4 Lisbon Strategy
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5990/05
COM(05) 24
+ ADD 1
+ ADD 2
| Commission Communication: Working together for growth and jobs — A new start for the Lisbon Strategy
Lisbon Action Plan
A new and integrated economic and employment coordination cycle in the EU
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| Legal base | — |
| Document originated | 2 February 2005
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| Deposited in Parliament | 10 February 2005
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| Department | HM Treasury |
| Basis of consideration | EM of 23 February 2005
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| Previous Committee Report | None; but see (26146): HC 38-iii (2004-05), para 35 (12 January 2005)
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| To be discussed in Council | 22/23 March 2005 European Council
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
4.1 In March 2000, the Lisbon European Council set the ten-year
goal for Europe to become the most competitive and dynamic knowledge-based
economy in the world, capable of sustainable economic growth with
more and better jobs and greater social cohesion. This overall
goal was supplemented by a variety of objectives, such as making
a decisive impact on the eradication of poverty, increasing investment
in education and training, creating a European area of research
and innovation and the completion of a fully operational internal
market. The European Council set specific targets for the achievement
of some of these objectives. Together, the overall goal and supplementary
objectives are generally known as the Lisbon Strategy.
4.2 At its meetings in March and June, the European
Council will conduct a mid-term review of the Strategy. This Communication
from the Commission and the report of the High-Level Group chaired
by Wim Kok[8] will be among
the papers considered by the European Council on 22/23 March 2005.
The document
4.3 The Foreword to the Communication says that progress
towards the achievement of the Lisbon Strategy:
"has at best been mixed. While many of the fundamental
conditions are in place for a European renaissance, there has
simply not been enough delivery at European and national level.
This is not just a question of difficult economic conditions since
Lisbon was launched; it also results from a policy agenda which
has become overloaded, failing coordination and sometimes conflicting
priorities. For some this suggests that we should abandon the
ambition of five years ago. The Commission does not agree. The
challenges we face are even more urgent in the face of an ageing
population and global competition. Unless we reinforce our commitment
to meeting them, with a renewed drive and focus, our model for
European society, our pensions, our quality of life will rapidly
be called into question."[9]
OBJECTIVES
4.4 The Commission says that a dynamic economy is
needed to fuel the European Union's wider social and environmental
ambitions. This is why the Commission's proposals for a renewed
Lisbon strategy focus on growth and jobs. To that end, it is necessary
to ensure that:
- Europe is a more attractive
place in which to invest and work;
- knowledge and innovation are fundamental to European
growth; and
- the policies of the EU and Member States allow
businesses to create more and better jobs.
4.5 The Commission calls for a new start for the
Lisbon Strategy, based on a "Partnership for Growth and Jobs,
supported by a Union Action Plan and National Action Programmes
containing firm commitments".[10]
4.6 In order to make the EU a more attractive
place in which to invest and work, the Commission says that
the internal market must be extended and deepened. Member States
must implement existing EU legislation and make a reality of opening
key markets, such as the energy, telecommunications and transport
markets. Reforms are needed to complete the internal market by
action on, for example, the Services Directive, a Community Patent
and a common consolidated corporate tax base. Better regulation
should be a cornerstone for decision-making at all levels so as
to remove unnecessary red tape. There are too many obstacles to
starting a small business and to entrepreneurship.
4.7 The Communication notes that the EU is investing
about a third less in research and development (R&D)
than the USA, mainly because the European private sector spends
less on research and innovation. The Commission says that, in
order to achieve the Lisbon target for R&D expenditure (3%
of GDP by 2010), there should be a coordinated EU approach to
the use of taxation to provide incentives for private sector investment
in research. Moreover, the Commission will make proposals later
this year on the revision of State aids to make it easier to provide
financial support for research. Among other things, the Commission
will also propose the creation of a European Institute of Technology
to attract "the very best minds, ideas and companies from
around the World".[11]
4.8 In order to create more and better jobs,
the Commission calls on Member States to pursue employment policies
to help people — and particularly young people and older
workers — find and remain in work. This should be backed
by more investment in education and training. Because Europe's
working population is contracting, the Commission will present
a plan later this year for legal migration to help meet shortages
in the labour market.
DELIVERING THE PARTNERSHIP FOR GROWTH AND JOBS
4.9 The Commission says that:
"We need to revamp the delivery process which
has become too complicated and is poorly understood. It generates
much paper, but little action. Responsibilities between the national
and the European level have become blurred. Limited ownership
is the result."[12]
4.10 To remedy this, the Commission proposes that:
- Each Member State should produce
a single National Action Programme for growth and jobs, setting
out proposed reforms and targets and replacing the "myriad"
of existing reports;
- Each Member State should appoint a "Mr or
Ms Lisbon" responsible for coordinating the government's
strategy;
- There should be an Community Lisbon Action Plan,
the contents of which are listed in a 54 page annex (ADD 1) to
the Communication; and
- The Employment Guidelines and the Broad Economic
Policy Guidelines, which are currently separate, should be brought
together in one document.
The Commission proposes that there should be a three-year
reporting cycle, comprising annual progress reports from Member
States and the Commission in the first two years and an in-depth
review in the third year.
4.11 An annex to the Communication (ADD 2) provides
a detailed description of the proposed new delivery arrangements.
4.12 Throughout the Communication, the Commission
refers to the importance of collaboration with organisations representing
employers and employees. It also argues that it is essential for
Member States to communicate to the public the significance of
the Lisbon Strategy for them and to involve the public in the
preparation and implementation of National Action Plans.
RECOMMENDATION TO THE EUROPEAN COUNCIL
4.13 The Commission recommends the European Council
to:
- launch a new Partnership for
Growth and Jobs;
- endorse the Community Action Programme at ADD
1 and call on Member States to establish their own National Action
Programmes; and
- approve the proposed delivery arrangements.
The Government's view
4.14 The Economic Secretary to the Treasury (John
Healey) tells us that;
"The Government agrees that globalisation has
intensified the competitive pressures facing Europe, making structural
reform more important than ever. It shares the view that Member
States need to act urgently to implement further reforms. The
opportunities offered by globalisation should not be missed: through
the reform of labour, product and capital markets, the EU can
capitalise on the growing interdependence of the global economy,
and stimulate growth and employment within its borders.
"The Government welcomes the focus on growth
and employment through fewer and clearer priorities to address
the challenges of globalisation. The Report also reflects several
of the UK's economic reform priorities, including regulatory reform;
labour market flexibility; a single market for services as well
as goods; and the need to promote greater external openness to
trade and investment.
"It agrees with the priorities identified in
the Report: making Europe an attractive place to work; promoting
knowledge and innovation for growth; and creating jobs.
"The report states that any further action on
the integration of financial services will be taken only if broad
consultation with interested parties and impact assessment demonstrates
a clear value-added. The UK Government agrees that the focus now
is on implementing and enforcing the measures agreed under the
Financial Services Action Plan in a consistent way. Many remaining
barriers stem from differences in national culture, practices
and language — these are all areas where EU legislation
is likely to be quite ineffective. It would be more effective
to tackle these barriers by non-legislative means wherever possible.
"The Report also expresses some views on tax
issues, including recommending that specific attention is given
to a common consolidated corporate tax base. The Government remains
clear that such matters remain a national preserve, and that fair
tax competition is the way forward for Europe not tax harmonisation,
including proposals for a consolidated company tax base. Tax harmonisation
would put Europe's global competitiveness at risk.
"The recommendations are not binding on Member
States. The Government will be working with the Commission, the
Luxembourg Presidency and our EU partners to secure a successful
outcome at the March 2005 Spring European Council and to advance
progress during the UK Presidency of the EU."
Conclusion
4.15 There are aspects of the Commission's proposals
which appear welcome, such as the wish to give the Lisbon Strategy
a sharper focus, to set fewer and clearer priorities, to bring
together the Employment Guidelines and the Broad Economic Policy
Guidelines, to clarify responsibilities for delivery and to simplify
the reporting process.
4.16 The Communication expressly recommends the
European Council to launch a new Partnership for Growth and Jobs,
to endorse the Community Action Programme and to approve the new
delivery arrangements. We are surprised, therefore, that the Minister's
Explanatory Memorandum does not tell us the Government's views
on these specific recommendations and, in particular, does not
comment on whether the Government endorses the Community Action
Programme set out in ADD 1 of the document.
4.17 Accordingly, we ask the Minister to provide
us with the Government's views on these matters. Pending his reply,
we shall retain the document under scrutiny.
8 See headnote. Back
9
Commission Communication, pages 3 and 4. Back
10
Commission Communication, page 5. Back
11
Commission Communication, page 21. Back
12
Commission Communication, page 30. Back
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