HL Deb 12 November 1996 vol 575 cc879-93
Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie)

My Lords, with the leave of the House, I shall now repeat a Statement on the Working Time Directive which is being made in another place by my right honourable friend the President of the Board of Trade. The Statement is as follows:

"With permission, Madam Speaker, I would like to make a Statement on the Working Time Directive.

"The Court of Justice of the European Communities has today given its judgment in the proceedings we brought to have Council Directive 93/104/EC, the Working Time Directive, annulled. That directive derives its origins and impetus from the 1989 Community Charter of the Fundamental Social Rights of Workers, to which the United Kingdom did not subscribe then and does not subscribe now.

"The directive was adopted by the Council at a meeting on 23rd November 1993 and was forced on the United Kingdom through the use of the qualified majority voting procedure by being adopted by the European Council under Article 118a of the Treaty Establishing the European Community, which relates to the health and safety of workers. It is due to be implemented on the 23rd of this month.

"A common position on the proposals for the directive had been reached by Ministers of Social and Labour Affairs at a meeting on 1st June 1993. At that meeting, the United Kingdom announced its intention to challenge the directive's legal base. Our legal challenge was mounted in March 1994.

"The directive's main provisions include limiting the working week to an average of 48 hours; putting various restrictions on the length of night work; giving employees entitlements to minimum daily and weekly rest periods and to a period of paid annual leave. Our case before the Court was essentially that these are matters relating to terms and conditions of employment which should be settled by employers and employees and not truly health and safety at work matters.

"The Court has now delivered its judgment and I am arranging for the text of the judgment to be placed in the Library.

"The Court has in essence confirmed the Advocate General's earlier opinion that the directive was properly adopted under Article 118a of the Treaty. This is not what was envisaged when we agreed to Article 118a as a health and safety provision. We shall therefore insist that the intergovernmental conference (IGC) addresses the issues which this ECJ judgment raises. That means both ensuring that the Working Time Directive no longer affects the United Kingdom and securing measures to prevent any other social engineering directives being forced on the United Kingdom by similar manoeuvres. The use of Article 118a in this fashion wholly undermines the spirit of our opt-out from the social chapter agreed at Maastricht. As he has already told the House, my right honourable friend the Prime Minister has today written to President Jacques Santer making clear in the most unequivocal terms our proposals to correct the position. A copy of the letter has been placed in the Library.

"In his letter, my right honourable friend makes clear that the broad interpretation of Article 118a implied by the ECJ judgment, 'goes directly counter to the spirit of what we agreed at Maastricht. It is unacceptable and must be remedied'.

"My right honourable friend has made clear that the Government will, therefore, be tabling amendments at the IGC aimed at ensuring that Article 118a cannot in future be used as it has been on this occasion and dealing with the specific problem of the Working Time Directive.

"The Government have made clear that, as my right honourable friend also said in his letter, we attach, `the utmost importance to these amendments, and [will] insist that they form part of the outcome of the Intergovernmental Conference'.

"In the meantime of course we have no option but to obey the law until we secure the necessary treaty changes. But we will legislate to implement the directive only after carrying out proper and necessary public consultation on the issues and options. In doing so, we will aim to take advantage of the valuable derogations already secured during our negotiation on the directive. We are determined to preserve the flexibility in labour matters that has been such an important element in the revival of our economy over recent years. British industry would expect us to do no less.

"The use of qualified majority voting was agreed by member states before the Maastricht negotiations for genuine matters concerning health and safety at work. Never for a moment was it envisaged that those arrangements could properly be applied to what we would always regard as social measures—including the general regulation of working time, rest periods and holidays.

"We have always been fully committed to protections needed to ensure good health and safety standards for British and other European workers. But employers and employees should also be free to agree terms and conditions, including arrangements for working time, rest breaks and holidays, that meet their particular circumstances and needs. We reject the imposition on industry of unnecessary requirements which can only damage competitiveness and jobs and we consider that this directive would be the thin end of a wedge that would lead to more such burdens.

"Because the Working Time Directive is incompatible with these principles, and because of what appeared to be the improper use of procedures to force it through, we had no option but to bring these proceedings to have it annulled. Avoiding unnecessary burdens on British businesses remains at the top of the Government's agenda. So we firmly intend to close the loophole which allowed the Working Time Directive through and to restore the rights of British companies and their employees to reach agreement on such matters, reflecting the requirements of their particular circumstances.

"The competitiveness of our industry is the key to economic success, employment and prosperity. We are not prepared to have it unnecessarily trammelled in the way this judgment would do".

My Lords, that concludes the Statement.

4.1 p.m.

Lord Peston

My Lords, I thank the Minister for repeating the Statement made by his right honourable friend in another place. I start by saying that the language of the Statement is strange, to put it mildly. It uses expressions that I am not convinced are suitable in a Statement made by a senior government Minister, especially if such Statements are in danger at least of being misleading. I refer, for example, to the beginning of the Statement and the expression that the directive was "forced" on the United Kingdom. That is a very strange way to put a matter that was fully negotiated by government Ministers and was carried on correctly within all the procedures of the Community and on which others took a different view. I find it very strange that the Statement should use such a word.

I also find it very strange that the Statement summarises the directive's main provision but leaves out something in which I would have thought everybody would be interested; namely, that almost every provision is optional. Would it not at least have been worth while for whoever drafted the Statement—being anxious to help your Lordships or Members in another place to understand what it said—to have put in its central tenet? That is not the way to issue Statements.

Having said that, let me lean over backwards to be helpful to the Government. It is arguable that the Working Time Directive is about employment rather than about health. That is certainly arguable, though it does not necessarily mean that it is correct. The Government believed that it was correct that it was about employment and Ministers and officials put the case as well as they could. There is no doubt about that and I do not doubt it. In fact, I understand that Ministers and officials did not do too badly. From its original proposal, the directive was watered down in the directions in which we wanted, in almost every way. So much so that Mr. Hunt, the Minister, said that it was toothless. I believe he said, but I do not have the quotation to hand, that it was a victory for us at the time. Certainly—I return to the use of the word "forced"—our country did not vote against it. That is worth bearing in mind.

However, now suddenly the Prime Minister, for reasons that I dare not think about, has decided that the directive is extremely important and dangerous to the interests of the country. He has decided that it was devised solely to undermine our opt-out from the provisions of the social chapter and therefore the question was put as a legal challenge to the Court of Justice of the European Communities, a body which we are solemnly committed to respect and which we do respect in general. It examined the case and found against us. The Court has confirmed that the directive was properly set out and arrived at.

The Prime Minister and his friends may be sad about that. The Prime Minister may not care for that decision or that adjudication. But that is the decision and that is the adjudication. In my judgment, if one belongs to such bodies, when they make adjudications and decisions one responds to them in a proper way. So the question that we must ask ourselves is what is the rational response to this Statement on the directive and the European Court's adjudication.

My judgment is that the initial correct response is not to exaggerate the importance of the directive. The propositions in the Statement are simply mistaken—propositions such as: The use of Article 118a in this fashion wholly undermines the spirit of our opt-out from the social chapter". It is absolute nonsense to say that it: wholly undermines the spirit of our opt-out from the social chapter"; or that it: goes directly counter to the spirit of what we agreed at Maastricht"; or is: unacceptable and must be remedied". For such a minor, trivial directive we use that language. Finally, it is said that we attach: the utmost importance to these amendments"— that is what we are proposing— and we [will] insist"— a very good word to use in Europe— that they form part of the outcome of the intergovernmental conference". I find it extraordinary, in a matter on which the Government feel that they have a good case, that they should use language of such kind on a matter which I should regard as not of overwhelming importance. I happen to favour it but there are many things I favour which are not of overwhelming importance.

I strongly believe that the attempt to threaten the European Union is mistaken. We all agree, and the Statement confirms, that we must of course obey the law. We also agree—here I do not disagree with the Minister—that we must continue to argue our case and convince our friends (assuming that we have some friends) that we have a case and that we are right in general. I also agree with the Prime Minister—much as I favour the social chapter and noble Lords opposite do not—that we have an opt-out and I recognise that the Prime Minister wishes to exercise it.

Let me lean over backwards again and say that he is right to scrutinise what the Community does, if it is the case that it seeks to undermine our actions. But he must not do it by misunderstanding what has happened. He must not do it by bluster and he must certainly not do it by empty threats.

I return to what I believe is the central question anyway. I asked whether this is a health related matter or employment related social legislation and therefore pertinent to the opt-out. At least one of the distinguished figures in this matter, Professor Harrington, says categorically, having examined the evidence, that excessive working time is a health matter. Others who have looked at this field say that it is a health matter. I must admit that, using my common sense, it seems to me to be a health matter. I do not say that those gentlemen are necessarily right. I do not say, to quote another of the papers that we all read, that we may not need more research. I do say that it is reasonable to argue on the basis of available evidence that it is a health matter and therefore that the Community in no way is being disreputable or in any way undermining us by saying that it is.

That seems to me to be the central question. In other words, if we examine the question and obviously it is a health matter and we find that many experts tell us that it is a health matter, it seems to me that the Government's whole position is undermined right from the beginning. It is also further damaging to us in the future when we have to confront matters of this kind and wish to argue with the Community. In order words, to put it as correctly as I can, I believe that it is better to fight a battle on territory that one can win, with a cause that one can win and not this.

Nearly in conclusion, let me refer to the last paragraph, again to put this matter into perspective, where the Statement refers to the importance of competitiveness and all that. I suppose that I have bored your Lordships as much as any noble Lord with the importance of competitiveness, productivity, efficiency and all that kind of thing. I never hesitate to argue that our future depends on that and nothing else. But, again, that only brings out the triviality of the Government's position and the way they exaggerate the importance of the matter before us.

Our economic future depends on competitiveness. In the context of the real and monetary forces that determine that competitiveness, this working time directive is of no significance whatever. Its effects could not fall within our ability to measure. And despite the arguments of noble Lords opposite, I would take a similar view in regard to the social chapter; that it will not determine whether or not this country is rich or poor in the future. Quite other forces do that. For example, as I pointed out to the Minister yesterday, the rise by 10 per cent. in the value of sterling over the past two or three days has a much more powerful effect on the ability of British industry to compete overseas than the working time directive, as does the seeming rise in the price of raw materials that go into our industry. Those are the important matters.

I conclude by asking myself and other noble Lords to reflect on what this is all about. It is certainly not about economics as I understand the subject; it is not even about social policy. It is surely only about politics and especially the internal politics of the party of noble Lords opposite.

Lord Rochester

My Lords, from these Benches I join in thanking the noble and learned Lord, Lord Fraser of Carmyllie, for repeating the Statement. My noble friends and I take a view that is different from that of the Government as expressed in the Statement with regard to the directive.

The matter has a long history. It is not, as is sometimes claimed, to be seen as a way of getting round the social chapter and our opt-out from it. It stems from the Treaty of Rome as amended by the Single European Act, subscribed to by the noble Baroness, Lady Thatcher, when she was Prime Minister.

The Statement refers to the valuable derogations already secured in the Government's negotiation on the directive. It was in fact Mr. David Hunt, the then Secretary of State for Employment, who, three years ago—as the noble Lord, Lord Peston, said—claimed that the teeth of the directive had been drawn. And he did not vote against it when he had the opportunity to do so at the European Council in its amended form.

I acknowledge that there are conflicting views as to whether the length of the working week should be regarded as a health and safety issue. That was plain enough from the evidence given in 1990 to Sub-Committee C of your Lordships' European Communities Committee (of which I was privileged to be a member) in its inquiry into the draft directive as it then was. The European Court of Justice has now ruled that working time is a health and safety issue. I am glad at least that the Government do not propose to go so far as to refuse to act on that judgment. However, I see from the Financial Times today—again the noble Lord, Lord Peston, has already mentioned this—that the Government's use of a confidential medical report in their appeal to the Court has now been heavily criticised by its author, Professor Harrington of Birmingham University. He said that his conclusions did not support the Government's claims and he believes that working hours are a health and safety issue. When the noble and learned Lord replies, perhaps he will comment on that report.

I do not pretend that implementation of the directive will necessarily be altogether without cost. I used to work in the chemical industry, and in the debate on the Maastricht agreement five years ago I expressed some anxiety about the provisions in the directive concerning night work and shift work because of their possible effect on continuous process work. Nor do I forget that the United Kingdom has to compete not just in Europe, but also with the United States and Japan, for example.

There are many groups who are exempt from the provisions of the directive. People who do not wish to work more than 48 hours in a week on average need not do so, and there is plenty of scope for those who are prepared to work longer hours, including continuous shift workers, to whom I have just referred, to negotiate appropriate arrangements with their employers. After all, it is the vulnerable, low paid groups who most need protection from unscrupulous employers and whom the directive will rightly most benefit.

The directive refers to amendments that are to be tabled at the intergovernmental conference dealing with the specific problem, among other things, of the working time directive. The Statement says that the Government attach, the utmost importance to these amendments, and [will] insist that they form part of the outcome of the intergovernmental conference". Again, the noble Lord, Lord Peston, made some mention of that.

I wish to ask the Minister this question: is it not in our own long-term interests that, rather than threatening to impede our future developments in Europe unless there are treaty changes—as the Prime Minister has already done and as the Statement implies—the Government should now take the advice of the director general of the CBI and adopt a constructive attitude in implementing the directive, taking account of the significant degree of flexibility that lies within it?

In relation to the suggestion that the directive may be the thin end of the wedge that would lead to "more such burdens", would not the approach I have advocated afford the best possible means of influencing their formulation to suit UK conditions?

Lord Fraser of Carmyllie

My Lords, perhaps I may respond to the two contributions from the Front Benches. First, the noble Lord, Lord Peston, said that it was strange language for a Statement and he took particular exception to the words, forced on the United Kingdom". That language was deliberately chosen, just as the Commission deliberately chose a route towards this directive which it knew meant that it could be implemented using qualified majority voting when it was believed by all at the time that it would be included within the social chapter from which the United Kingdom had an opt-out. It was for that reason that the language was undoubtedly strongly worded.

The noble Lord went on to say that he was surprised that we took exception to the directive, seeming to believe, as I understood him, that all that was contained within it was essentially optional in nature. I invite the noble Lord to look carefully at what is included within the directive, particularly with regard to night work which, on my reading of it, certainly does not allow for a wholly optional approach to that matter. It is exceedingly complicated and I say this: where there are optional provisions within the directive, the approach of the Government will be that so long as we have to implement it we will take the best advantage of what derogations there are and seek to ensure the maximum flexibility.

The noble Lord said that he considered this simply a political matter and that there had been a recent change of heart by the Government. With respect to him, I spelt out in the Statement that as far back as June 1993—some five months before the directive was implemented—the United Kingdom Government signalled that they would challenge the legality of the basis for the directive. So it is simply not true that a late challenge has been mounted.

Nor do we regard what is contained in the directive as being minor or trivial. I agree that optional arrangements are allowed for. They are extremely complicated and we shall have to look at them very carefully. For that reason—in view of the fact that the noble Lord did not raise it—I take it that he considers it acceptable that we want to consult on the matter. Indeed, the directive itself makes specific provision for consultation. We shall certainly want to consult. These are not minor or trivial matters.

Even if the noble Lord does not accept that view of what is already within the directive, what I am surprised he does not grasp is that Commissioner Flynn has already made it clear that he will be publishing a White Paper in which he will be looking at further action that might be taken to limit very much more the exceptions and derogations provided for in the directive. Once the legality of the directive is there, as we have to accept it is following the European Court ruling, it would be a very serious matter for the United Kingdom if all the hard-won derogations secured back in 1993 were at risk of being lost and the United Kingdom's position could be voted down because qualified majority voting would be the arrangement required. Some very complicated matters would then arise. For example, I understand that one of the issues the Commission now wishes to consider is the regime affecting offshore workers. That is a difficult matter because, in the interests of health and certainly safety, one would have thought that what one wanted to secure on offshore rigs was the minimum number of people and the minimum number of helicopter journeys made to and from them. If these provisions were to be imposed upon the offshore industry, far from bringing about an improvement in safety there would be a very real risk of safety being harmed yet further.

The inconsistency of the position seems to lie with the Opposition. At the time of the social chapter and the opt-out that was secured by the Prime Minister the Opposition objected to the opt-out because they believed that these very matters were included within the social chapter and would be thus excluded from consideration within the United Kingdom. If there has been a change of position, it has been by the Opposition. What has caused the Prime Minister and the Government real concern is not a matter of internal party politics; it is, as the Prime Minister said in his letter to Mr. Santer, because it goes directly contrary to the spirit of what was agreed at Maastricht. It is an issue of good faith. I believe that we are entirely within our rights to insist that where we thought we had dealt in good faith on a particular measure we should now go back and get that corrected.

I turn to what was said by the noble Lord, Lord Rochester. I agree with him. Although we might not wish to do so, we must obey the rule of law. For that reason we will implement the directive if we have not managed to bring about a change beforehand. There is little prospect of bringing about implementation before 23rd November. Indeed, I think that probably at least three other countries within the European Union will not achieve implementation by that date. But, as I indicated earlier, probably the more important feature is that we must engage now, as the directive itself enjoins us to do, in widespread consultation on some extremely complicated matters and on some parts of the drafting of the directive which I personally consider to be extremely obscure. It will take some considerable time for many to understand what it is all about.

The noble Lord referred to the comment by Professor Harrington which appears in today's Financial Times. It is correct that Professor Harrington provided a study and that it formed part of the Government's legal challenge to the working time directive. We always made clear, in accordance with established practice, that it could be published only once the case had been concluded. I have read, as the noble Lord has, what was said in the article but I have not yet read his report. I am led to understand that the report states that the scientific basis for establishing optimal hours of work is in doubt from the beginning and that it is impossible to be dogmatic on scientific grounds concerning the maximum number of hours to be worked each week. Professor Harrington says that there is no firm scientific basis for setting a specific numerical lower limit. In the article in the Financial Times he certainly offers the opinion that 48 hours is a sensible limit. But the study which he was asked to carry out was more to do with the scientific basis on which such a limitation might be set.

Finally, the noble Lord asked whether it was not now in our own interests not to threaten to impede. I come back to this point. We are concerned that this is indeed the thin end of the wedge, and with some real cause. The Prime Minister negotiated long and hard to secure the opt-out from the social chapter. The noble Lord and his party may not have agreed with him but it was perfectly clear that that was a major part of his negotiating position. It was clearly understood by most people for a considerable time that the opt-out would secure exclusion from just this type of directive. It was a deliberate act by the Commission to avoid the opt-out that the route under Article 118a was taken. It is our firm intention that in the negotiations at the IGC the position on Article 118a should not only be reversed but that we should not be tricked like this in future.

4.28 p.m.

Lord Boyd-Carpenter

My Lords, is my noble and learned friend aware that, contrary to what was said by the noble Lord, Lord Peston, many of us have great respect for the Prime Minister's Statement? It was fully justified by the circumstances of the case and sets out the position of this country very well and very clearly. Is he also aware that some of us have had for some time a considerable disregard for the European so-called Court of Justice? Certainly its latest effort gives us confirmation of the view that it is not a body to be treated with any respect or with very much attention. Is he further aware that it is extremely important that the British Government should maintain the position they have always maintained and that this decision should be overruled?

Lord Fraser of Carmyllie

My Lords, there are varying views on the value of the European Court of Justice. In fact, from time to time, we are more successful before it than is widely believed. I have had little time to study the judgment of the Court in its entirety, but from the parts I have looked at it seems a remarkably terse judgment and does not really provide any full explanation of the view to which it eventually comes. At the risk of repeating myself, it was because of the position taken up by the United Kingdom during the Maastricht Treaty negotiations that the Government have, in our view, the right to feel sore that this was exactly the type of directive from which we thought we would be freed. In the event, a route has been found to include us. We shall want to ensure that in the future we are excluded from it. As the Prime Minister has been saying in another place, that will be an important part of his negotiations at the IGC.

Baroness Turner of Camden

My Lords, is the Minister aware that I put down a Question earlier on this subject but withdrew it because I knew that there was going to be a Statement? I am sure that he is not surprised to learn that I accept wholeheartedly, and without any equivocation at all, that this is a health and safety matter. That is also the position of the TUC, which has undertaken its own survey of health and safety representatives. That survey points out clearly that working longer hours puts workers under stress and that is a health and safety matter.

I draw the attention of the Minister to the World Health Organisation's definition, which I believe has been of some guidance to the Commission. It states: Health is a state of complete psychic, mental and social well-being and does not merely consist of an absence of disease or infirmity". Quite frankly, I believe that the Government are making an enormous fuss over an issue which they cannot expect ultimately to win. As regards the argument in Europe, there is an acceptance of this issue as being totally one of health and safety.

As my noble friend Lord Peston pointed out, this is not a very strong directive: in fact, some of us would like to see a much stronger directive. It is a weak directive. It has provision for voluntary arrangements so that people can come to arrangements with their employer or there can be collective agreements between unions and employers which provide for exemption. An enormous fuss is being made about what is a relatively minor matter.

As regards the threat to employment, there is no evidence at all that implementation of the directive will mean a reduction in employment possibilities. It can probably be argued that the converse is true. If employers have to employ a few more people in order to meet the requirements of the directive, perhaps the taxpayer will benefit because there will not then be quite so much paid out in unemployment benefits, jobseeker's allowance and so forth.

The Government will have to put this directive into operation almost immediately for public service employees. They have until 23rd November. As I understand it, employees are immediately covered by the directive. The Government should stop wasting taxpayers' time and money on a futile quest to try to get this directive overturned. I hope that they will not proceed with their intention to raise this matter at the intergovernmental conference.

Lord Fraser of Carmyllie

My Lords, in answer to a final point which the noble Baroness made, there is probably a difference in the position between those who are employed in the private and public sectors, but whether it is quite as straightforward as she suggests is open to question. There is undoubtedly something of a difference.

I cannot agree with her—as I indicated in answer to her noble friend Lord Peston—that this is a minor or trivial matter. In December 1993 we put before Parliament the compliance cost estimate if this directive were to be implemented in the United Kingdom. The figure at 1992 prices was about £1.7 billion, rising to about £2.4 billion. I consider that to be a considerable compliance cost, particularly when the vast majority will fall on those companies that we are trying desperately to ensure not only become competitive but remain so. If they have to bear that sort of burden I cannot see how in any respect whatsoever it will help their position.

The noble Baroness made the point that parts of this directive were optional. I accept that. I also accept that there are a number of companies within the United Kingdom which already achieve for their employees what is included in the directive. Some of them will have terms and conditions of employment which go beyond the requirements of the directive.

Therefore, I say this to the noble Baroness: why is it necessary to impose this measure? We believe that the right way forward is that if employers wish and can afford these provisions, that is a matter for them. It is a matter for negotiation between them and their employees. To impose this inflexibility would deprive all British companies of the choice that they should be allowed to have in coming to decisions and arrangements with their workforce.

Lord Clark of Kempston

My Lords, does my noble and learned friend agree—

Lord Harmar-Nicholls

My Lords, does my noble and learned friend agree that, far from this being an unimportant matter, the Statement shows quite clearly a case where supposed partners have attempted to get round their own previous agreement by subterfuge? That is what it is. It is wrong to allow this measure to pass without comment, or by merely passing it off, as the noble Lord, Lord Peston, did, as arguable and a quibble. He did not say clearly whether he thought that, with these quibbles, we were right or wrong. He left it as an argument. The Government cannot afford to and must not do that. How can we enter into further negotiations and agreements with people who have used this kind of unfounded and almost illegal method to secure an alteration of their previous official intention?

Lord Fraser of Carmyllie

My Lords, as I hope I made clear to the noble Lord, Lord Peston, in my initial answer, we considered and believed—it was not just the Government, but all political parties within the United Kingdom—at the time of the Maastricht Treaty that we had secured an opt-out from the social chapter and that this matter would be included within it. They might not have agreed that that was the right course to take, but they nevertheless thought at the time that we had secured exclusion from just this type of directive.

I cannot agree entirely with my noble friend, because that would be inconsistent with something I said earlier. I cannot agree that this directive was brought about by means of subterfuge, because as early as 1st June 1993 we were arguing that there was a legal invalidity in the basis on which this directive proceeded. However, he is absolutely right to say that we all believed that we would be excluded from this measure. But by means of a devious route, as we have unhappily found out today, it has been possible for the Commission and the rest of the European Union to impose this directive on the United Kingdom.

Lord Stoddart of Swindon

My Lords, is the noble and learned Lord aware that I have been a trade unionist at local, regional and national level for 44 years and during the whole of that period I was taught that matters concerning wages and conditions were best settled at the workplace, through collective bargaining? I still believe that to be the case. Indeed, throughout my time in another place, particularly in 1972, the Labour Whips instructed me to vote against the Industrial Relations Act 1972 because it imposed court decisions on trade unions and collective bargaining. Noble Lords opposite voted for the courts to be involved, but I voted against. I still believe what I believed then: the best way of settling these matters is through collective bargaining. The 48-hour week has now been reduced in most cases to 39 or 38 hours. That proves the efficacy of collective bargaining.

I am very upset, as are most of the British people, at the humiliation which has been piled on this nation by the spectacle of Mr. Flynn instructing the British Government to do something which they do not want to do. Will he confirm that if the Government and this Parliament do not enact the provisions of the Court ruling, any employer or anybody else at all can ignore them? In the light of what the Minister has been saying about getting these provisions annulled, will he further confirm that there is no way in the IGC, without unanimity, for these proposals to be annulled? Therefore, these proposals cannot be annulled.

Will the noble and learned Lord give an assurance that there will be no backstage horse-trading to give away some other right which undermines our sovereignty in order to make progress on this particular issue? It is a bad day for Britain, the British people and, in the long term, trade unionism and trade unionists.

Lord Fraser of Carmyllie

My Lords, there is a great deal in what the noble Lord says with which I agree. However, regrettably there are some matters about which I must disabuse him. The Government believe in the rule of law. Faced with this decision of the European Court of Justice, however much we dislike the ruling we will implement it unless we manage to get it reversed before implementation. We will go forward towards implementation having carried out careful and detailed consultations. As I have indicated previously, there are matters within it which will require very detailed analysis. It may be that without implementation by the United Kingdom Government, either by primary legislation or under Section 2(2) of the 1972 Act, some employees in the United Kingdom who are employed within the public sector will have direct rights against the Government. However, this is a complicated matter on which I do not want to offer a concluded opinion immediately following the decision.

The noble Lord is absolutely right. The best manner in which to deal with these issues is to leave employers and employees to get on with it as a matter of choice without imposition. Many firms in the United Kingdom already offer better terms and conditions than can be found in this directive. If we are to continue to prosper and to be flexible it is necessary that we give just those companies and those with whom they negotiate flexibility to come to the best arrangements.

Lord Clark of Kempston

My Lords, does my noble and learned friend agree that this directive is a misinterpretation of the opt-out clause? Consequently, it means that this is not a health and safety directive but a directive about unemployment, as the noble Lord, Lord Peston, has said.

Lord Peston

My Lords, the noble Lord may wish to get his facts right. I merely tried to be reasonable by suggesting that both sides could argue that point. I did not say that it was a matter of employment but said that that argument could be made.

Lord Clark of Kempston

My Lords, I was merely endorsing what the noble Lord had said. Does my noble and learned friend agree that the voluntary aspect of the directive will be considerably diluted because of trade union interference in the matter? Further, does he agree that there is bound to be a loss of jobs? Some small businesses cannot possibly survive if they have to take on extra workers. Does he agree that my right honourable friend the Prime Minister is quite correct in saying that the Government will do all they can to reverse this decision? Finally, does he agree that this court ruling places an additional burden on business and industry and affects our competitive position? Is it not better that the Court of Auditors should concentrate on looking at the profligate waste of money in the Common Market?

Lord Fraser of Carmyllie

My Lords, I am grateful to my noble friend for the powerful support that he offers the Prime Minister in the position that he has adopted. If he cares to look at the judgment of the European Court of Justice he will find, as I do, that it is very difficult to discover what is not included within the term "safety and health". As the noble Baroness indicated earlier, a definition has been adopted from the World Health Organisation which appears to be all-embracing. The only curiosity about the judgment is that religious belief is excluded from the term "safety and health" because Sunday cannot be singled out as a particular day for rest according to the European Court of Justice.

My noble friend is absolutely right when he speaks of the possible consequences for the United Kingdom economy if this matter carries on indefinitely and we are not able to reverse it, as we are determined to do. Although he is absolutely right to single out the possible effects on small firms, those are not the only ones to be affected. Today I saw on television, and I have also met around the country, workers who dearly enjoy the opportunity to work night shifts because they wish to pursue such innocent interests as fishing during daytime hours. The noble Lord opposite may shake his head. What he did not appear to appreciate earlier was that the night working provisions within the directive were not wholly optional but would have a measure of compulsion about them.

Beyond the issue of the small firms to which my noble friend has referred, what troubles me as much as anything is that some of the major inward investment successes that the United Kingdom has had recently have been achieved because it has been able to construct semi-conductor factories, for instance, at a speed far greater than is achievable anywhere else in Europe. If an investment of, say, £1 .5 billion can be brought to the point of production seven or eight months faster than anywhere else in Europe because these provisions do not apply in this country, it is not surprising that the United Kingdom is more attractive than many others. Nor is it surprising that there is concern that if these matters have to be implemented in full there will be a real effect on employment.

Lord Gladwin of Clee

My Lords, I should like to press the Minister on the effect on the public sector. My understanding is that emanations of the state are directly affected by the directive. Can the Minister indicate the timetable for the consultative process to which the Statement refers? Will he also give an indication as to when he anticipates that legislation will be introduced into Parliament? Finally, I am a little puzzled by the Statement. Is it the intention that at the same time as legislation is introduced—because it has to be—the Government will seek to repeal that very legislation?

Lord Fraser of Carmyllie

My Lords, dealing with the first technical point raised by the noble Lord, in broad terms employees of emanations of the state (which I believe is the language that the court likes to use) can claim from their employers rights and protection within the directive providing they are sufficiently clear, precise and unconditional in the directive itself. I hazard to guess whether they will find that any of those qualities are met when they look to the directive itself. There may be a requirement for legislation, but we need to reserve judgment on whether primary legislation will be necessary if it is to be implemented or whether it can be achieved under Section 2(2) of the 1972 Act. That remains to be seen. In part, it will depend on the outcome of the consultative process, on which we shall begin work as soon as we can. Clearly, in a matter as complicated as this it will take some time to achieve that.

I make it absolutely clear to all noble Lords that even if we do go forward with consultation and legislation to ensure that we obey the law the Government are determined to do everything at the intergovernmental conference to ensure not only that this decision is reversed to exclude the United Kingdom but that in future there is no risk of any other social engineering activity being imposed upon the United Kingdom.