingly becoming the case that wherever there is qualified majority voting, the parliaments and electorates of the nations are being sidelined.

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Decisions are being taken not by Parliament by majority but by a majority of people who have not been elected by the British people and who are not responsible to them. The Bill is a further step towards that undesirable position.

I now turn to Amendment No. 17, which deals with the setting up of a social protection committee. It reminds me of the French Revolution. It is yet another Euro-quango which is being set up with the aim of promoting co-operation between member states. Its remit is wide, so let us look at it:

    "The Council, after consulting the European Parliament, shall establish a Social Protection Committee with advisory status to promote cooperation on social protection policies between Member States and with the Commission. The task of the Commission shall be: to monitor the social situation and development of social protection policies in the Member States of the Community; to promote exchanges of information, experience and good practice between member states with the Commission; without prejudice to Article 207, to prepare reports, formulate opinions or undertake other work within its fields of competence, at the request of either the Council or the Commission or on its own initiative".

It then states:

    "In fulfilling its mandate, the Committee shall establish appropriate contacts with management and labour",

In the first instance, the membership of the committee will be about 56, with 10 new members. I have no doubt that when the protection committee gets going it will range further and wider than envisaged in that article. It will drive towards the harmonisation of social systems and social provision. As I explained previously, that may not always suit us. Whatever party is in power, it may be detrimental to the policies that it wants to pursue. The provision could therefore lead to more financial resources—and it is true that it could lead to less.

Ten countries from the east are joining and many of them are poor and have a low standard of living. There could be a call for a large amount of extra finance. As we know, Mr Prodi and the European Parliament want direct taxation at the behest of the Parliament and the Commission. We really have to look ahead to discover what this social protection committee wants to do. As I say, there is already a call for an EU-wide tax. I have no doubt that the committee will do its best to promote that because it will enable it to do what it wishes.

There is one final point I wish to make as regards the contacts between management and unions. What will they be about? Will they be on the basis of negotiation? I am glad that we have now introduced a minimum wage. Will that be one of the kinds of things that will be discussed by the social protection committee? If so, I believe that that would be bad. My background is in the trade union movement and I believe that the right people to negotiate wages, conditions, salaries and the minimum wage are the trade unions as they represent the working people of this country. I do not want to see the intrusion of government of any sort into the area of collective bargaining.

I hope that Members of the Committee will understand the dangers that these two particular provisions present because increasingly and when each

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new treaty is signed, there is a passing of power from this Parliament or other such institutions to the institutions of the Community, which are less democratic, which are secretive and which could do much harm. I implore Members of the Committee to be very careful about what they are doing.

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