EC: That Maastricht match could lead to a replay - major's deal could cause future problems.

EC: That Maastricht match could lead to a replay - major's deal could cause future problems. - Major may have given us the fast track for a while but not for ever. By Peter Wilsher.

Last Updated: 31 Aug 2010

Major may have given us the fast track for a while but not for ever. By Peter Wilsher.

Two months on, and British business is still trying to work out the real score that John Major achieved in Maastricht. Was it game, set and match, as the prime minster confidently proclaimed at the time? Or were the sceptics more accurate when they recorded the results as a series of potentially damaging own-goals?

The up-beat view is that most cogently expressed by the Wall Street Journal. "There could well be a two-speed Europe," it wrote, "with Britain on the fast track to increased employment, and the rest of the Continent struggling with its traditional inability to increase new jobs." By successfully side-stepping the Community's commitment to social legislation, so the argument goes, the UK has sent a message to the world: that location in these clear-headed and pragmatic offshore islands will continue to offer access to the burgeoning single market but without the high and inevitably increasing labour-cost threshold that will be imposed by the EC social charter. It is an attractive comforting idea, and even Jacques Delors seemed to give some credence when he opposed the opt-out proposal because it would make one country a "paradise for foreign investment. The question is whether in practice our partners, with their already intractably high unemployment rates, will let us get away with it.

The Maastricht "social compromise" has the makings of a minefield. Britain will remain on the sidelines while the other 11 EC members construct their own uniform framework of employment laws, on the basis of "qualified majority voting". It is hard, even for the most diehard opponents of such behaviour, to believe that we can be insulated from what the rest may decide.

To start with there will be thorny problems over what law applies where, particularly when a company has a foot on both sides of the Channel or the North Sea. How long will the ICIs and Pilkingtons of this world be able or willing to maintain a distinction between the rules applying in Brussels and North Germany and those in St Helens and Billington? For the sake of shopfloor harmony, a lot of Continental practice seems certain to come in by the back door.

Even if there is relatively little leakage, Britain may find it more difficult to sustain her isolation than Major and his employment secretary, Michael Heseltine, are prepared to admit. If they are right in thinking that moves to limit working hours or extend social benefits are a threat to jobs and prosperity, then sooner or later there is bound to be a legal challenge on the grounds that sidestepping constitutes a competitive distortion under the terms of the Treaty of Rome.

Basically, the Maastricht compromises (and this applies just as much to the postponement of a decision to accept the single currency) were a attempt on Westminster's part to enjoy the advantages of European unity without its obligations. My own view coincides with that of Bruce Millan, the Commissioner or Regional Affairs, who bleakly warns that this will not be sustainable in the long term".

The likelihood is that at some stage we shall be forced, more or less grudgingly, to come into line. In the meantime, a whole new framework of employment law and practice could well evolve over which we have had no say whatever. In fact, by opting-out (or rather, by allowing the other 11 to go on without us) we shall have made it harder to restrain precisely the kind of over-radical measures we profess to fear.

The danger lies in the subtleties of "quality majority voting". With all 12 members sitting at the table, the passing of any disputed measure requires 54 votes out of 76, and it is not possible for the social-reform enthusiasts, France, Germany, Italy, Denmark and the Benelux trio, to impose their will on the smaller, weaker members without Britain's support. With Britain absent, however, the necessary number shrinks to just 44 out of 66, and the North European bloc, between them, muster a conclusive 45. Spain, Portugal, Greece and Ireland, the likely victims of any excessive nannying, can muster only 21, and without a sceptical UK to back them, any reservations and protests can just be swept aside.

It will be splendid if Maastricht has left us alone on the fast track. But I have a nasty suspicion that it will be a short-lived success. We had better brace ourselves for the skid back to join the rest of the convoy, and pray that our burst of speed has not slowed them even further.

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