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European Standing Committee C Debates

Social Policy Agenda

European Standing Committee C

Wednesday 1 November 2000

[Mr. Jonathan Sayeed in the Chair]

Social Policy Agenda

10.30 am

The Minister for Employment, Welfare to Work and Equal Opportunities (Ms Tessa Jowell): I know that all hon. Members look forward to conducting the Committee's business under your chairmanship, Mr Sayeed. I thank you for your agreement to the arrangements that we discussed last night, which I have communicated to the hon. Member for South Holland and The Deepings (Mr. Hayes), who speaks for the Opposition. I am joined by the Minister for Competitiveness, my hon. Friend the Member for Hull, West and Hessle (Mr. Johnson). The social policy agenda has broad implications across government, and we want to ensure that the Committee is well served by the answers and information that we are able to give.

The communication that we are discussing was prepared by the Commission in response to the Lisbon Special Council, which stated that

    the Council will pursue its reflection on the future direction of social policy on the basis of a Commission communication, with a view to reaching agreement on a European Social Agenda at the Nice European Council in December.

The communication is therefore a consultation document. It sets out proposals for action by players such as member states, social partners and the Commission itself. Those players are now submitting responses to the communication, which will be collated by the French as the holder of the European Union presidency. In light of the responses, the French will prepare proposals for a social policy action plan. They intend to discuss the draft proposals at the meeting of the Employment and Social Affairs Council on 27 and 28 November before seeking political agreement at the Nice European Council on 7 December. I have explained the background to the process, and I turn now to its status.

The consultation document seeks political agreement to the broad approach on social policy. The document does not have a specific legal base, nor does it need one as political agreement is being sought. However, any measures that result from that must have a legal base. A fundamental element of the United Kingdom's negotiating strategy on social policy will therefore be to ensure that proposed actions have a proper treaty base and that if there is no treaty base, there will be no Community action. However, that does not close the door to building on the successful post-Luxembourg experience of an open co-ordination process, which is what has driven the guidelines in the employment report.

We shall also negotiate to ensure that proposals for action respect member states' subsidiarity. We would therefore strongly resist moves in any direction that appeared to threaten it. We are supported in that by unanimity in such matters as social security and the social protection of workers. Having explained the background and the process and the UK's broad negotiating principles, I turn to our view on the communication itself and what we want from the subsequent action plan.

The UK wants to see real progress across the employment, economic and social agenda set by Lisbon. We were powerful advocates of that process and provided strong support to the Portuguese presidency in the development of its proposals. As my right hon. Friend the Prime Minister said at the conclusion of the Lisbon Council, Europe now has the goal of becoming

    the most competitive and dynamic knowledge based economy in the world capable of economic growth with more and better jobs and greater social cohesion.

The Lisbon Council agreed specific objectives for employment, one of which was to raise the employment rate from an average of 61 per cent. today to as close as possible to 70 per cent. by 2010. It also set the objective of raising within the same time scale the employment rate among women from its present EU average of 50 per cent. to an average of 60 per cent. Lisbon rightly recognised that action on the three fronts of economic reform, social policy modernisation and progress towards full employment must be co-ordinated in order to meet the overall goals.

In that context, we welcome the Commission's statement that the social policy agenda

    sets out to ensure the positive and dynamic interaction of economic, employment and social policy and the political agreement to mobilise all key actors to work jointly towards the new strategic goal.

The subsequent action plan must likewise recognise the interrelations between social, economic and employment policy. We agree with the Commission that we must modernise the social agenda. The old approach to social policy in Europe was over-regulatory and focused too much on protecting those in work rather than on addressing the needs of those without work. That arrangement risked holding back European economic growth, reducing employment and increasing social exclusion.

Lisbon marked the increasing consensus throughout Europe, which recognises the complementality of employment and social policy. That is combined with a clear emerging consensus about the importance of welfare reform in preserving flexibility in the labour markets. Social policy has an important role in promoting stability and maintaining growth.

Mr. Peter Lilley (Hitchin and Harpenden) rose—

The Chairman: Order. There are no interventions during the opening statement.

Ms Jowell: We want to see a modernised social policy that plays a productive role in the EU economy and which must strengthen aspects that foster economic growth and raise standards of living. It must meet the challenge of demographic, social and economic changes, especially in respect of an aging population and increased diversity of family structures, which have put pressures on social benefit systems. The social agenda must examine ways of making systems sustainable and inclusive for the future. That rests on expanding the size of the labour market. Finally, we want a social policy that supports the development of a highly-skilled and flexible labour force. Modernisation of the European social model is crucial to bridging the skills divide and making a reality the dynamic knowledge-based economy to which reference was made at Lisbon.

We want to achieve a European social model that builds on the UK's approach, in which economic efficiency and social justice go hand in hand. I think that we are in the lead in Europe in building a consensus for such a future.

Several hon. Members rose—

The Chairman: Order. We now have until 11.30 for questions to the Ministers. I remind hon. Members that questions should be brief and should be asked one at a time. If we keep to that rule, we will ensure that hon. Members have ample opportunity to ask a number of questions.

Mr. John Hayes (South Holland and The Deepings): I echo the welcome that has already been given to you, Mr. Sayeed. In accordance with your guidance, I should like to start with a specific and brief question. Page 25 of the document is critical of the Government's approach. It states that the UK ``shows room for improvement'' especially in relation to those who are long-term unemployed and trying to get back into the labour market. This reflects the criticism from the Industrial Society in its analysis of the new deal, which I raised with the Minister last week on the Floor of the House. It speaks of the gateway phase of the new deal being seriously underfunded. Why does the Minister think that the Commission is critical of the Government in that respect?

Ms Jowell: I can help the hon. Gentleman by saying that we are not debating the employment report, the employment guidelines or the employment recommendations, as he seems to think. We are debating another communication, from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions, the subject of which is the social policy agenda. The hon. Gentleman will find no reference to the United Kingdom's employment record on page 25 of that report.

Dr. Stephen Ladyman (South Thanet): Will my right hon. Friend tell us more about how she sees the social protection committee working, who will be on it and what it will be doing? If it makes statements about pensions, as seems to be implied in the documents, will not that have an impact on subsidiarity?

Ms Jowell: As my hon. Friend suggests, the report contains a large number of proposals—more than 20—some of which attract us. However, there are others that we shall want to examine very closely before giving them our support and providing the political agreement that the action programme needs. The social protection committee is very much part of that consideration, although there are well established mechanisms at Commission level for the involvement and consultation of social partners in developing proposals, which are then initiated by the Commission.

Secondly, my hon. Friend raised an important point about pensions. On that issue, too, we want to safeguard against any risk of what might be described as competence creep. There is a limited treaty base in relation to three articles relating to pensions, but they focus on protection for migrant workers. They are provisions that we have enthusiastically supported. There are also proposals relating to occupational pensions. However, we are quite clear that the setting of minimum pension levels, as part of the social security system, is a matter for subsidiarity. They are determined by unanimity and we are determined to preserve the responsibility and role of national Governments in that area.

Mr. Lilley: As I have never participated in one of these Committees before, I hope that you will keep me within the rules, Mr. Sayeed. I certainly aim to stay within them, but I do not know what the rules are.

Mr. Tony McNulty (Harrow, East): We will help the right hon. Gentleman.


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