Working Time Directive

HC Deb 12 November 1996 vol 285 cc155-70 3.31 pm

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang)

With permission, Madam Speaker, I should like to make a statement on the working time directive.

The Court of Justice of the European Communities has today given its judgment in the proceedings that we brought to have Council directive 93/104/EC—the "working time directive"—annulled. That directive derives its origins and impetus from the 1989 Community charter of the fundamental social rights of workers, to which the United Kingdom did not subscribe then, and does not now.

The directive was adopted by the Council at a meeting on 23 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 23 November.

A common position on the proposals for the directive had been reached by Social and Labour Affairs Ministers at a meeting on 1 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; and 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 those 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 now delivered its judgment and I am arranging for the text of the judgment to be placed in the Library.

The court has in essence confirmed the Advocate General's earlier opinion that the directive was properly adopted under article 118A of the treaty. That 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 addresses the issues that the European Court of Justice 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 that fashion wholly undermines the spirit of our opt-out from the social chapter, as agreed at Maastricht. As my right hon. Friend the Prime Minister has already told the House, he 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 hon. Friend makes clear the fact that the broad interpretation of article 118A implied by the judgment goes directly counter to the spirit of what we agreed at Maastricht. It is unacceptable and must be remedied.

My right hon. Friend has therefore made it clear that at the IGC the Government will table amendments aimed at ensuring that article 118A cannot in future be used as it has been on this occasion, and at dealing with the specific problem of the working time directive. The Government have affirmed that, as my right hon. Friend also said in his letter, we attach the utmost importance to such 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 shall legislate to implement the directive only after carrying out proper and necessary public consultation on the issues and options. In doing so, we shall aim to take advantage of the valuable derogations already secured during our negotiations on the directive. We are determined to preserve the flexibility in labour matters which has been such an important element in the revival of our economy over recent years. British industry would expect us to do no less.

Before the Maastricht negotiations, the use of qualified majority voting was agreed by member states 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 that cannot but damage competitiveness and jobs. and we consider that the directive would be the thin end of a wedge that would lead to more such burdens.

Because the working time directive is incompatible with those principles, and because of what appeared to be the improper use of procedures to force it through, we had no option but to bring 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 that allowed the working time directive through, and to restore the rights of British companies and their employees to reach on such matters agreements that reflect the requirements of their particular circumstances.

The competitiveness of our industry is the key to economic success, employment and prosperity. We are not prepared to have it unnecessarily trammelled, as it would be by the judgment.

Mrs. Margaret Beckett (Derby, South)

The Secretary of State said that the directive had been forced on the United Kingdom through the use of the qualified majority voting procedure. First, will he confirm that it was the present Government who accepted the introduction of qualified majority voting and diluted the British veto? So is it not a bit late to complain about that now? Secondly, will he acknowledge that the directive has been under debate since 1990, before the social chapter was even drafted, and that negotiations on it were completed before the Maastricht treaty was signed? If the Government genuinely believe that the directive cuts across their opt-out from the social chapter and raises issues that they thought that they had settled, why did the Prime Minister not raise the matter at the previous intergovernmental conference, where those matters were discussed, before the directive went on to the statute book? Will the Secretary of State confirm that the Government failed even to vote against it, that this procedure has been used similarly in respect of the protection of young workers and of maternity leave—legislation that has now been implemented—and that the Government's own negotiator said that the directive was toothless and that, as has been pointed out before, the Government had won in the negotiations?

Why have the Government wasted three years on a court case which, given the background, they were always likely to lose, when member states have a great deal of discretion in the way in which they implement the directive to allow for shift systems and other practical implications, and when the Government could have used that time to work with British industry on the handling of a measure that will now become law next week`' How much taxpayers' money has been spent, as I understand that costs have been awarded against the Government?

Is this not simply another example of the Government's posturing on Europe, whereby—as they did in respect of bovine spongiform encephalopathy—they begin with neglect, proceed to posturing, and end up having to cave in, having lost friends, respect and the argument along the way? Given that what stands out a mile is that, if the Government mean it, they have made a mess of it, will not the President of the Board of Trade admit that what shines clearly through the wording of the Government's previous statements on this subject and their handling of the matter is their dislike of the substance of the directive?

Will the Secretary of State admit that the directive does not outlaw voluntary overtime and that it has a string of exemptions as long as one's arm to allow for any practical problems? Are the Government really saying that there should be no protection at all against being forced to work long hours and no provision for reasonable breaks? Is it not true that the Department of Health admitted last year that it had destroyed copies of a Government-financed study that found that working more than 48 hours a week doubles the risk of heart disease? Is it not true that Professor Harrington's report, which the Government used in their case, shows that this is a health and safety matter and that, contrary to Government claims, the proposed norm is not unreasonable—and that the Government refuse to release that report, too?

Last, but by no means least, are the Government really arguing that British citizens should, alone in Europe, have no legal right whatever to any paid holidays—something that would directly benefit 2.5 million members of the work force? Now that the Prime Minister has pledged that those holiday rights will be taken away if he is re-elected, is that not another powerful reason to vote against this Government at the next election?

Mr. Lang

It is the Government's view that holidays are a matter that should be negotiated between employers and employees. The provisions affecting employment conditions contained in the directive—which cover many matters other than holidays, including the length of the working week, the range of shift patterns, daily and weekly breaks, and other issues—should be resolved at work by employers and employees, not handed down from Brussels and imposed on the United Kingdom in a way that is contrary to our economic interests.

The right hon. Lady referred to qualified majority voting. The point is that article 118A was used precisely to achieve the directive through qualified majority voting, because we had secured an opt-out from the social chapter. Yesterday, the right hon. Member for Dunfermline, East (Mr. Brown) proudly proclaimed to the Confederation of British Industry that Labour would not approve any more qualified majority voting, yet the Labour party wants to sign up to the social chapter and wants to accept the working time directive through qualified majority voting.

The right hon. Lady asked about abstention. At the negotiations, part of our purpose was to secure the best possible set of derogations and flexibilities for the benefit of the British people. That was secured, in the context of which an agreement to abstain took place. At the same time, we made it clear that we would challenge this case in the court, and that is what we subsequently did.

The right hon. Lady referred to overtime. Absolutely no effect on overtime arises from the directive—that is another typical Labour scare. The directive is about working hours and working conditions. The right hon. Lady suggests that we do not care about health and safety provisions. Under the Management of Health and Safety at Work Regulations 1992, employers are required to take into account hazards such as fatigue when developing employment conditions.

The right hon. Lady also referred to health. Professor Harrington's report, which, as we have always made clear, could be published only after the case had concluded, states that the scientific basis for establishing optimal hours of work is in doubt. It adds that it is impossible to be dogmatic on scientific grounds about the maximum hours to be working each week, and states that there is no firm scientific basis for setting a specific numerical lower limit.

Is it not a fact that the Labour party wants to accept the working time directive and to impose the social chapter, because it welcomes the imposition of those burdens by Brussels on employers and companies in this country? It has no compunction whatever about piling burdens on business. The Labour party is afraid to stand up for an issue of principle in Europe and would compromise the competitiveness of British industry. We have achieved a Britain that is the enterprise centre of Europe and we are determined to ensure that it stays that way.

Mr. John Biffen (North Shropshire)

May I welcome my right hon. Friend's statement and in so doing commend the remarks of my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) about the importance of developing national institutions for guarding and developing what are essentially national issues? In that context, is it not clear that the price for European partnership cannot be purchased by the danegeld of recurring European bureaucracy, recurring European integration and, above all, long-term aspirations for European uniformity? Will my right hon. Friend convey those homespun comments to his friends at the intergovernmental conference?

Mr. Lang

I shall gladly convey my right hon. Friend's comments; he is right to put his finger on the recurring nature of the problem identified by the working time directive. It is not merely the directive with which we are threatened, damaging though that would be to British industry. There is also the social chapter—two of the directives under that are already in place and many more are under consideration, discussion or negotiation. It is clear that the Labour party would accept all of them. It is what is coming down that pipeline that would be so damaging to us. This directive would be the thin end of the wedge and that is why we are right to stand on principle and to insist that, as was agreed at Maastricht, those are matters that should be decided by us and not by Brussels.

Mr. Nick Harvey (North Devon)

Why are the Government so keen for Britain to compete economically by making employees work longer hours and miss out on the holiday entitlement that our European competitors are prepared to grant? As Secretary of State for Trade and Industry, does not the right hon. Gentleman have the confidence that the British economy is strong enough for us to compete on the quality and innovation of our goods and services? Do we not have higher priorities at the IGC on which to use what is left of Britain's bargaining position and credit in Europe, rather than trying to jettison such a measure, which the majority of the British people will regard as a sensible guarantee against abuse in the workplace?

Mr. Lang

The best way to secure good working conditions for the British work force is to have a successful economy, growing, expanding and creating jobs. If one compares our unemployment rate of 7.4 per cent. with the rate of more than 10 per cent. in Germany, more than 12 per cent. in France and more than 20 per cent. in Spain, one begins to see the contrast between our approach, of a flexible labour force seeking to be competitive, and the burdens imposed on all those countries in Europe, which are so damaging their economic performance.

Sir Michael Neubert (Romford)

Is not the problem for the rest of Europe the fact that, as Jacques Delors correctly predicted, with our flexible labour laws, Britain has become a paradise for investment? Is not the essential and inescapable point that we are part of a world market? Our competitors overseas must be rubbing their hands with glee to see Europe tying itself in knots over this issue.

Mr. Lang

My hon. Friend is right. The very fact that we secure 30 per cent. of all the inward investment coming to Europe, including 40 per cent. of that from the United States of America and Japan, shows the contrast between our approach to competitiveness and that of our European counterparts. More tellingly, the fact that 300 German companies are now manufacturing in Britain underlines the fact that we have the right approach to those matters.

Mr. Peter Shore (Bethnal Green and Stepney)

I am in favour of the sensible limitation of working hours, but there is no doubt in my mind that legislation affecting social conditions, including working hours, is a matter for this Parliament and not for the European Council of Ministers or the European Court of Justice. However, is the Minister not aware that the great chink in our armour turns out to be acceptance of qualified majority voting over a wide area of European affairs—an agreement reached under the Single European Act and passed by the former Conservative Government? Is the right hon. Gentleman not aware that the big threat to our competitiveness is not the virtually empty social charter, but the danger that Britain will find itself part of a single currency in Europe?

Mr. Lang

The real danger would come from a Labour Government willing to accept all these social imposts—through the social chapter, the working time directive, and all the other burdens that could be imposed through article 118A under health and safety considerations. We must resist that in order to remain competitive.

Sir Michael Spicer (South Worcestershire)

As the Prime Minister accepted earlier, this is a question not so much of the details of the directive but of whether this country is to be ruled by an unelected court or by Parliament. Will my right hon. Friend say a little more about what the Government intend to do about that?

Mr. Lang

I agree with my hon. Friend. That is why, in the Maastricht treaty negotiations, the Prime Minister secured the opt-out, which was designed to protect us from the kind of social burdens now being sent down through the back door via article 118A. My right hon. Friend has made it clear that, at the IGC, we shall insist that this matter is dealt with and that the spirit of the social opt-out is honoured. He also made it clear that no progress on other issues can be made at that conference until this is agreed.

Mr. Giles Radice (North Durham)

Is it not out of all proportion for the Government to say that they will block the outcome of the IGC and damage relations with our European partners for a measure that the director general of the CBI said today will not substantially change current working patterns, and which the Government did not even vote against in the Council of Ministers?

Mr. Lang

This is an issue of principle: whether the social opt-out agreed at Maastricht should be sustained and honoured, or whether it will be abused and circumvented. It is not just the impact of the working time directive; there are other proposals under the social chapter and under the medium-term social action programme being developed by Commissioner Flynn. We know that the Labour party would accept all those measures; that would be immensely damaging to this country and would remove our capacity, as a country and a Parliament, to be responsible for working conditions.

Mr. Peter Bottomley (Eltham)

Does my right hon. Friend agree that if a health and safety measure will have a serious impact on reducing casualties at work, it should not be made optional? If it is said to be optional, the case that it concerns health and safety is given away.

Will my right hon. Friend confirm that the directive will not apply to most people who are paid salaries, and that it could really apply only to those who are paid hourly? Will he find out whether European Commissioners, senior officials in Brussels and, for that matter, members of the European Court of Justice work more than 48 hours a week—and what their health records are?

Mr. Lang

My hon. Friend makes a good point. It is clear that the relationship between working hours and health and safety is at best unproven. We defer to no other country in our commitment to having in place sound, relevant health and safety provisions. Indeed, we already have them under the Health and Safety at Work, etc. Act 1974 and the 1992 regulations. The head of the EU's representation in the United Kingdom has already emphasised the progress on flexibilities developed in the negotiations; and it is clear that the final state of the directive bears no relation to health and safety considerations. It is in fact a piece of social engineering.

Mr. Martin O'Neill (Clackmannan)

On health and safety, do not the Government have a good case in respect of offshore workers, for whom the dangers are twofold? A reduction in working hours would require more helicopter flights and the development of new and high-quality safety habits. So why have the Government been so singularly inept in advancing those two strong arguments? Is it because they are so isolated in Europe that even when they have a good case, they cannot advance it because no one wants to listen to them?

Mr. Lang

There are already exemptions in the directive, one of which includes offshore workers. Commissioner Flynn made it clear today that he intends to bring out a White Paper to reduce the exemptions, to tighten the ratchet and to diminish the derogations and easements available. We are right to stand firm on the principle and to insist on reversing the position and restoring our capacity to control our own employment conditions.

Mr. David Heathcoat-Amory (Wells)

Does my right hon. Friend agree that the importance of this court judgment has nothing to do with how many hours may be worked in Britain; rather, it has to do with who makes the laws, this House or a foreign jurisdiction? As my right hon. Friend has rightly promised to see off the directive by treaty change, and as that treaty change will require the agreement of all other member states, we shall have to invest a huge amount of negotiating capital to achieve that. Why has my right hon. Friend such a narrow objective? Will he not use this opportunity also to see off the innumerable other ways in which the powers of this House have already been lost to the European legal system, and tell us what other directives and measures he will seek to repeal?

Mr. Lang

I agree with the premise to my right hon. Friend's question. With regard to the question, my present responsibility is confined to the directive, but I shall convey his views to my right hon. Friend the Prime Minister. I am sure that the lesson will be learnt by our partners in Europe from our commitment to ensuring that the position is reversed.

Mr. Roy Beggs (East Antrim)

Does the Secretary of State agree that the flexibility in working hours that enables employers and employees to deliver projects on time against competition is making our industry successful? Does he further agree that, instead of interfering with what is making Britain prosperous, the European auditors would be far better employed doing something about the billions of pounds' worth of fraud that goes on every year undetected?

Mr. Lang

I am glad to agree with the hon. Gentleman on both points.

Mr. Tim Rathbone (Lewes)

Will my right hon. Friend remind the House that the Government are responsible for the safety, health and well-being of work people in this country? Does he accept that the great worry is not the directive but, following on the question from my right hon. Friend the Member for North Shropshire (Mr. Biffen), the precedent for the future that must be guarded against?

Mr. Lang

My hon. Friend is right. That would be the thin end of the wedge. That is why we are determined to close the loophole, as well as reversing the effect of the working time directive.

Mr. Nigel Spearing (Newham, South)

Why does the President of the Board of Trade consistently give incorrect and misleading statements to the House? Surely there is no social chapter in the Union treaty signed at Maastricht. There is, however, a subsection headed "social policy" in the Single European Act passed in 1986.

Does the right hon. Gentleman agree that in the Union treaty of Maastricht there is a social agreement? That agreement contains no list of legislation to be put before the signatory countries or this House. It is a means of promoting social legislation, which is then put to the Commission and goes through the usual channels of the articles of the treaty and the legislative processes already established. Are not all those facts correct? Why do the Government continue to make statements that are inaccurate and misleading?

Mr. Lang

I am sure that I have not deliberately made any inaccurate or misleading statements. The social chapter is, indeed, a conduit through which directives can be introduced. That is what concerned us about it. The vast majority of such directives would be governed by qualified majority voting and would be imposed on this country. That is why we secured the opt-out, why it is so valuable to us and why we so strongly resist the intentions of the Labour party to sign the social chapter.

Sir Ivan Lawrence (Burton)

Is it not clear that the essence of the court verdict has nothing to do with holiday rights or health and safety, but that once again the British Parliament is being told what to do by a foreign court? That decision was taken following a decision made by the European Commission with the supine support of members of the Council of Ministers who have economic interests in Britain being brought low and not being left in the high economic plane where it is. That decision was made in thoroughly bad faith. Is it not time that we told the European Commission and the Council of Ministers that if we are not to get fair play, and if the rights of nation states are not to be honoured, we are prepared to leave the European Union?

Mr. Lang

I agree with every word of the preamble to my hon. and learned Friend's question. However, as to our negotiating tactics at the intergovernmental conference, we are correct to take the position set out by my right hon. Friend the Prime Minister in his letter to President Jacques Santer and to insist that no progress will be made until we have secured the opt-out that we require.

Mrs. Margaret Ewing (Moray)

Does the President of the Board of Trade recall that he is a vice-president of the European Movement in Scotland and that he did not argue against the Single European Act, which has led to many of the directives that we discuss in this House?

As to the serious issue of the intergovernmental conference, is the right hon. Gentleman saying, as did the Prime Minister earlier today, that the 48-hour directive will become the critical factor in discussions regarding the IGC's progress? Despite its flexibility, the time scale for implementation and the existing derogations, will that issue now take priority over discussions about matters such as the common fisheries policy—which is very important both to my constituents and to those of the right hon. Gentleman? Will the Government delay those important negotiations for something that is not generally opposed throughout the country?

Mr. Lang

First, I should correct the hon. Lady: I ceased to be an honorary vice-president of the European Movement when I ceased to be Secretary of State for Scotland.

On the hon. Lady's question, she may regard it as an unimportant matter, but we believe that it is a fundamental issue that goes to the heart of the Government's economic policy. Because we have achieved flexible labour markets, become more competitive and increased productivity, we have attained the expansion and the growth in our economy that have created falling unemployment for four years, while unemployment has risen in other countries. There are other important issues to be addressed at the intergovernmental conference, but this is the issue that matters to the Government and we intend to insist upon it.

Dr. Michael Clark (Rochford)

What value will my right hon. Friend place on opt-outs and agreements reached with our so-called European partners in future? Does he believe that he is dealing with honourable and trustworthy people?

Mr. Lang

I do not think that the European Parliament comes into the equation, except to the extent that there are many Labour Members of the European Parliament. [HON. MEMBERS: "European partners."] I am sorry, I misheard my hon. Friend—which makes it difficult to answer his question.

Mr. Dennis Skinner (Bolsover)

Is it not nothing short of sheer hypocrisy for the Tory Government to say that it is all right for Members of Parliament to have 11 weeks' holiday in the summer, but it is wrong for British workers to have three weeks' paid holiday in a year? As one who opposed the Common Market long before those Johnny-come-latelys on the Tory Benches, I have an idea: if the President of the Board of Trade does not like the Common Market directive, the Government should bring in a Bill tomorrow allowing British workers to have those holidays, and we on the Labour Benches shall push it through in 24 hours. However, I suspect that this lousy, rotten Tory Government are more concerned about the class war than the Common Market.

Mr. Lang

The best way to secure good holidays for British workers is to ensure that they have good, successful, well-paid jobs. There is nothing more damaging to workers' holiday prospects than the possibility of losing their jobs, and that is what would happen if we were to accept the outcome of the directive.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Does my right hon. Friend agree that this is a very sad and serious day for Britain? Has not this judgment once more undermined the sovereignty of our Parliament and proved that we cannot rely upon the good faith of our European partners? Is it not time to reintroduce the tactic of non-co-operation, which met with the approval of the entire Tory party when it was last used and was recommended by the former Foreign Secretary, my right hon. Friend the Member for Witney (Mr. Hurd), who described it as being a "legitimate tactic within Europe"? Let us use it again and show that we are serious.

Mr. Lang

Let me assure my hon. Friend that we are indeed serious. I agree that the breach of good faith is the most telling aspect of the whole matter, and it is the one that most requires us to react to it.

As for non-co-operation, I believe that the proposition that I have put before the House—that we should go to the intergovernmental conference insisting that the matter be addressed and that our requirements be met—is the right approach. It is a robust, strong, focused and measured approach and it will achieve results.

Mr. Robin Corbett (Birmingham, Erdington)

Does not the Secretary of State understand that the twins of long hours and low pay—they almost inevitably go together—become triplets, with excessive rates of accidents and illness, as a result of working excessive hours? How on earth can he stand at the Dispatch Box and say to people who work in Britain that they must put up with fewer rights than people have anywhere in the rest of Europe?

Mr. Lang

We have health and safety regulations and legislation that require account to be taken of the hazards that workers face in their place of business, and we do not need Europe imposing further regulations on us. The best way of preserving jobs, with people working in secure and safe circumstances, is to have successful, profitable companies run by efficient, reliable employers who take account of the needs of their work force.

Mr. Nicholas Winterton (Macclesfield)

Is my right hon. Friend aware that a very large majority of the people of this country, and companies in this country, are sick to death of the decisions of the European Court of political manipulation, which have nothing to do with justice at all or the strength of the case? Bearing that in mind, I ask my right hon. Friend to ignore the decision of the court and not to implement it, but to bring about a change at the IGC, as the Prime Minister and my right hon. Friend promised. Surely the House must be sovereign.

Mr. Lang

I agree with many of the sentiments expressed by my hon. Friend, but I hope that he will agree that the House should not seek to disobey the law. We obey the law until we can secure a change in it, and we are determined to secure that change in the law through lawful means.

Mr. Michael Clapham (Barnsley, West and Penistone)

If the Government are so genuine in their opposition to the working time directive, can the Secretary of State tell us why the Coal Industry Act 1992, introduced by his Department, provided for the repeal of the Coal Mines Regulation Act 1908, which limited hours in the mining industry, to be replaced by the working time directive? Can he say how much other legislation his Department has passed which embraces the working time directive?

Mr. Lang

I am not aware of the details to which the hon. Gentleman refers, but as the working time directive has not yet come into force—it does not come into force until 23 November—I am somewhat sceptical about the point that he makes.

Mr. John Sykes (Scarborough)

The President of the Board of Trade will know that I speak as a northern manufacturer. Why does he think that workers in my factory should be obliged to suffer the agonies of European-style unemployment because the 48-hour week has made products in my company uncompetitive? Surely companies have to work when the work is there, not when some unelected Commissioner says that it is there. Is not the darkest irony the fact that yesterday we all paid tribute to those who gave their lives in two world wars so that we might govern ourselves, yet today we find ourselves at the mercy and diktat of foreign courts?

Mr. Lang

I entirely agree with my hon. Friend that it is quite unacceptable that the Commission should decide in Brussels what the working conditions should be in this country, which are properly the preserve of this country and should be negotiated at the workplace by employers and employees.

Mr. Dafydd Wigley (Caernarfon)

Does not the President of the Board of Trade accept that people will be astounded that the Government's key priority in the IGC at the moment is not to sort out the BSE problem or to help the fishermen; it is based on preventing people from having an entitlement to holidays, or on unscrupulous employers being able to insist on people working more than 48 hours a week? Is not the argument about competitiveness with the countries of south-east Asia totally spurious? Are we now basing the social policy of the United Kingdom on the child labour regimes of those countries? Is not that totally unacceptable?

Mr. Lang

There are many important issues to be discussed at the IGC, but this one is fundamental. We believe that there has been a breach of good faith, which has destroyed the impact of the opt-out that we achieved on the social chapter. We accepted in good faith the undertakings given by the other members of the European Union.

We regard this matter as extremely important. For the hon. Gentleman to suggest that competitiveness with the countries of south-east Asia is irrelevant shows how out of touch he is. because it is extremely important for us to be competitive on a global basis. The global competitiveness that this country has achieved has been the secret of rising employment, falling unemployment and economic success.

Mr. Henry Bellingham (North-West Norfolk)

Is my right hon. Friend aware that many large companies in west Norfolk already offer excellent pay and conditions, which are far better than those envisaged by the directive? They regard it as a gross insult to be lectured to by the European Court. Is he also aware that a number of small firms in the tourist and leisure industry in west Norfolk will lose out because of the directive, and will probably have to make people redundant? What message does he have for those small firms?

Mr. Lang

My hon. Friend is right. Organisations that represent small businesses have made it clear that they believe that the directive will damage their members' interests. Burdens will undoubtedly be imposed—not least the bureaucratic burdens of compiling and maintaining records—which will add substantially to the costs of small businesses, and will cost jobs.

Mr. Ken Purchase (Wolverhampton, North-East)

Does not the Minister use the techniques of cant and hypocrisy when he says that employers and employees should be free to reach agreements? In the past 17 years, the Government have emasculated the trade unions, and created an imbalance of power in companies. The agreements—purely as they are—would have been met years ago if properly prepared and constructed trade unions had enjoyed the confidence of the Government. Instead of that, the Government take a 19th-century view of working conditions. It is appropriate to meet that with a 19th-century quotation: "The Conservatives will do everything possible to help the workers, except get off their backs."

Mr. Lang

There speaks the voice of old Labour. The Government's industrial relations legislation has created a rule of law that did not previously exist, and has introduced democracy into the trade union movement. As a consequence, members of trade unions have had better-paid jobs and better working conditions than they had before.

Mr. Patrick Nicholls (Teignbridge)

Does my right hon. Friend agree that the contortions through which our so-called partners have gone to produce this result show how shabby they have been, even by their standards? Does that not also show that, after 25 years of membership, the terms on which we are in Europe are unacceptable as a basis of our membership for the next 25 years? Is not the lesson to be learnt from this dreadful business today that we should renegotiate an arrangement with Europe that fits in with the way in which we do things and with the way in which they do things, and that to go on like this is frankly unacceptable?

Mr. Lang

What is particularly unacceptable is that, after we had renegotiated the basis on which our social legislation relationship with Europe is secured, that was undermined by the devious ploy of using article 118A of the treaty, for which the directive was never intended, thereby circumventing the deal that had already been reached with us.

Dr. Norman A. Godman (Greenock and Port Glasgow)

Although in the past I have voiced serious reservations about decisions taken by the European supreme court, as a former shipyard worker, I welcome the judgment. Unlike my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), I do not trust the House or the Government to protect the interests of the millions of underpaid and overworked employees. Will the Secretary of State confirm that an individual employee or group of employees will have the right to seek a redress of grievance against unscrupulous employers in our national courts?

Mr. Lang

Our existing health and safety regulations protect the interests of shipyard employees. Employees already have recourse to the courts if those regulations are breached. Our objection to the directive and to the outcome of the judgment is that Europe is seeking to override our national arrangements, and to impose arrangements of its own that we consider to be unsuitable for this country.

Mr. Iain Duncan Smith (Chingford)

My right hon. Friend will be aware that Conservative Members are wholly united behind the Prime Minister in his determination to reverse the judgment. Given that, does my right hon. Friend agree that the real problem with the social chapter opt-out lies in the fact that the other provisions—some eight in number—already exist in the main body of the treaty? Future provisions—which my right hon. Friend knows are coming—will be driven through that route.

Does my right hon. Friend agree, therefore, that at the intergovernmental conference, rather than simply trying to reverse the judgment, we should say that a marketplace cannot possibly work if we try to centralise social provision as well? It is time for us to extend the opt-out to the provisions in the treaty that are covered, including health and safety provisions. Let us go ahead and do that now.

Mr. Lang

I agree with my hon. Friend's assessment, and I think that the social opt-out secured by my right hon. Friend the Prime Minister at Maastricht would have gained his objective, had it been honoured. It is because it has not been honoured as a result of this action that we are having to readdress the issue, in the most forthright terms.

Mr. Eddie Loyden (Liverpool, Garston)

Does not the right hon. Gentleman accept that what he has said this afternoon will be seen as cant and hypocrisy by many people? Over the past 17 years, this Government have waged war against organised labour. If the right hon. Gentleman is indeed suggesting that all employers are acting humanely, he should revisit the Liverpool docks, and many other industries in which there has been a return to casual labour. He should consider the ending of the mining industry. The Government should enter the world of realities, and face up to the fact that they have given us a load of cant and hypocrisy and are continuing the fight against organised labour.

Mr. Lang

The best way in which we can help labour, organised or disorganised, is to create more jobs. In the past three years, more than 150,000 new manufacturing jobs have been created in this country. I commend to the hon. Gentleman the view of the president of the BDI, the German industry federation, who said: We have too rigid labour laws"— he was talking about Germany— We have too high social costs and taxes. We work the shortest 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. Germany does have a problem, and we are keen not to have that problem here.

Mr. Tony Marlow (Northampton, North)

My right hon. Friend has said that we must obey the law, but the law is quite clear. It is in article 18 of the Single European Act, which states that the rights and interests of employed persons should be decided by unanimity. The law has been fraudulently applied by institutions with a defined agenda—an agenda against the United Kingdom. Where is the consent for this law? If there is no consent, why should we obey it?

Mr. Lang

Because the European Court of Justice has delivered a judgment that we are treaty bound to accept. Therefore, we must seek to have that judgment reversed by negotiation with the other partners of the European Union. That is our firm intention.

Mr. Harry Barnes (North-East Derbyshire)

Given that, for the Government, this is a matter of firm principle, what concessions were made by other nations to persuade us to abstain?

Mr. Lang

We are not in the territory of talking about concessions; we are in the territory of insisting on the principle of what was agreed in the social chapter opt-out being met in practice, and that is the message that we shall take to the IGC.

Mr. John Wilkinson (Ruislip-Northwood)

Is not this episode all the more tragic for having been predicted for so long—during Maastricht debates, and for many months, even years, thereafter? Can my right hon. Friend give the House any assurance whatever that we are not just going to talk tough and then have the directive imposed on us? In the public sector, will it not be applicable from 23 November?

Can my right hon. Friend list any sanctions that could bring about the unanimity that is required to change the treaty? Will we be, for example, exercising the right of the empty chair, like de Gaulle? Will we be cutting off contributions? What positive measures will be taken to concentrate these people's minds, and to bring about the changes that we require?

Mr. Lang

I contemplate neither of the measures that my hon. Friend has suggested. Let me make it clear to him, however, that many matters are being discussed at the IGC, on which our European partners are extremely keen to make progress. They will not make progress on any of them unless and until we have this matter dealt with.

Mr. Terry Lewis (Worsley)

Does not the President of the Board of Trade recognise the Government's responsibility in regard to employees who are in a weak bargaining position and who work for bad employers? How can he justify his position against that background?

Mr. Lang

I believe that the best interest of employers and employees in this country is served by maintaining light burdens on companies and their work forces, and by ensuring that we retain the advantage of the competitive, flexible labour market that we have achieved. That is the best prospect for our national economic prosperiry, and for the interests of employees.

Mr. Bernard Jenkin (Colchester, North)

Will my right hon. Friend clarify what he means by the law? If Parliament chose to pass an Act that empowered Ministers to defy the directive, would he seek to defy the will of Parliament? Does not that exemplify how the Government have the option to come to Parliament to seek powers to defy the directive, in the event of a stalemate at the intergovernmental conference in which case the directive would stand?

Mr. Lang

It is this Parliament that has accepted the European Court's jurisdiction in the matter. The court's judgment has gone against us and we must now seek to reverse it by persuading our European partners to agree that the spirit of our social chapter opt-out should be honoured.

Mr. Andrew Mackinlay (Thurrock)

May I ask the Secretary of State a technical question? From the date when the directive is triggered, will not people have recourse to industrial tribunals in the United Kingdom, which will find in their favour in terms of entitlement to annual leave, for example? Whatever our views in the House, therefore, is not there an immediate problem that requires legislation, otherwise not only will legislation be handed down to us by European judges, but our own judges will have to interpret and make decisions in the absence of a decision by the House? Will not industrial tribunals have to find in favour of workers—and I welcome that—with almost immediate effect?

Mr. Lang

As from 23 November this year, public sector employees will be covered by the directive's terms. We shall be consulting the private sector on the implementation of the directive, until we are able to have the law changed. Once we have completed that consultation, we shall present legislation to Parliament.

Mr. Nigel Evans (Ribble Valley)

This is about not the demerits or merits of the 48-hour directive, but the principle that we had an opt-out from that directive and that, by double dealing, cheating and twisting, faceless bureaucrats and their friends in the courts are now foisting the directive on Britain. What faith can we have, therefore, in future and current negotiations with the European Community? Will my right hon. Friend ensure that his consultations will be detailed and sufficiently lengthy to enable him to visit every business in my constituency? Thus he could ensure that, before the directive is imposed on Britain, he could listen to what my business people have to say about its imposition and the effect on their businesses.

Mr. Lang

I can assure my hon. Friend that we shall have to ensure that the basis on which the position is dealt with is completely watertight and will ensure that our interests are fully protected for the future. I intend that the consultation should be long enough to ensure that we take on board all the concerns of industry, large and small, and react to it.

Mr. Kevin Barron (Rother Valley)

Given that today's judgment was entirely predictable, will the President of the Board of Trade answer the question that was asked by my right hon. Friend the Member for Derby, South (Mrs. Beckett) and tell us how much the judgment and the case have cost the British taxpayer?

Mr. Lang

The cost of the legal case at the court was, I believe, about £50,000.

Mr. Michael Fabricant (Mid-Staffordshire)

Does it not ill behove European economies—which are loser economies, where unemployment is going up—to dictate to us how we should run our own affairs? Is my right hon. Friend aware that, in the United States of America, where unemployment is falling, as it is in the UK, on average, holidays are fewer and people work longer hours than in the UK? At the end of the very long day, is not the UK's future exemplified by the White Paper that he published yesterday, which talks about a global vision?

Mr. Lang

My hon. Friend is absolutely right. He recognises that we must compete with countries not just in Europe, but worldwide. There is clear evidence from the unemployment trend and from the growth of respective economies that the UK's solution of having flexible labour markets and of lightening the burden on employers is the best way to provide secure, lasting and prosperous jobs.

Mrs. Beckett

The Secretary of State quoted from Professor Harrington's report and said that it justified the Government's claim that this is not a health and safety matter. As Professor Harrington seems not to be aware of that, and as the report has not been published, will the Secretary of State undertake to publish it so that the House can come to its own conclusions?

Mr. Lang

I have no doubt that the report, which was submitted as part of the case to the court, will now be available and I shall give careful consideration to the right hon. Lady's request.