Mats Persson: The Conservatives are right to focus on EU social policy – but only a comprehensive opt-out from all relevant Treaty articles will do

Mats Persson is Research Director at Open Europe.

An argument heard in some corners is that employment and social policy is the “wrong battle” for an incoming Conservative government looking to bring back powers from the EU. EU social legislation is stuck in neutral, the argument goes, and picking a fight on these laws would see David Cameron waste valuable political capital that he can better spend elsewhere.

True, the Barroso Commission has been less active than its predecessors in pushing through employment legislation, and EU enlargement has to some extent stilled the appetite for new continental-style labour laws.

But to argue that EU social policy has died a quiet death is just wrong.

First, existing EU social and employment laws are having a massive impact on the UK economy.  A recent study by Open Europe, based on over 2,000 of the Government’s own Impact Assessments, estimated that regulations introduced in the UK between 1998 and 2008 have cost the British economy £148.2 billion. Of this, £36.7 billion, or 25 percent, stems from EU social laws alone.

Looking ahead and using the same methodology, EU social legislation will cost the UK about £71 billion between 2010 and 2020, even in the unlikely event that no new laws are introduced in that time.  In terms of impact on the British economy, EU social legislation is therefore exactly the right place to start.

Social policy also continues to evolve in the EU courts. The scope of the Working Time Directive has been extended no less than eight times by the European Court of Justice.

In each of these rulings, the cost of the regulation has increased, and national autonomy over working time has been further eroded. The latest controversial ruling came in September this year, when the Court ruled that an employee who is sick during his or her planned holidays has the right under the WTD to take that leave at a later date – an interpretation no-one anticipated.

It would be naïve in the extreme to assume that the ECJ will not continue to interpret the WTD and other existing employment laws in a manner which could unpredictably extend their scope.

Take the new EU rules for temporary agency workers, for instance. This is another EU Directive with a billion pound price tag – agreed only last year – with which the courts could really have some fun.

In fact, the Court’s behaviour illustrates another powerful argument in favour of repatriation: social policy is particularly susceptible to the type of incremental extension of EU powers which the Tories are now saying they want to end.

The Charter of Fundamental Rights in the Lisbon Treaty will also lead to new laws in this area. John Monks, General Secretary of the European Trades Union Congress jubilantly declared this week: “Now that the ratification process is finally out of the way, we have to act and open new doors for social rights.”

Presently, there’s an inherent ambiguity in the relationship between member states and the EU on social legislation. This locks in the EU’s infamous “democratic deficit”, and will be made worse by the Lisbon Treaty, because it makes this area of policy a confusing ‘shared’ competence.

The German Constitutional Court made this very point in its dynamite ruling on the Lisbon Treaty earlier this year. The Court identified social policy as “especially sensitive for the ability of a constitutional state to democratically shape itself”, prescribing that the EU should have limited powers in this area.

David Cameron has said clearly that social policy would be one of three priorities for ‘repatriating’ EU powers.  He talked about tackling “those parts of social and employment legislation which have proved most damaging to the British economy”. Open Europe believes other policies should also be targeted, but social and employment law is a good place to start.

But in order to give their policy real teeth, the Conservatives must pledge to turn off every single tap from which EU social policy currently flows – once and for all. In practice, this means opting out of all those articles in the Treaties which serve as basis for social legislation – whether existing or future – rather than picking and choosing individual Directives or segments of Directives, as Cameron seems to suggest.

Only a full, blanket opt-out will take the ECJ completely out of the equation and ensure that new, cumbersome rules aren’t pushed through against the UK’s will in future.  Open Europe’s new briefing explains which articles these are, and how to go about getting a comprehensive opt-out.

Sceptics argue that none of this is possible.  But, contrary to popular belief, the British Conservatives are not the only ones in Europe frustrated about EU employment law. From Stockholm to Stuttgart, the experience of the WTD and other laws has made people seriously uneasy about the merits of centralised, one-size-fits-all rules for all the different labour market models currently co-existing in Europe.

If the Conservatives succeed in bringing back powers over these policies, it doesn't mean scrapping every worker or social right out there. It means giving Westminster back the power to keep, scrap or amend these key laws to better suit the UK's individual economic circumstances. If done properly, this would cut costs for the private and public sectors alike. And it would bring important decisions about social policy back to where they belong – closer to families, front line workers and businesses.

Repatriating social and employment policy will be hard work, but it’s not impossible. The Conservatives should not be afraid to champion this new policy, with the help of allies in Europe.   The democratic and economic case for doing so is compelling.