The reaction of the government to the recent ruling by the European Court of Justice that Britain must implement the EU Commission’s 48 hours-a-week working time directive was predictably hysterical. Within minutes of the decision being announced, trenches were being dug, ministers were marching on the media outlets, and John Major was once more poised to go over the top and advance on the forces of European social protectionism armed only with the British veto. You could almost hear the theme tune: “Who do you think you are kidding Mr Santer …”
All of this had nothing to do with the real dangers posed by the dread directive and everything to do with the impending British General Election.
The few days before the ruling had seen the government thrusting its record on the economy firmly back to the top of the political agenda ahead of the Harrogate conference of the CBI and last month’s Budget. The Prime Minister was conveniently able to use his Guildhall speech to the City the evening before the judgement to make it clear this was one issue on which he would not yield to Brussels.
The fact is, that whatever the directive’s dangers to British business – and it is worth recalling here that three years ago the then employment secretary, David Hunt, said it was “toothless” – its real importance to Major is less in the principle and more in the politics. The working time directive combines two almost unique merits which must make the Prime Minister privately bless the European Commission for thinking it up.
First, it gives him an issue which unites the Tory Party in the Commons around a combination of Euro-scepticism and Thatcherite rejection of corporatism.
Secondly, it is one of the few areas which map a clear divide with Labour: a small pool of clear blue water in a desert of consensus. The directive is a gift to Major and one he will exploit for everything it is worth all the way to the Election, so don’t expect this war to end anytime soon.
In fact, the final confrontation is not expected until the conclusion of the EU’s inter-governmental conference in June next year. This is conveniently after the Election, which not only gives the scope for six months of tough rhetoric but also delays an outcome which may or may not see the Prime Minister covered in glory: if he is still in office.
To be fair to Major, however, we should also recognise that while he has everything to gain politically by adopting his present bellicose stance on the directive, he also has a point.
This is not so much about the content of the directive, of which more in a moment, but about the means by which the commission has foisted it on Britain. This was achieved via article 118a of the single European act which allows EU-wide action on health and safety matters to be agreed by a qualified majority of member states. Britain’s case in the European Court action was, broadly, that working time arrangement had nothing to do with health and safety and that the Commission should have used broader treaty heads which would have required a unanimous vote of the council of ministers, drawing a British veto.
The court ruled not only that the directive should stand but put the broadest possible interpretation on health and safety, thereby opening the way to other social measures being imposed on the UK in the same way.
The European Commission social affairs commissioner, Padraig Flynn, is, for example, examining arrangements to give further protection on working time to employers such as those in the transport industry not covered by the current directive. “There is nothing to indicate that these concepts should be interpreted restrictively, and not as embracing all factors, physical or otherwise, capable of affecting the health and safety of the worker in his working environment,” the Court’s judgement said.
This goes a long way towards undermining Major’s prized British opt-out from the European social chapter, so painfully won at Maastricht. It is not surprising he is furious.
It is also important to recognise, however, that the threat from the social chapter is in some way overstated. For one thing, the European Commission’s enthusiasm for pursuing social protection in all its forms is not as great as it was when Tory Euro-bogey Jacques Delors was its president.
The Prime Minister’s crusade to nullify the court’s ruling and shore-up his opt-out ought then to be less about mortal dangers to Britain’s competitiveness than about insisting that the free spirit of Treaty commitments by other member states is honoured. Of course he won’t be putting it like that.
The risk for business in the meantime is twofold. One danger is that the government might be so fixated on overturning the court that it neglects to properly address how the impact of the directive can be mitigated if it has to be put into effect. Another is more diffuse but perhaps more significant too – that by getting into another facedown with Europe, the Prime Minister risks a further erosion of Britain’s standing and a yet greater diminution of its influence on perhaps more crucial issues.
This was clearly the view of the CBI leadership. Hardly supporters of a directive they attacked as “gobbledygook”, they backed the government’s appeal to the court and have serious concerns over the burden the directive may inflict: guesstimates of the cost range from #1.7bn to more than six times that figure, but no-one can be certain.
But for all its concern, the CBI’s focus is on lobbying the government to get on with consulting business on cutting the costs to a minimum.
Exactly how much they are and where they fall will depend critically on the framing of the legislation that incorporates the directive into British law, if things reach that stage. There is, for example, considerable flexibility over how the 48-hour maximum is measured against so-called “reference periods”. Hours can be averaged over four months, so that seasonal workers could put longer hours in peak periods and shorter ones off-peak.
It is these issues of implementation which the CBI was last month urging the government to turn its mind to, and this ought for now be the key focus for those in industry and commerce confronted with the consequences.
There is little doubt that if Major fails in his efforts to have the directive “disapplied”, as ministers somewhat clumsily put it, there will be a tedious burden of form-filling and compliance to be borne. But the worst effects can be mitigated and an effective dialogue between government and business now can ensure that opportunity is exploited to the maximum.
Gary Duncan is economics correspondent of The Scotsman.