8 Employment situation in the EU
| (26329)
5824/05
COM(05) 13
+ ADD 1
| Commission Communication: draft Joint Employment Report 2004/2005
Annex to the draft report
|
| Legal base | — |
| Document originated | 27 January 2005
|
| Deposited in Parliament | 4 February 2005
|
| Department | Work and Pensions
|
| Basis of consideration | EM of 16 February 2005
|
| Previous Committee Report | None
|
| To be discussed in Council | 3 March 2005
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| Committee's assessment | Politically important
|
| Committee's decision | Cleared
|
Background
8.1 Article 128(5) of the EC Treaty requires the Council and the
Commission to make a joint annual report to the European Council
on the employment situation in the Community and on the implementation
of the Employment Guidelines laid down by the Council under Article
128(2). In the light of the joint report, the European Council
adopts conclusions which may lead the Council to reformulate the
Employment Guidelines. Each Member State is required by Article
128(3) to provide the Council and the Commission with an annual
report on the principal employment measures it has taken in the
light of the Employment Guidelines. Member States' reports are
known as National Action Plans for Employment (NAPs).
8.2 The current Employment Guidelines apply to 2003-06
and have three main objectives: full employment; quality and
productivity in work; and strengthened social cohesion and inclusion.
8.3 In March 2000, the Lisbon European Council set
the goal of the EU becoming the most competitive and dynamic knowledge-based
economy in the world by 2010. To that end, the Lisbon Council
set some specific targets for employment.
The document
8.4 The document is the Commission's draft of the
Joint Report to the Spring European Council. It provides an analysis
of the progress by the EU towards the achievement of the Employment
Guidelines and the Lisbon goals. The draft report is accompanied
by a detailed annex (ADD 1), which includes short assessments
of the performance and policies of each of the 25 Member States
(the EU25). Both the draft report and ADD 1 are based on the NAPs
Member States sent the Commission in the autumn of 2004.
8.5 The Commission says that, despite some progress:
"the EU is still very short of its objectives
and targets …. As stressed by the Employment Task Force chaired
by Wim Kok and confirmed in last year's Joint Employment Report,
boosting employment and productivity growth is essential to raise
Europe's economic potential.[15]
In this respect, improving quality at work, an objective in its
own right, is also essential to attract more people in employment
and raise productivity levels. More resolute action to address
social exclusion and regional disparities will also be needed
to ensure Europe's potential is fully tapped and that progress
is sustainable."[16]
8.6 Progress towards the Lisbon target of a 70% EU
employment rate by 2010 is at a standstill (63%). The total employment
rate of the EU25 is expected to rise but, on forecast trends,
will be insufficient to reach the 70% target by 2010. However,
four Member States, of which the United Kingdom is one, have already
reached the target.
8.7 The employment rate of workers aged 55-64 was
just over 40% in 2003. But the 2010 target rate of 50% of older
workers has already been attained by six Member States (including
the United Kingdom, which has also reached the 2010 target for
60% of women to be in employment).
8.8 The United States has successfully combined employment
growth with productivity growth since 2000, whereas the older
Member States (the EU15) have not. For example, between 2001-03,
employment in the US grew by 0.5% and hourly labour productivity
by 3.3%; the comparable figures for the EU15 were 0.4% and 1.1%.
8.9 Adult participation rates in education and training
vary significantly across the EU 25, from 34% in Sweden to 4%
in Portugal. The United Kingdom is among the four Member States
with the best participation rates not only for adults but also
for young people and people with low skills.
8.10 The difference between the earnings of men and
women in the EU25 remains significant. In most Member States there
has been no reduction in the gender pay gap since 1997.The United
Kingdom is among eight Member States in which the gap is 20% or
more.
8.11 The draft report expresses concern about the
rate of long-term unemployment in some Member States and about
youth unemployment. It also draws attention to the disparity between
the employment prospects of people with disabilities and immigrants
and the prospects of the rest of the population.
8.12 The draft report includes "pointers for
action" on the implementation of the Employment Guidelines.
The proposed action includes:
- accelerating the pace at which
entrepreneurship is introduced into education programmes;
- reducing the regulatory burden on business;
- reducing the time, effort and cost of setting
up businesses, for example, through the provision of one-stop
shops and business advisory services;
- improving the environment for risk capital investment;
- making investment in R&D a top priority;
- facilitating the integration of young people
and other disadvantaged groups into the labour market;
- promoting temporary agency work as an "effective
tool to enter, remain and progress in the labour market Greater
flexibility needs to be accompanied by reinforced employment security";[17]
- facilitating the mobility of workers by removing
obstacles to it in social security systems;
- taking measures — including the provision
of incentives — to transform undeclared work into regular
employment;
- discouraging early retirement and taking measures
to encourage and enable older workers to keep or find jobs;
- making part-time work more attractive financially;
- providing affordable care for children and other
dependents;
- providing adequate parental leave for both parents
and promoting flexible working patterns for both men and women;
and
- closing the gender pay gap.
8.13 The section of the draft report about the United
Kingdom says that the economy has proved resilient during the
global economic slowdown, with growth rates well above the EU
average.[18] Key challenges
for the United Kingdom include:
- improving productivity;
- reducing the number of people who claim sickness
and disability benefits;
- over-coming educational under-attainment (although
the UK participation rate in education and training is significantly
above the EU average);
- tackling persistent pockets of unemployment;
- regulatory reform;
- improving health and safety at work; and
- reducing the gender pay gap and improving access
to affordable care for children and other dependents.
8.14 The draft report notes that policy reform is
well advanced in the United Kingdom, and progress in implementation
is being made, on:
- ensuring that wage increases
do not exceed productivity gains;
- attracting more people into the labour market
and making work a real option; and
- implementing national and regional skills strategies
to provide better incentives for lifelong learning, placing particular
emphasis on improving literacy and numeracy.
The draft comments that the United Kingdom has made
less progress on improving access to affordable care for children
and other dependents and tackling the causes of the gender pay
gap.
The Government's view
8.15 The Parliamentary Under-Secretary of State at
the Department for Work and Pensions (Mr Chris Pond) tells us
that:
"The Government welcomes the report, and shares
the Commission's concerns about insufficient recent economic performance
in the Union and the fact that the EU is still very short of its
employment objectives and targets. In order to achieve the employment
Lisbon objectives the government believes that the focus must
be on employment and growth as the foundation of opportunity and
social justice for all."
8.16 The Minister draws attention to the passages
of the draft report about the United Kingdom's achievement of
the Lisbon targets for 2010 and the action that the Government
has taken or is taking to implement the Employment Guidelines.
Conclusion
8.17 The draft report includes an encouraging
picture of the United Kingdom's economic performance compared
with that of most Member States and a summary of the challenges
still facing the UK. It also contains background information
relevant to the mid-term review of the Lisbon strategy. The findings
of the draft report are similar to those of the Joint Report for
2004 and we therefore doubt the value of the document. There are
no questions we need put to the Minister about the draft report
and we clear it from scrutiny.
15 (25291) 5620/04; see HC 42-x (2003-04), para 6 (11
February 2004). Back
16
ADD 1, pages 1 and 2. Back
17
ADD 1, page 19. Back
18
ADD 1, pages 129 to 131. Back
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