Employers and unions highlight concerns over EU constitution

Following the UK government’s decision in April 2004 to hold a referendum on the proposed EU constitution, and the resumption of EU-level treaty discussions during May, employers and trade unions have been setting out their objectives concerning the outcome of the constitutional process.

On 20 April, the UK Prime Minister, Tony Blair, announced the government’s intention to hold a referendum on the planned EU constitution (EU0308204F), once its terms had been finalised. In May, ministerial-level discussion of the draft constitution resumed in Brussels. This features outlines the respective approaches of the Confederation of British Industry (CBI) and the Trades Union Congress (TUC) to the proposed new treaty.

CBI views

The referendum announcement was welcomed by the CBI, whose director-general Digby Jones said: 'Membership of the EU is vital to Britain’s economic future so it is important that European governance has the support of the British people. It is obviously too early to judge the merits of a new treaty that has yet to be agreed, but the CBI has already set out its key concerns. We don’t want anything that weakens UK control of decisions on tax, employment law, financial regulation or energy policy.'

In the area of employment law, the CBI has been urging the UK government to maintain and entrench existing national vetoes concerning EU social policy measures, and to secure guarantees that the inclusion of the Charter of Fundamental Rights of the European Union in the constitution, giving the Charter legal status, will not allow the European Court of Justice (ECJ) to reinterpret UK employment law. The CBI says 'there is a serious risk of the ECJ overriding British law when ruling on disputes, destabilising UK industrial relations'.

On 18 May, the CBI president, Sir John Egan, told the organisation’s annual dinner that: 'The government must deliver on the red lines it has vowed to defend in its negotiations at the inter-governmental conference ... We will judge the treaty’s acceptability by how far those red lines are met. To be good Europeans it is not necessary to always acquiesce to all the current elements of the European project. It is far more important that we use our British common sense to judge what is right to create a world-class competitive European economy.'

At the same event, UK foreign secretary Jack Straw emphasised that the government had 'put the interests of business at the heart of [its] negotiating position on the EU constitutional treaty. We will insist that any new treaty - amongst other things - keeps the national veto for tax and social policy and that the charter of fundamental rights creates no new rights under national law, so as not to upset the balance of Britain’s industrial relations policy.'

TUC views

British trade unions generally support key aspects of the proposed EU constitution, notably the inclusion of the Charter of Fundamental Rights, the extension of qualified majority voting and the protection of public services.

Mr Straw’s remarks to the CBI drew a strongly critical response from the TUC. Following a meeting of the TUC executive committee on 19 May, general secretary Brendan Barber wrote to Mr Straw to express the 'despair' felt by union leaders 'as our government has appeared systematically to oppose every recent positive European initiative in the social field', including its 'last ditch' resistance to the EU information and consultation Directive (2002/14/EC) (EU0204207F), its continuing opposition to the proposed Directive on temporary agency work (EU0306206F) and its lobbying to preserve the individual 'opt-out' from the working time Directive (UK0401104F).

Mr Barber criticised the government’s intention to ensure that the Charter of Fundamental Rights had 'little more than declaratory status with no practical capacity to support and strengthen workers’ rights', and Mr Straw’s comment that the interests of business were 'at the heart of [the government’s] negotiating position'. He argued that 'those trade union leaders who have been seeking to encourage active member interest and participation in the forthcoming European elections' faced being undermined 'as the social dimension of the European Union, on which so much trade union support has been based, appears to be under attack from our own government'.

He concluded by stating that: 'The trade union movement - and I am convinced the peoples of Europe - will only back a constitution that nurtures the European social model, balancing the dynamism of free markets with protection for people at work, consumers and the environment from the destructive forces that unregulated capitalism can unleash. We need to strive to create a people’s Europe that is more than a business arrangement to suit Britain’s boardrooms.'

Commentary

Although the Labour Party government elected in 1997 reversed the UK’s previous opt-out from the social chapter of the Maastricht treaty, it has remained sensitive to employers’ concerns about the regulatory burden on businesses, particularly the impact of EU legislation. Both the government and employers’ groups are anxious to maintain the current exclusion from the EU’s remit of key aspects of employment law such as the right of association and the right to strike, and fear that the incorporation of the Charter of Fundamental Rights into the EU treaty may pave the way to more extensive EU influence in these areas, with implications for the current domestic employment law 'settlement'.

In the light of the government’s decision to hold a referendum on the subject of the EU constitution, such concerns may be reinforced by a perceived need on the government’s part to be seen to be sharing the CBI’s agenda on the constitution in order to counter the growing 'euroscepticism' of British business. A poll of chief executives carried out for the 'eurosceptic' New Frontiers Foundation in late April suggested that most UK businesses oppose the EU constitution as likely to be damaging to their interests. According to the Times, almost 60% believed that the constitution would '[surrender] crucial powers to a failing EU', with only 18% disagreeing. Some 73% reportedly considered that Britain would be 'more prosperous and secure' if it retained the pound and clawed back regulatory powers from the EU.

In the 1975 referendum, the UK’s continued membership of the then EEC was supported by the overwhelming majority of the business community. Current business opinion seems to have moved strongly against further European integration. Although a referendum on the new constitution is unlikely to be held until the autumn of 2005, following the general election which is expected in the spring of 2005, the importance to the government of maximising employer support for, and involvement in, a 'yes' campaign is already a factor in its handling of the constitutional negotiations at EU level.

But the danger is that the government’s approach could have an adverse impact on the trade union side of the equation. Senior officials want the TUC to adopt a position of 'critical support' for the constitution as currently drafted, and begin discussions with other interested parties on encouraging a 'yes' vote when the referendum is eventually held. However, internal differences over the euro (UK0308104F), and union criticism of the government’s adherence to business’s agenda, particularly in relation to the status of the Charter of Fundamental Rights, may blunt the enthusiasm of some union leaders for playing a prominent campaigning role in support of the constitution. (Mark Hall, IRRU)

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