The Government wants further clarification from EU bureaucrats before signing up to new rules on tackling undeclared work, a Business Minister said tonight.
Jenny Willott won the backing of the Commons to raise concerns about subsidiarity - a principle which says decisions should be made at the lowest political level possible - about the EU Commission plans.
The Commission wants to create a cross-Europe platform to tackle undeclared work, which is defined as paid activities which are lawful but not declared to the authorities.
Ms Willott told MPs ongoing negotiations had eased some of the concerns about the proposal but moved a motion to send a "reasoned opinion" outlining concerns about subsidiarity.
In a last-minute debate begun just an hour before an 11pm deadline on the issue, Ms Willott said: "This European Commission proposal seeks to establish an EU level platform on undeclared work.
"This matter is high on the Commission's agenda against the backdrop of efforts to improve job creation, job quality and fiscal consolidation.
"The Commission is proposing a platform with members drawn from member states' nominated enforcement bodies to try to improve cooperation, share best practices and identify common principles for inspections.
"Addressing undeclared work is a priority for the Government, we have taken action at a national level to detect and deter fraud through inspection as well as encouraging good practice by providing guidance for employers.
"We remain to be persuaded that the Commission has demonstrated a need to mandate member states to take part in the platform, or that EU-level action will add value.
"However, it emerged in negotiations late last week that while states' participation in the high-level platform would be mandatory, participation in any cross-border operation activities that are recommended by the platform would be voluntary instead.
"We have asked them to clarify their official position - this means the principle concern about subsidiarity... drops away. We would be able to decide on an issue-by-issue basis if the UK should participate."
Shadow business minister Ian Murray said Labour supported the Government's plans to raise concerns about subsidiarity but stressed that tackling rogue employers who do not declare work was important.
He said: "The reality of the situation on the ground is people are often desperately looking for work and will sign any contracts that are placed in front of them in order to be able to get that particular employment."
On the freedom of movement across the EU, he added: "It is right that member states work with one another to tackle those rogue employers who perpetrate undeclared work, who attempt to hide behind the borders of other member states, who hide behind undeclared work not to take their share of taxation and also try to undermine workers' rights."
The motion stating that the EU plans to not comply with subsidiarity was passed unopposed.