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Distinguished guests,
Ladies and gentlemen,
I extend my warmest greetings to you all and my thanks to the organisers for their kind invitation.
It is always a pleasure to be back in London. I acquired a deep respect for the city and its institutions — like the Houses of Parliament, the British Museum, the Old Lady of Threadneedle Street — and the pubs too.
As a former student of economics, what springs to mind when I think of Britain is its contribution to the study and practice of political economy: the theorists who laid the foundations for the modern science of socio-economics — Adam Smith, Malthus, Ricardo, and of course Keynes.
There are two points that strike me about this country. The first is a widespread — though not universal — and seemingly unreasoning belief in the primacy of the market in the governance of the economy.
I find it curious — in this 200th anniversary year of the birth of Charles Dickens — that the unbridled power of the market should be viewed so positively — particularly after the reforms made since Oliver Twist’s time.
The second is the British people’s indecisiveness about their place in Europe.
Coming from a country in Central Europe, I have always thought of the continent as a jigsaw puzzle, with the countries fitting neatly together into fixed positions. There was never any doubt in my mind about who our neighbours were and how we interlocked with them.
Setting aside the land border in Ireland, the United Kingdom’s position is admittedly less clearly determined by its neighbours.
Perhaps that is why people here seem to see their position vis-à-vis Europe as somehow relative and negotiable, allowing them to move closer to — or further away from — the continent, depending on their need or mood at the time.
In my talk today, I want to take issue with that widespread belief in the absoluteness of the market and the relativity of Britain’s engagement with Europe.
Ladies and gentlemen,
When the British joined what they regarded in the early 1970s as nothing more than a “Common Market”, the European Union’s Single Market was far from a fact.
Even today, there are areas where freedom of movement for goods and services, capital and persons continues to be subject to restrictions, and the single market needs completing. Professor Monti’s 2010 report ‘A new strategy for the Single Market’ amply illustrates that.
While the Treaties enshrine those economic freedoms, they also underpin them with fundamental social rights — rights for the individual, for workers, for their families.
The desire to foster improvements in living and working conditions and promote economic and social progress is a theme that runs through all the Treaties along with the concern to ensure supply to — and freedom of competition on — the market.
Article 3(3) of the Treaty on European Union speaks in particular of “balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress” — a Union that combats “social exclusion and discrimination”, that promotes “social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child”.
By balancing economic freedoms against workers’ and citizens’ rights, I believe that EU social legislation has undeniably brought huge benefits for UK workers and business.
Let me quote a few examples of rights of UK workers that stem from EU legislation:
* The minimum four weeks’ paid annual leave;
* Better protection for fixed-term and temporary-agency workers;
* Workers’ rights to information and consultation by their employers.
The EU’s occupational health and safety legislation is an area of great importance. It has helped make the EU a world leader in health and safety at work. In the Union, workplace deaths and injuries and, consequently, their cost to individual businesses and society as a whole, are among the lowest in the world.
They have also fallen dramatically, partly as a result of the adoption and implementation of EU legislation. In the past 10 to 15 years, accidents at work in the EU of 15 have fallen by more than a quarter, and fatal accidents dropped by over 40%.
Even in the UK, which has a good health and safety record, the number of accidents at work fell by 28% between 1998 and 2007 — owing in no small part to EU legislation.
Now, I hear some murmuring that, while EU social legislation may be good for UK workers, doesn’t it hurt UK employers and destroy the country’s competitiveness?
On the contrary, EU social legislation goes hand in hand with access to the Single Market, which hugely benefits the UK economy.
The Single Market is one of the EU’s great successes, but it cannot function properly without fair competition — just as you can’t play cricket on a sloping ground.
That’s why EU social legislation sets common minimum social standards for all 27 Member States — to protect individuals, workers and businesses from unfair competition, and ensure open access to one of the world’s richest and largest markets.
That point is made by Professor Ragnar Löfstedt in his independent review of health and safety legislation commissioned by the Secretary of State for Work and Pensions and published in November last year. He notes that:
“The increasing influence of the EU in health and safety regulation has provided a number of benefits to the UK. The more prescriptive nature of much of EU legislation may have helped small businesses who often welcome greater certainty over what they are required to do. Where EU Directives have been implemented, it has provided an opportunity to consolidate a number of previous sets of regulations. Furthermore, the Directives provide a level playing field across Europe, which can help competitiveness, particularly as UK health and safety law was already well established. “
EU social policy in the area of health and safety and working conditions is therefore vital for the creation of a level playing field across the Single Market, and that is of massive benefit to the UK economy.
For one thing, minimum occupational safety and health standards existing throughout the EU reduces the potential for social dumping.
Countries like the UK which provide their workers with a high standard of worker health and safety protection therefore have everything to gain from the introduction of common standards based on EU Directives and applying throughout the EU.
These contribute to greater equalisation of indirect labour costs and reduce the risk of distortions of competition that favour Member States with lower standards.
Clearly, therefore, investing in occupational health and safety is good for business. It contributes to company performance, improves staff well-being, reduces absenteeism and staff turnover and leads to greater job satisfaction.
Another point worth making is that strong UK participation in EU social policy initiatives is good for the UK and the EU. A large number of UK actors are directly involved in the drafting of EU occupational safety and health legislation.
This is also because EU social legislation is not based on a “one-size-fits-all” model — on the contrary. Without exception, EU social law involves framework laws that lay down minimum common standards and allow the Member States extensive leeway on the way they are to be implemented.
This ensures that the UK’s specific national features, the situation on the ground there and the UK’s unique experience are taken into account.
May I take the opportunity to debunk a myth frequently heard here in the UK — that “unelected Brussels bureaucrats” dictate EU health and safety at work legislation.
I often muse at the term “unelected bureaucrats” — as if many bureaucrats were elected! It also fudges the issue of accountability, which has nothing to do with being elected.
As regards Brussels “dictating” legislation, in fact, various UK political actors, scientific experts, social partners and others are involved at all stages of the process, and even before it starts — through tripartite bodies, scientific bodies, inspection committees and so on.
Proposals have to be agreed by Member States and the European Parliament, where the citizens are directly represented.
And the Treaty provides that the Commission must consult the employers and trade union federations at European level before we even put forward proposals for EU social legislation.
That means the social partners in each Member State are guaranteed an opportunity to contribute and influence the direction and substance of any legislation put forward — from the very first stages.
Another myth worth debunking is that EU rules prevent the UK from imposing stricter health and safety rules where it feels they are needed.
I’ve seen suggestions recently that the UK could impose stricter health and safety limits on pilots’ flying time if it were to “repatriate” social law.
That is quite wrong. EU social law sets common minimum standards, but the Member States are always free to introduce or maintain stricter rules that offer workers greater protection.
Professor Löfstedt makes a similar point when he says that ‘Many myths focus on issues where health and safety is apparently responsible for curtailing beneficial public activities.’1
For the sake of discussion, it is worth thinking about what would happen if the UK were to “repatriate” social policy competence.
It would take us back the time before the UK opted in to the social protocol to the Maastricht Treaty — the time between 1994 and 1999 when the European Works Council Directive did not apply to the UK.
And what was the situation then? UK workers were excluded from cross-border social dialogue, even in UK companies, while other employees enjoyed the right to be informed and exchange views with management at European level. The UK situation and UK workers’ interests and views were left out of discussion at EU level.
Businesses and employees all remember those times well. UK companies were obliged to base their European Works Councils on other Member States’ legislation and could not properly involve their own employees in the dialogue established. Other EU companies would be able to involve UK employees properly. Even where they were mainly active in the UK, American companies chose German, Belgian or Irish representatives to settle their European employee relations.
When the UK opted in, the Directive on European Works Councils applied to the UK and the UK implemented the 2009 recasting of the Directive, along with the other Member States.
Today, 115 of around 1000 European Works Councils in existence are established in UK companies and 180 under UK law, which has also attracted some American and Japanese companies.
I see only benefits for UK and other EU employees and companies in playing a full part in the EU rules on European Works Councils, especially in these uncertain and difficult times, when better employee involvement is needed.
From a more strictly legal viewpoint, under the EU Treaty, legislation which has been agreed by the Council — where all Member State Governments are represented and put forward their views on proposals — and the European Parliament is binding on all Member States.
A change in the Treaty would be required to give the UK an exemption from EU social and employment legislation, and that change would also demand the agreement of all the Member States.
In our experience, employers often complain not about the EU directives themselves, but about how they have been implemented by national governments, or about national rules which do not come from Brussels. Repatriating powers would not change this.
I therefore think it is clear that repatriating social policy competence is a non-starter — legally, socially and politically.
Ladies and gentlemen,
Along with my portfolio, I inherited a few thorny issues that have raised a lot of discussion and which I must say a little about. These are the Working Time, Temporary Agency Workers and Posting of Workers Directives.
Working Time
Let me start with the Working Time Directive. We need to adapt the current EU rules on working time to take account of profound changes that have taken place in recent years in the world of work.
A few examples of those changes are the intensification of work, the impact of IT change and instant communications, the challenges of globalisation and escalating demands on public services.
Our priority is to respond to workers’ and employers’ needs today while stepping up protection of workers’ health and safety. What we need is constructive, balanced solutions that can garner broad-based support.
I am therefore very pleased that the cross-sectoral social partners have opened negotiations at European level on the Working Time Review. If the European social partners reach agreement on establishing or amending EU social legislation, such agreement may be implemented as EU legislation.
The social partners have given themselves nine months to reach agreement. They will tell us the outcome in early September. We will wait until then out of respect for the autonomy of their negotiations.
The European social partners understand exactly how working time is organised in the various Member States and in different activities, and have frequently shown they can find practical solutions to complex issues.
In the past, they have reached agreement on texts that have subsequently been adopted as European directives — for example, on part-time work, fixed-term work and working time in various sectoral activities.
We hope the talks will succeed this time too, but if they don’t, then the Commission will come forward with a proposal to amend the legislation.
Agency Workers Directive
The second thorny issue is the Agency Workers Directive. Temporary work agencies in the EU employ more than 3 million workers in terms of full-time equivalent, accounting for approximately 1.7% of total employment. The figure for the UK is about 4%, making it the first agency work market in Europe.
The economic and financial crisis has had a severe impact on the agency work sector in the EU, but since mid-2009, activity has been recovering dramatically, despite a marked slowdown in the sector’s growth in recent months. Temporary agency work is therefore a leading indicator of both the positive and the negative trends on the labour market.
The 2008 Directive on temporary agency work aims to improve the protection of temporary-agency workers and to support the positive role temporary-agency work plays by providing sufficient flexibility in the labour market.
A fundamental element of the Directive is the principle of equal treatment in terms of pay and other basic working and employment conditions.
These conditions, which include working time, rest periods and holidays, should be as good as those that would have applied to agency workers if they had been recruited directly by the user undertaking for the same job.
However, the Directive offers some flexibility by taking the needs and specific features of the Member States into account.
The UK, which did not recognise equal treatment for agency workers in the past, now applies this principle, but only after they have spent a qualifying period of 12 weeks in a given job, as the Directive allows.
The UK was actually one of the first Member States to transpose the Directive into national law when it adopted the Agency Workers Regulations in 2010.
Another important provision of the Directive states that prohibitions and restrictions on the use of temporary-agency work can only be justified on grounds of general interest. The UK is among the Member States that impose the least restrictions on agency work.
The Directive had to be transposed by the Member States by 5 December last year, so it has now been fully applicable for a few weeks.
The Commission is carrying out a detailed analysis of the implementing measures communicated by the Member States and of their compliance with the Directive.
It will check in particular whether the UK and the other Member States which apply derogations from equal treatment do not misuse this possibility.
Posting of Workers
The third and thorniest of the three files I inherited is the Posting of Workers Directive.
Each year, around one million workers in the EU are posted from their country of employment by their employer to perform work temporarily in another country.
The UK sends and receives between 30 000 and 40 000 posted workers a year.
Even if the overall scale of postings is relatively small, posting plays an important role in the cross-border provision of services, in particular in such sectors as construction, agriculture, transport and temporary agency work. It is also important for service activities requiring a specialised, highly skilled workforce — for instance in the IT sector.
The Posting of Workers Directive sets a core of mandatory working conditions applicable to posted workers in the host Member State. This facilitates the cross-border provision of services, since companies need not be familiar with all the labour law of the host Member State.
It also ensures that posted workers enjoy an adequate degree of protection during their postings and prevents a race to the bottom in terms of working conditions.
It guarantees fair competition between all service-providers and a level playing field.
Repealing the Directive would clearly have a negative effect on workers and companies. It would mean that posting would be more difficult for companies and posted workers would be left without mandatory protection. This could lead to social dumping and unfair competition on working conditions.
The Commission will adopt two proposals for legislation on the posting of workers in the coming weeks. I am happy to explain our ‘posting package’ during our discussion after my speech.
Conclusion
Ladies and gentlemen,
The UK has no doubt about the benefits it owes to access to the Single Market, so I do not understand certain calls for the repatriation of EU social policy legislation.
A marketplace depends on free competition if it is to function properly, and that calls for agreed rules and a level playing field.
I have every confidence that the British people’s innate sense of fair play will guide them in this area.
Deep down I am also convinced that the marketplace is for meeting people’s needs, not primarily for profit.
And I am sure the map of Europe would look strange with the UK missing from the puzzle.
Thank you.
Source Article from http://www.egovmonitor.com/node/46694
