§ Mr. MillsTo ask the Secretary of State for Employment, what estimates he made of the cost to business and industry of the various provisions of the social protocol in the Maastricht treaty; what breakdown he made of the costs for each measure; and if he will make a statement.
§ Mr. Michael ForsythNo specific proposals have yet been advanced for measures to be introduced under the terms of the social protocol and the agreement of the Eleven. However, the protocol and the agreement of the276W Eleven extends Community competence and qualified majority voting into a number of new areas for the other 11 member states, including working conditions, information and consultation, and social exclusion. New legislation in these areas could quite clearly impose very substantial additional burdens on business and damage the competitiveness of the entire Community.
Much of the impact of action taken under the social protocol and the agreement of the Eleven would be indirect, through a loss of choice and flexibility, leading to lower competitiveness and lower output. However, some types of action would undoubtedly have direct cost implications for employers.
For the reasons set out, it is not possible to quantify the potential impact of the entire protocol and the agreement of the Eleven if it were to be applied to the United Kingdom. However, in a number of areas, for illustrative purposes, the Department has estimated the potential costs to United Kingdom employers of the type of measures which might result from terms of the social protocol and the agreement of the Eleven.
(i) Access to Training
Legislation could be proposed granting all employees the right to a minimum of 10 days training per year, paid for by their employer, regardless of whether or not this meets the needs of the employee or the business. There is some uncertainty about how many employees in the United Kingdom would currently meet the terms of such a requirement. In addition, the proportion of employees currently without 10 days' training who would take up their entitlement is difficult to predict. Using a plausible range of assumptions on current provision and take-up, the additional costs to employers—in terms of salary and lost output—could be between £2 billion and £9 billion at 1992–93 prices.
(ii) Paternity Leave
Legislation might require employers to grant all male employees paid leave on the birth of a child. Using a plausible range of assumptions on current provision and take-up, the additional cost to employers of each week of paid leave could be between £30 million and £100 million at 1992–93 prices.
(iii) Maximum Working Week
Restrictions on the working week would also be possible. As an illustration, a compulsory maximum working week—including paid overtime—of, say, 45 hours might be imposed. If this were to apply to all employees, and assuming that half the wage costs involved with the reduction in working time were borne by employers, the additional costs, compared with current arrangements, could be about £5.5 billion at 1992–93 prices.
In all three cases, the cost estimates are subject to margins of error, and, in the absence of specific proposals, should be regarded as purely illustrative. They do, however, provide some idea of the potential scale of the financial burden that could be imposed on United Kingdom employers.