EU social laws to affect 100 UK companies

A HUNDRED British companies will be affected by new European social legislation, despite the reassurances John Major won this week from Brussels.

The news will only add to the belief that the Government won little in return for accepting changes in EU voting rules. Officials in Brussels say Britain is still seeking written guarantees, though British officials could not confirm this last night.

The European Commission plans to come forward with a draft directive on Works Councils for the information and consultation of workers in multinational companies. The directive will go forward under the social protocol of the Maastricht treaty, from which Britain is excluded.

But it will cover companies with sizeable investments in Europe, and roughly 100 British companies are likely to fall under its ambit, according to sources in the Institute of Directors, the Commission and the Confederation of British Industry.

The Commission's decision to go ahead with a directive follows the breakdown of negotiations between the bodies representing management and unions. The European Trade Union Confederation gave up on talks after the CBI withdrew from consultations.

Earlier this week, the Government claimed that it had won assurances that Brussels would no longer seek to pass 'back door' social legislation. But the Commission said only that it had 'reminded' Britain of its social policy plans.

Specifically, the Commission said that it recognised that Britain's opt-out from the social protocol was 'territorial' - so that the protocol affects British companies in Europe, but not employees or organisations in Britain itself.

With suspicions growing that the European Commission has made few, if any, concessions, officials in Brussels said that the Government was trying to obtain further assurances. The British permanent representative to the EU, Sir John Kerr, has written to the Commission asking for a written version of comments made in conversations between British and Commission representatives this week, they said.

The Commission is resisting this, and the officials said that it is not possible to do more than restate existing policy. When negotiations were going on, Commission officials were concerned not to give the impression that anything had been conceded to Britiain, partly because of fears that other states would object.