13 July 2015

On Saturday, The Times and the Daily Telegraph both reported that Prime Minister David Cameron will seek to restore the UK’s opt-out from EU social and employment laws such as the Working Time Directive and the Agency Workers Directive as part of his EU renegotiation. In the longer term, the EU Treaties could be amended to state that this policy area is solely a national responsibility.

Appearing on BBC Radio 4’s Today programme, Open Europe’s Pawel Swidlicki argued that it remains to be seen exactly what Cameron will ask for in this area and that, while securing a blanket opt-out would be an “ambitious” objective as it would require unanimity among EU leaders, given that many of the laws originate from a different time when there was less global competition, other member states could support changes in this area to make the EU as a whole more competitive.

Pawel also argued that changes to EU social and employment laws should not be seen in isolation but as part of a broader push to make Europe more flexible, and that in the longer term those member states that want to have more tightly coordinated labour market policies (potentially in the context of deeper Eurozone integration) are free to do so, but that other countries like the UK would be free to set their own policies in this area providing the four fundamental freedoms of the EU’s single market would continue to be respected.

This should be seen in the broader context of the renegotiation. It shouldn’t just be about be about securing a number of specific objectives, it should be about changing the way Europe functions about making it more flexible and making the argument that while we have a single market with the four fundamental freedoms, areas like social and employment policy really shouldn’t be part of that.

Pawel Swidlicki, BBC Radio 4 Today programme, 11 July 2015

Although Labour MEP Richard Corbett argued that this was merely a manifestation of intra-Tory politicking, in reality aspects of the application of EU social and employment law is a matter of cross-party interest. For example, despite signing away the opt-out in 1997, Labour Ministers bitterly opposed the way the Working Time Directive – specifically the ECJ’s SiMAP and Jaeger rulings – has impacted on the NHS. In addition, even within the Commission itself there has been a rethink about the desirability of further burdensome regulations in this area as evidenced by the appointment of Frans Timmermans as the first Vice-President of the European Commission.

As Open Europe has found, EU social and employment laws impose a significant cost on the economy – £8.6bn (in 2011 prices). This burden falls disproportionately heavily on small businesses, and it is therefore right for David Cameron to address this as part of his renegotiation.