European Communities (Amendment) Act 1993: Protocol on Social Policy

HL Deb 22 July 1993 vol 548 cc797-895

3.35 p.m.

Lord Wakeham rose to move to resolve, That this House, in compliance with the requirements of Section 7 of the European Communities (Amendment) Act 1993, notes the policy of Her Majesty's Government on the adoption of the Protocol on Social Policy.

The noble Lord said: My Lords, before addressing myself to the substance of today's debate, perhaps it would help the House if I were to give your Lordships my advice as Leader, first on the application of the sub judice rule on our debate.

The House has agreed that the practice relating to matters sub judice (Companion, p. 52) should be similar to both Houses. Another place has resolved that reference may be made to matters awaiting adjudication in the courts on matters concerning issues of national importance (May, p. 378). It follows that my advice to your Lordships is that the House may debate freely the policy issues which underly the Motions before us; namely, whether the Government should become party to the provisions set out in the agreement annexed to the social protocol or not. That issue can be debated fully by the House today without any need for any discussion on the legal issue before the High Court.

I should like to remind noble Lords of why we are having this debate today. On Tuesday, your Lordships' House gave a Third Reading to the 1993 European Communities (Amendment) Bill and the Royal Assent has been signified. Section 7 of the Act provides that the Act will not enter into force until both Houses of Parliament have come to a resolution on a Motion tabled by a Minister of the Crown considering the question of adopting the Protocol on Social Policy. The Motion standing in my name today, asking the House to note the policy of the Government on the adoption of the Protocol on Social Policy, is to fulfil this requirement.

The issue before your Lordships is, if I may say so, quite simple. It is whether the United Kingdom should ratify the Maastricht Treaty on the basis on which it was negotiated, or whether, before ratifying, we should commit ourselves to signing the social chapter in due course.

The issue of whether we should ratify the treaty is not in doubt. There have been lengthy debates in both Houses—some 90 hours in your Lordships' House and many more in the Commons—and large majorities at every stage of what is now the European Communities (Amendment) Act for the principle of ratification. The will of Parliament on the issue of ratification has been made clear. And we should be in no doubt about the extent to which British interests would be undermined if we failed now to proceed to ratify the treaty that Parliament has overwhelmingly supported. Perhaps I can just briefly remind your Lordships of the reasons for that.

Europe is this country's largest market. We export nearly £60 billion worth of goods to the Community, 56 per cent. of our total exports; and 275,000 jobs have been brought to this country through inward-investment in the last five years. Two-fifths of Japanese investment in the Community has come to the United Kingdom and over one-third of United States investment. The rest of Europe envies our success in marrying Japanese and European industrial and management practice.

The single European market was an initiative begun by my noble friend Lady Thatcher, carried forward by a British Commissioner and seen largely to fruition under the British presidency. But there is still more to do to extend the market into areas not yet fully covered, and where Britain excels, such as telecommunications, financial services, and energy.

We want to extend that market. We want to welcome the Scandinavian nations and Austria, countries that are free traders by nature. We also want to welcome the newly emerging democracies of central and eastern Europe. That will ensure democracy and security. Western Europe already has a surplus on trade with the markets of central and eastern Europe, and it is in our interests to ensure that those markets become more prosperous and more receptive to highly competitive British exports.

Europe is a key player in the GATT negotiations. The United Kingdom needs to maintain its strong voice in the Community to ensure that the current GATT round is completed. Above all, we need to ensure that the forces that would drive the world back into the damaging protectionism of the 1930s are disposed of.

We are part of the Community. Leaving it is not an option. Our only option is to decide whether the United Kingdom is to remain an influential force in directing European thinking; or whether we are content to let others take the lead. By ratifying the Maastricht Treaty we will ensure that Britain maintains its increasingly authoritative voice in Europe, so that we are able to stay at the forefront in shaping Europe's future.

So, the question at stake is whether we should ratify the treaty negotiated by my right honourable friend the Prime Minister, including as it does the opt-out from the social chapter; or whether we should subsequently seek to re-open negotiations with our partners to exclude the opt-out.

The amendments in the names of the noble Lords, Lord Richard and Lord Jenkins of Hillhead, would indeed invite the Government down that latter road. For my own part, I confess that I can see little substantive difference between the purposes or effect of the two amendments—though no doubt the noble Lords opposite will, with their usual skill and persuasiveness, seek to distinguish their respective positions and those of their parties. While I look forward to their contributions, I think that it is sufficiently clear that each of the amendments would seek to bind the Government to adopt the social chapter. I cannot accept that argument and I urge the House not to do so either.

Let us consider what effects the social chapter would have on the United Kingdom. It would, most crucially, mean more Community involvement in the activities of the workplace, thus giving it the power to impose social and working conditions on the United Kingdom. The Commission could devise centralising and harmonising measures on social and workplace issues—for example, on the rights of part-time workers or on trade union rights. These are matters which the Government believe are best left to individual governments, or indeed to individual employers and their employees. The Community could, under the provisions of the social chapter, subject British industry to a raft of rules and regulations, replacing those appropriate to our country which we have developed over many years. And, because decisions on these issues would be by majority voting, we would be obliged to impose these rules, whatever their cost to individual firms and to the competitiveness of our economy, if a majority of our partners supported them.

But this is not a purely philosophical dispute. It is a dispute about establishing a framework in which enterprise can flourish; for it is the United Kingdom's competitiveness in world markets which is the essence of our debate today. My right honourable friend did not negotiate the social protocol, as the party opposite may claim, because the Government wished to disadvantage British workers compared with their counterparts elsewhere in the Community. Far from it. This country's levels of protection are higher than in many members states. We have the best health and safety record in Europe, one of the best occupational pension schemes in Europe, and the best system for looking after vulnerable people in our society. My right honourable friend resisted the social chapter because he recognised the importance of maintaining and improving further the competitive basis of our economy.

Throughout the 1980s a key objective of the Government was to make the British economy more competitive. The Government's reforms since 1979 have transformed the labour market and our industrial relations record. We have achieved faster growth in manufacturing productivity than any other major industrial country over the last decade. There has been a reduction in the number of working days lost through industrial disputes, from 29 million in 1979 to half a million last year. And the United Kingdom now has the highest participation rate for women in the labour force in the Community after Denmark.

In the 1980s the British economy grew faster than those of our European competitors; and we attracted more inward investment and created more new jobs than they did. It would be folly now to put our achievements at risk, at a time when growing international competition demands higher and higher productivity in Britain if we are to improve growth and create employment.

It has to be recognised that, if the United Kingdom were to sign the social chapter the effects on our economy would be very damaging indeed—British companies would face higher costs, and become less profitable and less competitive. Inward investors from Japan, the United States and all round the world would have less reason to bring their investment here. Even M. Delors has recognised that the United Kingdom opt-out of the social chapter has given this country greater advantage over our competitors in attracting foreign investment.

As we now emerge from a damaging recession and as the economic indicators show that we are moving towards recovery, agreement to the social chapter would herald a return to the industrial framework of the 1970s. It would allow the imposition of higher costs on our business, and so put at risk the jobs of our people.

But this is not a point of narrow British advantage. Our partners are increasingly recognising that excess regulation and social costs are making the Community uncompetitive against the rest of the world. At the Copenhagen Council and in Tokyo it was beginning to be acknowledged that Europe's lack of competitiveness and high social costs had to be addressed, and that to press forward with measures that will destroy jobs, with virtually no compensating benefits, is an unwise course.

Since the mid-1980s, Community exports to world markets have fallen by 3 per cent. and its trade surpluses with the United States and Japan have become trade deficits. These are clear signs that the Community is becoming less competitive, even by comparison with other industrialised countries, let alone the newly-industrialising countries in the Pacific Rim. Countries can only afford social costs with the backing of a successful economy. Competitiveness is the key to generating the necessary wealth.

Perhaps I could turn to the amendment standing in the name of the noble Lord, Lord Houghton of Sowerby. This would, as I understand it, require the social protocol to be referred to a Select Committee of your Lordships' House for it to inquire into. I for one have no objection to the purpose of the noble Lord's amendment. But I should point out to your Lordships that the social protocol already falls squarely within the terms of reference of your Lordships' Select Committee on the European Communities. In those circumstances, I do not think it would be wise to establish a new committee simply to inquire into the social protocol. Indeed, the European Communities Committee have already produced a brief report on the issue; as indeed, further back, your Lordships may recall that the committee also produced a report on the Social Charter.

It is of course open to the committee to return to this issue in more detail should it consider it desirable. I imagine, for instance, that the committee may choose to look with particular care at any Green Paper which the Commission may produce. But I think that your Lordships would wish to be wary of directing the Select Committee down a particular line of inquiry. It is my belief that Select Committees should be free to determine their own proceedings within the framework laid down for them by the House.

As the social protocol issue is one of which the committee is already seized, I think it would not be appropriate for the House to agree to the noble Lord's amendment, and indeed I hope that he will not seek to press it this evening. However, I see that the noble Lord, Lord Boston of Faversham, is in his place, and he will no doubt take careful note of your Lordships' views as expressed in this debate before consulting his colleagues on the Select Committee.

Ten other member states have now ratified the Maastricht Treaty as it stands. Germany has completed its parliamentary process and also agreed the treaty as it is. That treaty includes the protocol. It includes the United Kingdom's opt-out from the social chapter. We should now get on and do likewise: ratify the treaty as it stands, as the Prime Minister negotiated at Maastricht. I urge noble Lords to reject the amendments, and to support the Government Motion. I beg to move.

Moved, to resolve, That this House, in compliance with the requirements of Section 7 of the European Communities (Amendment) Act 1993, notes the policy of Her Majesty's Government on the adoption of the Protocol on Social Policy.—(Lord Wakeham.)

3.50 p.m.

Lord Richard rose to move, as an amendment to the Motion, to leave out from ("That") to end and insert ("in the opinion of this House, Her Majesty's Government should not deposit the articles of ratification of the Treaty on European Union with the Government of the Italian Republic until such time as they have given notification to the European Community that they intend to adopt the agreement attached to the Protocol on Social Policy.")

The noble Lord said: My Lords, I am grateful to the noble Lord the Lord Privy Seal for exposing yet again the Government's thinking behind their opposition to the social chapter. hear it, as I have heard it before, but I do not understand it now any more than I understood it then.

This is a significant debate and I am sure that noble Lords on all sides of the House will wish the matter to be taken seriously. Therefore I am bound to say to the Lord Privy Seal that I hope the House will quickly reject some of the scare stories that he came out with in the course of his speech. By way of introduction, perhaps I may say that the amendment I move in this House is in identical terms to that being moved by my right honourable friend in another place —no doubt he is in the process of moving it there as I am in the process of moving it here.

There has been considerable speculation both in Parliament and the press regarding the possible outcome of today's debate and its relation to the implications of the legal challenge to the Maastricht Treaty. I was grateful for what the Leader of the House said in regard to the sub judice rule. It accorded totally with the advice that I was given on that subject. But I take the opportunity to say to the Government clearly, and I hope unequivocally and unambiguously, that the Labour Party will resist any attempt by the Government to use the legal challenge as an excuse simply to ignore a possible vote by Parliament in favour of Britain's incorporating the social chapter into United Kingdom law.

We must not forget—we have been reminded about it ad nauseam in the course of the past two or three months—that Parliament is supposed to be sovereign. Noble Lords will recall that one of the main arguments deployed against a referendum was the principle that Parliament was sovereign and therefore was the most appropriate mechanism for considering the intricacies of the Maastricht Treaty. I am sure the House will recognise that any attempt by the Government to bypass the will of Parliament on this issue will set a grave precedent. It will open a Pandora's box full of constitutional complexity, to put it at its lowest.

The Government appear to me to have three principal choices if the amendment is carried in another place. First, they can accept the social chapter. Secondly, they can ride roughshod over the will of Parliament and proceed direct to ratification. Thirdly, they can refuse to ratify the Maastricht Treaty. We on these Benches believe that the only real option open to the Government is to incorporate the social chapter into United Kingdom law. Refusing to ratify the treaty after this lapse of time is, frankly, a non-starter.

I put this to the House. Any temptation the Government may harbour to ignore Parliament will plunge this country into a political and constitutional crisis of the gravest proportions. The Government must be prepared to accept the will of Parliament. If that means endorsing the social chapter, so be it.

At Third Reading I reminded the House of what the Prime Minister told the other place in June of last year. It is worth restating. On that occasion he said that, common consent in this country is exercised through a parliamentary democracy and through the voices and words of Members of Parliament in this House".—[Official Report, Commons, 3/6/92; col. 832. In view of those words, and also the deep-rooted traditions of parliamentary democracy in this country, the Labour Party believes that it would be outrageous for the Government to attempt to circumvent Parliament. Noble Lords on all sides of the House should urge the Government to think long and hard before going down that route. Equally, any suggestion that the Government could attempt to use the legal challenge as a device to bypass a decision taken in Parliament is quite unacceptable. Will not the Minister accept that it would be a denial of that very parliamentary democracy which the Prime Minister claims to uphold?

The simple, and indeed the honourable option, would be for the Government to accept the social chapter. That would represent one of the most bitter pills the Government could swallow. I recognise that—any of us would. After all, was not the opt-out on the social chapter the Prime Minister's greatest diplomatic triumph? At least, that is what he tried to claim at the time. If it was a victory—and that is extremely debatable—it proved to be almost entirely pyrrhic.

Let us look for a moment at the result and the implications of that great victory: did the opt-out heighten Britain's stature within the Community or extend our influence over our EC partners? The answer must be a resounding "no". In fact, the opt-out on the social chapter helped to marginalise Britain within the Community precisely at a time when Europe is involved in key debates over its future development. It has weakened our standing and allowed other countries to set the pace. Britain consequently has ended up in a position where it is forced continuously to react to events rather than play a more positive role. We could have been, and should have been, helping to set the agenda for a future Europe. We are not. We are quibbling about something which the other 11 member states had no difficulty whatever in accepting.

The Government's attempts to portray the social chapter as a Euro-monster with an insatiable appetite for British jobs also fails to stand up to serious examination. The social chapter is not a deliberate attempt to devastate what the Government have left of the British economy. It seeks simply to offer people throughout the Community the chance to enjoy basic rights such as the right to decent and safe working conditions; the right to be consulted in regard to changes which affect them, and equality of treatment for men and women. As I have asked the House before: what on earth is wrong with that? Can any noble Lord say that he disagrees with those: statements? I sincerely hope not; not even in your Lordships' House.

In essence, therefore, the social chapter is modest in its proposals. It involves an increase in majority voting, to include legislation on working conditions and equality; but it specifically excludes—I hope the: House will note—areas such as the right to strike and. rates of pay. It is a moderate and sensible extension of existing Community social measures, implemented until now under Article 118 of the Treaty of Rome.

I believe that opting out in the way that the Government have, if Parliament today does not reverse that policy, will effectively exclude the British people from those benefits and from those which will accrue from the full social dimension of the Community. There is a harsh irony to it. Despite what the Leader of the House said, in reality Britain needs the social chapter more than most other Community countries. I looked at some of the figures. Take the instance of poverty in this country—poverty being defined by the Commission as having an income of less than half the average in the country in which the people live. It is interesting that on the Government's figures, taking those criteria, one-quarter of Europe's poor—some 13.5 million people—are UK citizens. One-in-four of the UK's population live in relative poverty, of which almost 4 million are children.

I can perhaps also draw the House's attention to other figures which suggest that one-fifth of Europe's unemployed live in the United Kingdom. It exposes a picture of poverty and social degradation which is appalling for the times in which we live. The only conclusion that one can draw—and this is borne out by the Labour Party's commission on social justice—is that the gap in this country between rich and poor is at its greatest for 107 years.

Who will benefit from the social chapter if the Government adopt it? Let us see what is the position in this country in reality. Employment and social rights in the United Kingdom are already inferior to those which exist in most other European Community countries. The proportion of wage earners earning less than the Council of Europe's decency threshold is highest in Britain. We are now the only country without legal pay protection. Working hours for men in Britain are the longest in all the Community countries. We are the only member state without a limit to working hours. Unlike other European countries, no British worker has a statutory right to paid holidays. Apart from the Netherlands, Britain has the largest proportion of its labour force working part-time, yet Britain's part-timers are discriminated against in terms of employment rights and social protection.

The gap in pay between men and women is bigger in the United Kingdom than in most other European Community member states. The abolition of wages councils, affecting mainly women, will widen rather than diminish that pay gap, and is almost certainly in contravention of EC equality legislation. Britain has the worst child care facilities and parental leave rights in the European Community. I have to say to the noble Lord that, for all his vaunting of them, state pensions in Britain are lower—not higher—than in most other European Community member states.

In seeking to deprive British workers of the rights which their counterparts in the other 11 member states can expect to enjoy, the Government will further reduce living standards in the United Kingdom. Frankly, I believe that that is fundamentally against the principles of the Community. For example, noble Lords will remember that Article 117 of the Treaty of Rome specifically states: Member States agree upon the need to promote improved working conditions and an improved standard of living for workers". Unfortunately, such arguments or declarations seem to cut little ice with the Government today. They have abolished wages councils and left the United Kingdom as the sole country within the EC without a minimum wage or statutory protection on working hours. It is precisely for those reasons that the social chapter is needed. The Government have made much of Britain's position as a low-wage country. I am bound to say that we on these Benches find the kind of advertisement that Government departments appear to be putting out to market Britain abroad as a sweatshop economy utterly deplorable. Perhaps I may say to the noble Lord that foreign investment is attracted not by poor wages or bad working conditions but by a skilled work force, good communications and transport and access to markets. On the contrary, poor wages and inferior employment protection can lead to job losses, not job gains.

The Government have made much of Hoover's transfer from France to Scotland, but conveniently forget the movement of Nestlé in the opposite direction. In the current European-wide recession it is likely that British and foreign multinational companies will close their United Kingdom operations first because it will be cheaper and easier to lay off their less well protected British employees than their European counterparts. I believe that recent events at Leyland DAF have shown the extent to which multinationals tend to concentrate job losses in those countries where employment protection is at a minimum.

The opt-out has not exactly left the multinationals unscathed either, because the Government's opposition to the social chapter has complicated their operations. The opt-out creates a situation in which most United Kingdom workforces will be denied the benefits of the social chapter. However, British workers in continental-based multinationals can expect to be covered by social chapter legislation and British-based multinationals operating in continental countries will have to apply this legislation to their units in other Community countries. This seems to me to be totally illogical. It creates a highly anomalous position that is both confusing and expensive for the companies concerned.

Much has been said about competitiveness. The noble Lord repeated the point this afternoon. The Government's argument is that the social chapter will place Europe under too many constraints and thus undermine the Community's competitiveness. I am bound to say that I regard that as ridiculous because on this premise the United Kingdom, which has the worst employment protection laws in the Community, should be the most prosperous country in Europe. Well, this country is not, and is unlikely to scale those heights by remaining outside the social chapter. I reinforce that point by referring noble Lords to a table in the 1993 world competitiveness report which shows that the United Kingdom has slipped from 13th to 19th place and that our European partners generally provide more social and employment protection yet still enjoy higher levels of prosperity. Therefore, that argument will not wash. I believe that we have to look elsewhere for an explanation.

The Government have consistently claimed that we cannot afford the social chapter. They say that it will raise labour costs, reduce competitiveness and fuel unemployment. The evidence appears to show that, contrary to the thesis advanced by the Government's spokesman, our Community partners and leading world competitors have significant unit labour-cost advantages over us despite having higher wages and social charges. Why? The answer is that their employees are more productive. To what is our lack of competitiveness to be attributed? It stems more from low skills and lack of investment than high wage costs as the Government allege.

The noble Lord referred to those countries which are applying to join the Community. It is very interesting to note that the social chapter has the backing of those countries. Norway, Sweden, Finland and Austria all support the need for a Community with an active social dimension, and their accession in 1995 will further isolate this country. The social chapter also has the backing of the European Parliament, including its Conservative Members. Perhaps I may remind noble Lords that a gathering of European Conservative politicians censured the Government's opposition to the social chapter. At the end of the day the only other party in Europe supporting the Government's position is M. Le Pen's neo-fascist party in France, which I am sure many noble Lords will agree is hardly proper company.

I should like to say a few words about procedures. If the opt-out remains and the Government fail to take part in the deliberations of the 11, I am bound to say that the relationship between measures under Article 118 of the Treaty of Rome and measures under the social agreement in Maastricht will, to put it mildly, become somewhat delicate. The tendency will inevitably be to use the procedure involving the 11 rather than the Treaty of Rome procedure involving the 12 for precisely the reason that people will say, "Why bother with all these difficult British? Let us do it within the Community of 11 and use the institutions of the Community, as we are entitled to do under Maastricht, without bothering with the British". Again, it will be the rest of the Community versus the United Kingdom.

The Government's short-sighted, capricious and politically-motivated campaign against the social chapter is proving costly. We are now isolated within the Community and removed from the European mainstream. If the Government are to restore this country to the centre of the European debate, as they say they will, as the Community considers its agenda for the next century the United kingdom must get back on board as far as European social policy is concerned. It cannot do that without accepting the social chapter. Failure to do that risks confirming Britain as a European backwater with a low-wage, semi-skilled economy. I believe that the British people deserve much better than that, and it is time that the Government realised it. I beg to move.

Moved, as an amendment to the Motion, to leave out from ("That") to end and insert ("in the opinion of this House, Her Majesty's Government should not deposit the articles of ratification of the Treaty on European Union with the Government of the Italian Republic until such time as they have given notification to the European Community that they intend to adopt the agreement attached to the Protocol on Social Policy.")—(Lord Richard.)

4.8 p.m.

Lord Jenkins of Hillhead

My Lords, I rise to speak to, though not formally to move, the amendment standing in my name. This amendment does not fall formally to be moved until the end of the debate, though I promise not to speak to it again at that stage. I feel that we have not suffered from a shortage of either speeches or words during recent debates.

In spite of what the noble Lord the Leader of the House has said, your Lordships may detect a certain difference between our amendment and the Labour amendment. We do not do that out of any desire for differentiation for the sake of it. If I may say so, my feelings for the Labour Party have recently been warmer than they were last week when the noble Lord, Lord Richard, made such a powerful speech against the referendum and they whipped so strenuously for the Government, a remarkable feat for an opposition, and one completing, as it were, the rich tapestry of the diversity of Labour Party attitudes towards Europe which we have seen over the past 30 years. At least I thought he had completed it until we came to Tuesday night's abstention on Third Reading. But perhaps a Third Reading is not much between friends and it is the intention of my noble friends and myself in an ecumenical spirit to vote for the Labour Party amendment tonight. However, voting when there are only two lobbies cart be a rather rough and ready process.

We define our position more precisely with our amendment, for which we also propose to vote—that is, if the Government, as the Lord Privy Seal regrettably indicated, oppose it. I was prepared to express optimistic doubt about that because I recall vividly the ringing declaration with which the noble Baroness, Lady Chalker, wound up on Tuesday night, after 10 nights in this House, with a mast able, patient and authoritative performance at the Dispatch Box, one which I think I have not seen equalled in this House in its sustained quality. She wound up saying: However, we on the Government Front Bench have made it absolutely clear that the policy of the Government is for Britain to be at the heart of Europe and that the Bill and the treaty keep us there".—[Official Report, 20/7/93; col. 698.] The aspiration is impeccable but the Act and the treaty as it stands do so only very partially. I defy anyone to deny that what we in our amendment are proposing would place us closer to the heart of Europe than what the Government are proposing, which is the old and weakening British stance of half in and half out which over 40 years has been responsible for a decline in our European influence compared with that of the two principal powers of Europe.

Our Liberal Democrat position is this. We want to see Maastricht ratified. We have done everything we can to assist that. We think that the Government were grossly mistaken in not getting on with it after last year's Second Reading. It would have saved a great deal of time. The noble Lord, Lord Tebbit, would not even have been here. He is not here again this afternoon. We also want the social chapter. We do not think that it is perfect, but nor for that matter do we think that the treaty is perfect. But we certainly believe that Europe needs a social policy. Indeed, the considerable industrial changes which Europe's present relatively sclerotic economy demands renders social policy more necessary. We think that that policy should be flexible and we think that we, the British, should be in at its formation. If, as the Lord Privy Seal says, the other 11 are moving in our direction in this way, and indicated it at Copenhagen, that is surely an argument for working closely with them on an issue and not separating ourselves from them. We do not see a satisfactory future for Britain as a cut-rate economy complained of whenever we appear to be stealing a cheap labour march. That is no way to the heart of Europe.

So far from the Maastricht opt-out being game, set and match for Mr. Major, it has been trouble, confusion and delay. Never have a government said so many contradictory and unconvincing things about an issue as this Government have done about the effect of the various votes on the social chapter. But one of the few things that is currently clear is that the Prime Minister is not saying and the Government are not saying that tonight's votes endanger ratification. It is therefore perfectly legitimate for us to say "Maastricht and the social chapter". We are not saying "no social chapter, no Maastricht". That would not be our position. Our amendment says what we believe and have consistently believed. It says no more and no less.

4.15 p.m.

Lord Houghton of Sowerby

My Lords, I need spend little time on my amendment but I am very grateful to the Lord Privy Seal for the explanation which he gave quite adequately and spontaneously of the Government's attitude towards that amendment. I wish, however, to underline what the noble Lord, Lord Jenkins of Hillhead, has just said about the importance of the social chapter in the whole concept of the Common Market to very large numbers of working people.

I remind the House, too, that the Labour Party was very shaky indeed on its attitude towards the Common Market for far too long. It was hostile to begin with and later was unduly lukewarm in its attitude towards the link-up with Europe. It was not until M. Delors addressed the Trades Union Congress a few years ago and presented his vision of the European future and received a standing ovation for it that the labour movement turned more positively towards adherence to the Community. It is that which is so important now. It is so big a slice of the working peoples direct interest in the Community's work and in the chapter and charter that we must pay particular attention to getting the best out of it, examining it closely and presenting it to those who are anxious to see light within it for their own future. If that can be done, we shall overcome a good deal of ignorance, prejudice and indifference towards membership of the European Community which we are getting from a great many working people. There is a trend towards the return of nationalism in various parts of the world today and it is dangerous if it develops in Europe. We must preserve this unity. I believe that this is the basis of peace in Europe. It is the basis of our co-operation with other European countries. It can provide a bulwark against chaos in Europe and the world and preserve the peace for all of us.

I hope that the work will go on on this matter. There is a lot more to do. At the same time, however, it will not be necessary for me to press my amendment later today to get the Government and the Select Committee already sitting to give close attention to their work and be fully aware of its importance in the whole debate.

4.19 p.m.

Lord Hailsham of Saint Marylebone

My Lords, being the first speaker in the debate without an amendment or a Motion to propose, I feel that there must he an element of the impromptu about what I have to say. I should like to begin by congratulating the noble Lord, Lord Houghton of Sowerby, on the lucidity and brief and exquisite quality of his address. I should like to associate myself with the remarks which came from the Government Bench two or three nights ago in congratulating him on his approaching 95th birthday.

Noble Lords

Hear, hear!

Lord Hailsham of Saint Marylebone

It gives me some hope at 85. Despite my admiration for him, his proposed amendment was the least attractive to me of the three amendments standing on the Order Paper.

In all deliberative assemblies there is the danger of the debilitating disease of "Select Committee-itis". But I believe that my noble friend the Leader of the House disposed of that on this occasion by pointing out that it is already within the terms of reference of our existing European Communities Committee to have a debate on this subject if it wants to. But I sincerely hope that it will not because we have flogged this old nag, the Maastricht Treaty, interminably and repetitively for so long that if it were a cat it would have exhausted its nine statutory lives about 25 times. Therefore, I hope that we can come to a conclusion today without any further inquiry.

I say this as regards the two Opposition amendments and to the noble Lords, Lord Richard and Lord Jenkins of Hillhead: I respect their opinions about the social chapter. In a different historical context there was a time when I might even have joined them in their views on it. But I do not approve of using it as a lever to prolong the debate on ratification of the Maastricht Treaty. Despite the closing words of the noble Lord, Lord Jenkins of Hillhead, I believe that both the Opposition party amendments would have that effect.

We have discussed this treaty at great length in all its aspects many times and over many weeks. We have now come to the point when we have to hold another debate only two days after the Bill has received Royal Assent and become an Act of Parliament. We ought to go ahead with ratification, respecting each other's differences for what they are.

I share the resistance of my noble friend the Leader of the House to the social chapter at this present phase of our development. I do not feel that I can quarrel with the economic view of the Government that the real secret of our economic improvement, and from the point of view of poverty, is to reinstate full employment as part of our social background. I agree with their assessment that the social chapter in its present form might well interfere with that. In my hierarchy of priorities full employment comes very high indeed.

But there is another reason why I do not follow the social chapter argument to its full conclusion which both the Opposition speakers have given. I believe that, given the tapestry of present-day western Europe, there is no danger of our falling behind the rest of the world in social legislation. We are all very high up in that degree of priority. But the differences in conditions from one country to another in the world—with my noble friend, I hope that the Community will not remain very much longer just the 12—the differences in tapestry of culture, social development, pattern and structure of industry, require that these things should, within the limits of decency, be decided by the national parliaments and not by the Community. That is why I do not share the views of noble Lords opposite. I respect them, and they may well be right, but I do not share them because, using the jargon of the day, in its present form the social chapter is contrary to the principle of subsidiarity.

I now come to the Motion. It is on the Order Paper because of Section 7 as it now is—Clause 7 as it was until a few days age—of the Act. I wish it were not there because it has involved us in yet another day's debate. It being there, and if the mood in which we approach the final stages of our arguments should be one of mutual understanding and agreement to differ about important matters, should we not take note of the attitude, as the main Motion says, rather than try to put forward partisan points of view? I call them "partisan" without any sense of deprecation because politics is about parties and about partisan views. But on this occasion should we not agree to differ, respecting each other's opinions, because of one central fact? It is that every time the main issue has come to be debated and divided on in this House—as I hope it would be in the other place —the pro-Maastrichters have won by overwhelming majorities. The time has now come to put it in order and to say that we will finish the job thoroughly today.

I do not conceal the fact that, if I had to swallow Maastricht holus-bolus, chapter and all, I would probably go for swallowing it holus-bolus, chapter and all. But we do not have to do that. The Motion before the House, unamended, is that we take note of the Government's opinion and go forward to ratification. I say this to the Opposition parties: if there were to be a change of government—perhaps they would like one and think that there will be one—they could put the social chapter on the Order Paper and pass it through whatever new Parliament then existed on the very first day of its meeting after the Queen's Speech debate was over. Therefore, no harm at all would be done if they backed the principal Motion on the Order Paper knowing that they had the power—if they could secure it from the electorate—to do exactly as they wanted.

Lord McIntosh of Haringey

My Lords, is the noble and learned Lord saying that the numerical majority which would still exist for the Conservative Party in this House would not oppose such a Motion tabled by a new Labour Government?

Lord Hailsham of Saint Marylebone

My Lords, I have not the least idea what the answer would be to that hypothetical question. But I hope that we would behave with the same sense of Christian charity and harmony as I am trying to strike at the present time. I say to some of my noble friends that I sincerely hope that, agreeing as I believe they do with my views about the social chapter—which happen to coincide on two grounds with those of the Government—they will not commence any tactical voting with the desire to defeat the treaty by saying something which they do not believe about the social chapter. In my view that would be both unprincipled and dishonourable. On that slightly uncharitable note I now conclude my remarks.

4.27 p.m.

Lord Barnett

My Lords, I do not understand the point made by the noble and learned Lord that carrying these amendments to the Motion would mean delay. They do not need to mean that at all. All that would need to happen would be for the Government to recognise the will of Parliament. There would be no need for there to be any delay if the amendments are carried.

The subject matter was debated at length on 30th June. Reading that debate and the social chapter protocol, I am at a loss to understand why the Prime Minister and the Government have backed themselves into a corner. It seems unbelievable to me that they should have got themselves into this can of trouble. The plain fact is—

Lord Harmar-Nicholls

My Lords, may I ask the noble Lord a question? Is he telling the House that if this amendment were passed, it would automatically become part of the effective Act which has had Royal Assent? Is that what the noble Lord is saying?

Lord Barnett

My Lords, I am saying that if the will of Parliament is that the social chapter should be included, that is what should stand. That is what I am saying. It is quite simple. I should have thought that even the noble Lord could understand it.

Having said that, and disagreeing again with the noble and learned Lord, Lord Hailsham, and with the noble Lord, Lord Wakeham, on their references to the social chapter, I can only assume that they have not read it. Frankly, my reading of the social chapter does not bear out any of the conclusions that they have drawn. One has only to look at some cif the things in it. Indeed, my noble friend Lord Richard referred to some of them the last time that we debated this. Most of the important areas need unanimous approval—that is to say, we have the power of veto. The agreement states: the Council shall act unanimously on a proposal from the Commission … in … social security and social protection of workers; protection of workers where their employment contract is terminated; representation and collective defence of the interests of workers". If noble Lords do not want to protect those workers, they would have every right to veto such proposals.

There are many other such areas. The agreement states: The provision of this Article shall not apply tc pay, the right of association, the right to strike or the right to impose lock-outs". There are all kinds of areas in which the social chapter does not apply, so I honestly do not understand how the noble and learned Lord and others can say that the social chapter is so damaging. It is nothing of the kind.

I thought that the strongest case that was made against including the social chapter was in a way better than any of the cases that were made by anti-Maastricht noble Lords and honourable Members in another place. If the other 11 member states, the majority of which (and particularly the bigger states) are such idiots as to want what the Prime Minister has called the "Socialist Charter for Unemployment", what on earth are we doing joining idiots of that kind? The plain fact is that they are not idiots. They have read the social chapter and approved it. For the life of me, I do not understand those who are arguing that Right-wing governments in Europe are so unbelievably stupid as to want to have a chapter which will be so damaging to them. But that is what is being said. If we accept what the noble and learned Lord said, we must ask why on earth they voted for it.

As usual, in our previous debate on this the most logical case to be confronted was put by the noble Lord, Lord Cockfield, in col. 895 of Hansard on 30th June. I have enormous respect for the noble Lord. He always puts a very logical case. On that occasion he started with a reference to the 50 billion deutschmarks cut in public expenditure which the Germans are imposing—as if that had anything whatever to do with the social chapter. Of course, it does not. They have done it and we can do it. Indeed, we may need to make some cuts in public expenditure, although noble Lords may be surprised at how difficult that is to do, as I found in five years' experience in that job. But that has nothing whatever to do with the social chapter.

I think that it is worth quoting what the noble Lord, Lord Cockfield, said because he put what I thought was a good and central issue. Referring to the serious economic damage that may be caused by the social chapter, the noble Lord said: To me, the only question is whether it would have been better for us to have been inside the Community advancing that argument and seeking to get sense; or whether we are better off outside, saying, 'A plague upon all your houses. You go your way and we'll go ours'. It is a difficult issue. I do not seek to answer the question".

In fact, the noble Lord did go on to answer the question when he said: that seems to be the essential issue. It is not a question of defending the present social policy at the barricades. Something has to be done about it; there is no question about that. It is purely a question of what is the best way. In the present difficult circumstances the line that was taken by our own Government may"— it is worth emphasising that the noble Lord said "may"— well have been the best line to take, in particular having regard to the vulnerability of British industry. I wish at times that we were a little more honest about our own failings. We have great strengths but we also have failings. Possibly, from time to time we ought to face up to them. We are in a more vulnerable position than many of the countries on the Continent". The noble Lord concluded by saying: It may"— again, I emphasise that the noble Lord used the word "may"— well be that in those circumstances … the Prime Minister was right".—[Official Report, 30/6/93; col. 895.] So, the Prime Minister may be right in the circumstances where British industry is vulnerable. I thought that the Government had been telling us that British industry is now doing very well. But we now understand that British industry is in such a vulnerable state—more vulnerable than the other 11—that we cannot join the social chapter and we should be outside it. It is the same argument as was put by the noble Lord, Lord Tebbit, and by my noble friend Lady O'Cathain. I must say that I have rarely heard a more defeatist case than to argue that our industry is so vulnerable to something in the social chapter (of which I have described part) that the other 11 can accept it but that we cannot sign up to it because we are more vulnerable than they are.

The plain fact is that if we vote against including the social chapter, we shall be voting to exclude Britain from the forum which decides how social welfare shall develop. It will develop without us. We shall be excluding ourselves from it. We shall not be at the heart of Europe. We shall be at the periphery. Directives will be decided without us having a say or a vote, but that does not necessarily mean that we shall not have to pay. We shall—in a variety of different ways.

4.36 p.m.

Lord Simon of Glaisdale

My Lords, I had proposed to say something about the sub judice rule because the sub judice rule and the privilege of Parliament are the two sides of one coin and inevitably as a parliamentarian, Law Officer and judge, I have to handle that coin and see both sides. However, with the advice of the noble Lord the Lord Privy Seal and with the example of the speeches that have been made, it seems that there is nothing more to say and that your Lordships can proceed to debate the substance of these amendments without fear of embarrassing in any way the judges who might have to decide the issues which have been presented to them.

So perhaps I may say quite shortly why I propose to vote in favour of the Government this evening. There are important considerations which weigh with the Opposition amendment. It is said that by opting out of the social chapter we are distancing ourselves from our European colleagues and, to some extent, gaining an economic advantage over them. Then again, it is undesirable that we should contemplate, as a permanent state, a low-wage economy based on bad working conditions.

But even then there are powerful countervailing arguments. Europe is an international trading entity. It trades internationally in competition with the United States of America, Japan and the other countries of the East Asian seaboard. There is a very high rate of structural unemployment—not merely of cyclical unemployment, but of structural unemployment—throughout Europe, and to add to unit costs by restrictive labour conditions seems to me to be a recipe for disaster. So even if the argument had rested there, I would feel that we should come down strongly in favour of opting out of the social chapter.

In fact, however, the clinching argument to my mind is one that was touched on by the noble and learned Lord, Lord Hailsham of Saint Marylebone—namely, that the opt-out from the social chapter is a manifestation of the principle of subsidiarity. Subsidiarity means that the decision is taken as close as is reasonable to those who are affected. When I touched upon the matter of subsidiarity in the debate on the Bill, I ventured, not just to define it as I have, but rather negatively: that no decision should be made which cannot reasonably be made by a subsidiary decision maker who is closer to the subject matter. I gave an example from our own domestic scene; in other words, nothing should be decided in Whitehall which cannot reasonably be decided by a county council, and so on down, so that nothing shall be decided by a parish council which cannot reasonably be decided by the parishioner. I remember the noble Lord, Lord McIntosh, advancing such an argument when we discussed the Local Government Bill of the last Session. Again, it seems to me that the social chapter has a similar, cogent domestic counterpart.

The noble Lord, Lord Windlesham, initiated an important debate on regional policy—the devolution of the economy towards the regions—at a time when there was a considerable difference in the economy of the North of England and that of the South East. Some of us argued that, in addition to measures such as the devolution of the Civil Service, what we needed most were local wage and salary settlements. If we had that, then the North East, where the cost of living is very much lower, could make competitive bids for industry and commerce, and gradually the economy would rise to the level of that elsewhere. That seems to me to be exactly paralleled by what is being done in our opt-out of the social chapter.

Lord Kaldor used to tell us that we went into industrial decline somewhere about the third quarter of the last century, and that decline has unquestionably been accelerated in the post-war years. We need to catch up, just as the North East needed to catch up with the South East. It is not selfish. It is not for all time. It is the prudent way to set about it. Because, as I said, the opt-out of the social chapter is a manifestation of subsidiarity, I shall vote against the Opposition amendment.

4.44 p.m.

Lord Carr of Hadley

My Lords, it seems to me that the political manoeuvring and posturing in which the debate about the social chapter has been embroiled is in real danger of obscuring what is, in fact, a serious issue underlying the merits of the chapter. I noticed that the noble Lord the Leader of the Opposition gave a long list of alleged inferiorities suffered by employees in Britain compared apparently with employees in every other country of Europe, including, for example, Portugal and Greece. I cannot help but doubt the validity of some of those statistics, but that is not my point. In making them a reason for supporting the social chapter, he did not put forward one concrete argument as to why the adoption of the social chapter would lead to a quicker remedy of those failures of Britain compared with getting on with the job ourselves, with our own Parliament and our own policies.

Of course, the Community must have a social dimension, but it already has a social dimension. It was laid down from the very beginning in the Treaty of Rome. I do not believe that the social chapter, as we now see it, is desirable, let alone necessary, to make fulfilment possible of that social dimension which was written into the European Community from the beginning.

One of the things I wish to do briefly is to put a final nail, I hope, in the coffin of the myth that has been propagated: that those who care about employment conditions in this country are those who support the social chapter; and that those who disagree with the social chapter are those who do not care. That is a lie. It wants nailing, and nailing finally.

Perhaps I may be personal for a few moments. My first speech on a major public occasion was at a Conservative Party conference in Brighton, think in 1948, when I was a seconder to the late Reginald Maudling who proposed and persuaded the conference to adopt what we called the workers' charter. When I became a Member of the other place, my maiden speech—so long ago was it that, strange though it is to believe, I made it in your Lordships' Chamber because that is where the other place was still sitting—was about joint consultation in industry. The text of my speech on that occasion was that until ordinary men and women found satisfaction, and not just material reward, in their work, they would not lead fully satisfying lives, nor would we have a satisfactory community. That is the first social priority.

What is needed to assist that process? It is, first and foremost, to produce at any given moment the highest possible level of employment. Mass unemployment is a great cancer in our society. We must never underestimate it. To do anything which, even in the short term, might prejudice that is against that major central priority. What else should we expect from governments if we are to promote that social enhancement? First, and most importantly of course, it is the provision of a first-class education and training system. We do not have that, but we have been moving towards it, I am glad to say, in recent years in a fundamental way.

We also need proper protection for health and safety. We need, I have always believed, a proper framework of civil law, governing the rights and duties of employees, employers and their organisations. That is something, incidentally, which the Labour Party opposed with all its main and might for many years, It resisted it being introduced by its own government, but now, apparently, wants it introduced from Brussels. Be that as it may, those are all measures which are within our own powers to give and get on with. We need no social chapter to help us to do so.

This is not a field where the wholesale harmonisation across many countries of Europe is necessary or desirable. On the contrary, it is a field where flexibility is increasingly needed on purely economic grounds We need flexibility within one country, let alone flexibility within different countries. It is also a field where, in social terms, the needs, hopes and fears of ordinary people, and the priority which they give to them, vary enormously from country to country, according to their circumstances, cultures and histories. It is not a field where provisions can be standardised throughout the 12 existing members of the Community, let alone what I hope will soon be a. significantly larger number of members. I submit that it is a field where the provisions need to be tailor-made for each country within the Community. If ever there were a field for the strongest possible application of the principle of subsidiarity, it is this.

I believe that the Prime Minister was right to exclude us from the social chapter. He was right for immediate and long-term economic reasons and for social reasons to give us, as a country, the freedom and the responsibility to pursue vigorously our own social policies and priorities and to use what I hope will be our increasing national wealth to enhance the quality of work and life in this country.

Parliament has had many opportunities to express a view about the matter. It approved what the Prime Minister set out to achieve before he went to Maastricht and it approved that again when he returned. Both Houses gave the Bill an overwhelming majority on Second Reading and this House gave it an overwhelming majority on Third Reading. I believe that the greatest need for this country is to achieve rapid ratification of the Maastricht Treaty without the social chapter.

Lord Richard

My Lords, before the noble Lord sits down perhaps I may reply to his challenge. He challenged me to produce an example of the way in which the social chapter would have made a difference to people in this country. Perhaps I may give him two examples to consider. The first is the rights of part-time workers and the second is parental leave. I raised both issues in 1981 and 1985 when I was Commissioner for Social Affairs. Both were strangled at birth by the then Conservative Administration led by the noble Baroness, Lady Thatcher. There is no doubt that if there had been European legislation in respect of those two issues the position of part-time workers in this country would be better, as would the provision for parental leave.

Lord Carr of Hadley

My Lords, that may be an adequate criticism of the Opposition and the Government of the day. However, it is no argument for the need for a social chapter to remedy the problem.

4.52 p.m.

Lord McCarthy

My Lords, those of us who begin the day with "Thought for the Day" on Radio 4 know that this morning the Reverend Philip Crowe told us of a lady who had reached the age of 100 this week. When asked what she wanted of the future she replied, "To hear no more about all that Maastricht". That is understandable. Indeed, we have heard from several noble Lords on the other side that they have heard more than enough about all that Maastricht. I am afraid that they are going to hear a great deal more —and they will hear a great deal more about the social chapter, whatever the result of today's votes.

It would be naive to try to change minds at this stage. However, we might try to clarify issues; in particular those behind the social chapter. In the light of the Government's refusal to sing the protocol, will they tonight clarify what they regard as their policy on the role of international action in maintaining and improving labour standards? That is the central issue behind the protocol. As was mentioned by noble Lords opposite, irrespective of the protocol we are signatories to a series of declarations which assume that we believe there to be a role in international action for maintaining and improving labour standards. The ILO conventions, the 1961 European Social Charter, the 1972 Treaty of Rome and the Single European Act were statements and declarations involving the Government's commitment to a role for international action in maintaining and improving labour standards.

By refusing to sign the protocol the Government seem to be declaring that they do not believe that there is a role any more. They appear to believe, as at one stage the noble Lord, Lord Carr, appeared to say, that governments should be allowed to do what they like with labour standards. Certainly that is what they have been doing since 1979. As my noble friend Lord Richard said, they have, inside the Commission, opposed every attempt to extend international labour standards—whether the Fifth Directive and the Vredeling Directive or the watering-down and frustration of drafts on equal treatment, the transfer of enterprises, working time, parental leave and so forth.

Worse than that is the fact that on several occasions when drafts have become directives this Government have implemented them only when pushed by international courts. The House of Commons Research Paper 93/28 on the Maastricht issue showed that we are the worst country in Europe as regards the non-implementation of directives. We are four times as bad as the average. Therefore, I ask the question: do the Government any longer believe in international action for the maintenance and improvement of labour standards?

That brings me to my second question. The Government certainly believe in international action in almost every other field. That is involved in membership of the European Community. I looked at the treaty and the excellent document The Maastricht Treaty in Perspective and I sought to classify the areas in which irrespective of the social chapter the Government are committed to international cooperation in the formulation of rules. They involve everything from agriculture to tourism including auditing, budgeting, a central bank, commerce, drugs, external markets, exchange rates, electoral systems, the environment, foreign affairs and so forth. We have had rules about all those issues and others such as formal qualifications, growth rates, health standards, inflation rates, interest rates, international crime, immigration, tax principles and transport. You name it, it is there! This Government clearly believe in international co-operation and common standards in every area except the labour market. My question is: why?

I do not suggest that in every one of those areas the Government believe in laws. I do not suggest that they do not believe that some decisions—for example, that on a common currency—will have to come back to Parliament. However, in principle they are in favour of international co-operation, rules, practices, procedures and convergence on all those issues except the labour market. My second question is: why should the labour market be excluded?

That brings me to my third question. I am pleased to say that it was raised by my noble friend Lord Barnett. What about the way in which this Government are totally isolated from all the other governments in the Community? We have had no explanation of that except the occasional insinuation that they are all being hypnotised by M. Jacques Delors. One would have thought that there would have been one country in Europe with a similar political government, of similar size and with a similar level of employment protection somewhere down the bottom end of the scale who might have said, "On the whole we agree with the British Government".

It might have been, for example—and I should like to know why the Government believe that it was not the case—that the four countries with a lower level of GDP than ours (Ireland, Spain, Portugal and Greece, which has half our GDP) would have said, "This social chapter really would ruin us. We can't afford it". But they have not done so. What is the Government's explanation of that? Or one might have thought that the seven countries in the Community with a higher GDP than ours—for example, Luxembourg, Germany, France, the Netherlands, Denmark and Italy, most of whom have levels of employment protection which are considerably better than ours in the area of the Social Charter—would have said, "We have had enough. It is too expensive. We will follow the British lead. We will join the British Government". Nobody did that. Therefore, I ask the British Government what is their explanation for that, beyond the hypnotic effect of M. Delors' oratory?

That brings me to my fourth and final question. Could it be that there is something in what those countries say? Even at this stage could not the Government think again for the future about the weaknesses of their isolated position? As far as I understand it—and this point has been made several times in the debate and no doubt will be made again, but it is necessary for me to make it again very briefly—there are three reasons why the other countries do not agree.

First, they believe that for the most part the chapter, focusing not on pay and social security but on working conditions, focuses on areas where the record shows that, in the long run, action taken to improve working conditions of that kind raises productivity. This is because it introduces practices which the best employers already operate and forces the worst employers to operate them.

That was the argument used in the "ten hours" legislation in 1847 in this Chamber. At that time Members of this House who opposed that legislation said that it would ruin the country; and it did not. The difference was that 10 years later those Members all came back and said that it had not ruined the country and they apologised.

This Government have published over and over again in Department of Employment research papers inquiries which show that that was and is the effect of the legislation, some of which was first introduced by the noble Lord, Lord Carr, in 1971. His unfair dismissal provisions have not ruined the country. They have improved personnel practices because the bad employers are forced to do what the good employers already do.

The second European argument is that, in the short run, the determination to lower standards can legitimately be described, as a form of social dumping. If one country gets away with it, it is a form of protection. After all, that is what the Government say over and over again. The noble Lord the Lord Privy Seal said it in opening today's debate —that they hoped that through a low standard of employment protection, we shall be able to undercut Europe. That is a form of social dumping. In the short run, it can be dangerous although in the long run it does not help anybody.

Finally, the Europeans say that by introducing the vast changes involved in the single market with a single currency and free movement of capital and labour the workers will suffer and something should be done about that. The noble Lord, Lord Carr, told us that when he was at a Conservative Party conference some little while ago he campaigned for a workers' charter. We do not hear that language from this Government today. We hear about every other charter. There is a Customer's Charter, a Patient's Charter and a Citizen's Charter. There is every other charter but there is no worker's charter. That is what the social chapter is all about and that, is why we shall vote in the way that we shall this evening.

5.5 p.m.

Baroness O'Cathain

My Lords, we have spent a great deal of time looking at, reading and trying to understand both the Maastricht Treaty and the Protocol on Social Policy. Indeed, as has been mentioned, some would say that we have spent too much time. The noble Lord the Lord. Privy Seal reminded us that we have spent 90 hours discussing those matters. However, I must admit that my current reactions are identical to my original ones and I really have not changed my views since Second Reading on 8th June.

However, despite the fact that we have spent a great deal of time already discussing the social policy, I feel compelled to spend just a little time giving a further explanation of my antipathy to the Social Protocol and, as a consequence, my relief that the Prime Minister negotiated an opt-out clause in Maastricht. I am the first full-time worker in industry and commerce to speak in the debate so far.

On the surface, the social chapter is a bit like "motherhood and apple pie"; it is very worthy. The objectives of promoting improved working conditions and an improved standard of living can, and should., be subscribed to by all. However, there is an underlying divorce from reality and a fundamental misconception of how imposed regulations would affect the world of work, the world of trading and, as has been mentioned already, the level of international competition. By imposing the harmonisation envisaged in the treaty, the whole European Community would be consigning itself to ever-declining standards; of living and, by consequence, deteriorating working conditions. My Lords, why is that? It is because we just could not afford them. Our international competitiveness would be so seriously eroded.

Of course, we all want to see improved working conditions but, from my years of experience in industry and commerce, I know that improved working conditions are a very local issue. I have known workplaces where the single most demanded improved working condition is that the whole workplace should be designated a non-smoking area; another workforce demands that a creche should be installed on site; yet another that a creche should be installed off-site so that anxious mums do not rush back and forward from the office or the factory. Imposed from Brussels, how would management and staff together decide to work out those problems? These may sound comic issues to your Lordships; but I can assure you that those simple—or apparently simple—issues dominate the debate on improved working conditions in the real world of work.

Improved working conditions are a local issue. They are not even—and I say this to the Government —national issues to be dictated from Whitehall. Of course there should be, and there is, legislation to deal with improved working conditions in the areas of health and safety; and, as the Lord Privy Seal has said, we have the best health and safety legislation in Europe. But the general move to ever improved working conditions must be worked out at local level between all those affected; namely, management and staff who have a detailed knowledge of the aspirations of the local workforce and the needs and demands of their customers.

As regards an improved standard of living, that would be achieved only by creating wealth. Such wealth creation will be achieved only by being increasingly internationally competitive.

On Second Reading, I gave your Lordships the figures of the high cost burden of social charges pertaining to other EC member states by comparison with those of the UK. If we were ever tempted to adopt the social protocol our international competitiveness would be sorely diminished. We have struggled long and hard to get where we are. Please do not let us even contemplate yielding on this now.

As regards harmonisation, why do we believe that all should aim to harmonise? Our international trading competitors must be praying that the whole of the EC will harmonise to the lowest common denominator, which in this case means the highest on-cost for social charges. I bet they are not too happy with the UK just now.

I know from many conversations with nationals in fellow member states that they are not too happy either with the UK just now; industrialists throughout the Community are envious of our competitive advantage and wish that they had it. Dare I say?—I will!—politicians often think that they know best how industry and commerce should be run. They do not, my Lords. They often think that they know best as regards what working conditions the workforce wants; they do not.

The noble Lord, Lord Barnett, asked why the other 11 governments espouse the social chapter if it is harmful. I submit that those governments are not in touch with their industry and commerce. Again, the politicians may think that they know best. According to the industrialists and businessmen in those countries, they do not. The noble Lord, Lord McCarthy, wonders why countries like Ireland, Portugal and Greece espouse the social protocol. Could it be that they toe the line because they are considerable net beneficiaries of European Community funds and really wish to safeguard that source of income?

Let us wake up. The world out there is not likely to buy our goods if they are so much more expensive than those from the Far East or even Czechoslovakia, which is currently producing semi-manufactured goods at half the cost of those produced in neighbouring Germany. The products of China are cheapest of all. While the international trend towards lower costs is escalating at a frightening pace, do we willingly wish to go the other way?

There will always be calls for harmonisation; there always have been. In my brief period as an adviser to the Ministry of Agriculture, I remember well how the Dutch tomato growers were seen to be the niggers in the woodpile because they were getting subsidised gas, and UK farmers were saying that the interest rates which the French farmers obtained from the Credit Agricole in France caused unfairness to UK farmers.

I have to say that it makes a nice change to see other member states now complaining about our low cost base. Indeed, an article in last Saturday's edition of The Times says it all: Belgium seeks EC debate on BA's low wage costs". Could it be that the Transport Minister, Guy Coeme, is slightly envious of the fact that British Airways put in post-tax profits of £178 million compared with Sabina's £120,000?

I shall conclude with one thought. Is it possible that instead of being isolated in the European Community, as has been suggested by many, we might become the leaders of the movement to reject the mandatory nature of the social policy when others realise that we have taken the right course—that is, the only course —in opting out?

5.10 p.m.

Lord Boyd-Carpenter

My Lords, the noble Baroness, in what I hope she will allow me to say was a most impressive and persuasive speech, made a very important point; namely, that knowledge of what should be done by way of labour policies, social policies, and so on, is not a matter upon which politicians have any monopoly and that, indeed, those who have worked in industry, as the noble Baroness and I have, know that there can be very different views. In that context, I should like to recall to your Lordships the view of the matter expressed by the CBI whose industrial experience is, of course, all-embracing. In a very recent document, the confederation said: The Social Chapter has very little capacity to do good —in terms of improving employment conditions—and a great deal of capacity to do harm—in terms of imposing pointless costs and rigidities., destroying competitiveness and jobs". That is the view of the CBI. Whatever noble Lords may say about the confederation, it is not lacking in very widely connected knowledge of industrial conditions. I am sorry that the noble Lord the Leader of the Opposition is not now in his place. I say that because I should like to take up a little of what he said. He drew attention to all the adverse features of the working of our economy today. He appeared to suggest that they were likely to be remedied if we adopted the social chapter. As has already been pointed out, he produced no evidence for what he said and, indeed, it seems most odd to suggest that applying quite a few complicated restrictions on the operations of industry would be likely to help. It is surely at least as likely that it would be extremely harmful.

I thought that the whole of that argument, in the noble Lord's otherwise admirable speech, was extremely weak. If any of us really thought in our hearts that adoption of the social chapter would bring about a great economic recovery, we should be very well disposed towards it. However, the truth of the matter is that not only is there no evidence to that effect, but also that the noble Lord the Leader of the Opposition gave a very one-sided view of the situation. He passed over without comment the fact that we in this country are further now towards, coming out of recession than any of our European friends; and that, on the contrary, our position is steadily improving. During the past few weeks there have been some extremely encouraging items in respect of production, sales and so on. If there is anything at all in the noble Lord's argument, it points absolutely the other way.

The other serious point that I should like to leave with your Lordships is on subsidiarity. If we accept the social chapter, we are handing over to Brussels the organisation of social support in industry, restrictions on industry and industrial practices. That seems to me to be wholly wrong. not only because they are matters which we are concerned to handle as we think right, but also because the situation differs in different countries. For example, our social and personal habits are quite different from those of people in other European countries. Therefore, surely it is most important that, if one is laying down rules in respect of working conditions, they should be laid down by people who understand the habits and practices of their country rather than by an international body operating in an area where social habits are different. I strongly believe not only in the principle of subsidiarity but, in particular, in its application to those very matters which the social chapter covers.

If we are to have a happy and successful industrial system and if we are to have people working in a situation in which their real needs are sensibly and intelligently catered for, surely the decision as to what those rules and regulations should be must be one which is made by our own fellow countrymen. I know of no reason whatever for believing that to hand that over to a body in which we shall be but a small minority and one which has majority voting, that would overrule our small minority, would be of any advantage. I give way to the noble Lord, Lord McCarthy.

Lord McCarthy

My Lords, I am much obliged. Does the noble Lord agree that the points he makes about matters being decided close to the ground by people who know could apply just as well to many other issues which we shall decide collectively; for example, educational qualifications, auditing principles, health principles and the regulation of transport? All those matters could equally be said to be best decided on the ground by us.

Lord Boyd-Carpenter

My Lords, if the noble Lord wishes me to deal with all those issues, I shall, indeed, take a great deal of the time of the House. However, I do not propose to do so. We are not dealing with education; we are dealing with working conditions in industry and social policies in that connection. The noble Lord cannot just run away by introducing all those extraneous matters and avoid the points that I am making which, apparently, he does not wish to controvert.

In industry it is necessary for regulations to be compiled by people who understand local conditions and needs. That is what accepting the social chapter would forfeit. For that reason, I hope that we shall not at any foreseeable time accept it. On the contrary, I hope that we shall accept that the regulation of such issues, which matter so much to so many of our people, will be kept in the hands of people who, at any rate, know the situation and needs of the country and of our fellow countrymen. For those reasons alone, I think that the case against the social chapter is absolutely overwhelming.

5.18 p.m.

Lord Howell

My Lords, for members of the present Government, the social chapter has now become a totem pole around which they are dancing with increasing frenzy. As we have heard today from many of the speeches, the debate has taken on something of the nature of a charade which has very little to do with the Europe that we know, to which we wish to belong and in which we wish to participate. The noble and learned Lord, Lord Hailsham, even questioned the fact that we were having the debate. I have to tell him that we are having the debate because his son in another place accepted an amendment which stated that we had to have the debate today.

Lord Hailsham of Saint Marylebone

My Lords, I made it quite clear that I wished that he had not.

Lord Howell

My Lords, I shall trespass no further on that intra-family relationship. it think that the noble and learned Lord's son was wiser than his father today.

Following on from my noble friend Lord Barnett, I come to the first question that I want to ask. In recent days three senior Ministers—the Prime Minister, the Chancellor of the Exchequer and, this morning on the radio, Mr. David Hunt, Secretary of State for Employment—have used "socialism" as a term of abuse about this chapter.

Noble Lords

Hear, hear!

Lord Howell

My Lords, noble Lords on the other side of the House say, "Hear, hear!". The question to be asked is why the Government believe that they can possibly advance British interests by calling Chancellor Kohl a socialist. It is an interesting question, to which we would like an answer.

The same applies to some of our other partners, as the noble Lord said. Let us remind ourselves that of all the other 11 member nations five have governments which in no sense can be described as socialist and five have coalitions in which socialists participate. Only one country in Europe has a socialist government, and that is Spain. Therefore, I want to draw the attention of the House and the Government to the fact that, whatever the outcome of the Maastricht Treaty, when it is all over we have to return to the councils of Europe and negotiate and co-operate with our fellow member states. In my experience it does no good to insult your partners before you have to sit down and negotiate and discuss with them.

Therefore, I object to the fact that for purely party political reasons which we know about and because of the difficulties which the Government face, they are jeopardising the future relationship of this country with our European partners. That is not statesmanship: it is stupidity.

To raise a point which I do not believe has yet been mentioned, I also have the gravest doubt as to whether we can escape the consequences of the socialist charter.

Noble Lords

Hear, hear! Very good!

Lord Howell

My Lords, I am very happy to have made that Freudian slip because I happen to believe that all the best Conservative Governments have to embrace some degree of socialism from time to time in order to achieve cohesion.

The point I want to make is that the social chapter is implicit in the Treaty of Rome itself. All that Maastricht does is to put meat on the bones of the Treaty of Rome in taking this forward. For example, paragraph 1(d) of Article 85 declared that it is incompatible to: apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a trading disadvantage". My noble friend Lord Richard mentioned Article 117 in a similar context.

Then again, under Article 86, which deals with abuses in trading positions, we have signed and declared that to apply, dissimilar conditions to equivalent transactions … thereby placing them at a competitive disadvantage", is unlawful. That is the background. We have subscribed and signed up to all that.

So what do the British Government have to say? Do they believe that they can escape the consequences of the minimum wage, of social legislation and of legislation relating to equal pay and conditions? I do not think so. I have not the slightest doubt that this matter will be tested in the European Court. It is almost certain to be tested in the Court, and the Government will be left with egg on their faces again because they are attempting to give us supposed advantages over our competitors. As has already been stated in this debate, the Treaty of Rome is all about the harmonisation of relationships and trading conditions within Europe.

The noble Lord, Lord Boyd-Carpenter, referred to the CBI. I recently heard on the radio the head of the German equivalent of the CBI make it very clear that as soon as he found any British companies trading unfairly by applying these opt-outs the matter would be taken before the European Court. The German SDP party has already made a similar statement. Indeed, Mr. Vitor Martins, the Portuguese Secretary of State, said that we risk: putting the eleven at a competitive disadvantage in relation to the UK". He referred to it as an abnormal situation which requires solution. That means that they will take us to the European Court. Therefore, it seems to me that this charade will be exploded in due course.

There is another aspect to which I wish to draw the attention of the House. Quite apart from the legal consequences, I believe that to opt out of the social chapter is a recipe for industrial conflict. I speak as someone who has been president of a trade union for 12 years. Your Lordships may be surprised to know that I spend most of my time trying to avoid industrial conflict, as most good trade unionists do.

Perhaps I may give an illustration. The Ford Motor Company manufactures cars in. Dagenham and in Portugal. If it is proposed that the workers in Portugal shall be at what this Government describe as an unfair disadvantage in relation to the Ford workers at Dagenham, what do the Government think will happen? Do they believe that the Portuguese workers will allow themselves to be undercut by Dagenham, or do they think that Dagenham will be happy to work at a disadvantage in relation to Portugal? No, my Lords. That is the argument for having harmonisation. I therefore hope very much that the Government will understand the industrial consequences of this situation. As many speakers have said in this debate, that situation can be repeated anywhere where British firms which are multinationals are establishing companies in Europe as well as in this country. They will find themselves in conflict if the Government are successful in this situation.

The next point that I want to raise is the fact that it makes no sense to allow other Community members to make social policy in our absence. In another place Mr. Eric Forth said that the conduct of business along the path laid down in the Social Charter is a matter for the other 11 countries: The United Kingdom shall not take part in their deliberations".—[Official Report, Commons, 19/12/91; col. 242.] Have we learnt nothing from the common agricultural policy? Have we learnt nothing from our failure to get into Europe, to sit round the table and to be present and involved when policy is made in Europe? Are we prepared to say that the other 11 nations can make all the social policy for Europe —which will certainly apply to this country for the reasons I have given—and we should not be there? What nonsense it is that the Government continue to repeat the mistakes which they have made before and which have cost this country so dear in the past. I hope that that will be considered.

I shall conclude by saying that there is a problem —which the noble Lord, Lord Wakeham, touched on in his opening speech—concerning the relationship between the European Community and what are now called the Pacific rim countries. That is a very important factor which we have to sit down and think through. We need new strategies. I repeat that it is ludicrous in the extreme to exclude ourselves from those discussions. However, the noble Lord, Lord Wakeham. and the Government say that we have to persuade the other 11 countries to join us in dealing with the competition from the Pacific rim by reducing the whole of Europe to the wage levels of the sweat shop conditions against which we complain. That is not the way for this nation to go. If we were to go down that road we should have much social unrest in this country.

I cannot understand what is wrong with Article 1 of the social chapter to which the Government are opposed. With your Lordships' tolerance, I shall read Article I. It states: The Community and the Member States shall have as their objectives the promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion. To this end the Community and the Member States shall implement measures which take account of the diverse forms of national practices, in particular in the field of contractual relationships. and the need to maintain the competitiveness of the Community economy". That is the declaration in Article 1. How anyone can vote against those principles is beyond my comprehension.

In conclusion, in the interests of this country nationally, co-operatively and in terms of social harmony and future industrial policy it is inevitable that we should embrace those principles and it is good sense for us to do so today.

5.31 p.m.

Lord Aldington

My Lords, earlier in his speech, the noble Lord, Lord Howell, reminded us that the current Treaty of Rome has a title with social provisions. He referred to Article 117. He might have referred to Article 118 and the succeeding articles too. In order to make our flesh creep, he referred to other articles elsewhere in the Treaty of Rome which relate to competitiveness. He stretched their interpretation as far as I have ever seen any piece of elastic stretched.

I do not share his fears. I see no reason why he should be so worked up about the fact that we shall be left out of discussions on social matters. We have joined in those discussions since we joined the Community in 1972–73. We have been present at the Councils during that time. I have no doubt that we shall continue so to do. The question that we have to ask ourselves today is whether we want to depart from the regime that we have accepted—it seems to have worked well over the years—and give Brussels power, which it has not had before, to make laws to enforce rules and regulations upon us. That is why we are having this discussion. That is why I, along with my noble friends who spoke earlier in the debate, welcome the Prime Minister's success in negotiating our opt-out of the social protocol. We welcome the Motion that the noble Lord the Leader of the House moved today. The issue is not about our belief in good working conditions or good social arrangements for workers in industry and in business generally. The issue between us today is this: where rules have to be made, who makes those rules?

The noble Baroness, Lady O'Cathain, reminded us that the regulation of working conditions arid the way in which people behave is settled by local bargains at plant level, business level, or sometimes by industrial agreements. Very seldom is it settled by laws. However, we have some laws which have worked well, and we improve them from time to lime. That is the way in which we have learnt to behave in this country. We happen to approach the issue differently from some other countries. But we do so largely because of our traditions and habits, and the localities in which we work. I should have thought that that is an application of the principle of subsidiarity to the Protocol on Social Policy.

I remember in earlier discussions that the noble Lord, Lord Clinton-Davis, waxed eloquent at the Dispatch Box about the importance of' subsidiarity. He believed that it ought to apply more than it does to affairs of this country. He was referring to local government. But why should that principle not apply to working conditions, to social policy in industry, and so on?

Colleagues of the noble Lord—the noble Lord, Lord McIntosh, made the point too; I see that he is taking notes —have championed exactly the opposite: no longer will the rules be made in the plant; no longer will they be made by British industry; no longer will the laws be made by Parliament, but by Brussels. That seems to be their battle cry. I do not know whether that battle cry will reverberate around the battlements of Christchurch. However, it is an interesting battle cry on which to fight the last little episode on the European Communities (Amendment) Bill.

The noble Lord, Lord Richard, usually commands my attention, and often my great support, for what he puts before us. I was astounded when he stated that Britain needs the social chapter more than any country in Europe. Does he really believe that Brussels will make our industry more competitive or our people working in industry happier? I am surprised if he believes that. He cannot have had much experience in industry. Many noble Lords who have spoken have such experience. We know that to make a firm as competitive as possible our relations with our workers have to be the best that we can afford. The question is: what can we afford? We are more likely to be able to decide that even than noble Lords opposite, and more so than Brussels.

As my noble and learned friend Lord Hailsham said, the opt-out does not in any way inhibit Parliament from considering all or any of the questions raised in Brussels under the protocol. If we believe it right to alter any of our laws on any matters current in the protocol, or suggested in a Green Paper, we are free to do so. That should be made absolutely plain. If we decide to do so, we shall be deciding with the knowledge of what can be afforded and what is most likely to be acceptable. We would be mad indeed if we sought to regulate work or employment conditions, or in any way to add to the costs of business so that we damage the competitiveness of any business trading and competing overseas.

Even if we acted in the name of helping employees, if it led inexorably to the collapse of the business in which they worked, it would lead to the loss of their jobs. It would lead to a situation that was bad for our country and for Europe.

As I said at the beginning, we have different ways of doing things from Germany or elsewhere. Recently that has resulted in productivity here improving more than it is there. In earlier days, the opposite took place, and much of that was due to legislation put forward in the late 1970s by the party opposite.

Let me be quite clear. We in this country, and I certainly speak for myself, share the objectives of Articles 117 and 118. We share the objectives of Article 1 in the social protocol. However, the noble Lord, Lord Howell, did not read out the other articles. He did not read out Article 3 which gives power or corporatism—I have never quite understood what corporatism is—for legislating agreements between UNICE (that is the CBI of Europe and the TUC of Europe) and turning that into rules which have to be obeyed at all the plants.

What did Mr. Ashdown, the leader of the Liberal Democrat Party, have to say about that? He said: Article 118/3 of the social chapter opens the way, as the Prime Minister said, to European-wide collective bargaining … arrangements. They are wrong for this country's future and contrary to this party's belief in decentralised wage bargaining … It is … an approach that failed in the 1970s, and one that will not work in the 1990s. It is too inflexible, too costly, and too rigid".—[Official Report, Commons, 18/12/91; col. 303.] I do not understand why the noble Lord, Lord Jenkins, supports the Labour Party in its approach to the problem. It seems to me quite inconsistent with his party's attitude and I am very surprised. He, or someone, accused the Government of making many contradictory statements. If we examined the statements made on the social chapter by the Liberal Party, we would find it impossible to make more contradictory statements more frequently.

Baroness Seear

My Lords, will the noble Lord give way?

Lord Aldington

My Lords, is the noble Baroness not going to speak later?

Baroness Seear

My Lords, the noble Lord found one contradictory statement, but I do not think there would be any difficulty in finding more than one coming from the Government.

Lord Aldington

My Lords, I have three here but I was not proposing to read them all out. I shall read one on which I shall end because I believe that I have already spoken for too long. In the Liberal Democrat News at the end of 1991, Mr. Ashdown said: There are too many socialists in Europe who have been encouraged to believe that they can win through Brussels the intervention measures that they have failed to get through their own national Parliaments". That is what he said and it is exactly that for which the noble Lord, Lord Jenkins, proposes to vote tonight.

5.42 p.m.

Lord Wedderburn of Charlton

My Lords, in rising to support the amendment in the name of my noble friend, I wish to address a relatively narrower issue than those raised by the noble Lord, Lord Aldington. I ask: why is it that the Government withdrew their support from the social dimension of the market? After the Commission's White Paper in 1985 and the Cecchini Report of 1988, it was agreed by all 12 heads of state that there was a need for a social dimension. I quote the words of the conclusions of the Madrid Summit: in the context of the establishment of the single European market, the same importance must be attached to the social aspects as to the economic aspects". It is quite clear that the social aspects involve intervention in the market, which some Ministers were once prepared to do but it now seems that that is offensive. Why was that? It was because one of the predictions of those reports was that in at any rate the first phase of the single internal market there might be—indeed, in one case there would be—a serious loss of jobs and that the redeployment and restructuring which were inevitable would need in them some protection for those upon whom otherwise the main costs and burdens would fall and are now falling.

Noble Lords who speak about these matters must remember that, with a return of the reserve army of unemployed of 18 or 19 million in the Community, whoever is doing a little better or a little worse in the member states, it is a shocking situation. It is that situation that the social dimension addressed.

The Government supported the social dimension. I shall give one example as evidence, because I see that that statement creates something of a shock across the Chamber. On 8th November 1989, the Minister for Employment, Mr. Eggar, speaking for the Government, told your Lordships' Select Committee that they were, committed … to fulfilling the social dimension". He said a little later, taking account of the doctrine of subsidiarity, that there was no basic challenge to the need to fulfil a social dimension. He said that the Government were guided by the Madrid conclusions; and there are many statements of that kind. I do not remember any great wave of protest from the Conservative Party or the Conservative Benches against that statement. Of course, it then depends on what one puts into the social dimension. Some of the contents proposed were far-reaching. It is well known that M. Delors convinced the British Labour movement that there was something in it at the TUC conference in 1988 when he said that the social dimension should include lifelong retraining, employees' participation in European companies and, every worker's right to be covered by a collective agreement". None of that is in the social chapter.

Yet by 1980 the Government had resiled from their support for a social dimension and will not now support even the minimal procedures for the social chapter. I insist that they are procedures. They are often publicised as though they were a set of substantive norms for employment law, but they are a set of procedures.

In that historical context I believe that we can heavily discount the recent rhetoric about "burdens on business", competitiveness and loss of jobs which came later than the change of government policy. I say to the noble Lord, Lord Aldington, that the Government are not against European collective bargaining because it is European. They are against European collective bargaining because it is collective bargaining and may negotiate protection for workers. The noble Lord has a distinguished record on collective bargaining which I appreciate. However, the Government now believe that all the structures which he helped to build in the port industry and elsewhere should he dismantled into individualised employment. That is, of course, the key to the change.

If we look at the social chapter what do we find? I submit that we find three categories. First, we find a group of bipartisan matters; that is to say, the pursuit of policies concerning equality of the sexes and a ban on discrimination, although, alas, not a ban on race discrimination, which may be the hole in the heart for the Community in many ways. Further, we find improved measures on health and safety at work, which historically this country saw on its statute book earlier and which in some respects are better than, and at any rate as full as, those of any other member state.

If health and safety legislation is acceptable, whether it be at European level or otherwise for the Government, by what divine ordinance is the permission retracted when we pass across the boundary into modest legislation on working hours? Why is there that line, other than by reference to history and the work of Professor von Hayek? Apart from that, I can find no justification for drawing the line in this ideological manner. All other social legislation appears to he bad, apart from those two now traditional policies.

Secondly, it is true that Community competence in the Council of Ministers is extended by the social chapter's agreement to decisions by qualified majority, but only over a comparatively modest range—for me, far too narrow in many respects. I willingly concede that.

What do we find? It does not extend to social security, to collective interests of workers or to the employer's right to dismiss workers. Under Article 2(6) it does not extend to freedom of association—something which the Commission ought to face up to but will not. It does not extend to pay. It does not extend to rights to strike or rights to lock out. The Minister—

Baroness Elles

My Lords, I am most grateful to the noble Lord for allowing me to intervene. Did I understand him to say that the social policy agreement did not include social security? I draw his attention to Article 2, paragraph 3, where it says, the Council shall act unanimously on a proposal from the Commission … in the following areas:

—social security and social protection of workers". I may have misunderstood the noble Lord, in which case I apologise, but I should like to draw his attention to that paragraph.

Lord Wedderburn of Charlton

My Lords, the noble Baroness is quite right in what she reads. But I was referring to the qualified majority provisions. It is from that narrow area in the chapter that all these provisions are excluded, by two different paragraphs of Article 2. There is no minimum wage, despite what the noble Lord the Lord Privy Seal said. He is not here, but I am sure that he will correct me if I get it wrong. He said that all sorts of trade union rights could be introduced. How you do that by not being able to pass a qualified majority decision. without touching upon freedom of association, rights to strike, lock out and so on, defeats me. I have no idea.

Thirdly, the main areas set out in the social chapter—and this is what it comes to—are: first, consultation with employees; secondly, integration of persons excluded from the labour market; and thirdly, working conditions. Those are the three main areas of new possibilities for qualified majority decisions.

The historian will find it difficult to understand how noble Lords on the Benches opposite, who played such a distinguished role in introducing the Industrial Relations Act in 1971 and passing new laws on rights of association and unfair dismissal, can object to this extraordinarily minimal document of procedures. What has happened is due to the Government's unquenchable appetite to strip away, on the one hand, employment protection legislation and, on the other, collective bargaining from the market. Those aims were made quite explicit in their White Paper of last year, in which they state that they wish to replace collective arrangements with individualised employment relations. That is the Government's norm: it is the star which they follow —ideas which are not shared in Bonn, or indeed in Paris, or in Italy.

It is true that many of those national labour laws have changed and been adapted over the years. But the notion that you should not approach large areas of the labour market on a collective basis is one which is not shared in other member states. That curious and unique belief of the Government is the problem in regard to the Social Charter, not its contents.

Finally, in another part of the chapter, (I say this for completeness) Articles 3 and 4 aim to facilitate collective mechanisms at European level for consultation or negotiation. I must admit that some are more optimistic about that route than I am. It is not at all clear how the legal and industrial difficulties of Community level negotiations could be overcome in the translation or transposition of European level agreements or arrangements to national or sectoral level in the domestic labour markets. Two examples show the extraordinarily narrow point of this part of the chapter. Declaration No. 2 attached to the agreement clearly states that there is, no obligation on the Member States to apply the agreements directly … nor any obligation to amend national legislation … to facilitate their implementation". What is this part about? This part is about agreements. No employers need go further than they will agree in these arrangements, even were the arrangements to work rather more easily than I would foresee. Nor is there anything in the social chapter to breathe new life into Community plans for the protection of part-time workers; nor in regard to worker participation in a European company, and so forth.

The reality of the social chapter is not the normative Frankenstein, even if all the procedures were used to the full, that exists in the nightmares of Ministers; nor is it, in my submission, the passport to more sun and cheaper wine, which those who support it appear sometimes to suggest. It is a very careful and narrow document for a beginning of a social dimension.

It is well documented that many, many ordinary people have a sense of disillusionment about the Community. The impoverishment of the social dimension has been a major cause in that. If you lose a job and you have been led to believe that something will perhaps come from Brussels to protect you, when you find that it is not there, that is a rather more serious situation than most of us experience most of our lives. It is that disillusion to which the Government have contributed. They have done that rather than support this first fragile set of procedures to protect workers and their families in the coming economic storms.

5.55 p.m.

Lord Reay

My Lords, I listened carefully to what the noble Lord, Lord Richard, said this afternoon; and I listened carefully to what he had to say when we debated the subject of the social chapter at Committee stage. I must say that I find it very surprising that he has nothing to say about Europe's 18 million unemployed; nor about what might be the causes of Europe's persistent unemployment; nor about what might be done to remedy that situation; nor what part social costs might have played in bringing about that situation or what part their reduction might play in improving it.

To some extent we are conducting two separate debates. Noble Lords opposite are discussing the social policy to some extent in abstract. Those of us on this side, I do not say of the House but of the argument, while not denying the desirability of much—not of all but of much—of what noble Lords opposite argue for, nevertheless try to relate it to the economic circumstances of the day.

I have no doubt that the agreement on social policy attached to the treaty which the 11 have signed up to represents the opposite of the approach required if Europe is to make progress in dealing with its chronic and related problems of unemployment and declining international competitiveness. The very last thing that the Community should be thinking of is raising the costs of production and employment by social legislation and placing further bureaucratic and interventionist rigidities into the functioning of an already notoriously inflexible labour market.

I emphatically do not agree with what Mr. Gordon Brown, the Treasury spokesman of the party opposite, is reported to have said earlier this week; namely, that, The future lies with the advocates of the Social Chapter rather than the reverse". There is a dawning realisation in Europe that social legislation has been pricing people out of jobs. It is reflected in Chancellor Kohl's almost despairing description of his country as one large amusement park, with the shortest working week, the oldest students and the youngest pensioners in the industrialised world. It is reflected in some, if not all, of the remarks that President Delors has made; and it was reflected in his analysis of the Community's competitiveness problem which he delivered to the Copenhagen Summit, which I believe our Government found little to disagree with, although they did not follow him in regard to the remedies that he proposed.

Of course this continental "mea culpa" is not the only voice to be heard in Europe; it is not even the loudest one. We would not have the social chapter if that were the case. The call is still very much heard for Europe to protect itself from low-cost imports—a corollary of a high-cost social policy.

Also still heard is the false cry of social dumping, which claims that the creation of the single market requires labour costs to be levelled up across the Community so that no one member state can enjoy a competitive advantage in that respect over the others. Indeed, I am quite sure that a determination to remove this country's labour cost advantages was one of the motives behind the social chapter.

I was at one with the noble Lord, Lord Harris of High Cross, when he spoke on this subject the other day in considering the accusations of social dumping to be an absurdity—as absurd and as self-destructive as if interest rates or productivity rates were to be set by legislation at whatever was the least competitive level prevalent in the Community at the time.

We must stoutly repudiate the argument about social dumping and all charges of it when levelled against ourselves. One very good reason for us to refute it is that it inevitably brings in its wake a call for the further massive transfer of funds to poorer, more remote regions, whose ability to compete the social policy will have destroyed. The European Commission does not seem to find it very disagreeable organising the transfer of large sums of other people's money from one member state to another. No doubt it enjoys the gratitude of the beneficiaries and the status of a Robin Hood in their eyes. But as a member state more transferred from than transferred to, we have a very obvious interest in limiting the growth of that tendency.

The effects of social policy as it has developed on the Continent can be seen in Europe's high non-wage labour costs. Non-wage labour costs in the United Kingdom fall within the same bracket as in Japan and in the United States—between 25 per cent. and 30 per cent. of total labour costs. However, in Italy, France and Germany they fall within the 45 per cent. to 50 per cent. bracket—that is, 50 per cent. to 60 per cent. higher. No wonder that Britain has been attracting the lion's share of foreign inward investment into the Community and no wonder that other member states should be keen to see us subscribe to Europe's social legislation under another chapter of the treaty if need be.

Lord McCarthy

My Lords, does the noble Lord agree that the relative figures that he gave have been roughly the same for the past 30 to 40 years and derive from the fact that in this country we do not finance the welfare state on the back of employers? That is the difference.

Lord Reay

I do not have time to pursue that argument at the moment. Nothing better illustrates the effect of Europe's high cost social policy than the contrast between the employment record of Europe and that of the United States of America. With a population two-thirds the size of the Community but with a flexible labour market, the United States has succeeded in creating nearly 40 million jobs since 1971, nearly all of them in the private sector. The Community by contrast has succeeded in creating barely 3 million new jobs in the same period, many of them in the public agencies.

The result is that the unemployment rate in the Community at approaching 12 per cent. is almost twice what it is in the United States and the contrast between the rates of structural unemployment is even more striking. In 1991, according to OECD figures, only 6 per cent. of the US labour force had been out of work for 12 months. In the Community that figure approached 50 per cent. I suggest that it is to America that Europe will need to look for lessons on how to restore incentives and flexibility in the labour market, if Europe is serious in its intention to do anything about unemployment. It is on American experience that I hope that our Government will draw when they come to submit their paper on competitiveness to the European Commission, as they have been invited by the Council to do by 1st September.

However, I must say that I can understand the force of the argument of those who say that despite the wrong-headedness of the social chapter, nonetheless it might have been better had we signed up to it; that it is uncertain what if any legislation it will give rise to; and in particular that it is always better in principle to be present to influence the formulation of Community policy rather than seek to be absent and try, perhaps vainly, to exclude ourselves from its effects. That is a tempting argument.

On the other hand, I would argue that our conviction about the very enormity of the Community's error in this field can best be expressed by our refusal to have anything to do with it. It may even be the case—I argue that it was the case—that excluding ourselves would have more effect than anything else in getting the Community to change its ways. It is certainly the case that much of what the Community seeks to do in the field of labour relations—the expensive standardised procedures of works councils, the bolstering of the position of trade unions and so forth—is particularly inappropriate in this country. Our lower manufacturing productivity, which is still up to 30 per cent. below the Community's levels even after the improvements that my noble friend the Leader of the House mentioned, is another reason why in this country we would not be able to sustain non-wage labour costs as high as those on the Continent.

Be that as it may, securing the social opt-out in the teeth of opposition was a diplomatic triumph for my right honourable friend the Prime Minister. To ratify the Treaty of Maastricht without the social chapter is now the expressed will of Parliament. I fully hope and expect the Maastricht Treaty to be ratified as it was negotiated and as it has emerged from this House, without the social chapter and without any promise to sign up to it in the future.

6.5 p.m.

Earl Russell

My Lords, the noble and learned Lord, Lord Hailsham of Saint Marylebone, with his usual happy versatility, has made a speech which was both statesmanlike and seductive. At this time of year, the argument "Let us go for ratification quickly and think about the social chapter later" is bound to have very great attractions. On 22nd July any Parliament may be entitled to say, "We have sat here long enough for any good that we have done".

I am also grateful to the noble Lord the Lord Privy Seal for making clear that ratification is not at issue in this debate. That is the basis on which we take part in it and that is a central point in our position. But. I put to the noble and learned Lord a question. Seductive though his suggestions are, do we in fact legally have that option? Or is the noble Lord, Lord. Howell, right and we are in fact committed to a common social policy for the Community?

Are we committed because we have not understood the significance of intent in the development and interpretation of Community law? It seems to me that the significance of intent in Community law has led to a great deal of misunderstanding during our debates. Had certain opponents of the treaty understood that, they would not have had their fingers burnt.

When I developed that argument in Committee, I was extremely interested to notice that the noble Baroness, Lady Chalker, whose handling of these, debates has been the only great pleasure about them, did not deny what I said. To my great amusement, shedenied something that I had not said. She said: The noble Earl, Lord Russell, winding up for the Liberal Democrats, used the phrase, 'In legislation, intent is all'". I think she will find that I did not use that phrase. She went on: That is not so. It makes a great difference what legislative powers are given to carry out that intent".—[Official Report, 30/6/93; col. 916.] I agree entirely with what the noble Baroness said. Therefore it is rather unfortunate that, as I read Articles 117, 118A and 118B of the Treaty of Rome, we are committed to a common social policy but not to any specific content of that policy. In fact we have left others to draft the content of a common policy which we, willy-nilly, sooner or later will have to accept.

I entirely agree with the noble Lord, Lord Aldington, who talked about what he called Article 3— I believe that he will in fact find that it is Article 4— of the social protocol. That seems to me to be a good deal too centralised as an approach. But my right honourable friend Mr. Ashdown realised very quickly, as I hope perhaps the noble Lord, Lord Aldington, may realise rather more slowly, that we shall not change that unless we are inside the process. I promise the noble Lord that when he realises that, I shall not twit him with changing his mind. I shall let him off.

The noble Lord, Lord Aldington, also asked why this was not a matter of subsidiarity. It is simply because we have signed up to the contrary already. We may have been right; we may have been wrong. But under the Treaty of Rome and the Single European Act we have actually done so.

The noble Lord, Lord Aldington, argued that the use of "competition policy" by the noble Lord, Lord Howell, was far-fetched. I ask him to look, when the Official Report is published, at the opening speech by the noble Lord the Lord Privy Seal. I believe I have his words right. He said that not signing the social chapter will give us a greater advantage over our competitors. I ask him to consider how those words would look quoted in evidence before the European Court of Justice in proceedings under Article 85 of the Treaty of Rome, or if the noble Lord, Lord Howell, prefers, under Article 86.

I do not see how we can have a single market without having some element of common social policy to go with it. The question then arises: what are we going to do about it? Are we going to change our minds now or are we going to go down the alternative route? That is, will we wait until the case goes before the European Court of Justice and then, to the utter shock and horror of some of the opponents of the treaty, be dragged kicking and screaming into a social policy that we have not helped to form? If that happens I do not look forward to hearing the noble Earl, Lord Onslow, saying: "I told you I would tell you 'I told you so"'. That may take a little time.

On the bigger argument, I agree with the noble Lord, Lord Reay, that we have been having two debates. It is essential to engage with the economic philosophy which is behind the Government's objections to the charter. That makes me understand why in the 19th century, in the heyday of practical economics, it became known as the "dismal science". It is the Government's belief that by cutting the cost of labour one automatically increases the demand for the product. If there is no other variant, that may be true.

We hear behind that argument and the argument of the noble Lord, Lord Reay, for example, the common free market English of labour being like apples in a market place. If apples do not clear it is because we have not lowered the price far enough to clear them. If there is no independent variable, that is all right. But labour and apples are not exactly the same. Let us take one significant difference: apples do not spend money. On the other hand, when labour is paid wages it spends money. If it spends less money, the money it spends will generate less employment and then there will be less money, which again will generate less employment. Or again—I was going to say that apples do not have children, but that perhaps is not quite accurate—apples do not have dependants. So if the price of apples goes down, their dependants do not then become a charge on public funds.

When we think of costs we must think of total costs. Non-wage labour costs are not the only costs that enter into our competitiveness. So if by lowering wages we generate, through family credit and housing benefit, a massive charge on public funds, we do not become any more competitive at the end of the day; or again, we do not increase our competitiveness by generating a massive under-class. I do not need to talk about the costs of crime. The House is well aware of them.

I appreciate that the Social Charter is something different from the chapter. It is referred to only in a matter of general intent at the beginning of the protocol. But were we to accept, for example, Article 10 of the charter—that everybody shall be entitled to an adequate level of social security benefit—we would not have what we have now with 16 and 17 year-olds—a denial of all benefit, which may render some of them unemployable for life. In the present demographic situation young people are a scarce resource. It is not good economic policy to squander them.

If we talk of total costs—and competitiveness must be a matter of total costs—then we must think of other costs which are being placed on business. The noble Lord, Lord Aldington, if I have the phrase right, objected to "any addition" to the costs on business. I believe that that is the correct phrase. I beg the noble Lord's pardon if I have it wrong. But certainly we have an argument in which the Government are relying simply on the concern of business costs.

I shall take that a lot more seriously when they abolish the uniform business rate; when they repeal the Statutory Sick Pay Act; when they stop asking business to pay for London orchestras; when they stop asking business to pay for university research; and when they stop asking business to pay for the Jubilee Line. Those are not necessarily businesses' business. But the costs of labour properly are. And when they do their sums I hope that they will abandon the old Treasury practice of counting only the expense and not the extra revenue which may be generated by getting people into employment. If they do that, they will find that the costs of the social chapter look extremely different from the way they looked yesterday to Mr. Forsyth.

I shall touch only on one other point—the political situation. In relation to this Bill we have a hung Parliament. Although there is a massive majority for the treaty in both Houses, there is not down the road a majority drawn from a single party. In that situation one needs to think about the possibility of partnership politics. However much one believes in a specific measure, it is difficult for any opposition party to sustain in office the most unpopular government within living memory. We try to do what we believe in, but it seems reasonable that, if that is to be done, there should also be some adjustment; there should be something in return for that support.

As the Government need the support of the official Opposition, they should consider that there are only two things that they can give them which are big enough to bring in the support that they need, and which they may need yet again should court action prove successful. One of those is a general election. I do not believe that the Government want that. The other is the social chapter; they may find it cheap at the price.

6.18 p.m.

Lord Elton

My Lords, I rise briefly to remind your Lordships, following my noble friend Lord Carr of Hadley, that noble Lords who support the amendment and who sit opposite are not the only people with social consciences and that their final objectives differ little from ours. However, we differ on the means of attaining them.

They broadly see the function of government being to run a programme of social development within which the economic machine has to generate the cash to pay for it, and they apply that model to the European Community. We see the function of government being to run a programme for economic development generating the resources necessary for whatever social development we desire and can afford; and that is how we see the Common Market.

Hence, the instinct of noble Lords opposite is to back the social chapter and they must then advertise its attractions by praising its products. That the noble Lord, Lord Richard, proceeded to do with a string of statistics chosen with not a little skill, as my noble friend Lord Reay brought out a moment ago. I should like to add a few comments to what he said.

There was no mention of the 18 million unemployed in the rest of Europe; nor was there any mention of the fact that only Denmark and Luxembourg had a higher proportion of their population in work. As regards working hours, he did not tell your Lordships that the United Kingdom had the broadest range of working hours in the Community. Fifteen per cent. work more than 48 hours per week, but 20 per cent. work less than 30 hours per week. That reflects the choice of individual workers made in conjunction with their employers. It is not for Brussels or other member states, using majority voting (as they would do under Article 2.1), to tell British workers how long they should work. Nor did the noble Lord mention that 21 per cent. of the British workforce were in part-time work. That figure is well above the European average. As I understand it, only 6 per cent. of those who work part-time do so because they cannot find full-time jobs.

The noble Lord proceeded to run down our social achievements without mentioning that we alone with Denmark provided comprehensive medical services for all residents irrespective of their means of paying for them. In addition, the United Kingdom's record on health and safety is second to none.

That brings me to the question of the agreement on social policy itself. However, before looking at it I ask your Lordships not to judge it on the sales pitch of the noble Lord the Leader of the Opposition, or to be reassured by the noble Lord, Lord Diamond—supported with some vigour by the noble Lord, Lord Wedderburn—who said that everything important in the social chapter was regulated by majority decision. The noble Lord, Lord Wedderburn, shakes his head, and I happily absolve him of the charge. I concentrate upon his colleague. Article 1 defines the area of application: The Community and the Member States shall have as their objectives the promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour. the development of human resources with a view to lasting high employment and the combatting of exclusion". Article 2, which precedes the paragraph referred to by the noble Lord, Lord Barnett, lists the items to be dealt with by qualified majority. The first one is irrelevant as it is already covered by the treaty: health and safety. It is a matter on which we already have a very good record. The second is working conditions. That is a vast area for interference. The next matter is the information and consultation of workers. I do not accept that the Greeks or Portuguese have anything to teach us about that. The next matter concerns equality between men and women with regard to labour market opportunities and treatment at work. The final and most surprising item is the integration of persons excluded from the labour market; that is, the unemployed. That represents a huge area of possible interference by a body which is not thought by many of your Lordships to be best qualified to deal with it. Conditions vary from country to country. For example, consider when the Spanish have their dinner and then suggest that they can advise us on how we should arrange our working conditions.

If the application of the agreement is as narrow as some noble Lords have suggested—in that respect I believe that I heard the noble Lord, Lord Wedderburn, correctly—your Lordships may think that it is a matter of very little importance whether or not we sign up for it. If it is as wide as I believe it to be, it is a matter of considerable importance.

We come back to the question of what we believe the Common Market is for. We believe that what is needed is a single market surrounded by the machinery necessary to make it work and to keep it stable and secure. That is the essential core. That is needed as a means of achieving a healthy economy able to generate the wealth that we need to improve our lot. When I say "our lot", I mean the lot of all the citizens of this country, not some elitist stratum that occasionally Members of the Party opposite seek to impute to us.

We have the priorities right. We share the ambitions of noble Lords opposite for the improvement of this country but, unlike them, we have some prospect of achieving it. It is because the social chapter is symptomatic of their approach—that we must first decide what we want, then buy it and find the money —that these amendments are irrelevant and should be brushed aside. We should vote for my noble friend's Motion as it stands on the Order Paper.

6.25 p.m.

Lord Eatwell

My Lords, I submit that the measures described in the social protocol are themselves innocuous. Nobody can seriously believe in the hyperbole which characterises the social protocol as a threat to British and European industry. As I have argued in earlier debates, the costs which are imposed upon European industry by the knock-on effects on wages of the high food prices of the common agricultural policy are far greater than the wildest nightmares of the Benches opposite about the social protocol. Similarly, no one can seriously suggest that incorporating the social protocol into British law will transform the employment conditions of British workers for the better. The impact of the social protocol on workers' rights is minimal compared, for example, with the Government's own health and safety or wrongful dismissal legislation.

What is all the fuss about? Why have the Government gone out of their way to antagonise their European partners, prolong the already lengthy debate on Maastricht and court the risk of political defeat for such minor measures? One plausible explanation may simply be gross political incompetence on the part of the Government. That is not an issue upon which I wish to speculate. I believe that there is a more fundamental and deeply-felt reason for the difference of opinion that we hear today.

The social protocol, innocuous though it undoubtedly is, is a touchstone for profound differences in both the formation and implementation of economic policy. It defines the dividing line between those on the Government Benches who regard labour as a cost and those on these Benches who regard it as a resource. The essence of the social protocol, and the intellectual thread that runs through these otherwise insignificant measures, divides those on the Government Benches who regard any increase in social expenditures or the rights of workers to be additional expenses, which in the interests of competitiveness must be minimised, from those on these Benches who see a proper extension of workers' rights and social expenditures as investments in the long-term quality of the labour force—investments which in this country have been dangerously neglected. That is the crucial divide in this debate. Unlike the social protocol, which in itself will have only minor effect one way or the other, the difference in approach is the key to our entire economic future, permeating as it does all economic policy-making.

The protocol comes down firmly on the side of those who consider labour to be a resource. That is evident from Article 1: The Community and the Member States shall have as their objectives… the development of human resources with a view to lasting high employment… It is also evident from Article 2 which lists the fields to which the protocol is addressed. Those have recently been listed by the noble Lord, Lord Elton: the improvement of the working environment and working conditions; information and consultation; equality between men and women; and the integration of persons excluded from the labour force. That latter point refers to the disabled and those who do not have the facilities to compete in the labour force under current circumstances, not the unemployed.

All of those areas point to the need to invest in the quality and use of labour as a resource. It is that investment, geared to building the long-term efficiency of the labour force, which is the key to competitiveness. I take one example from the list: equality between men and women. In the cause of cost-cutting the Conservative Party has consistently opposed every measure brought before Parliament to achieve equal rights for women and equal pay for equal work. The result has been a continuing waste of the skills and talents of women in this country, diminishing the efficiency of the British economy.

The same is true of "information and consultation of workers", another item from the social protocol list. While the party opposite chants a familiar mantra of preserving the manager's right to manage, it fails to notice that modern management practice has moved on. Efficient management now recognises that consultation and information are part of any apparatus of efficiency. The same is true with respect to working conditions and health and safety. Today enlightened management clearly recognises those facts. It knows that investing in the labour force is the only way to a competitive future. But it is faced by a Government and by its own organisation, the CBI, declaring that these are not matters for legislation; they should be left to the individual firm—points echoed today by the noble Baroness, Lady O'Cathain, and the noble Lord, Lord Aldington.

The CBI makes that point in the parliamentary brief which it distributed to noble Lords prior to the debate. The CBI brief states: As a general principle, the closer the setting of employment conditions to those directly affected, the more likely they are to suit individual tastes and traditions". Maybe they will fit individual tastes and traditions, but that is hardly the point. Individual tastes and traditions will not be much good in the competitive struggle against Korea and Taiwan. The question is whether the setting of employment conditions at the level of the firm is the most efficient.

Consider, my Lords, the crucial component in the development of labour as a resource—investment in skills and training. Everyone knows that the British economy suffers badly from having an undertrained, underskilled labour force. Yet in current circumstances, in which training is determined by individual employer's tastes and traditions, it is in the interests of each individual employer to cut the costs of training and poach trained workers from other companies. The result is that the rational decision of each individual employer to minimise his or her costs leads to an irrational, inefficient decision for the economy as a whole with a diminished expenditure on training.

Exactly the same is true with respect to the development of women's employment rights. The issue of equal pay is not just about fairness; it is also about investment in women's skills and the development of women as a vital resource in the economy. Yet those firms which neglect to invest in women workers can cut costs by exploiting the pool of skilled women created by their competitors. Once again the rational decision for the individual employer produces an irrational result for the economy as a whole. The same case can be made for all the measures covered by the social protocol—for getting the disabled back into the labour force, for health and safety, for information and so on. The reason that the same case can be made is that in all circumstances the protocol is about the development of labour as a resource and the fact that in so many cases this will be done efficiently, enhancing the profitability of the whole, if there is a collective responsibility on all employers to share in the investment.

Moreover, the blinkered view of the Government and the CBI systematically reduces the flexibility of the labour force. If workers' rights and working conditions are kept at the level of the individual company, then workers will be locked into individual companies, not efficiently allocated in the economy as a whole. Take, for example, the provision of workplace nurseries provided by the individual co:mpany rather than nursery places available to all. In that case women will be reluctant to leave employers providing nurseries even though their skills might be more efficiently used elsewhere. Defining rights and conditions at the social level rather than at the level of the firm increases market flexibility and the efficient allocation of resources as well as raising the quality of the labour force.

In an era in which capital is internationally mobile, in which technology knows no borders and in which markets are global, labour, and the skills of labour, are the ultimate resource. That is why the view of the Government, who treat labour as a cost and seek to leave the responsibility of investment in labour to the narrow calculation of each individual firm, is so profoundly mistaken. This "labour as cost" obsession, which defines the Government's opposition to the social protocol, has unfortunately gained wider credence during the current recession.

Not just in Britain but all around Europe—indeed, throughout the OECD—governments are reacting to falling revenues and rising expenditures created by the recession by seeking to roll back the gains in workers' rights and protections as well as by cutting welfare expenditures. This reaction to the world-wide recession—cutting expenditure, reducing working conditions, cutting training and other investments in the labour force—is almost exactly the reverse of what is required. The OECD as a whole needs a reflationary strategy to attack the waste of what we were told on Tuesday by the OECD will be 36 million unemployed in the advanced countries. Europe as a whole even more desperately needs a co-ordinated fiscal expansion to attack the dreadful waste of 17 to 18 million unemployed in the Community. Instead we see everywhere policies reminiscent of the 1920s and 1930s, when successive expenditure cuts, successive wage cuts and successive cuts in working conditions saw the economies of the West spiral downwards towards disaster. Nothing undermines more destructively the ability to engineer a general recovery programme than one major country opting out., seeking to be a free rider on the rest cif Europe. That is what Britain is doing in opting out of the social protocol.

Indeed government Ministers have boasted—the Lord Privy Seal boasted today—that we in Britain, by lowering the conditions of work and by refusing to invest in our labour force, will attract investment away from our European neighbours, will steal jobs from them. So instead of fostering a co-ordinated European strategy, the British Government are actively sabotaging the very foundations of co-ordinated recovery. By pursuing their own small-minded, short-term local rationality they encourage an irrational result for the Community as a whole. This Government seem to be content to secure a larger part of a shrinking cake rather than fostering the co-operation which would secure an equal part of a growing cake.

Europe as a whole needs to develop its most important, indeed its only, unique resource—the quality and skills of its labour force. Investing in that labour force—securing the commitment and confidence of the labour force—is not an expense: it is an investment in our future. 'We will never compete with the technical sophistication of the new economic powers of the Far East if we continue to treat labour as a cost and not as a resource.

6.37 p.m.

Lord Hacking

My Lords, I am very grateful to the noble Lord the Leader of the Opposition for being in his place as I stand to address the House. lit enables me to make a small personal statement. I am an admirer of the noble Lord, Lord Richard! This has been going on for a very long time—nearly 30 years now. It started in an agriculture hall in Aylesbury in January 1964. I should in a small digression explain that the agricultural hall in Aylesbury in January 1964 had been chosen as a suitable place for the Great Train Robbery trial. I was so young that I was only a bag carrier at that trial but the noble Lord, Lord Richard. had a more significant role.

The trial had been going for only a few days when that role became even more significant because the noble Lord, Lord Richard, lost his leader, which is a kind of occupational hazard for junior members of the: Bar. In the loss of his leader the noble Lord had to address the trial judge, Mr. Justice Edmund Davies, on an exceedingly difficult point of law. I remember to this day the eloquence of his argument in January 1964. I have witnessed the eloquence of the noble Lord's argument on many occasions since then, right up to today's debate. However, my experience with the noble Lord, Lord Richard, is that one has to go rather deeper into the eloquent argument that he presents to us.

Very broadly speaking, the noble Lord, Lord Richard, has invited us to sail our ship of state over the gentle waves of the social protocol on the argument that it is well chartered water. The noble Lord argues that the "Social Policy" in Title III of the Treaty of Rome and in the subsequent provisions, included by the Single European Act in Articles 118a and 118b, have been with us for some time. He argues that there is nothing new and nothing to be afraid of.

It is necessary to look a little deeper into those waters because beneath the surface there are rocks which I venture to think the noble Lord, Lord Richard, is aware of. I do not have any difficulty in approaching the drafting of EC lawmaking in the conceptual manner in which it is drafted. Indeed, I find it helpful to see broad, simple statements of policy. I shall not illustrate my argument again with one of the Ten Commandments lest I choose the wrong Commandment. But having established what I believe to be the helpful approach of simple propositions of broad policy, it is necessary to look at the application of those policies. If we do not like them it is then for us to stand up against them.

One of the areas of Community competence set out in Article 118 of the treaty is that over "working conditions". The noble Lord, Lord Richard, argues that everybody should agree that there should be Community harmonisation over such a "basic right". But as my noble friend said in our last debate on the social chapter, these measures go further than the welfare of the worker. They go to such things as working patterns, minimum paid annual leave, parental leave and special leave. They are matters which should be dealt with but not at Community level.

It is important to identify exactly where the rocks are. The best example that I can bring to your Lordships' attention is the posted workers' directive. Interestingly, the legal base for that directive was not under Articles 117 to 122 which are the social provision Articles in the treaty, but Articles 57.2 and 66. Therefore, they come under the chapter in the Treaty of Rome dealing with the free movement of workers and, more precisely, under the article concerned with the rights of self-employed workers.

There was good reason why the treaty base for the posted workers' directive was not under the social provisions. It was because they would have given no competence to that directive. They would have given no competence to the directive because it went into such matters as pay. That would also be the case under the social protocol because matters of pay fall outside the Community competence and of the social protocol as well.

Perhaps I may explain that the directive on posted workers which noble Lords did put under scrutiny was directed to the protection of workers who are nationals of one member state but move into another member state to work. If noble Lords were to look at Article 3 of the posted workers' directive they would see that Community competence is being created for maximum daily and weekly hours of work, rest periods, work on Sunday, night work, minimum paid holidays, minimum rates of pay, including overtime rates and allowances, but excluding benefits provided for by private occupational schemes.

While it did not have a treaty base under the social provisions, it is a directive which goes right to the heart of the social policy of the Community. In our Select Committee report we said that there were, serious objections to classifying matters such as maximum daily and weekly hours of work, work on Sundays, paid holidays and rates of pay as mandatory rules which must be applied to a posted workforce regardless of their agreement to the terms of a contract and regardless of the proper law of the employment contract". That was the conclusion which we set out in our report. I remember we were also concerned—and certainly stated in the debate which my noble friend Lady Elles introduced on our report—that the directive was also anti-employment. It is because of that that I believe Her Majesty's Government are absolutely right to be concerned. As my noble friend Lord Reay has rightly said, social legislation in Europe is pricing people out of work. Therefore, I believe that Her Majesty's Government's stand is correct. At this stage we should resist the social provisions as contained in the Maastricht Treaty. That is not to say that we are against social policies. In the fullness of time I can see us adopting them, but not now.

Lord Wedderburn of Charlton

My Lords, before the noble Lord sits down, did I hear him say—and if so, I am sure he said it correctly—that the matters to which he adverted relating to pay, Sunday pay and so forth, would not of course fall within the qualified majority provisions of the social chapter agreement and therefore are irrelevant as regards the discussion on that particular document?

Lord Hacking

My Lords, I did say that the directive had not been brought in under the social provisions because of the complication over pay. I illustrated that in my comments to your Lordships' House. But I also said that it went right to the heart of the social policy of the Community.

6.45 p.m.

Baroness Castle of Blackburn

The whole House should be grateful to my noble friend Lord Wedderburn for his masterly analysis of what the social protocol is about. The country has been bewildered by the Government's mounting hysteria. The persistence with which they have manufactured a non-crisis is unparalleled in my long political experience. The phraseology has become more and more extreme. The Prime Minister told us that the document is a charter for unemployment. David Hunt, the Secretary of State for Employment, said on Radio 4 today that it would destroy jobs, as though there were a great many crazed fanatics in Europe going about slashing jobs.

The situation has been very hard to grasp. One of the Government's latest excitements and excesses was the Prime Minister's declaration that the social protocol would take us back 20 years. My heavens, I wish it would. No doubt he was referring to the Wilson and Callaghan governments. In some of the Cabinet's secret sessions it must go down on its knees and say, "Dear Lord, give us merely 1.3 million unemployed", which was the figure when we left office in 1979.

What would this Government say if they could produce a public sector borrowing requirement of £8.5 billion? They would say, "That is the great success of our anti-social charter policy". The Government are floundering under a public sector borrowing requirement of £50 billion.

Let us consider the balance of payments. It was in surplus by £1 billion in our last year in office before these great monetarists took over. Now there is a deficit to the tune of £4 billion. I cannot wait for the day when this Government chortle to us about the success they have achieved when they have got perhaps one-tenth of the way back to the position of strength in which we left the country. I find it astonishing that the Prime Minister should dare to say that the social protocol is a charter for unemployment. Who is he to talk, for heaven's sake? He and his predecessor resolulely turned their backs on any social charter for the past 14 years. Can anybody say that their success in dealing with unemployment has been blindingly obvious?

Let us get our feet on the ground. Let us try to grasp in this House this afternoon just what we shall be judged by when the vote takes place. I make no apologies for reading from the social protocol again because it is obvious that a large number of Members opposite have either not read it or are a little slow in catching up with this new test. Article 1 states: The Community and the Member States shall have as their objectives the promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combatting of exclusion. To this end the Community and the Member States shall implement measures which take account of the diverse forms of national practices, in particular in the field of contractual relations, and the need to maintain the competitiveness of the Community economy". Lord Carr said that we needed some flexibility. This protocol exudes flexibility. I think that it was Lord Aldington who said—I do not think that any honourable Member opposite dare say for a moment that there is anything wrong with the aims of the protocol. They say, "That is not our case". The aims are very reputable and nobody could disagree with any of them, although somebody did try to say that they did not want a dialogue between management and workers, but then there are some Conservative Members who would stop at absolutely nothing.

The Government have said, "We want to do it ourselves". It would be very nice if they did. Perhaps one of the speakers from the other side who is to follow me will give us a detailed list of what progress towards these aims has been made during the past 14 years. After all, the Government have had untold bonuses that we never had when we were in government. They have had billions and billions of pounds from North Sea oil, to say nothing of the yield from selling the family silver, with which process they are still bailing themselves out.

It does not happen under Conservative governments. but as far as governments are concerned, we say this, "Yes, we are conscious of the need to remain competitive". That is why I, who, as I think some of you know, have had my criticisms of the European' Community, jump at the Social Charter. It is the sort of thing that it ought be giving us—because what could be more to our benefit than to have all our 11 major competitors toeing the same line? Do not forget: we are constantly reminded how much of our trade is now with Europe. I believe that the figure is 60 per cent., explaining why we are tied so deeply in to Europe. Okay, if it is so important to our trade, it is vitally important that, if we in this country want to have social standards such as I quoted from Article 1, we should take the rest of the Community with us. Be thankful that they want to tie their own hands—if tying their hands it is—in the same way.

However, that does not strike a chord at all with honourable Members opposite. They say, "Look at the small print. We don't want to be dictated to by Brussels. We don't want to have these things imposed on us by Brussels". By using that word "Brussels", they are very good at using subliminal propaganda: "Brussels" means "bureaucracy". I shall tell you who will implement Article 1: the Council of Ministers—12 member states.

As Lord Wedderburn brilliantly pointed out to us, there is no great incursion of qualified majority under the social protocol. It is a list. It is no good hinting that there might be this directive or that directive. We are being asked to sign this document, not something in the fevered imaginations of Members opposite. As Lord Wedderburn told us, the number of items which will be covered by qualified majority is very modest. I shall not read them out again because you can reread his speech, and you will be much. the wiser at the end of it.

What I want to point out to you is this: even taking the items covered by "qualified majority", what does it mean? The "qualified majority" means a two-thirds majority out of 74 votes because the votes of all the member states are weighted according to their size. So we have to have 56 votes out of 74. Britain is one of the big boys; we have 10 votes. If we object to something, all that we have to do is to get 13 more votes on our side, and it is not carried. I have heard a lot tonight about how Germany is straining at the leash and about how President Kohl wants to break loose from all the restrictions and social minutiae. Here is his opportunity. He has 10 votes. Give us Britain and Germany and throw in Denmark, and the qualified majority is bust. Of course, the major part comes under the rule still of unanimity or does not appear at all.

While listening to the debate, I have been thinking back to my own period as Minister of Employment when I introduced equal pay. There would have been no equal pay if honourable Gentlemen opposite had pursued the arguments that noble Lords have used today. Indeed, some people produced such arguments then. I must be fair to the noble Lord, Lord Carr. He did not do that when he was shadowing. They did not dare to do that because women are the majority of voters, are we not? I noted in my diary in September 1969 when I was preparing the legislation: have a meeting with CBI on equal pay. They came in breathing fire and slaughter. I was told that equal pay would ruin Britain. I was told, "Think of the number of firms with women workers. We won't be competitive". With that criterion one can stop every bit of social progress in its wake because it is built on a great piece of monetarist mythology.

This debate is not really about the kind of Europe that we shall have but about the kind of Britain that we shall have. Are we going to be dominated by "Bangkok Hilton" politics, in which the monetarist masters will deal savagely with any attempt to smuggle in a few social modifications to the market economy? That is really the issue. The British people know instinctively that this is a test.

In conclusion, I must say this: I was in the House of Commons for 34 years and on the Front Bench for eight of them. I have seen a remarkable sea change in British conservatism. Until 1979 you could have a dialogue with the political enemy. You could talk in a civilised way. You had values, and social ones. But since the reign of monetarism the Conservative Party is unrecognisable. Even people like the noble Lord, Lord Carr, whom I remember as a humane and—for a Tory—progressive Minister of Labour, are here defending an attack on the Social Charter. What has become of you all? It is frightening. It frightens me. It frightens the country. I hope that if we cannot convert any Members opposite, at least the message will go out to the country as to what the battle now raging between the two sides is all about.

7 p.m.

Lord Gray

My Lords, last week I was able to agree with every word of the speech of the noble Baroness, Lady Castle of Blackburn. I fear that that is not repeated today. I have always been open about my dislike of the EEC, and these past weeks have made clear my opposition to the Maastricht extension of the Community and the European Union, but today I must address the Motion.

The nations which make up the Community have developed their social policies along differing lines. The social chapter can only put back the clock in the United Kingdom by virtue of upheaval, if for no other reason, with knock-on effects for commerce and employment that will damage the competitiveness of business and destroy jobs. The horrific potential costs alone will do that.

The more I consider the matter, the more I feel that subsidiarity should apply, even if we adopt broad principles new to us. The emotional appeal appears to blind opposition parties to the reality that the imposition of social European provisions on our commerce and industry can eventually only harm those whom they claim to champion—sand from whom they will get no thanks when reality unfolds and the straitjacket of bureaucratic institutionalism is imposed on us.

I note that Chancellor Kohl has already announced what looks like an intention to breach the social chapter by calling on his countrymen to work additional hours for nothing. Might one be tempted to anticipate that it will be more breached than observed and fall into disrepute? In-trays laden with costly and frequently futile EEC regulations are an irksome fact of commercial life. My right honourable friend the Prime Minister has, I read, declared war upon red tape, but not even he can staunch the flood from Brussels when the Government are no longer master in their own house. Like parasitic ivy, the EEC's tendrils have invaded the nooks and crannies of our national and commercial life. Fortified with social chapter regulations, with a dose of Maastricht fertiliser and a good dollop of Euro-manure in 1996, it will threaten to destabilise our democratic way of doing things and cost us dear.

As a Maastricht opponent, and contemplating how I should vote today, I had a conversation with myself and isolated some notions. The first was why bother with the opt-out if you are to swallow the Union? If you are selling your birthright for a mess of potage, it is pointless saying, "No turnips, please". It will not detract from the finality of the bargain, but it may save a little indigestion.

The second thought went the other way. It said, Maastricht is bad enough, so why be masochistic and pile on social chapter agony? The third said, it is misguided to think that embracing the social chapter makes us better Europeans when thereafter we shall be forced to resist implementation of detailed provisions. I make that two to one against the social chapter.

I referred just now to the quality of Europeanism. That we have arrived at our present situation is sad. On Third Reading of the European Communities Bill, my noble and learned friend Lord Hailsham said: Nothing could be worse for this country than to pass into the Community half-heartedly, churlishly or supiciously". —[Official Report, 20/9/72; col. 1268.] My noble and learned friend's advice could be appropriately applied to the Union and the new EC. No one could deny that there is half-heartedness and suspicion abroad in the land, and, unfortunately, the social chapter opt-out leaves the Government's position open to question in the eyes of some, even if that is unfair.

Unless the Cabinet can find the courage to call for an early return to the European drawing board, I fear that we shall have bad times and soured Community relationships ahead due largely to problems over social Europe. Opposed as I am to Maastricht, I am not one to stand on my head. I must therefore abstain or support the Government. I have convinced myself that I shall do the latter tonight.

7.7 p.m.

Lord Beloff

My Lords, I find it difficult to understand how those who voted in favour of the Third Reading of the Europeans Communities (Amendment) Bill can now express anxiety about the social chapter. Their position, logically, should enable them to embrace the rule of Brussels on whatever aspect of our national life it descends. It is, after all, difficult to disentangle social provision from many other aspects, as indeed the noble Lords, Lord McCarthy and Lord Wedderburn, illustrated. My own feeling, for what it is worth, is not so much that noble Lords on this side of the House have got themselves into a tangle—they got themselves into a tangle when the Government first decided to bring forward the Bill—it is rather that they must recognise, as we must all recognise, that the opt-out upon which they rely heavily is a fiction.

I say that for two reasons. One of them was made evident in the speech of the noble Lord, Lord Howell, who pointed out that, opt-out or not, there would be appeals to the European Court if we did not go along with the measures that might flow for the other eleven from the social chapter. His view was that the European Court would probably take that view. Knowing what we do about the European Court as an instrument of integration, he is almost certainly right. So, what we are doing in the opt-out may assist in domestic politics, but it is not likely, for long, to impede the imposition of the measures which so many noble Lords on this side of the House assure us are bad for British business.

The second reason, which has already been illustrated, is that many of the issues to which the Government would object will, if not introduced under the Social Charter, be introduced under other articles in the Treaty of Rome and the treaty as now amended. In an earlier debate I raised the attempted introduction under health and safety provisions of limitations on the hours of work. Noble Lords who were in the Chamber when the Minister replied, or those who have read Hansard, will already know the Government's reply. It was, first, that we had argued our way into a less undesirable measure than the original directive. My reply to that would be that if one directive had been introduced and watered down by British opposition there would be no reason to believe that another directive closer to the desires of other members of the Community would not in due course be introduced.

The second argument put forward by the Government was that, subsequent to the agreement on the directive, we had taken the case to the European Court. For the reason I have already given, that seems to be a very weak defence of our position because, once again, the European Court is unlikely to find favour of something which limits the capacity of the Community to legislate.

The Government will face problems of that kind. I do not believe that anyone who has read any of the recent speeches of Continental statesmen or commissioners can doubt that we shall face attempts to implement such regulations. My view is that if they come before a meeting of Ministers under an article which is clearly remote from the substance—if under the umbrella of health and safety they try to regulate on issues which like working hours have nothing to do with that—the proper procedure for Her Majesty's Ministers would be to walk out of the meeting. They should say, "We cannot discuss something which is on the face of it illegal". The policy of the empty chair served General de Gaulle very well and at some point it might serve us very well.

Perhaps that answers the question which has been puzzling me throughout the debate. Why did the other 11 agree to the opt-out? It has been suggested that it was the result of a complicated bargain into which other aspects of Community policy entered. Until we have open government which goes well beyond the recent White Paper we shall never know whether that is true. However, we cart now say that the other 11 countries did not much mind because, for the reasons that I have given, they knew that they would get their way in the end and so the British could he allowed to have their moment of triumph. It is not a pretty picture, but noble Lords who supported Maastricht must not expect pretty pictures.

7.14 p.m.

Lord Butterfield

My Lords, I rise conscious of the fact that we have heard from the noble Baroness, Lady Castle of Blackburn, a remarkable presentation of her and her party's case in favour of the retention of the social chapter in the Maastricht Treaty. As a not very political person I am a little fearful in saying that I believe that we should resist the social chapter. I am also conscious of the fact that I have had many conversations with the noble Lord, Lord Beloff, and I am a great admirer of all that he says. However, I am not at one with him either.

I shall be brief in explaining my reasons because time is running on and dinner is passing. Over the years I have had many long conversations with young people from Europe. I am thinking in particular of young people from five countries in the Community who have been in my house. It has been clear to me that on the whole they are full of admiration for the development of social policy in this country. It has run through the 19th century, to Lloyd George, to the Master of University College, Oxford, Lord Beveridge, and all the developments which came from the social legislation of the Labour Party after the war. It was made clear to me by them that our social policy has been much more flexible, empirical and understanding of the individual than that which existed in their own countries. They were fearful of the legislation which applied to them as young people and felt that it was rigid and awesome. Perhaps that was as a result of the civil servants who executed it. I do not: know.

I start with the belief that among younger people the arrangements embodied in the social chapter, which have been so exemplified by the noble Baroness, Lady Castle, and others, are not completely acceptable to the people in other countries who will have to live with them. I speak from experience of my sample of young people, which does not mean to say that it is as complete or as compelling as the statistics, from the OECD.

Furthermore, a problem is that the social chapter is likely to impinge on the people whom I have always wanted to protect the most; that is, those who are concerned with the pursuit of excellence. I find that those people are most uncomfortable when they are involved with regulations such as those which arise under the social chapter. One of the great sovereign rights of our people is the opportunity to pursue excellence and, if the need arises, to develop new inventions. I do not believe that the people in the small firms with which I have been involved are greatly moved by regulations which reflect time and motion study and so forth. We must try to allow intuitive and inventive people to be as free as possible.

I grew up in Birmingham near the motorcycle industry. I am sorry that the Government Chief Whip, who has an interest in motorcycles, is not in the Chamber to share some of my experiences. I considered that the smaller companies with which I was involved could do without impedances to their inventiveness. I know of a small company in Stechford, the area of Birmingham from which I took my name, in which about 100 people developed motorcycles—thus my anxiety to speak to the Chief Whip. It won races in the Isle of Man and won Grands Prix in general and was carried along with the terrific morale of competing in international contests. I felt then, as I feel now, that we must be terribly careful to leave those people free to develop competitively. In fact, that particular motorcycle had a two-stroke engine. The main problem which the company had to combat was the overheating of the engines during races. Who would have thought—I certainly would not have thought—that that ability to avoid overheating would mean that that little engine could be used in the portable generators which our forces used all over the world during the various campaigns which we conducted in World War II? That was so because those engines could continue to purr away all night without seizing up.

Your Lordships may ask whether that is relevant to the social chapter. I feel that it is because I want people who invent such things to be given a free rein and not feel that factories and industries are in any way impeded by European developments.

The Engineering Employers Federation has been telling us for some time that our manufacturing base—our small and large factories—has been shrinking. I have no doubt that that is associated with the recession which we have experienced. However, one of the things that I felt was good about the Prime Minister's drive to try to delay the acceptance of the social chapter is that it left us much freer with our employment regulations so that our small industrial base would be better able to seize the opportunities for selling its products when the recession is over and we are facing the rest of the world's competition, in particular that of the Pacific rim. There are fewer places of work but there is an opportunity to employ people vigorously in those different small and large factories.

I am not sure that the individual points which I have made are likely to carry your Lordships. I merely give them to the House to explain why, under the circumstances this evening, I feel that I must support the Government's intentions.

7.22 p.m.

Baroness Elles

My Lords, I am sure that many noble Lords, particularly those on this side of the House, will have great sympathy for what the noble Lord, Lord Butterfield, said. We note with great pleasure some of his observations.

I should like to make a brief comment on the amendment tabled by the noble Lord, Lord Houghton of Sowerby. I see that the noble Lord, Lord Boston of Faversham, is in his place but I do not see his name on the list of speakers. Therefore, as a modest Member of the Select Committee dealing with the European Community's affairs which is chaired so ably by the noble Lord, Lord Boston, perhaps I may say to the noble Lord, Lord Houghton, that we have already published one report on social policy after Maastricht. I am quite certain that the Select Committee will continue to look at social policy issues when the Commission issues its Green Paper later this year. Therefore, like many other noble Lords, although I support the amendment in the name of the noble Lord, Lord Houghton, in principle, I believe that it is unnecessary because part of it has already been implemented and, as I understand it, the rest will be implemented later.

I am sorry that the noble Lord, Lord Richard, is not in his place because I see that on the sixth day of our Committee deliberations, on 30th June at col. 887 of the Official Report, he read through a whole lot of issues which are tabled in the social policy agreement and said repeatedly, "I think we agree that". One of those issues concerned dialogue between management and labour.

Those of us who happened to be in the European Parliament in the early 1980s, when the noble Lord, Lord Richard, was an extremely distinguished commissioner appointed by the United Kingdom Government, will recall that we were dealing with a draft directive under the name of the Vredeling. That dealt with co-determination, worker participation and consultation between workers and management. Although many people do not think much of the European Parliament, I can say with the greatest satisfaction that that particular directive was totally decimated by the European Parliament as being quite unacceptable to any of the member states within the Community.

Consequently, when one sees those headings repeated in the agreement on social policy, all the dread returns at the thought of having to deal with the kind of directive with which we had to deal with for at least a year in the European Parliament with the co-operation of the many parties within the parliament.

It is nothing to do with not having co-operation between management and labour. Recent studies undertaken in the Thames Valley area have proved that one of the essentials of success for small businesses is total co-operation between management and labour. In fact, there is a kind of blending of the two so that it is very difficult to tell, quite properly, which is the manager and which is the labour force because they work together with a common purpose. That has been shown to be successful.

I believe that that is why so many small businesses in the Thames Valley area have survived the recession and have established a strength in order to take up and benefit from the opportunities which will now accrue as we come out of the recession. One of the ways in which that can be proved is that the unemployment rate for Berkshire, in the Thames Valley area, is well below the national average. It has been up to 7.8 per cent., which is well below the national average, and is now declining to 7.4 per cent. That shows that the small businesses in that area have made a great contribution towards trying to keep unemployment low. As I say, the studies of best practice in those small companies show that one of the main reasons for that success and ongoing business has been that question of communication. Therefore, we do not need legislation or anything from Brussels in that regard.

I must say in passing that it was a remarkable and, indeed, histrionic speech by the noble Baroness, Lady Castle. I am sorry that she is not in her seat. That brought back many memories for me of the time when Brussels and qualified majority voting were not among her favourite subjects. Therefore, it is a great pleasure to hear her in the House of Lords speaking in favour of Brussels and qualified majority voting.

On this side of the House—and my noble friend Lord Carr of Hadley expressed it so well—we believe that there is a social dimension. You cannot divorce economic policy or any other policy from a social dimension because everything depends on people. If your Lordships look at the lists which have been published, over and over again the United Kingdom has one of the best records in implementing health and safety regulations and directives and all the 18 directives concerned with social issues which have been recently published. We have as good a record as France or Germany and a considerably better record than any of the other member states.

I regret the rather negative approach which noble Lords opposite have had to some of the statistics concerning our social security benefits. I ask your Lordships why it is that so many people are coming to this country from the Continent precisely in order to benefit from our social security measures. Those people are greeted at the airport with brochures in many languages which tell them how to obtain housing benefit, national health services, unemployment and invalidity benefit—all the benefits which are given quite properly to the people of the United Kingdom. If those benefits are so poor, why do so many people come to this country and not stay in their own countries?

Similarly, there has been a slight neglect of the fact that this country is the one country—and this is recognised in all the European Community reports—which is coming out of the recession. We have the lowest rate of inflation except for Denmark. We have the highest decrease in unemployment figures of any of the Community countries. We should recognise that this country is well on the way to recovery while, regrettably, other countries in the Community are going clown. Indeed, if we have such appalling statistics, why is it that other countries are investing more in the United Kingdom than any other country of the Community? it is not just that we are benefiting at the expense of other member states. I believe that it should he pointed out—I do not think that any other speaker has done so—that the UK is the highest investor in other member states throughout the Community. We invest more in outward investment than any other member state both within and outside the European Community. I give way to the noble Lord, Lord McIntosh.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Baroness for giving way. If the agreement is so wicked, does she not think it curious that we should be so keen to invest in countries which do accept the Agreement on Social Policy?

Baroness Elles

Absolutely, my Lords; the social policy has not yet come into effect. Noble Lords would no doubt be very surprised if any of the measures that are listed in the social policy agreement ever come into effect. If one reads the reports coming out of Brussels, even M. Delors (who I know some people consider a bogyman, but for whom I must say I have a personal affection and regard having known him for so long in the European Parliament) is himself doubting whether some of the issues contained in the social policy agreement will be those which will be needed to create jobs. It is the creation of jobs that is needed both for this country and other member states. At last, everyone is now recognising that unemployment is the greatest social and economic problem within the European Community, as well as the cost of productivity in relation to our competitiveness with other parts of the world.

All I can see in conclusion is that I feel very regretful that the Opposition has given, so far as I can see, no enlightenment to show that the social policy will improve our unemployment position. Indeed, I have not heard any speaker give one solid reason why or how unemployment will decrease as a result of the social policies. It is our experience over the years that such measures will not work. I strongly support the Government and the Government's Motion. I very much hope that it will be passed.

7.32 p.m.

Lord Harmar-Nicholls

My Lords, the debate this afternoon has produced some very excellent speeches which will read well to any students who may bother to read them to try to understand the history of these particular years. However, we in this House ought to recognise where we are and what the debate is all about. Anything to do with Maastricht and the Common Market was settled last week. The present debate has nothing to do with it. Clearly, we are returning, once again, to good old party politics. There are party manoeuvrers who have in mind the possible results of the next election which really have nothing to do with the operating of the effects of Maastricht in a way which some of the speeches seem to imply.

Both sides have been guilty in the latter respect. The Government side in the other place made a great mistake. Because they thought that they might be defeated in a vital stage of the Maastricht debate, they conceded a Motion to the Labour Opposition to enable the present debate to take place. That will have the effect, under certain circumstances, of delaying the actual operation of Maastricht, despite the fact that the Bill we passed—which has now become an Act—went through all the parliamentary stages in both Houses, received Royal Assent and, to all intents and purposes, should now have all the power of being effective and being a policy for the nation.

The Government conceded that Motion in order to ensure the winning of that vote at that time, and confusion followed as regards the legal effect of allowing the social protocol to be included. I gather that it was the Foreign Office lawyers who said it might or might not have any effect and then the Attorney-General was brought in. However, because of that confusion we are now in a position of having enacted the Maastricht Bill, thus giving it all the powers of an Act, before it could be put into operation. I think that we should approach the debate as a matter of being back again to party politics.

The most cynical manoeuvre that I have ever seen in the 43 years that I have served in either House of Parliament was the decision of the Labour Opposition on Third Reading to abstain on the vote. Having been keen partners and having played their part in the way that they did to help the Government get through many aspects of the Maastricht Bill—which, to my mind, ought not to have been got through—when it came to the vital issue, it was quite clear that they were not all that interested in the Maastricht Act in its entirety and that they still had in mind the desire to grasp all the party-political kudos that they could by claiming to be the champions of the social protocol. They tried to argue that they are the only ones who will ensure, out of any future prosperity we may have, that any benefits will be shared by everyone.

We had a perfect example in the most effective speech of the noble Baroness, Lady Castle. The noble Baroness and I are about the same age. I should like to point out that she on the Labour side and myself on the Conservative side have been active in party politics over exactly the same period of time. People who did not know the noble Baroness before she came to this place were able to see today what a formidable debater she is. Of course, we have known it for years. Indeed, we saw her over all her years in the other place being most effective both as a Member and as a Cabinet Minister. She used all of those powers of persuasion to suggest in her speech today that the Conservative Government could not be trusted to ensure that any benefits that may flow will be shared by the rank and file of this country.

Noble Lords will no doubt remember the point she made. She made a challenge that I should like to meet. She said, "Will someone tell me what benefits along the lines that I am now describing have ever come from a Conservative Government over the past 14 years?" She confined the period to 14 years. My recollection of the 14 years in terms of the general state of the people in the country as I know them is that it is infinitely better than it was in 1979. Moreover, our future prospects are more rosy than they were in 1979. We have nothing to apologise for as regards those 14 years.

However, as I said, both the noble Baroness and I were arguing such political points long before the war and certainly through the various elections. I challenge my recollections against hers; that is, not over 14 years but over the whole period of our lives in politics which, as I said, is about equal. The noble Baroness is the one who claims to have had the practical contact with those whom she calls the rank and file people of the country and suggested that the Tories did not know anything about them.

The fact that I am a Baron and sometimes wear a monocle is often thrown at me. One is supposed not to have made a failure of one's life in terms of one's general ways of living. However, the truth is that I am the son of a Staffordshire miner. I pit my life's experience with that as my base against that of the noble Baroness as regards the challenge that she issued. I should like to challenge her to look at the general advancement and general state of living of the people of this country over the period of our lives. If one looks at it when a Conservative Government was in power and examines it in the sort of detail available—whether it is a matter of wages, working conditions and general understanding of health and safety needs—we have a record which is infinitely higher and better than anything that the Opposition can produce during the periods that they were in office.

That is all by the way. That is what this is about. The noble Lord, Lord Houghton, who has longer experience than any of us, raised a matter which we ought to keep in mind in order to justify my point. We are now back to party politics. Because it is a matter of party politics I shall be in the Government Lobby tonight, despite the points that I have made concerning the details of the Maastricht Treaty.

The noble Lord reminded us—perhaps some noble Lords never knew or had forgotten—that Jacques Delors came over to talk to the Trades Union Congress. Until that time the Labour Opposition had been vehemently opposed to anything connected with the European Community. It was not a U-turn; it was an about-turn with a vengeance. It occurred overnight, following the speech which the noble Lord, Lord Houghton, told us about.

What caused that about-turn? At that meeting, both in private and in public, Jacques Delors told his socialist friends that they would never get socialism through Westminster. He said that they would achieve socialism through Europe. The social protocol is part of the delivery of socialism through Europe which he promised them in order to obtain that about-turn. It was at that time that we saw this great change. The Labour Party feels that it is good tactics and it is duty bound to draw as much attention as possible to its claim to be the proponent of good living for the people and the only party which can produce it.

If there is any good in the Maastricht Treaty or in the Treaty of Rome, if good can flow from the social protocol, as it is claimed, then, as my noble and learned friend Lord Hailsham explained, we have the subsidiarity powers. Those are powers which we can use at home to bring these things about if we feel that they are desirable. Many of them are desirable.

As I understand it from the speeches which we have heard from the Benches opposite, it is suggested that we can only achieve those benefits by accepting the social protocol. I have more confidence in the trade union organisations in this country. I am a great believer in trade unions. Just as trade unions have produced good in the past through collaboration with Conservative governments, they are the ones whom I would like, under subsidiarity, to bring about the improvements in living conditions which I believe would be available. I do not want people in Brussels, Strasbourg, Greece or anywhere else to lay down the rules as to how we should develop any skills, ability and wealth that we might have. We can do that better ourselves. I believe that the trade unions and the governments which we are capable of producing can bring about benefits through the subsidiarity powers which my noble and learned friend told us about.

On this issue we should not feel that we have to discuss Europe any more. We are back in good old party politics. That is the driving force on the other side of the House. It was mistakes in party politics which led my right honourable friend to allow this debate to take place before the treaty, which is now an Act, could be ratified. It is on that basis that I feel that it is my duty to go into the Lobby in support of the Government, and I shall do so with joy.

7.44 p.m.

The Earl of Longford

My Lords, the noble Lord who has just spoken is one of the most forceful and sincere speakers in the House, but sometimes it is hard to follow his drift. In spite of his eloquence I am not sure whether he is in favour of Maastricht. Is he in favour of Maastricht?

Lord Harmar-Niicholls

No, my Lords, I am not.

The Earl of Longford

My Lords, therefore, in spite of all his crap—I am sorry, I mean all his words—about party loyalty and so on he is not a very good exa:mple of party loyalty. He is above party. Therefore, I am not sure why he is sitting on those Benches. Why is he not on the Cross-Benches?

Lord Harmar-Nicholls

My Lords—

The Earl of Longford

My Lords, I am speaking. The noble Lord has had his say. The noble Lord is repudiating his leader. He is a traitor to the Conservative cause. I was that once, so I understand his position very well. It is always a great pleasure to listen to the noble Lord.

I strongly support the Social Charter. I do not think that he can really believe this, but the noble Lord who has just spoken gave the impression that this is some sort of party manoeuvre. Does he not realise that anyone who calls themselves a member of the Labour Party, or even a Liberal, regards it as disgraceful that we are unable to set out to do as much for our working people as the other countries in Europe. It is a disgrace. I hope that the noble Lord understands that. This is not a position which has suddenly sprung up. Our position is based on a deep philosophical approach.

There are three, or more, ways of looking at the social chapter. One may say that it is of no importance. That would be a difficult line for any Conservative to take because the present Prime Minister, who is admired by so many of his colleagues but not, it seems, by the noble Lord who has just spoken, has claimed the exclusion front the Social Charter as a triumph. If it is of no significance that is nonsense, but I would not like to accuse the present Prime Minister of being nonsensical. There are enough accusations which I could level against him without that. Therefore, we must treat the Social Charter as important.

If one considers it important, one can regard the exclusion of this country as of great value, as the Prime Minister sees it, or one can see it as damaging and morally disgraceful. If one wants to understand the point of view of the Conservative Party—and I must take off my glasses to read this—one must consider a speech of the noble Lord, Lord Cockfield. I take it that he is still regarded as a Conservative. He sits on the Conservative ex-ministerial Bench and he was a Cabinet Minister. I tried to tell him that I would quote him but could not find him today. The noble Lord said: In other words, progress on social policy has reached the point where it is imposing a burden that cannot be borne without doing serious economic damage".—[Official Report, 30/6/93; col. 895.] Either one thinks that that is absolute nonsense or one accepts it.

That takes me back to the old days of the Beveridge Report. I was assistant to Sir William Beveridge for three years. I am glad to think that the noble and learned Lord, Lord Hailsham, supported that report, unlike, I am afraid, the great Sir Winston Churchill. I drew up an appendix to the main report. In those days in this country we were ahead of all the European countries in terms of social legislation. Where are we now? We are certainly not in the lead. Perhaps we are somewhere in the middle. In social legislation we have slipped a long way down in the European league.

The noble Lord, Lord Cockfield, expressed the view that we cannot afford this kind of legislation. He believes that the whole thing has gone too far. We were told earlier by my noble friend Lord Richard, in his effective opening speech, that, as others have pointed out during the debate, the gap between the rich and poor has increased steadily during the past 14 years. We were told not so long ago in a government publication that the average standard of living is perhaps one-third higher than it was 14 years ago. We were also told that the standard of living of the poor was 14 per cent. lower. That statement was welcomed by a Conservative Minister. We regard it as a detestable result of 14 years. That is our approach. We do not take the Cockfield approach. We believe the opposite.

We believe that there should be more redistribution in favour of the poor. We believe that there should be more social legislation. But if other people say, "We cannot afford it", then we have to listen to them. In a sense we can do nothing about them except pray for them. That is about the best that we can manage. In one sense it is a straight party issue. People on the Conservative side tend to take one view; people on the progressive side—I use that expression to cover the Labour and Liberal Parties—take another.

I came to the House recently to vote on an amendment on the social chapter at the same time as an eminent man in business—one of the business leaders of this country. I did not have to ask him which way he was going to vote. He did not have to ask me which way I was going to vote. In that sense, therefore, it is a straightforward division. Those who favour the extreme Conservative point of view vote against the social chapter; on the progressive side we vote in favour of it.

However, I draw attention to another possibility. I was reading again a good book on the life of Lord Shaftesbury. In case some noble Lords have not read it, perhaps I may remind you that it is a first-class account of someone who was a great Conservative but also the main promoter of factory legislation in the 19th century. The noble Lord, Lord Jenkins, knows the period particularly well. There are interesting aspects that I had forgotten. When I read the book again, I noted that Shaftesbury was very sharp in his comments on people. For example, he ascribed to Peel, the Conservative Leader, "a singular and marked malignity". That is plain speaking. The noble Lord, Lord Harmar-Nicholls, does not seem to admire Mr. Major, but I am sure that he would not accuse him of a singular and marked malignity.

I am bound to say that Shaftesbury was fairly unpleasant about other leaders. He described John Bright, the Quaker, who was a factory owner, as swinish. Shaftesbury spoke more bluntly than people speak in this House in these latter days. Nevertheless, as time has passed, Shaftesbury has been accepted into the Conservative pantheon. Recently the noble Lord, Lord Annan, was praising him. I ventured to suggest that Lord Shaftesbury was not representative of the Conservatives. I was slapped down in the best King's College, Cambridge, manner for even making that suggestion. However, the fact is that Shaftesbury was regarded as an outsider, but a very aristocratic one. In the end the Conservatives accepted him; they are very proud of him. He was a great Conservative reformer.

I look around the Chamber and wonder how many Shaftesburys we have on the Government Benches. The noble Baroness, Lady Faithfull, is no longer present. But she is almost a female Shaftesbury, with great potentiality. Before the debate ends, I should like to believe that someone will rise to say, "We also believe in the working classes and in improving their conditions".

7.52 p.m.

Lord Pearson of Rannoch

My Lords, I am afraid I feel compelled to speak briefly against the positions taken by all three Front Benches. Of the three, I am relieved to say that I find the Government's position marginally less untenable than those of the Labour and Liberal parties, but still untenable. The Labour and Liberal Parties wish to import the social chapter into British law, together with the rest of the unfortunate Treaty on European Union, signed at Maastricht. So open an act of folly should obviously be rejected.

But the social chapter is not the worst part of the union treaty in my view. The treaty's establishment of a European Union, whose brave new citizens will enjoy rights but no corresponding duties; its reinforcing of the "irreversibility" of progress to ever-closer union; its strengthened so-called economic and social cohesion, which will give increased aid from richer to poorer countries in an absurd attempt to create level playing fields, which are the antithesis of any market known to man; its meaningless and therefore worthless subsidiarity clause; and perhaps above all, the sheer folly of its central plank, its proposals for economic and monetary union—all those provisions of the union treaty seem to me much more misguided and dangerous than the social chapter which is the subject of these amendments tonight. I appreciate that the Government have a theoretical opt-out from final monetary union, but as we have discussed in our recent debates, the value of that opt-out is in doubt to some of us.

Since the Government are so determined to have the rest of the union treaty, I therefore find it hard to understand why they dislike the social chapter so much that they want to opt out of it. I say that because I fear that even if the Government win their amendment tonight here, and in another place, they will still be exposed to the social chapter's effects. I say that because even if we manage to avoid the social chapter itself wholesale, the Community is already firing at us piecemeal the legislation to which the Government object and about which they can do nothing under the provisions of the Single European Act. By way of example, I could quote the Acquired Rights Directive—we have already imported it into our trade union law—the 48-hour week, works councils and young people at work. I imagine that the Government may say that they can appeal to the European Court of so-called Justice in Luxembourg against these measures being forced upon us by qualified majority vote under the health and safety provisions of the Treaty of Rome. I am among many who have little faith in that court because it strikes us merely as the engine of the treaty and not a court of justice as we understand the meaning of the words.

In case some of your Lordships might think that I exaggerate, I should perhaps give you one firm example. I should tell you that your Lordships' Select Committee on the European Communities, on which I have the honour to sit, published a report only last week entitled, "Protection of Young People at Work". It refers to the proposed directive from Europe. In it your Lordships will find on page 4, if you care to look, the record of our conversation with my honourable friend Mr. Michael Forsyth, the Minister of State for Employment. He had confirmed that the Government are rightly opposed to the provisions of the Young People at Work Directive, which is just about as idiotic a piece of interfering nonsense as even the European Commission can think up. But I suggested to Mr. Forsyth that there was nothing we could do about it because it was coming at us under a qualified majority vote, which presumably we had lost, and that what I had described as the worthless subsidiarity clause would not help us either.

I can but quote Mr. Forsyth's answer which I believe confirms what I am saying precisely. Referring to the Young People at Work Directive he stated: I think you [have] asked the key question and the answer is bluntly that it is subject to qualified majority voting. That is of course in part because of the choice of legal base which we say on the face of it is rather difficult to explain". That is presumably what the Government will be appealing to Luxembourg about. He continued: As to the point about subsidiarity, there are a number of issues concerning our Department which will be, I would imagine, likely to be on the agenda for the next meeting. This is one of them. Working time is another. The Acquired Rights Directive, which will not be on the agenda, and the European Works Councils Directive are two more. In all these areas there are arguments about the extent to which the measures are appropriate and with the exception perhaps of European Works Councils Directive subsidiarity is a major part of the Government's argument and there is amongst Member States a widely differing view as to what subsidiarity means and how it can be implemented … Member States' minds … are concerned that the United Kingdom has a competitive advantage in terms of inward investment within the Community because we have taken a deregulatory approach to the labour market and many of them have an agenda which is concerned with ensuring that we are put in the same position as they are, in respect of social costs and employment costs, and therefore the subsidiarity argument is not always well received. All we can do, given that it is subject to majority voting, is to try and persuade our partners to take on board these arguments and not proceed, but at the end of the day you are right: it is subject to qualified majority vote". That is the Minister of State for Employment in another place speaking to your Lordships' Select Committee.

Your Lordships will notice that Mr. Forsyth also makes another point for me—my final point you will be pleased to hear. This is that other member states are already angry at what they see as our competitive advantage because we have taken a deregulatory approach to the labour market. So I must put it to my noble friend on the Front Bench that if our opt-out from the social chapter works to our advantage, as the Government claim it will, the other member states may get even more angry. Of course, lurking in the background are Articles 85 and 86 of the Treaty of Rome which forbid unfair competition within the Community. Surely it cannot be long before the Community attempts to use those clauses against us if our opt-out is going to prove as successful as the Government claim it will.

So I am afraid that our opt-out from the social chapter is not much more than a fig leaf. I am afraid that the wind from Europe is blowing rather strongly and we are going to get what is coming anyway. In these circumstances, I shall abstain on all the Motions tabled, in disgust at the entire process.

8 p.m.

Lord Finsberg

My Lords, the House is approaching the Summer Recess and I recommend for holiday reading a rather delightful book by Gerald Kaufmann called How to be a Minister. It is clear that in her entertaining and dynamic speech, the noble Baroness, Lady Castle, used much of what Gerald Kaufmann says in that book: when you are making a case, try to omit the importan1 things, be selective and finish up with a loud "Rah rah". If I may say so, that is what the. noble Baroness did. She was selective in talking of the wonderful times there were during that period. Like my noble friend Lord Harmar-Nicholls, I saw the noble Baroness in action down the corridors. I notice that she did not mention the way in which the then Chancellor, the noble Lord, Lord Healey, had to go running back from Heathrow to meet the demands of the International Monetary Fund. There was no comment on that, so not all was as rosy as the noble Baroness would have us believe.

I also have to say, as someone who had the honour of serving in a junior capacity in the first government of the noble Baroness, Lady Thatcher, that I very much resented what the noble Baroness, Lady Castle, said about the sea change of the Tory Party since 1979 and people with no heart and no social conscience. I regard the privilege I had of helping to take through the mental health Act as a dynamic example of genuine belief in and understanding of social needs. I cannot refrain from saying that that kind of argument from the noble Baroness does not do whatever case she was trying to put forward much good.

There was also a comment from the noble Earl, Lord Longford, who, in the chapters of social progress, seemed not to have heard of Benjamin Disraeli, who probably did more for what he called the working classes than any other Prime Minister before or since. However, there was no mention of him.

It is clear, certainly to rite, that the social chapter is a recipe for unemployment. It is clear from the bulk of speakers on the Opposition Benches, exemplified by the noble Lord, Lord Richard, that they have little practical experience of business. The social chapter is the brainchild of those who wish to centralise and make every country conform to what is inherently socialism. The noble Lord. Lord Houghton, reminded us of the sudden conversion of. his party when. M. Delors came to talk to them.

However, of course, many of those countries who first espoused some of the ideas behind the social chapter are having second thoughts. Germany, for example, is now looking again at the maximum number of hours that people can work. That example may be followed by many others because it is impossible for Europe to continue as she is, with the growing competition not from Hong Kong, but from. China, the Philippines, Taiwan and so on. If Hong Kong is being priced out of the market, just think how much in Europe we are being priced out by our methods.

Most industrial and business experts and enterprises in the UK have spoken up firmly against the social chapter which they believe would damage irrevocably our competitiveness. All the European Community employer organisations have said exactly the same thing. The noble Lord, Lord Eatwell, is not with us at the moment, but he has been here for most of the debate. He quoted from the CBI brief, again selectively. He referred to the argument that our tradition is to set employment conditions by individual or collective agreements, not to prescribe through legislation. He said how terrible that really was, that it would lock people into a particular industry instead of them being "allocated"—and I noted his word—where they can be more useful. That, I seem to remember, was the direction of labour that we had during the last war. ft does not sit well with me.

As one who has spent over 35 years in industrial relations and personnel management in one of Britain's major multinational companies, I do not believe that the social chapter is in the interests of the United Kingdom. Perhaps I may add a personal note to what the noble Lord, Lord Carr, said. I too was at that conference when he spoke so eloquently on what was then the workers' charter and subsequently the industrial charter.

However, I think there is much more at stake here tonight. Of course, my noble friend Lord HarmarNicholls is right. This is a blatant piece of political gerrymandering on the part of the Labour Party who thinks that this is the only way it can pull all its people together. It will have no effect because the public has seen through it. The public recognises what the Labour Party is trying to do. What the public does not yet understand is how there can be some Conservatives in another place who have espoused the philosophy of conservatism and yet could vote in a way this evening that could be the opposite of everything, not that they claim to believe in, but on which their voters elected them. That is what I find most upsetting.

I believe that the social chapter is something that we must not accept and we must battle hard. I understand the views of my noble friend Lord Pearson on the court. I share many of them, though not all. If we can put our case sufficiently well, based upon the evidence that we have, even that court would uphold any illegality or attempt to bring in items in the social chapter that were based upon the wrong articles in the Treaty of Rome. I hope that we shall pass the Government's Motion noting the policy with a large majority and reject the typical Liberal-Labour coalition which has bedevilled this country for 50 years, and reject their two amendments which have no merits at all.

8.7 p.m.

Lord Desai

My Lords, it has been a long day and we have talked quite a lot about the social chapter and Maastricht. However, I think that the problems and issues are important enough for us not to begrudge spending so much time on them. If anything, the truth about Maastricht is that, boring though it may sound, not enough has been explained to people about the issues involved. Because those issues have been obscured and made boring, people have not realised that great matters are at stake.

First, as my noble friends Lord McCarthy and Lord Wedderburn, explained, if anyone reads the protocol on the social chapter carefully, it is quite clear that in terms of matters which worry employers about wages, hiring and firing and the hard points about hiring labour, the social protocol does not have much to say. The social protocol establishes certain minimum conditions on health and safety, working conditions, non-discrimination etc. It cannot be shown—and I shall argue that in more detail in a minute—that the present level of unemployment in the OECD or the EC has anything to do with the social chapter because it has not yet come into effect. I shall also show that following policies which are exactly the opposite of what the social chapter advocates—indeed, the policies so proudly followed by the present Government—has not done much to reduce unemployment. If anything, the exact opposite is the case.

Why then are we discussing the social chapter? It is innocuous. But a big monster has been made out of it. The Prime Minister is supposed to have said that it is a charter for socialism. How I wish that that were the case! I am afraid there is no such luck. It is a matter of party politics, as the noble Lord, Lord Harmar-Nicholls, and other noble Lords said. But the party whose politics it relates to is not Labour or Liberal. It is the party opposite. The Prime Minister, before his term in that office, had a pro-European reputation. He was supposed to be the person responsible for having persuaded the noble Baroness, Lady Thatcher, to join the exchange rate mechanism. Indeed, we were told that he was always, along with the Foreign Secretary, a pro-European. Upon becoming Prime Minister, his pro-European stance continued. He wanted to be at the heart of Europe. But given the divisions in the party opposite, he decided that it would pay him to act as a Euro-sceptic. Exaggeration of his Euro-sceptic stand finally led to the "great triumph" that he brought out of Maastricht; namely, two opt-outs. It has been shown, as all know, that the opt-out on economic and monetary union is not worth the paper that it is written on. Therefore, the opt-out on the social chapter became the only matter on which the Prime Minister could, as it were, pacify the opposition within his party, keep the divisions within his party at bay and hope to achieve some peace and quiet. Unfortunately, that policy has failed—as we shall find out soon enough in another place. The whole exaggeration of the possible effect of the social chapter has to do not with reality but with rhetoric, in order to bind the possible divisions in the party opposite.

So far as we are concerned on this side and on the Liberal side, we say again and again that if all these things are happening, and if all the employers are alarmed about the possible costs of the social chapter, how come all the other countries have not objected to the social chapter? How come 11 out of 12 have accepted and welcomed the social chapter? And how come that we are the only people who are against it? Is it to be argued that our deregulated labour market policies have been so marvellous that we have achieved high rates of employment?

I hate to say this, but unemployment, as recorded, has not gone down since the day the Labour Party lost office. It stood at 1,234,000 in 1979, and it has not fallen below that in all the past 14 years. Abolishing trade unions, workers rights and wages councils, all the nice Hayekian things that have been done—competition has been let loose—and all the great flexibilities that have been introduced, have done nothing to reduce unemployment. Unemployment has not been reduced despite several redefinitions. Even on the redefined basis, after 32 different changes of definition, unemployment remains very high in this country.

Two points could be made. First, it could be said that unemployment is high not because our policies have not worked—that the policies have indeed worked—but other things have happened which have kept unemployment high. If that is true, and if macro-economic forces rather than deregulation policies have kept unemployment high, then perhaps one could argue that the social chapter will also not be responsible for introducing unemployment; that other forces will be responsible. I do not believe that the argument can be made for all the great policies of labour market flexibility and so on. They may have influenced income distribution. I believe that that is the effect that they have had. But the effect that they have had is to make the poor poorer and the rich richer. They did not do very much to reduce unemployment.

No doubt somebody will cite in reply the figures of employment creation. Employment creation can be defined in any way one likes. What emerges is that there is a category called self-employment, which is very flexible, and quite a lot of self-employed jobs have been created. But in unemployment, standardised numbers can be compared across countries. In the latest publication by the OECD, which came out yesterday, called Employment Outlook, noble Lords will see the truth of what I have said. There is not a single year since 1979 when measured unemployment in the UK has been less than it was in 1979. I believe that we can be agreed that policies which derogate from the mild policies prescribed in the social protocol will not help reduce unemployment.

Regarding reducing unemployment, my noble friend Lord Eatwell made a point with which many other people will agree. In this new era of global competition it is folly to imagine that we shall be able to compete with Hong Kong and China by reducing our wages, no matter how much flexibility is introduced, to the level of wages in those countries. What will create employment is to value the labour resource that we have and invest in it. We must consider policies on health, non-discrimination or employer-employee co-operation. Those policies are required as long-term investment, over and above other sorts of investment which will create long-term employment in this country. Long-term employment will not be created by hope of a wage cut. That hope has been tried for the past 14 years and it has not worked. What will create jobs is investment. If we are to create jobs with investment, we have to follow some sort of dynamic macro-economic policy. That would require a co-ordination at the European Community level if we are to get any success out of that policy.

Lastly, it will be clear to people who think about the modern economy that the driving force in the modern economy is the large multi-national corporations. If the large corporations which operate in different countries operate in any of the other 11 countries, they will follow the policies laid down in the social chapter. If one asks those corporations, they will see the logic of having some sort of uniformity among their employees, no mat ter where they are employed. That is the whole point of having the social protocol and having uniformity in it. If one is to have a single market, a single economic area, and if one wants companies to operate across that area, one cannot ask those companies to follow one sort of policy in one country, and another sort of policy in another. That does not make any sense.

We should establish a dynamic European economy, a prosperous single market in labour and capital. We require the social protocol. It will not be true or even accurate to argue that these policies will be opposed by employers. Indeed, employers will welcome them. The social protocol is a very minimal price we ought to be willing to pay so that we can take part at. the heart o f Europe, and further the sort of dynamic macroeconomic policies that we need to increase employment in the long run.

Lord Sharp of Grimsdyke

My Lords., before the noble Lord sits down, I should like to say this. He made much play of the fact that during the period of Conservative administration the level of unemployment never reached that of 1979. But has he not overlooked the fact that there was massive overmanning of nationalised industries which led to massive losses and subsidies which the consumers and taxpayers of this country had to meet? in other words., there was concealed unemployment, which was not good for the efficiency of manufacturing industry or the service industries dependent upon them.

Lord Desai

My Lords, I thank the noble Lord for that intervention. Several points could be made about that. Look at the cost to the taxpayer in subsidising all. that massive hidden unemployment. Let us ask whether, as a result of all the dynamic policies followed in the past 14 years, the burden of taxation has gone down. The burden of total taxes collected as a proportion of the GDP has not gone down. It has gone up. Let us see whether the growth rate has gone up over the long period of 1979 to 1993. We should not be selecting 1981 and abandoning 1990, which Ministers always seem to do. Over the long period 1979 to 1993 it cannot be argued that the growth rate of GDP has exceeded the growth rate in the 1970s. If, as the noble Lord, Lord Finsberg, said, one cites the example of my noble friend Lord Healey going to the IMF, I can offer in exchange Black Wednesday. We all have our disasters.

8.20 p.m.

Lord Elibank

My Lords, during the long hours that we spent in Committee and Report stage debating the Maastricht Bill, I learnt: one lesson, for which I am grateful to noble Lords who are better instructed than I am both in the Maastricht Treaty and preceding legislation. The lesson was that we delegated to Brussels very substantial powers in preceding years under preceding treaties, particularly the Treaty of Rome and the Single European Act. Any powers that we propose to delegate under the Maastricht Treaty, including those relating to the social protocol, are comparatively minor. If I were a Euro-sceptic, which I am not, I would say that we sold the pass years ago.

An interesting illustration of that is the discussion, indeed dispute, about the 48-hour minimum wage, which is in front of the European Court at the moment. The case was brought under health and safety regulations to which the other 11 member states agreed under a preceding treaty. It made me ponder a little as to the scope of health and safety, when maximum working hours can be brought in under such a clause. With a little nudging and argumentation, could not most fields of social policy be brought in as well? As I said, the powers that we have already passed to Brussels are very substantial. The rather anodyne provisions of the social chapter of the Maastricht Treaty seems to me to add comparatively little to the powers that have already been yielded.

We are all concerned about social costs. In this country we have our own problem. We have a £50 billion deficit, which we all know will result in cuts in certain areas of national expenditure. Where we think those cuts should fall is a matter of personal choice, but in the end it will be a government decision. Those social costs are already at a level which—certainly in recession—it appears we cannot sustain. In times of greater buoyancy in the economy maybe we can do so, but there is at least a case for saying that in 1993 (and perhaps into 1994) social costs are getting out of hand. It is a dismal thought perhaps but there is also the fact that our population is getting older and we must ask how far the younger workers can sustain us, old pensioners, at the level to which we have grown accustomed.

That is also happening to other countries which are our competitors and partners in Europe. Indeed, they are in a worse position because when they come to look at their national budgets and deficits, so far as social costs are concerned they start from a higher base. They pay more. They too will be looking critically at those costs and wondering whether cuts should not be made. When they come to consider our lower social costs, a measure of envy creeps in. Criticism is launched at us for what is known sometimes as "social dumping". They are not concerned about the well-being of the British worker or his level of pay, working hours and social benefits. They are concerned purely with commercial considerations. They are worried that they will have to pay more than we do in this country to produce the same product. For some time they have been putting pressure upon this Government and they will continue to do so. That pressure will increase. They will try to eliminate the social gap.

I do not believe that that has a great deal to do with the Maastricht Treaty or the social protocol. It is a form of pressure which has built up in the past and will become greater. It will be for the Government of the country to meet it as best they can. It is no direct consequence of Maastricht and the social protocol. It is simply a commercial advantage that we have and other powers in Europe will seek to erode it.

Having listened very carefully to the arguments, I am neutral on the subject of the social protocol. To some extent the arguments for and against cancel each other out. I am not so sure of the treaty itself. I am most anxious that it should be brought into law and implemented as speedily and quickly as possible. We have heard some talk of what might happen if, unfortunately, the vote should go against the Government in another place. Various political manoeuvres have been dangled in front of us which I believe would only result in delay in the implementation of the treaty. Indeed, they might put at some risk the treaty itself. I am most anxious that that should not happen.

I suggest to Her Majesty's Government that, if the crunch should come and they must either accept the social protocol within the treaty or risk failure in the implementation of the treaty, they should take a deep breath and sign up. I do not believe that the nightmare that they fear will materialise in practice.

8.29 p.m.

Baroness Hooper

My Lords, at this stage in the debate almost everything that needs to be said has in fact been said. Therefore I shall limit myself to two questions that have arisen regularly in the course of the whole debate on the treaty as well as today. I approach those questions as a supporter of the principle of subsidiarity, which I believe was admirably defined earlier this afternoon by the noble and learned Lord, Lord Simon of Glaisdale.

One of those questions is: since we already do many of the things required by the social chapter—indeed, some of the arguments for and against that we have heard today have grossly exaggerated the position—why cannot we then go that little bit further and embrace the social chapter, as our 11 partners have done? It is, I believe, because to do so is to ignore the concept of subsidiarity, which I thought that the parties opposite had welcomed in the course of the debates on the European Communities (Amendment) Act.

But nobody in proposing or supporting the amendments before us has convinced me that these are matters best dealt with at a European Community level rather than at a national level in accordance with each member state's different social structure. Nobody, not even the noble Baroness, Lady Castle, has shown how there is an added value for us in dealing with these matters at a European level, as I believe is the case in dealing, for example, with environmental matters or public health issues. My response is that if it is not necessary to do something, then it is necessary not to do it. If in the past we have done some unnecessary things, there is no reason for doing so again.

The second question that regularly crops up is: why on earth make a fuss over having a European framework? While we are going in for citizen's charters and others, why not also have a Social Charter? My answer is that we already have one. All the member states of the European Community are members of the Council of Europe. As the noble Lord, Lord Richard, reminded us yesterday, the Council of Europe has a Social Charter which we signed in 1976. That charter deals adequately with workers' rights and conditions of employment; indeed, it deals with most of the things for which it has been argued today we need to adopt the social protocol in order to achieve. I commend it to your Lordships and in particular to the noble Lord, Lord McCarthy.

Lord McCarthy

My Lords, the point I was trying to make is that we never do anything to implement that charter. Everything we have done since 1979 has denied its existence.

Baroness Hooper

My Lords, I was coming to that. In saying that that is another reason why it is not necessary to adopt the social protocol, I would point out that currently the parliamentary assembly of the Council of Europe is working to give that Social Charter more teeth. It wants to make it more significant for those countries in central and eastern Europe which have recently become members and need the framework and standards prescribed by the charter in much the same way as they need the benefits of the Convention on Human Rights. To say that, notwithstanding the Social Charter, we as members of another club must adopt the social protocol, merely devalues the Social Charter for those countries. That would be unfortunate if we believe in the development of a peaceful and prosperous Europe beyond the limits of the present European Community.

For those reasons, as well as many others advanced by a number of my noble friends, I declare my support of the Government's Motion unamended.

8.33 p.m.

Lord Kilmarnock

My Lords, I am glad that we have largely avoided the political manoeuvring and posturing that the noble Lord, Lord Carr of Hadley, condemned and that this debate has concerned social and employment issues rather than tactics. I applaud that. I too shall concentrate on the merits, or otherwise, of the opt-out secured by the Prime Minister from the Agreement on Social Policy accepted by the other 11. My main theme is that we must get away from the idea that we are in a retrograde position—almost pariahs, as some implied—in the matter. I shall argue, on the contrary, that we are in the vanguard of European thinking on social and employment policy.

The social chapter, as it is generally labelled in the press and by some of your Lordships, is in fact an extremely complex web of social legislation which is being advanced under several rubrics and on a number of fronts. For example, the famous directive on the organisation of working time to which the noble Lords, Lord Beloff and Lord Elibank, referred and which we have resisted up till now is not covered by the Maastricht opt-out as it has been advanced under Article 118A of the original treaty. By an agreement reached in the Council on 1st June it appears that we shall be obliged to implement that within three years.

In the social protocol of the treaty the 11 agreed to continue along the path of the Social Charter of 1989 (which we did not sign) until all its provisions are completed and it becomes in effect acquis communautaire. In other words, what was merely declaratory becomes part of the immutable structure of the Community, and that was the degree of rigidity from which we opted out.

I confess that I started with a relaxed view of the agreement that the other 11 signed. We have already scrupulously observed most of the health and safety measures, where our record is excellent. As for the rest, my initial view was that it was a relatively harmless bundle of high-sounding, long-term intentions with a bien pensant—or perhaps these days I should say "politically correct" —flavour which would not affect us very much for good or for ill. But it gradually became apparent to me that the complex web of the chapter, the charter and the social agreement within the protocol, together with a long chain of directives which for the sake of convenience I shall bundle up together and call the "social package", had a cumulative effect which should be resisted.

Why do I say that? I say it because the whole thrust of the social package is backwards towards the ponderous tripartite structure of the corporate state. Its thrust is away from the gathering movement in industry towards smaller units, differential local pay agreements, performance related pay, profit sharing, labour market flexibility, portable pensions and so forth. Above all, there is nothing whatever in the social package which helps unemployment or the unemployed, whether in continental Europe or in Britain, as the noble Baroness, Lady Elles, pointed out. In Spain, with which I have some connection, there are extremely high non-wage employment costs. Unemployment is currently running at around 20 per cent. and, much as I love the Spaniards, I do not want to jostle with them in that league.

I therefore return to my main point—that Britain leads the Community in thinking on social policy. There is a growing realisation across a wide band of the political spectrum that nearly 50 years after the end of the war there has to be a radical rethink, a. thorough reappraisal of both the labour market and. the social security system.

In a recent paper called Beyond Unemployment (recommended reading), the noble Lord, Lord Skidelsky, who I am afraid is not with us tonight. reminded us that 5 per cent. of all our workers are now covered by profit-related schemes; and more people than ever before own shares in the companies which employ them. That is a far more widespread practice here than in Germany, France or Italy. The benefit is fairly clear. It means that in a downswing there is a flexible element in the total wage package which reduces employers' incentives to lay off labour, while in an upswing additional labour can be taken on at a rate which will not swamp the marginal utility of the additional worker. That seems to be a blindingly obvious way of doing something which is basically sensible, as after two centuries of the dismal science no one has managed to come up with a policy to iron out the business cycle.

It is not only a matter of theory. In the past 10 years British companies have made much progress in the forms of employer/employee relationships. Mercury Communications, Marks & Spencer and Smith Kline Beecham are in the vanguard of employer relationships worldwide. The truth is that any blueprint of how companies should reward or involve their employees is bound to be counterproductive in terms of reducing unemployment. Different practices will suit the needs of different types of industry. That pattern will change rapidly over the years.

The labour market has changed enormously in its composition and in the balance of sexes since the noble Baroness, Lady Seear, so ably chaired her unemployment committee in 1982, on which I had the honour to serve. It will go on changing rapidly as technology changes and the size of business units change. It is the last area on which we should want to clamp a bureaucratic straitjacket.

Such ideas come not only from ultra-libertarians, the new Right, the centre Right or any of those pigeon holes beloved by commentators. I have just been reading Liberty, Equality and Efficiency by James Meade, the Nobel prize winning economist who is not exactly associated with the Right. In his chapter on "Building the New Europe" he refers to, the need for much experiment in developing liberal capitalist economies". He continues, It would be a grave obstacle if change could be tried out only on a uniform basis in every European country simultaneously". Meade invents a land called Agathotopia (whose etymology will not be lost on noble Lords) in which the preferred social security and employment policy is a guaranteed basic income coupled with flexibility in wage rates and profit sharing. There are other important institutions in Agathotopia such as social investment in order to turn the national debt into a national asset; and the state runs what he calls, a somewhat socialistic apparatus for a more egalitarian distribution of wealth and for greater social security and fuller employment". Presumably that is what noble Lords on the Labour and Liberal Democrat Benches also want. Yet Meade is unhappy both with equal pay and any kind of minimum wage. Equal pay for equal work interferes with his partnership principle by which a worker receives, not a contractual wage rate, but a share in the concern's profit. Indeed, he says: Any attempt to lay down a meaningful minimum wage … as an equalising device at the lower end of the income scale would have disastrous effects". In particular, he says that it will be extremely unfair to any country adopting an Agathotopian policy of tackling unemployment by combining a low wage with a high basic income.

The most important of all Meade's perceptions is that there could be, a very great variety of experiments in the type of institutions required for the maintenance of full employment and for the redistribution of income and wealth in a competitive free-enterprise market". On those grounds Meade is extremely chary of the Social Charter. It is my submission that it will make the whole area of experimentation and development progressively more difficult, if not impossible.

A whole new debate and agenda are opening up in this country. We are beginning to think the almost unthinkable. Rather than settling for a natural rate of unemployment of 7, 8 or 9 per cent., people like the noble Lord, Lord Skidelsky, and others—for example, the noble and learned Lord, Lord Hailsham—say that we should aim seriously at full employment, with frictional unemployment at, say, 3 per cent., which was the aim of the 1944 White Paper.

The Labour Party's Commission on Social Justice has also adopted that aim. On page 23 of Social Justice in a Changing World it is said: full employment must become a central objective of policy again to enable people to enjoy real independence, and to provide the services on which we all at various stages of our lives depend". How laudable and inspiring. But how we shall achieve that by voting for the Social Charter beats me. I do not know how the fine-sounding passage which the noble Baroness, Lady Castle, read out in her fiery speech will help to achieve that end. There is not a single job-creating proposal in the following seven articles. Even the noble Lord, Lord Desai—one of the most distinguished economists on the Left (who is not at the moment present)—does not convince me. I am not interested any longer in unemployment in 1979. I am interested in unemployment now and how we will get it down. The social protocol offers nothing in that direction.

Signing up for the social package is not the way to go. I believe that the opt-out is useful and should be supported. I said at Second Reading that I thought it might be challenged in the European Court, as trans-national companies would find themselves operating under different rules here from those applying on the Continent. A number of other noble Lords have mentioned that point. But that is no reason for opting back into it. Rather, we should be there in the Council chamber arguing our point of view, for which I suspect we will find growing acceptance. I am not sure that the noble Lord, Lord McCarthy, is right in saying that we shall find no friends at all in this matter. On those grounds I shall vote for the Government tonight.

8.43 p.m.

Lord Sanderson of Bowden

My Lords, after a few weeks of considerable argument within the parties on either side of the House I detect that normal service has now been resumed. It will not come as a surprise to the noble Lord, Lord McIntosh of Haringey—who happens to share my birthday—that I do not share his political views. I do not particularly want to see socialism through the front door, back door, side door or trap door. I support my right honourable friend the Prime Minister, who remains absolutely convinced that we must be a fully-fledged party to the council table of the European Community, but, like him, I believe that the social policy agreement is a bridge too far.

I declare an interest as the director of relatively small companies which utterly depend upon world trade for their business and for exports of their main products. I believe in high productivity, and so do the workers concerned. I also believe in good wages and working conditions. But these things cannot be legislated into existence. I regard with real dread the Brussels directive which may load costs onto employers and therefore result in lost jobs.

The debates in this House on industry have two main themes. Two cries go up: "Save us, Oh Lord, from high unemployment", and, "Save us, Oh Lord, from more and more bureaucracy". I say amen to both of those. If we look at Article 1 of the social protocol, they are eminently worthy principles to attain. I do not mind European-wide broad aspirations about social dimensions for the single market, but those matters are not for supra-national body directives at all; they are for directives from the nation states concerned. The United Kingdom may be an island and the European Community a huge market of 350 million people, but this country is not isolated from the world trade scene. In the famous words of my noble friend Lady Thatcher, it is a tough old place in which to run a business. One very important point that has not featured much in your Lordships' House today is that the satisfied customer is an essential ingredient of that.

For me, unlike my noble friend Lord Pearson of Rannoch. subsidiarity in the treaty is a very big plus. I believe that the Brussels regulations and directives which will flow from it will be subject to the tests so ably described by my noble and learned friend the Lord Chancellor when the Bill was going through this House. If subsidiarity means anything at all in this field it must mean that directives should come solely from national governments and not from Brussels.

I care deeply for the best possible co-operation in the workplace on social matters. I believe that that is the way to help employers and employees alike. Like the noble Lord, Lord Eatwell, I believe that employees are a resource, but I also believe that agreements between employers and employees are best settled as near as possible to the workplace.

In my view, the social protocol is a bridge too far and is potentially a wide-ranging intrusion into the ability of nation states to regulate their employer-employee relationships. Therefore, I believe that we should support the Government tonight. I shall certainly do so and trust that all my noble friends on this side of the House will do likewise.

8.48 p.m.

Lord Alexander of Weedon

My Lords, I feel rather like a No. 11 batsman. Wickets have, I suspect, fallen more quickly than expected. It may be my task to occupy the crease for a few minutes while the ground fills up for the star batsmen to come. I am also glad of the opportunity to speak. I have not done so since Second Reading. Each time I sought to do so my views were more eloquently expressed by others. However, on this issue, working as I do for a company that employs some 90,000 people, I should like to highlight a few points. I am firmly in favour of ratification. Like most of those in business and industry, I believe it is vital to be at the centre of the debate that influences the future development of Europe. As a country we have taken far too long to decide that in relation to the Maastricht Treaty. But in common with most of those engaged in commerce I am wholly against the social chapter.

Those who urge us to adopt it do so in markedly contrasting tones. Some speak with siren voices; others are much more strident. The siren voices, orchestrated as they are by the noble Lord, Lord Richard, lead us on by telling us that the ambitions of the social chapter are decent, obvious and can only do us good. We are reminded that they are no more than the promotion of employment, proper social protection, good communications between management and labour, equal opportunities and so forth. It is suggested that all of them are uncontroversial and pure motherhood stuff.

The strident voices, although heard less in this House, speak to a very, very different text. They tell us—I heard the Leader of the Opposition say it in another place this afternoon—that the social chapter is necessary to prevent this country becoming the sweatshop of Europe. Without it, so it is said, the legitimate ambitions of our own workforce will be trampled on; we should strive for the high standards achieved by our much more enlightened Community partners. I believe that there is one very clear and simple answer to those two inconsistent arguments. The purposes of the social chapter can, if countries wish it, be achieved through the normal democratic processes at national level. On this I wholly agree with my noble and learned friend Lord Hai 'sham. It seems to me proper and sensible that individual countries should have freedom of choice in this area. They can then take account of their own national priorities. They can reflect their own national cultures. Perhaps most of all they can meet the wishes of their own people.

The European Community already has, under the Treaty of Rome, some powers to regulate in this area. To grant it a further raft of powers is both unnecessary and, as my noble friend Lord Sanderson indicated, dangerous. It would create a charter for inflexibility, a charter for red tape. It would impose a clog on competitiveness. In saying this I make plain my own belief in the importance of good labour relations. The noble Lord, Lord Eatwell, suggested earlier in the debate that we who are against the social chapter regard labour as a cost and not a resource. I say as passionately as I can that he is mistaken. Perhaps I may also say that his side has no monopoly at all on social concern.

I share the philosophy so eloquently expressed by my noble friend Lord Carr. We know that the skills of our workforce are our most precious asset. We know that they are the bedrock of our success. The way companies harness the talents of their people and motivate them has never been more important to our future. But what is also clear is that approaches to employment are becoming, and will increasingly have to become, much more flexible. Issues are high on the agenda which simply were not there at all in even the very recent past—maternity and paternity leave; job sharing; flexible hours; career breaks: homeworking; retraining; and I could go on. There are different employee needs to be taken into account, from those of two career couples to those of single parents; from single-minded careerists to people who wish to work but also to engage in community service. Flexibility is, and must be, the key.

In this changing world national wishes and commercial needs will best determine in each country what the working conditions in that country should be. Where a legislative framework is needed, as many noble Lords opposite suggest, national parliaments can surely decide best what is right. Where business needs dictate, as they surely do, the attraction and motivation of a skilled workforce, individual employers must continuously assess what they need to do.

Nor can I see, as my noble friend Lord Aldington also cannot see, how the transfer of such powers to Brussels would square with the doctrine of subsidiarity. In the Second Reading debate I indicated my reservations about the long-term effectiveness of this doctrine. Article 3b of the treaty is open to a variety of legal interpretations. The procedures agreed at Edinburgh are helpful. They require the European Commission and the Council of Ministers to focus their minds on every piece of Community legislation to see whether it is necessary. But I do not believe that they yet entrench the concept of subsidiarity.

This may not matter much at present. The excessive claims of the Commission have so far temporarily been curbed. But fashions change, and trends towards centralism will at some time re-assert themselves. I believe that this would be the greatest single danger to the future fabric of the European Community. So I very much hope that the Government will seek in the next round of negotiations to give subsidiarity a rock-like legal foundation. It is a delicate plant and it needs firm constitutional roots. But in the meantime I simply cannot see how it can be said to be necessary for the Commission to undertake the tasks outlined in the social chapter. They are a classic illustration of powers which can best be exercised at local level.

Nor does such regulation meet the real practical needs of Europe at present. What Europe needs, and what this country needs, as my noble friend the Lord Privy Seal said, is greater competitiveness. Consider just a few—and I promise not many—statistics. The European Community share of total OECD exports fell by almost one-sixth during the 1980s from 25.5 per cent. to 21.5 per cent. Europe's manufacturing productivity grew during that time by less than 3 per cent. compared with 4 per cent. in the United States, 5 per cent. in Japan and a much higher percentage in the Pacific rim, which it is estimated by the year 2000 will account for 30 per cent. of the world's gross domestic product. Europeans work a shorter week than people do in the United States or in Japan. The European workforce is more highly paid and social costs are higher. Europe is losing its competitiveness in the world market-place. This is causing unemployment to rise.

We shall need tremendous efforts over the next few years if we are going to make Europe competitive against the rest of the world. This will need imagination, entrepreneurship and flexibility. Regulation to ensure the openness of the single market will remain vital. It is still necessary to counter ingrained protectionism. But apart from this, regulation should have as light a touch as possible. The bankers and businessmen I talk to in our partner countries seem to be very sceptical of the social chapter. They are concerned about the costs to industry. They are concerned about inflexibility of labour relations. They are concerned about the high rate of non-wage labour costs. The spectre of Euro-sclerosis is back with us again.

For us in the United Kingdom the economic success not just of this country but of Europe as a whole is very important. Eight of our 10 top export markets are in the Community. We export about as much to Germany as to the United States and Japan combined. We are truly trading partners. But we are also competitive partners. What we must preserve is our freedom to be competitive both within Europe and as part of Europe in the rest of the world.

We have at the moment a very considerable opportunity. We have low inflation—may we long maintain it. Productivity is continuing to rise and so are exports. The Government are now sensibly and constructively seeking to support and promote the efforts of manufacturing industry. We are emerging from the recession ahead of other European countries. We have a platform for growth and a window of opportunity which we must use to win new export markets and to displace imports with our own manufactured goods. Our balance of trade deficit is still a sober reminder of why it is crucial for us as a country to grasp this chance. The Government are absolutely right in their determination not to shackle us with the rigidity, regulation and cost of the social chapter. We need our freedom to be competitive both within and outside the single market.

As a No. 11 batsman I have served my turn. The spectators are here for the skilled performance of the gladiators still to come. But in conclusion let me say, as I and others have done earlier, that I believe that those of us who oppose the social chapter are every bit as much in favour of improved living conditions as those who urge us to adopt it. We share the aims, but we differ on the means. I believe that their mistake is in believing that increased regulation by the Community would of itself magically improve working conditions. I believe that it would impose an unacceptable burden, would lessen employment opportunities and would drag us down.

Surely we all know that there is only one sure way to achieve better living and working conditions; that is to achieve a competitive, industrial base and sound economic growth. I believe that that is the prize. It is an area in which we have a chance of industrial and business revival. That is why I believe we should steer firmly on the course which the Prime Minister has so skilfully and courageously charted.

9.1 p.m.

Baroness Seear

My Lords, as I have listened to the debate this evening in your Lordships' House, it has struck me that a number of noble Peers are making very little distinction between the Social Charter and the social chapter. But it is the social chapter about which we should be talking tonight. This Bill is concerned with the social chapter.

I reinforce what other noble Lords have said about the mild nature of the social chapter and the extent to which it still leaves very considerable freedom of movement and decision to individual countries. In particular, I draw the attention of noble Lords to Article 2.2. which states, referring to achieving a number of objectives which have been laid down in Article 2.1: To this end, the Council may adopt, by means of directives, minimum requirements for gradual implementation, having regard to the conditions and technical rules obtaining in each of the Member States. 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". I suggest that that article is falling over backwards to introduce a maximum element of flexibility. It is about that protocol and not about the Social Charter that we are talking tonight and on which we shall vote later this evening.

Many noble Lords in the debate this evening have referred to Brussels. Brussels is becoming a kind of "boo" word. It is used to conjure up a picture of an all-powerful, centralised authority able to get away with doing whatever it wants. But all directives have to go through the Council of Ministers. Surely that council is alive and awake and looking at what the directives contain. It is in the position to decide yes or no and whether a directive should be adopted. In the great majority of cases, as many other noble Lords have pointed out tonight, on matters of considerable importance there still remains the veto which can be applied by any member of the council. So let us have no more talking about Brussels as though it were king and could not be challenged.

Tonight's debate is about whether or not we should opt out. I urge your Lordships very strongly to support the argument that we should not opt out, but not perhaps for the reasons which other noble Lords have put forward during the debate. As all noble Lords have agreed, in the Treaty of Rome itself there are articles which require social policy. That is required for perfectly good reasons which are explained in the Treaty of Rome and understood by all of us when we signed that treaty.

There have to be social policies. Just because a great many of us do not very much like—and I do not very much like—some of the ideas which come from Brussels, it is extremely important that we should not be out of the discussions which determine what social policy is going to be. We need to be there in order to stop the major follies which may come from Brussels. But: if we opt out the discussion goes on and decisions are taken without us. Once again, as in the sorry story of this country's relationship with the European Community, right from the time when we were not at Messina and when we did not sign when the other countries did, we are landed with decisions which we do not like but which we have to try, all too late and too little to modify, because we were not there when the important decisions had to be made.

So for no other reason and since we accept that there will be social policies, let us be there to get the right ones; because there are social policies which I, and I am sure many of my noble friends, would not like. We do not wish to see a revival of the corporatist state. I go along with the noble Lord who said something which was very interesting; namely, that the conversion of the Labour Party to Europe followed M. Delors' visit to the TUC in which he conveyed the impression, no doubt, that by accepting the European Community as part of its policy for entry into the Community, the rights would be restored that the trade unions had had and which had been undermined so much in the past. It would be a way back to something like the corporatist state. I am dead against that and so are my noble friends. That was concerned with reservations at one point which my leader in the other place, Paddy Ashdown, made, and for which he has been criticised, as a critical comment on the social chapter. We do not wish to see that. It is my belief that the excessive power of sectional interests both of employers and trade unions have done a very great deal of damage to this country. They have affected the economic efficiency of the country and increased the poverty which we need not have had if sectional interests had not dominated so much. So do not let us have any talk of any return to the corporatist state. But we need to be there to see that it does not happen.

We all know that because we have a single market there has to be some element of social policy. That is in the treaty. We all know that it is. We know that there will have to be such policies—and there are already such policies. After all, the equal pay legislation, about which some noble Lords have commented during the debate, which is based on Article 119 of the Treaty of Rome, was not adopted for social reasons or because the founding fathers were particularly interested in rights for women or any fancy concepts of that sort. but because—misguidedly in my view— the French thought that they had equal pay and that they would be at a. grave disadvantage unless Article 119 was incorporated into the treaty and applied. That element of social policy was introduced inevitably for economic reasons. Such things will occur again and again. We are bound to have some elements of social policy in the operation of the Community and we had better be there to see that it is the kind that we want.

If there is a single market, obviously there have to be rules to ensure that people do not cheat in what is intended to be an open and free market in which everybody can compete on equal terms. One cannot compete on equal terms unless there are some rules and conditions to govern the way in which people compete. Even the most out and out free marketeer does not think that there are no rules. A free market is not a jungle. It is a market that is properly regulated. That has been true ever since medieval times. Part of that regulation has to be social regulation. But how much and in what way? That is what needs to be decided.

We have to be there because there will be such rules. Some will develop out of what is in the social chapter. If we are part of it, we can discuss how it develops and we can insist—and here I go along with a great deal of what has been said by the noble Lord, Lord Alexander, and others—that we want a maximum amount of subsidiarity. Many matters in this field are better settled at national level or, indeed, at the local level, but not all. Some such matters definitely have to be handled at the level of the Community as a whole.

There is another reason which has not been mentioned to any extent this evening. Your Lordships may think that I am becoming excessively gloomy and excessively a Cassandra here. The noble Lord, Lord Alexander, referred to the competition coming from the Pacific Rim. I am deeply frightened about the ability of the European Community, and particularly of this country, to meet that challenge. Labour costs in the Pacific Rim are lower and they can undercut us in price. Surely we are not going to turn to protectionism to meet that challenge. The Pacific Rim countries are a threat competitively, but they are also an opportunity. As their success increases and as they have more money to spend, there is an opportunity for those who are capable of taking it. My nightmare is that this country, with its woefully under-educated and under-trained labour force, will not be able to stand up to that competition and will not be able to take advantage of the opportunities. That is why I greatly welcome that part of Article 1—and this is where I should like to put the major emphasis on social policy—which refers to, The development of human resources with a view to lasting high employment and the combatting of exclusion". We need a new kind of social policy. There is a framework here. If we are in Europe and arguing about it—and have not contracted out—we can ensure that our social policy is geared so that we can meet these frightening challenges—and they are frightening challenges—which are coming from the growing success of the Pacific Rim. I am referring not only to Japan, but also to China. China's statistics may well be open to challenge, but China's growth rate last year was over 12 per cent. That is a threat, but it is also an opportunity.

I should like the European countries to consider all their past policies because in many ways those policies are out of date. Some of the arguments from the Labour Benches sounded as if we were still in the world economy of 20 years ago. We are not; we are moving into a global economy. We need social policies if we are to respond to those challenges because there will be drastic changes and a great deal of economic disturbance inside the European Community, and particularly in this country.

If we are going to make those economic changes, we have to have social policies, we have to equip the people to meet them and make them reasonably acceptable to the people who will suffer from them. If we do not make them reasonably acceptable to the people who will suffer grievously from those changes, the result will not just be economic failure, it will be social disaster.

9.14 p.m.

Lord McIntosh of Haringey

My Lords, for those of us who have sat through a large part of the proceedings on the European Communities (Amendment) Act this has been, in many ways, a refreshing debate. It has been refreshing because, on the whole, it has been concerned with the real treaties rather than the fantasy treaties which we were largely debating. Indeed, only the noble Lord, Lord Pearson of Rannoch, who is as irrepressible as he is incorrigible, continued with his fantasy idea of the Maastricht Treaty and the treaties that preceded it.

All the same, it is slightly odd (is it not?) that we should be debating an original Motion from the Government which merely takes note of the Government's policies. Normally, governments ask us to approve their policies. The fact that they are asking us only to note them rather than to approve them indicates that there may be—perhaps not in this House but in another place—some difference of view within the government party about the advisability, or otherwise, of the Maastricht Treaty being approved at all. Otherwise, why have the Government, as my noble friend Lord Barnett said, backed themselves into a corner? It seems strange that we should be up against this issue at this stage, after Royal Assent. The point was made by the noble and learned Lord, Lord Hailsham, and, with a slightly different thrust, by the noble Lord, Lord Harmar-Nicholls.

Of course, the political effects of the debate can be dealt with fairly quickly compared with the much more important economic and social effects. The noble Lord the Lord Privy Seal made it clear that there would be ratification anyway, although, if he believes that the Government can get away with ratification against the vote of another place—we have another 45 minutes before we know what that will be—he has another think coming. There will be considerable outrage if they attempt that.

We heard from the noble and learned Lord, Lord Hailsham, again, about the risk of delay to the ratification of the treaty. It has been made clear that, whatever happens, there will be no delay. Either the Government will win their vote in another place, or it will be necessary for them to swallow what they have been saying and to ratify, with the inclusion of the social chapter.

The noble Lord, Lord Harmar-Nicholls, complained about the Labour Front Bench abstaining on the Motion that the Bill do now pass. I wonder what he would have said had we voted with the Government, and then come back with the amendment that we have put forward today. Would he not say that we had pre-empted our position by supporting the treaty without the social chapter? As an astute politician of long standing, he would have found a way to complain about our behaviour, whatever we did.

I have also been amused by some of the discussion on subsidiarity. As we all know, subsidiarity stops here. If I am in Brussels, I do not want national governments to take decisions that I could take. If I am in Westminster, especially if I am a Conservative government, I want to destroy the possibility of there being local authorities which might take different decisions; for example, any regional government, or any other elected authorities that could exercise powers which I, in central government, could keep to myself. I am a little cynical about some of the political positions taken up on subsidiarity. The real point here is that the whole of the social chapter and the Agreement on Social Policy exude subsidiarity. That is what it is all about. It is all about the powers which remain with member states and the restrictions on the right of the Community to take action on social policy. I shall return to that issue when I consider the economic and social effects.

As I say, we do not need to detain ourselves too long over the political effects of the issue that we are debating. We need, however, to detain ourselves considerably—not that I mean to detain your Lordships more than I have to—with the economic and social effects of the social agreement and the social chapter. If we read those documents, as not many people seem to have done—my noble friend Lord Wedderburn did an excellent job of explaining what it is all about—we see the fundamental phrase which comes in the Agreement on Social Policy. It says: The Community shall support and complement the activities of the Member States". That is why I say that it exudes subsidiarity.

We must ask ourselves, as my noble friend Lord Eatwell did, what all the fuss is about. Is it true that this is as good or as bad a document as has been claimed? Having heard the debate, surely the answer must be that it cannot possibly be as good or as bad as has been claimed. My noble friend Lord Wedderburn described it as minimal. He described it as a careful and narrow document leading to the commencement of a social dimension rather than as being something important in itself. Any objective reading would show that those who made excessive claims about the virtue of the social chapter or, as did the noble Lord, Lord Alexander, made excessive claims about the vices of the social chapter, have not taken in its wording and restrictions.

I believe that there is a good business case to be made. We have heard a great deal from noble Lords who have been involved in business. So too have I all my life. Padraig Flynn, the Commissioner for Social Affairs, said that a good social climate is a sine qua non of a good business climate. Most hard business people recognise that. I suggest that that is the case in every country except this country. It is the CBI which is out on a limb. The General Secretary of UNICE, the European employers organisation, has said that if the social chapter is used sensibly it will be a very good thing.

There are a number of good business reasons why the social chapter should be adopted by this country in addition to the other 11 nations. First, I give as an example the multinational companies. We have heard from a number of noble Lords who work for such companies. Multinationals expect to have common social policies so that they can make rational decisions about the location of industry within the European Community. Secondly, as the Ernst and Young study made plain, inward investors expect that the countries in which they are investing will wholeheartedly take part in the institutions of the Community. They dislike semi-detached countries, which is what we should be if we excluded ourselves.

The third reason is not perhaps so much a business reason as a social reason. If we in this country make it easier to sack people, as we have during the past 10 or 15 years, British workers will of course be sacked rather than workers in other countries. Fourthly, employers want to employ highly-skilled highly-paid and high quality employees rather than employing those with fewer skills, lower pay and less security of tenure and able to contribute less to the business. In that respect I have found some of the contributions rather strange. Saving the presence of noble Lords opposite who have been involved in business and in industrial relations, I find it strange that anyone engaged in a modern business should attempt to deny that. Finally, it is good business practice everywhere that there should be full consultation with employees. That is what the social chapter is about.

In addition to the business case for the social chapter, we must look at the social ease. That was made clear by a number of my noble friends. notably Lord Eatwell, Lord McCarthy and Lord Wedderburn. The effect on the economy and on soctety of low pay and low security of employment is not merely that the direct labour costs are lower—of course they are. Business people look on labour as a resource, as my noble friend Lord Eatwell said. They look on it in the total context of the society and the economy in which they are working. If we encourage low pay, part-time work and insecurity of employment, and if we permit—I shall not say "encourage"—high unemployment as we have during the past 14 years we shall get, as we have, a low tax base and high social security costs. We shall have all those things which lead to the progressive breakdown of social cohesion, which is what I understand the Maastricht Treaty and the earlier treaties to be about. The noble Lord, Lord Elibank, curiously enough, saw that point but drew the diametrically wrong conclusion from it.

What is apparent from all that is that we have two Tory parties. It may be that we have always had two Tory parties. The noble Lord, Lord Finsberg., referred to Disraeli and my noble friend Lord Longford referred to Shaftesbury. It has been true ever since the Tory Party existed that there has been the Tory Party which recognises the existence of two nations and tries to make it one nation; arid there has been the Tory Party which exploits the existence of two nations.

If I am being polite about Conservative attitudes towards the social chapter, 1 would say that they are defeatist. I agree again with the noble Lord, Lord Finsberg, that their argument is that the social chapter is a recipe for unemployment; that comes from a party which has increased unemployment over the past 14 years to the highest level since the 1930s.

Of course there are noble Lords—notably the noble Lords, Lord Carr of Hadley and Lord Alexander or Weedon—who have genuinely, throughout their lives, been concerned with social cohesion and harmony in industry and commerce. But the record does not support the view that the Conservative Party has collectively taken that position.

If I am being impolite. I would say—and I really believe that there is far too much truth in this—that the rejection of the social chapter Is a cynical repudiation of progress towards social cohesion. My noble friend Lord Desai described it as the rich becoming richer and the poor becoming poorer. That is what has happened in the past 14 years and it has happened in a situation in which the decisions on social policy have been made by this Government rather than being influenced or controlled in any way by Brussels.

If you want a society in which the norm is low wages, minimal employment rights and the creation of an underclass, you will vote against the inclusion of the social chapter. If you believe, as I do, that there are both practical and moral reasons why we should have the social dimension in our economic policy, you will vote for the amendment in the name of my noble friend Lord Richard and if necessary, for the amendment in the name of the noble Lord, Lord Jenkins.

9.27 p.m.

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)

My Lords, once again your Lordships' House has produced a debate of really high quality. Certainly there are no signs of Euro-fatigue in this House.

Under Section 7, the European Communities (Amendment) Act will enter into force only when each House of Parliament has come to a resolution on the Motion. Therefore, it is in compliance with Section 7 of the Act that the Government's Motion simply asks your Lordships to note the policy outlined so clearly this afternoon by my noble friend the Lord Privy Seal.

There is no doubt where the Government stand. We continue to support a sensible social dimension for the Community but our policy must take account of the different national traditions from country to country. As my right honourable friend the Foreign Secretary said in another place: It should be a question not of how to ensure precisely the same levels of social protection in each member state but of how to ensure that Europe can compete effectively on the world stage".—[Official Report, Commons, 22/4/93; cols. 541–2.] I understand that that is not the view shared by the noble Lords, Lord Richard or Lord McIntosh. The noble Lord, Lord Richard, made crystal clear his view when he moved the Labour Party's amendment to the Government's Motion. But I believe that the choice is straightforward: on the one hand, there is the Government's view, shared by British business, of a deregulated, competitive and free trading Europe unburdened by unnecessary and arbitrary social costs imposed by Brussels; on the other hand, there are old—I would say outdated—corporatist views advocated by numerous Labour Peers this evening.

I do not believe that those ideas worked in the past. Moreover, I do not believe that they will work now or in the future. However, the one thing about which I am absolutely sure is that business in Europe has changed and is changing very fast. I have to tell the noble Baroness, Lady Castle, that the world is a very different place since she tried to introduce In Place of Strife. It is also a very different place from that of her memory of 1979 when this nation, as noble Lords will remember, lost 29 million working days. Let us contrast that with the situation that we now have with half-a-million working days lost. That is still too many, but it is the lowest since 1891 when records began.

We heard a number of speeches from the Liberal Democrat Benches which were not quite in the same vein but, no doubt, that party still agrees that Brussels should have greater powers than I believe all employers and those who wish to create wealth in this country believe. I was amazed when the noble Baroness, Lady Seear, quoted eloquently from Article 2.2 of the social protocol and completely left out Article 2.1. It is perfectly true that in the first tirét of Article 2.1 there is no change because the existing treaty continues. But one only has to look at the tirét on, —working conditions;

—the information and consultation of workers", and so on, through the rest of Article 2.1 to realise that there are huge extensions of the Community's competence and scope for Community law imposed by QMV, including matters best left entirely to national decision as my noble and learned friend Lord Hailsham of Saint Marylebone said or to individual firms and their employees as the noble Baroness, Lady O'Cathain, said.

It is true that all member states have had to accept that European competitiveness has been declining. Since the mid-1980s, EC exports and world markets have fallen by 3 per cent. In the 1980s, the Community had trade surpluses with the US and Japan. They have now become trade deficits. On labour costs, hourly wages in manufacturing in leading Community countries are not much higher than those in the United States. But, as a number of speakers pointed out, it is the high proportion of non-wage costs of social security payments that makes the difference. Those elements make up about half the, total labour costs in Germany, France and Italy. In the United States they make up about 25 per cent. and in countries such as Korea and Taiwan the figure is about 10 per cent. That accounts for the higher overall labour costs in Europe.

Implementing the social chapter would mean increasing social costs across the board. That is our worry. In turn, it would make European industry less competitive. If we are uncompetitive, then we create unemployment. The noble Lord, Lord Jenkins of Hillhead, in moving his amendment and the noble Lord, Lord Barnett, asked why opt out of the social agreement if the Government wanted to be at the heart of Europe in shaping the debate? I should merely point out that we are shaping the debate in Europe through the social protocol. Other member states are looking very carefully at Britain's policies and realising that what we have been saying is true: high social costs do inhibit employment and affect Europe's competitiveness. The director-general of the CBI said on Monday last that every single employer group like the CBI in Europe, in Germany and in France is against the social chapter, but that only our Government actually had the courage to say that we did not want any part of it.

If we had not set an example in Europe, the current debate on social policy in the Community might never have happened. A number of Labour Peers asked why the United Kingdom was against increased social protection. Perhaps I may say quite unequivocally to them that we are not against social protection. The UK has one of the most comprehensive safety nets in the Community. Our nationwide system of social assistance provides income for all. There are many other aspects of our social provision which on another occasion, no doubt, we shall discuss.

The noble Lord, Lord Eatwell, said that the difference in the debate is between those who think only in terms of cost and those who think of workers as a resource. That is simplistic nonsense. Investment in workers in the form of training and skill development is not only desirable, it is essential, as my noble friend Lord Alexander of Weedon, said. What does not follow, in the argument of the noble Lord, Lord Eatwell, is that it is best achieved or guided by the Community and the social chapter. I believe that it is best done in Britain, just as my noble and learned friend Lord Hailsham said.

The noble Baroness, Lady Castle, asked what progress had been made in 14 years. I must say to her that when I look at the reform of trade union law and what that has led to, I see that it has restored the control of unions to their members and the role of unions to representing their members' interests and not seeking to run the country. That is the great difference from the wonderful days which the noble Baroness, Lady Castle, seems to recall now through her rose-tinted diaries.

The noble Lord, Lord McCarthy, asked about implementing social action and said that the UK's record was deplorable. It is nonsense to say that the UK has blocked social progress. We have not blocked any legislation in the Social Affairs Council for over five years. We have not voted against a single legislative measure in the whole of the social action programme. Our record in implementing agreed social measures is second to none in the Community. The latest Commission report on the implementation of measures up to the end of 1992 shows that the UK was top of the league table, having implemented into domestic legislation 32 out of the 33 relevant measures. No other member state could match that record, and some have even failed to implement over a third of the measures.

There is a growing realisation on the Continent of Europe that the UK approach is right. The OECD, the European Commission and the IMF all forecast that the UK will grow faster than major EC competitors in 1993. Our interest rates are the lowest for 15 years. We have inflation levels which we have not seen for nearly 30 years, and interest rates are the lowest in the Community. Unemployment is coming down. We have had our fifth consecutive monthly fall. Manufacturing unit wage costs are the lowest for 20 years. Between 1980 and 1990 UK manufacturing productivity grew faster than in all other major industrial countries, and I remind your Lordships that in the previous two decades the UK was bottom of the league. According to the OECD—not British figures—between 1984 and 1990 the UK had by far the best job creation record among the larger EC economies.

There are many other statistics like that. I shall not bore the House with them all at this hour of the night, but 1 can say this to your Lordships. We have more people in self-employment now than ever before—2.9 million. We have a proportion of workers in permanent part-time work well above the EC average at 21 per cent. because they want part-time work. Both self-employment and part-time work would be adversely affected if the views of some of our European partners were brought to bear through the social chapter.

I believe that the decisions of the Copenhagen' European Council, which were dominated by concern about economic growth and unemployment in Europe, are right. The Council wants to study the challenge of competitiveness and it wants to make sure that we have greater efficiency and flexibility in the labour market, that we restrain the rising costs of social expenditure while safeguarding the protection of the most vulnerable in our society. As the noble Lord, Lord Kilmarnock, said, I believe that that sort of flexibility can only come when we decide at national level the social policy which should be our own to decide.

There are many other aspects of our debate. But we have different systems of industrial relations in the Community, different traditions and different working practices. That is why I believe that the social chapter is irreconcilable with the United Kingdom's approach.

When my right honourable friend the Prime Minister went to Maastricht in December 1991 he had a clear negotiating mandate from Parliament which included the avoidance of intrusive Community measures in social areas which are matters for national decision. He returned from Maastricht with a treaty that does just that. That is not just the view of the Government. It is the view of the then director general of the CBI, Sir John Banham. It is the view of the Association of British Chambers of Commerce which said: The Government was quite right to stick out for an exclusion on the Social Chapter. All 800 Chambers of Commerce in Europe have rejected the Commission's plans to legislate in areas such as hours of work. There will be many Continental businesses today envying their UK competitors for the comparative flexibility and low labour costs that will arise from the UK opting out". All in all there are three reasons for supporting the Government Motion and opposing the Labour and Liberal amendments tonight. First, this is an area of policy which should continue to be made in Britain. Secondly, it is not an effective means of furthering social progress. Thirdly, it will raise expectations of greater spending on social policies at just the time when all G7 countries in the EC are agreed that such spending must be contained.

The potential for damage to our employment prospects and those throughout Europe—but to ours were we to be forced to sign up to the social chapter of the Eleven—would be immense. British employers, large and small, know that it would be most unwise to sign up to the social chapter. That is why the treaty so carefully negotiated by my right honourable friend the Prime Minister means that we do not have to do so. It is the treaty that he negotiated that we should ratify, without the Labour amendment and without the Liberal amendment. That is why I ask your Lordships to pass the government Motion tonight.

9.41 p.m.

Lord Richard

My Lords, I detect that the House desires to come to a decision very soon upon the issues. Therefore, I shall not detain it long. I merely say a few sentences, if I may. I warn the noble Baroness, I warn the Government, that this issue will not go away. They may win the vote in the Chamber tonight but the son of the social chapter will be here, as will the grandson of the social chapter. Eventually this country will be carried kicking and screaming into a European social policy which, because of the Government's action now, we shall find more difficult to accept and much more difficult to adapt to. With enthusiasm, I commend the amendment.

The Lord Chancellor

My Lords, the original Motion was, That this House, in compliance with the requirements of Section 7 of the European Communities (Amendment) Act 1993, notes the policy of Her Majesty's Government on the adoption of the Protocol on Social Policy, since when an amendment has been moved by the noble Lord, Lord Richard, to leave out from ("That") to end and insert the words set out on the Order Paper.

9.43 p.m.

On Question, Whether the said amendment shall be agreed to?

Their Lordships divided: Contents, 88; Not-Contents, 295.

Division No. 1
CONTENTS
Addington, L.	Jay of Paddington, B.
Airedale, L.	Jeger, B.
Archer of Sandwell, L.	Jenkins of Hillhead, L.
Ardwick, L.	Jenkins of Putney, L.
Barnett, L.	Judd, L.
Beaumont of Whitley, L.	Kennet, L.
Birk, B.	Kilbracken, L.
Blackstone, B.	Kirkhill, L.
Bonham-Carter, L.	Lichfield, Bp.
Boston of Faversham, L.	Listowel, E.
Callaghan of Cardiff, L.	Llewelyn-Davies of Hastoe, B.
Carmichael of Kelvingrove, L.	Lockwood, B.
Carter, L.	Longford, E.
Castle of Blackburn, B.	Macaulay of Bragar, L.
Cledwyn of Penrhos, L.	McCarthy, L.
Clinton-Davis, L.	McGregor of Durris, L.
David, B.	McIntosh of Haringey, L.
Dean of Beswick, L.	Mackie of Benshie, L.
Desai, L.	McNair, L.
Donoughue, L.	Mallalieu, B.
Eatwell, L.	Merlyn-Rees, L.
Ennals, L.	Meston, L.
Ewing of Kirkford, L.	Molloy, L.
Ezra, L.	Morris of Castle Morris, L. [Teller.]
Gallacher, L.
Galpern, L.	Mulley, L.
Graham of Edmonton, L. [Teller.]	Nicol, B.
	Parry, L.
Greene of Harrow Weald, L.	Pitt of Hampstead, L.
Hamwee, B.	Plant of Highfield, L.
Harris of Greenwich, L.	Prys-Davies, L.
Henniker, L.	Rea, L.
Hilton of Eggardon, B.	Richard, L.
Hollick, L.	Rochester, L.
Hollis of Heigham, B.	Roll of Ipsden, L.
Holme of Cheltenham, L.	Russell, E.
Hooson, L.	Seear, B.
Houghton of Sowerby, L.	Sefton of Garston, L.
Howell, L.	Serota, B.
Irvine of Lairg, L.	Shackleton, L.

Shepherd, L.	Wedderburn of Charlton, L.
Strabolgi, L.	White, B.
Thomson of Monifieth, L.	Williams of Elvel, L.
Tordoff, L.	Williams of Mostyn, L.
Turner of Camden, B.	Young of Dartington, L.

NOT-CONTENTS
Aberdare, L.	De Freyne, L.
Abinger, L.	De L'Isle, V.
Aldington, L.	Deedes, L.
Alexander of Weedon, L.	Denham, L.
Allenby of Megiddo, V.	Denman, L.
Amery of Lustleigh, L.	Denton of Wakefield, B.
Amwell, L.	Digby, L.
Annaly, L.	Donegall, M.
Arran, E.	Dormer, L.
Ashbourne, L.	Downshire, M.
Astor, V.	Dudley, E.
Astor of Hever, L.	Eccles, V.
Attlee, E.	Eccles of Moulton, B.
Auckland, L.	Elibank, L.
Barber, L.	Ellenborough, L.
Bathurst, E.	Elles, B.
Belstead, L.	Elliot of Harwood, B.
Bessborough, E.	Elliott of Morpeth, L.
Bethell, L.	Elphinstone, L.
Biddulph, L.	Elton, L.
Birdwood, L.	Erroll of Hale, L.
Blakenham, V.	Fairhaven, L.
Blatch, B.	Faithfull, B.
Blyth, L.	Ferrers, E.
Boardman, L.	Finsberg, L.
Bolton, L.	Fisher, L.
Boyd-Carpenter, L.	Flather, B.
Brabazon of Tara, L.	Forbes, L.
Braine of Wheatley, L.	Forester, L
Bramall, L.	Forte, L.
Bridgeman, V.	Fraser of Carmyllie, L.
Brigstocke, B	Fraser of Kilmorack, L.
Brougham and Vaux, L.	Gainford, L.
Buccleuch and Queensberry, D.	Geddes, L.
Butterfield, L.	Gilmour of Craigmillar, L.
Butterworth, L.	Gisborough, L.
Byron, L.	Glendyne, L.
Cadman, L.	Goold, L.
Caithness, E.	Gormanston, V.
Camden, M.	Goschen, V.
Campbell of Alloway, L.	Gowrie, E.
Campbell of Croy, L.	Granard, E.
Carlisle of Bucklow, L.	Gray, L.
Carnegy of Lour, B.	Gray of Contin, L.
Carnock, L.	Greenway, L.
Carr of Hadley, L.	Gridley, L.
Carrington, L.	Grimston of Westbury, L.
Carver, L.	Hacking, L.
Cathcart, E.	Hailsham of Saint Marylebone, L.
Cavendish of Furness, L.
Cayzer, L.	Harding of Petherton, L.
Chalker of Wallasey, B.	Harlech, L.
Charteris of Amisfield, L.	Harmar-Nicholls, L.
Chelmer, L.	Harmsworth, L.
Clanwilliam, E.	Harrowby, E.
Clark of Kempston, L.	Harvey of Tasburgh, L.
Cochrane of Cults, L.	Harvington, L.
Coleraine, L.	Haslam, L.
Colnbrook, L.	Hayhoe, L.
Colwyn, L.	Henderson of Brompton, L.
Constantine of Stanmore, L.	Henley, L.
Cork and Orrery, E.	Hertford, M.
Craigavon, V.	Hesketh, L. [Teller.]
Craigmyle, L.	Hives, L.
Cranborne, V.	Holderness, L.
Cranbrook, E.	HolmPatrick, L.
Crathorne, L.	Hood, V.
Crickhowell, L.	Hooper, B.
Cullen of Ashbourne, L.	Hothfield, L.
Cumberlege, B.	Howe, E.
Darcy (de Knayth), B.	Howe of Aberavon, L.
Daventry,V.	Hylton-Foster, B.
Davidson, V.	Inchyra, L.

Ironside, L.	Reay, L.
Jeffreys, L.	Rees, L.
Jellicoe, E.	Remnant, L.
Jenkin of Roding, L.	Renfrew of Kaimsthorn, L.
Johnston of Rockport, L.	Rennell, L.
Killearn, L.	Renton, L.
Kilmarnock, L.	Renwick, L.
Kimball, L.	Rippon of Hexham, L.
Kindersley, L.	Rockley, L.
King of Wartnaby, L.	Rodger of Earlsferry, L.
Kinloss, Ly.	Rodney, L.
Kinnoull, E.	Roxburghe, D.
Kitchener, E.	Sackville, L.
Knollys, V.	St. Davids, V.
Knutsford, V.	St. John of Fawsley, L.
Lane of Horsell, L.	Saint Levan, L.
Lauderdale, E.	Saltoun of Abernethy, Ly.
Lawrence, L.	Sanderson of Bowden, L.
Lawson of Blaby, L.	Savile, L.
Layton, L.	Seccombe, B.
Leigh, L.	Selborne, E.
Limerick, E.	Sharp of Grimsdyke, L.
Lindsay, E.	Sharpies, B.
Lindsey and Abingdon, E.	Sherfield, L.
Long, V.	Shrewsbury, E.
Lothian, M.	Shuttleworth, L.
Lucas of Chilworth, L.	Simon of Glaisdale, L.
LyeII, L.	Stanley of Alderley, L.
McColl of Dulwich, L.	Stedman, B.
Macfarlane of Bearsden, L.	Stevens of Ludgate, L.
Mackay of Ardbrecktrsh, L.	Stewartby, L.
Mackay of Clashfern, L. [ Lord Chancellor.]	Stockton, E.
	Strange, B.
Macleod of Borve, B.	Strathcarron, L.
Mancroft, L.	Strathclyde, L.
Manton, L.	Strathmore and Kinghorne, E. [Teller.]
Marchwood, V.
Marlesford, L.	Sudeley, L.
Massereene and Ferrard, V.	Suffield, L.
Merrivale, L.	Swinton, E.
Mersey, V.	Terrington, L.
Middleton, L.	Teviot, L.
Mills, V.	Thomas of Gwydir, L.
Monk Bretton, L.	Thorneycroft, L.
Monteagle of Brandon, L.	Tollemache, L.
Montgomery of Alamein, V.	Torphichen, L.
Morris, L.	Torrington, V.
Mountevans, L.	Townshend, M.
Mountgarret, V.	Trefgarne, L.
Mowbray and Stourton, L.	Trumpington, B.
Moyola, L.	Tryon, L.
Munster, E.	Ullswater, V.
Murton of Lindisfarne, L.	Vaux of Harrowden, L.
Nathan, L.	Vinson, L.
Nelson, E.	Vivian, L.
Nelson of Stafford, L.	Wade of Chorlton, L.
O'Cathain, B.	Wakeham, L. [Lord Privy Seal.]
Oppenheim-Barnes, B.
Orkney, E.	Warnock, B.
Orr-Ewing, L.	Waverley, V.
Oxfuird, V.	Weatherill, L.
Park of Monmouth, B.	Weinstock, L.
Parkinson, L.	Westbury, L.
Pender, L.	Wharton, B.
Perry of Southwark, B.	Whitelaw, V.
Perth, E.	Wilberforce, L.
Peyton of Yeovil, L.	Willoughby de Broke, L.
Pike, B.	Wilson of Tillyorn, L.
Plumb, L.	Wise, L.
Plummer of St. Marylebone, L.	Wolfson, L.
Polwarth, L.	Wolfson of Sunningdale, L.
Portman, V.	Woolton, E.
Prentice, L.	Wyatt of Weeford, L.
Pym, L.	Wynford, L.
Quinton, L.	Young, B.
Rankeillour, L.	Young of Graffham, L.
Rawlinson of Ewell, L.

Resolved in the negative and amendment disagreed to accordingly.

9.56 p.m.

Lord Jenkins of Hillhead

My Lords, I beg to move.

Moved, as an amendment to the above Motion, to leave out from ("That") to end and insert ("in the opinion of this House, Her Majesty's Government, within thirty days of the coming into force of this Act, should give reality to their announced desire to put Britain "at the heart of Europe" by informing the governments of the other eleven members of the European Community of the United Kingdom's willingness to adhere to the terms of the Agreement on Social Policy annexed to the terms of the Protocol on Social Policy adopted at Maastricht on 7th February 1992, thereby putting themselves in a position to influence the development of the Community's social policy from the inside rather than the outside.")— (Lord Jenkins of Hillhead.)

The Lord Chancellor

My Lords, the Question is that the amendment standing in the name of the noble Lord, Lord Jenkins of Hillhead, be agreed to. As many as are of that opinion will say. "Content"? To the contrary, "Not-Content"? I think the "Not-Contents" have it. Clear r.he Bar.

9.57 p.m.

On Question, Whether the said amendment shall, be agreed to?

Their Lordships divided: Contents, 85; Not-Contents, 271.

Division No. 2
CONTENTS
Addington, L.	Jenkins of Hillhead, L.
Archer of Sandwell, L.	Jenkins of Putney, L.
Ardwick, L.	Judd, L.
Beaumont of Whitley, L.	Kennet, L.
Birk, B.	Kilbracken, I..
Bonham-Carter, L.	Kirkhill, L.
Boston of Faversham, L.	Kissin, L.
Bramall, L.	Listowel, E.
Callaghan of Cardiff, L.	Llewelyn-Davies of Hastoe, B.
Carmichael of Kelvingrove, L.	Lockwood, B.
Carter, L.	Longford, E.
Castle of Blackburn, B.	McCarthy, L.
Cledwyn of Penrhos, L.	McGregor of Durris, L.
Clinton-Davis, L.	McIntosh of Haringey, L.
Dahrendorf, L.	Mackie of Benshie, L.
David, B.	McNair, L.
Dean of Beswick, L.	Mallalieu, B.
Desai, L.	Mayhew, L.
Donoughue, L.	Merlyn-Rees, L.
Eatwell, L.	Meston, L.
Ennals, L.	Morris of Castle Morris, L.
Ezra, L.	Nicol, B.
Gallacher, L.	Parry, L.
Graham of Edmonton, L.	Pitt of Hampstead, L.
Greene of Harrow Weald, L.	Plant of Highfield, L.
Hamwee, B. [Teller.]	Prys-Davies, L.
Harlech, L.	Rea, L.
Harris of Greenwich, L.	Richard, L.
Henniker, L.	Rochester, L.
Hilton of Eggardon, B.	Rodgers of Quarry Bank, L.
Hollick, L.	Roll of Ipsden, L.
Hollis of Heigham, B.	Russell, E.
Holme of Cheltenham, L.	Seear, B.
Hooson, L.	Sefton of Garston, L.
Houghton of Sowerby, L.	Serota, B.
Howell, L.	Shackleton, L.
Irvine of Lairg, L.	Shepherd, L.
Jay of Paddington, B.	Thomson of Monifieth, L.
Jeger, B.	Tordoff, L. [Teller.]

Turner of Camden, B.	Williams of Elvel, L.
Wedderburn of Charlton, L.	Williams of Mostyn, L.
White, B.	Young of Dartington, L.
Wigoder, L.

NOT-CONTENTS
Aberdare, L.	Denton of Wakefield, B.
Aldington, L.	Digby, L.
Alexander of Weedon, L.	Donegall, M.
Allenby of Megiddo, V.	Dormer, L.
Amery of Lustleigh, L.	Downshire, M.
Amwell, L.	Dudley, E.
Annaly, L.	Eccles, V.
Arran, E.	Eccles of Moulton, B.
Ashbourne, L.	Elibank, L.
Astor, V.	Ellenborough, L.
Astor of Hever, L.	Elles, B.
Attlee, E.	Elliot of Harwood, B.
Auckland, L.	Elliott of Morpeth, L.
Barber of Tewkesbury, L.	Elphinstone, L.
Bathurst, E.	Elton, L.
Belstead, L.	Erroll of Hale, L.
Bessborough, E.	Fairhaven, L.
Bethell, L.	Faithfull, B.
Biddulph, L.	Ferrers, E.
Birdwood, L.	Finsberg, L.
Blatch, B.	Fisher, L.
Blyth, L.	Flather, B.
Boardman, L.	Forbes, L.
Bolton, L.	Forte, L.
Boyd-Carpenter, L.	Fraser of Carmyllie, L.
Brabazon of Tara, L.	Fraser of Kilmorack, L.
Braine of Wheatley, L.	Gainford, L.
Bridgeman, V.	Geddes, L.
Brigstocke, B.	Gilmour of Craigmillar, L.
Brougham and Vaux, L.	Gisborough, L.
Buccleuch and Queensberry, D.	Glendyne, L.
Butterfield, L.	Goold, L.
Butterworth, L.	Gormanston, V.
Byron, L	Goschen, V.
Cadman, L.	Granard, E.
Caithness, E.	Gray, L.
Camden, M.	Gray of Contin, L.
Campbell of Alloway, L.	Greenway, L.
Campbell of Croy, L.	Gridley, L.
Carlisle of Bucklow, L.	Grimston of Westbury, L.
Carnegy of Lour, B.	Hailsham of Saint Marylebone, L.
Carnock, L.
Carr of Hadley, L.	Harding of Petherton, L.
Carrington, L.	Harmar-Nicholls, L.
Cathcart, E.	Harmsworth, L.
Cavendish of Furness, L.	Harrowby, E.
Cayzer, L.	Harvey of Tasburgh, L.
Chalker of Wallasey, B.	Harvington, L.
Charteris of Amisfield, L.	Haslam, L.
Chelmer, L.	Hayhoe, L.
Clanwilliam, E.	Henley, L.
Clark of Kempston, L	Hertford, M.
Cochrane of Cults, L.	Hesketh, L. [Teller.]
Coleraine, L.	Hives, L.
Colnbrook, L.	Holderness, L.
Colville of Culross, V.	HolmPatrick, L.
Constantme of Stanmore, L.	Hood, V.
Cork and Orrery, E.	Hooper, B.
Craigavon, V.	Hothfield, L.
Craigmyle, L.	Howe, E.
Cranborne, V,	Hylton-Foster, B.
Cranbrook, E.	Inchyra, L.
Crathorne, L.	Jeffreys, L.
Crickhowell, L.	Jellicoe, E.
Cullen of Ashbourne, L.	Jenkin of Roding, L.
Cumberlege, B.	Johnston of Rockport, L.
Darcy (de Knayth), B.	Killearn, L.
Daventry, V.	Kilmarnock, L.
Davidson, V.	Kimball, L.
De Freyne, L.	Kindersley, L.
De LTsle, V.	King of Wartnaby, L.
Deedes, L.	Kinloss, Ly.
Denham, L.	Kinnoull, E.
Denman, L.	Knollys, V.

Knutsford, V.	Roxburghe, D.
Lane of Horsell, L.	Sackville, L.
Lauderdale, E.	St. Davids, V.
Lawrence, L.	St. John of Fawsley, L.
Layton, L.	Saint Levan, L.
Leigh, L.	Saltoun of Abernethy, Ly.
Limerick, E.	Sanderson of Bowden, L.
Lindsay, E.	Savile, L.
Long, V.	Seccombe, B.
Lothian, M.	Selborne, E.
Lucas of Chilworth, L.	Sharp of Grimsdyke, L.
Lyell, L.	Sharpies, B.
McColl of Dulwich, L.	Sherfield, L.
Macfarlane of Bearsden, L.	Shrewsbury, E.
Mackay of Ardbrecknish, L.	Shuttleworth, L.
Mackay of Clashfern, L. [Lord Chancellor.]	Simon of Glaisdale, L.
	Stanley of Alderley, L.
Mancroft, L.	Stedman, B.
Manton, L.	Stevens of Ludgate, L.
Marchwood, V.	Stewartby, L.
Marlesford, L.	Stockton, E.
Massereene and Ferrard, V.	Strange, B.
Merrivale, L.	Strathcarron, L.
Mersey, V.	Strathclyde, L.
Middleton, L.	Strathmore and Kinghorne, E. [Teller.]
Mills, V.
Monk Bretton, L.	Sudeley, L.
Montagu of Beaulieu, L.	Suffield, L.
Monteagle of Brandon, L.	Terrington, L.
Montgomery of Alamein, V.	Teviot, L.
Mountevans, L.	Thomas of Gwydir, L.
Mountgarret, V.	Thorneycroft, L.
Mowbray and Stourton, L.	Thurlow, L.
Moyola, L.	Tollemache, L.
Munster, E.	Torphichen, L.
Murton of Lindisfarne, L.	Torrington, V.
Nathan, L.	Townshend, M.
Nelson, E.	Trefgarne, L.
Nelson of Stafford, L.	Trumpington, B.
O'Cathain, B.	Tryon, L.
Oppenheim-Barnes, B.	Ullswater, V.
Orr-Ewing, L.	Vaux of Harrowden, L.
Oxfuird, V.	Vinson, L.
Park of Monmouth, B.	Vivian, L.
Perry of Southwark, B.	Wade of Chorlton, L.
Perth, E.	Wakeham, L. [Lord Privy Seat.]
Peyton of Yeovil, L.
Pike, B.	Warnock, B.
Plumb, L.	Waverley, V.
Plummer of St. Marylebone, L.	Weatherill, L.
Prentice, L.	Weinstock, L.
Pym, L.	Westbury, L.
Quinton, L.	Wharton, B.
Rankeillour, L.	Whitelaw, V.
Rawlinson of Ewell, L.	Willoughby de Broke, L.
Reay, L.	Wilson of Tillyorn, L.
Rees, L.	Wise, L.
Renfrew of Kaimsthorn, L.	Wolfson, L.
Renton, L.	Woolton, E.
Renwick, L.	Wyatt of Weeford, L.
Rockley, L.	Wynford, L.
Rodger of Earlsferry, L.	Young, B.
Rndnev. T.	Ynnnp nf Graffham. L.

Resolved in the negative, and amendment disagreed to accordingly.

10.9 p.m.

The Lord Chancellor

My Lords, the amendment of the noble Lord, Lord Houghton of Sowerby.

Lord Houghton of Sowerby

My Lords, not moved.

The Lord Chancellor

My Lords, the Question is that the original Motion be agreed to.

On Question, Motion agreed to.