Documents considered by the Committee on 14th October 2015 - European Scrutiny Contents


9 Integration of the long-term unemployed into the labour market

Committee's assessment Legally and politically important
Committee's decisionNot cleared from scrutiny; further information requested; drawn to the attention of the Work and Pensions Committee
Document detailsProposal for a Council Recommendation on the Integration of the long-term unemployed into the labour market
Legal baseArticle 292 TFEU in conjunction with Article 149 TFEU; QMV
DepartmentWork and Pensions
Document Numbers(37111), 10281/15 + ADD 1, COM(15) 462

Summary and Committee's conclusions

9.1 Article 149 of the Treaty on the Functioning of the European Union (TFEU) foresees incentive measures designed to support the action of Member States in the field of employment. Such incentive measures may — according to Article 292 TFEU — be addressed to Member States in the form of a Recommendation from the Council. Such a Recommendation is to be adopted by the Council acting alone by a qualified majority.

9.2 Long-term unemployment (unemployment lasting more than a year) across the European Union has doubled since 2007 and accounts for half of total unemployment. Reducing long-term unemployment was one of the key challenges set out in the Commission's Annual Growth Survey and Work Programme for 2015.

9.3 The Commission considers that Member States would benefit from further support in helping those who are long-term unemployed to return to work. It has proposed specific actions to increase the rate of transition from long-term unemployment to employment.

9.4 At the heart of the draft Council Recommendation is the suggestion that the long-term unemployed be made a specific job integration agreement offer at the latest when they have reached 18 months of unemployment. Improved arrangements for registration with an employment service are also proposed as is more personalised guidance to those affected.

9.5 Member State officials should draw up monitoring indicators, and guidelines for national evaluation and reporting. The European Commission will evaluate action taken and report to the Council within three years.

9.6 The Minister for Employment at the Department for Work and Pensions (Priti Patel), indicates support for the proposal but notes that minor changes to the provisions on monitoring will be sought in order to make the text clearer and to ensure that there is no added burden on the UK. Changes will also be sought in order to remove any perceived prescriptiveness.

9.7 The proposed Recommendation is in an area of policy over which the European Union may only support the work of Member States. It does not therefore set out binding requirements on Member States. Nevertheless, we consider it important that the tone and detail of the text are appropriate. We note the Minister's broad support for the proposal but that she will nevertheless seek some changes to the text. We look to the Minister to provide more detail on the nature of the proposed changes the Government will be proposing, and an assessment of whether they are likely to be accepted.

9.8 The Explanatory Memorandum indicates that the ordinary legislative procedure — whereby the European Parliament and Council are jointly responsible for adopting the legislation — applies. We would welcome confirmation that, in fact, Article 292 TFEU provides for the Council alone to adopt a recommendation acting on a proposal from the Commission.

9.9 We will retain the proposal under scrutiny and look forward to the requested information well in advance of the December Council at which the Recommendation is expected to be adopted. We draw the document to the attention of the Work and Pensions Committee.

Full details of the document: Proposal for a Council Recommendation on the Integration of the long-term unemployed into the labour market: (37111), 10281/15, COM (15) 462.

Background

9.10 The long-term unemployed currently represent 5% of the EU's active population. The longer people remain out of the labour market, the more difficult it is for them to be hired again. Of the 12 million long-term unemployed in the EU, more than 60% have already been out of work for two consecutive years. Each year, one in five stops trying to find a job and becomes inactive. This, the Commission concludes, implies a serious risk of poverty and social exclusion for the unemployed and their families. The Commission adds that addressing long-term unemployment would contribute to sustainable growth and cohesion through higher employment and it could also alleviate the burden on public finances through lower social assistance spending and higher tax revenues.

9.11 Although they make up half of the unemployed, only an estimated 20% of active labour market programmes are allocated to long-term unemployed people and in many Member States they do not have access to individualised services. Programmes offered to long-term unemployed often do not sufficiently involve employers. Only one third of Member States coordinate the action of their employment and social services.

9.12 A number of measures are already in place at EU level:

·  Recommendations are given within the framework of the European Semester, the annual exercise of economic policy coordination;

·  Up to 10% of the European Social Fund can be used to support long-term unemployed people in the period 2014-20; and

·  The European network of Public Employment services is cooperating to exchange good practices.

9.13 Nevertheless, there is variable success among Member States in helping the long-term unemployed to secure jobs. The Commission takes the view that there is room for building on successful practices from across the EU.

The Commission's proposal

9.14 The general objective of the proposed Recommendation is to increase the transition rates to employment of the long-term unemployed. The specific objectives are to:

·  increase coverage with higher registration and active support for the long-term unemployed;

·  ensure continuity and coordination between relevant services; and

·  increase the effectiveness of interventions aimed at both the long-term unemployed and employers.

9.15 In addition to further engagement with employers, three concrete steps are proposed:

·  encourage registration with an employment service;

·  assess individual needs and potential of the long-term unemployed before reaching 18 months of unemployment; and

·  offer a job integration agreement to the long-term unemployed at the latest when they have reached 18 months of unemployment.

9.16 The job integration agreement should consist of a tailor-made offer of intervention combining measures provided by different organisations and spelling out mutual rights and obligations. It would be offered to all long-term unemployed at the latest when they have reached 18 months of unemployment.

9.17 A set of common monitoring indicators and guidelines for national evaluations should be drawn up, including a reporting mechanism. The Commission will evaluate the action taken in response to the Recommendation and will report to the Council within three years on the lessons learned.

The Minister's Explanatory Memorandum of 2 October 2015

9.18 The Minister is supportive of the aims of the Recommendation, as it acknowledges that long-term unemployment remains a problem across the European Union and that support for the long-term unemployed can be inconsistent depending on the Member State.

9.19 The Minister is content that the text respects the balance between EU and Member State competence as set out in the Treaty. Discussion of the proposal was expected at the Employment Council on Monday 5 October, with adoption provisionally scheduled for the Council's December meeting.

9.20 The Minister goes on to explain the Government's approach in the following terms:

    "Long-term unemployment in the UK has seen quarterly falls each month for the past two years. The latest data shows fewer than 546,000 people have been unemployed for more than 12 months; this is the lowest since 2010. The UK long term unemployment rate (1.9%) is currently less than half that of the EU (4.8%).

    "Given our experience in tackling long-term unemployment, we have sought to share our knowledge and best practices with the European Commission during the drafting process. This is reflected in the draft recommendation as it closely resembles UK policy in this area.

    "There are, however, some minor issues for which we already have some support. The recommendation expects a new set of indicators to be set out for the purpose of monitoring the initiative. Instead, the use of existing indicators will be sought to ensure that there is no added burden to the UK. Minor language changes to make the text clearer and to remove any perceived prescriptiveness will be sought as well."

Previous Committee Reports

None.


 
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