Adding to the burden

Just as the British Chambers of Commerce warn grimly of a “manufacturing meltdown”, news emerges that Brussels is considering immerse new burdens on our smallest and most vulnerable companies.

Under proposals now before the European Commission, employers with as few as 20 staff will be forced to consult their workforces before taking major commercial decisions. Bosses would lose much of their independence on such issues as redundancies, production and sales. Real power would be in the hands of the unions.

Britain is playing a heavy price for the Government’s decision to sign the Social Chapter. That piece of folly has given the green light to EU employment commissioner, Padraig Flynn.

Even if his grandiose plans don’t come to fruition this time, the writing is on the wall. Brussels has learned nothing from the heavy unemployment which scars Europe. It still seeks to extend its influence through more controls and nitpicking regulations. And the tragedy is that there are still ministers who refuse to acknowledge what is going on under their very noses.

Bosses fear return of union power by Europe’s back door

More than a million British firms face a massive return of union power under new rules from Brussels. Each company with at least 20 employees could have to give worker consultation councils an unprecedented say in how it is run. Business leaders said last night the scheme was the biggest attack ever on their right to manage their own companies.

The threat is being drawn up by European Union employment commissioner Padraig Flynn and follows Labour’s decision to end the Social Chapter opt-out. Under the Europe-wide scheme, worker representatives could influence a wide range of crucial management issues including whether or not firms can merge with others, introduce efficiency drives, close plants and boardroom appointments.

The measure could be in force in three years – imposing the councils on 1.1 million firms, with 5.1 million employees – one fifth of the UK workforce. Business leaders fear it will mean endless meetings dominated by obstructive unions.

Ruth Lea, of the Institute of Directors, said: “It amounts to a major swing towards union involvement which could interfere with the ability of management to manage. The unions are regaining their power through the back door of Europe.” Labour is also opposed to the move, believing it should be one of subsidiarity, where member EU states can remain independent on certain issues. But removing the opt-out, won by the Tories under the Maastricht Treaty, means little can be done to stop Mr Flynn. The imposition of the works councils will give the lie to Mr Blair’s claim that the UK would be in a better position to influence EU affairs by signing up to the Chapter.

So far, Brussels has only gone as far as ordering multi-national companies with bases in more than one EU country to set up the councils. Before the Labour opt-in, large UK firms could choose whether to include British worker representatives on the Euro consultation panels. Now, they are required to do so – but fewer than 1, 000 UK companies are involved.

Mr Flynn is intent on getting the “national consultation” regulations voted through the European council of ministers. He has already met resistance in Germany, where employers have refused even to discuss the issue. They are already pressing for domestic laws requiring works councils to be repealed because they need more flexibility and less regulation – the kind of freedom to manage that UK businesses now enjoy.