John Major told the House that the issue had to be resolved. 'It cannot be permitted to fester any longer.' He therefore invited MPs to return to the Commons today to vote on a motion of confidence.
Its terms will be: 'That this House has confidence in the policy of the Government on the adoption of the Protocol on Social Policy.'
The protocol contains Mr Major's opt-out from the Social Chapter agreed by the other 11 EC states at Maastricht and attached to the treaty. Tory rebels joined with Labour, the Liberal Democrats, the SDLP and nationalists to defeat the Government by eight votes on a motion which, under the European Communities (Amendment) Act, it needs to win before it can ratify the treaty.
A vote on a Labour amendment that the Government should not ratify the Maastricht treaty until it had notified the European Community it intended to adopt the Social Chapter resulted in a 317-vote tie, and then fell on the casting vote of the Speaker, Betty Boothroyd, who, following precedent, supported the Government's position.
In points of order following the votes, Mr Major said the debate had shown there was 'no majority in this House for the UK to join the Social Chapter. There is however, as we know, a majority of this House in favour of ratifying the Maastricht treaty. I therefore invite the opposition parties who say that they support ratification and that they respect the opinion of this House, to reconsider their position'.
With the Ulster Unionists giving their votes to Mr Major at the last minute, Sir Russell Johnston, for the Liberal Democrats, said: 'One has to say that in this tied vote the Government has been willing to strengthen sectarian politics in Northern Ireland in order to deny workers rights in the UK as a whole.'
To shouts of protests from Unionists, Sir Russell added: 'The fact is that on a free vote, there is a majority for the Social Chapter.'
Opening the debate, Mr Major made a final attempt to win over anti- Maastricht Tories, warning them against 'playing games' with the economy. To vote with the opposition parties in favour of the Social Chapter would be 'cynical and unscrupulous'.
Tory MPs were aware of the deficiencies of the Social Chapter, he said, 'and yet I know that some of them are tempted to vote for the Labour amendment or against the substantive motion. They don't believe in it. But they have convinced themselves it would prevent ratification of the Act'. Other MPs may have considered voting in a similar way, but they too did not want more unemployment or a more centralist Community.
Turning to address his MPs directly, he went on: 'I hope those members will reflect again on the cynicism of such a vote and on the damage that it would do to this country.
'To vote for the Labour amendment today is a cynical and unscrupulous vote - it does not represent the true will of the House.
'It is an alliance of different parties with different interests, voting for the same amendment for different purposes. In any genuine free-standing vote in this House, the Social Chapter would be defeated, as any member of this House knows.'
A parliamentary performance of mixed quality - flat passages on his vision for a wider, free-trading Europe contrasting with a lively clash with Paddy Ashdown - veered towards farce as two erstwhile Tory rebels declared they were returning to the fold. Citing the effect on companies such as ICI in his constituency, Michael Lord, MP for Suffolk Central, said: 'I will be voting against the Social Chapter.' Moments later, the Commons erupted in cheers and jeers when John Carlisle, MP for Luton North, gave witness to his conversion.
This was too much for Sir Peter Tapsell (East Lindsey), a consistent Maastricht critic. To a roar from Labour, he said bitterly: 'May I congratulate the Prime Minister on his latest convert.' Mr Major grinned and replied: 'I am always delighted to accept a sinner returning home.'
Mr Smith accused the Government of 'persistently misrepresenting' the content and effect of the Social Chapter. It amounted to a modest extension of the competence of the Community on such issues as health and safety and working conditions. He was convinced that adopting the Social Chapter would improve employment opportunities rather than undermine them.
'The irony of this Prime Minister posing as a job protector will not be lost on millions of people who are the victims of the economic policies for which he has been responsible as Chancellor and Prime Minister. This self-styled saviour of jobs and growth has the worst record on jobs and growth since the war.'
What the Conservatives failed to understand was that it was low wages, inadequate skills and persistent under-investment that were the 'real drag anchors' on economic performance.
In a concluding warning, Mr Smith said Labour was accustomed to and sometimes entertained by Mr Major's 'increasingly desperate games' with his party. But at the end of the day, that was a matter for them. 'What is an entirely different matter is the Prime Minister's attitude to Parliament. It must be a matter of astonishment that he has not readily accepted that the decision on the Social Chapter is for this House to make.'
Over the Conservative years, the checks and balances of Britain's system of government had been persistently undermined in favour of the central state, Mr Smith said. 'But I warn the Prime Minister that if he takes it even further and seeks to defy the will of this House, he will have exceeded the power of his office.'
Uncompromising as ever, Sir Teddy Taylor, Tory MP for Southend East, urged MPs to vote for the amendment, against the motion, and then spend the summer re-thinking. The Maastricht treaty would undermine Britain's economy and democracy. 'The tragedy of the treaty, the tragedy of this debate, is that parties have grown apart from the people.'
Ian Paisley, leader of the Democratic Unionists, confirmed that the Government would not be able to count on the support of its three MPs. 'My party has a policy on this issue . . . I hope tonight that the Maastricht treaty will sink, not swim.'
The next hurdles
Further hurdles facing John Major:
29 July, Christchurch by-election;
5 October, Tory Party Conference;
November, possible leadership challenge;
5 May, local government elections;
June, European elections.