Documents considered by the Committee on 13 July 2016 Contents

4European Pillar of Social Rights

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Innovation and Skills Committee, Education Committee, Health Committee, Women and Equalities Committee and Work and Pensions Committee

Document details

Commission Communication — Launching a consultation on a European Pillar of Social Rights

Legal base

Department

Business, Innovation and Skills

Document Numbers

(37614), 7276/16 + ADDs 1–3, COM(16) 127

Summary and Committee’s conclusions

4.1The Commission’s Communication launched a consultation on the social dimension of the single currency. The objective is to draw up a “Pillar of Social Rights” applicable to the Eurozone states and any other EU Member States that wish to participate on a voluntary basis. At the same time, the consultation may highlight legislative changes that would be desirable for the EU as a whole and for non-EU members of the European Economic Area, to which elements of the social acquis (body of EU law) apply.

4.2When the Committee considered the Commission Communication at its meeting of 20 April, the Committee retained the Communication under scrutiny and sought the Government’s view on the objectives of the consultation and on its planned engagement with the Commission. The Committee brought the Communication to the attention of various Departmental Select Committees given its cross-cutting nature.

4.3The Minister for Skills, (Nick Boles), has since written to the Committee on 10 May and 9 June. In his first letter, he acknowledged that the consultation has the potential to include a number of policies of interest to the UK Government. He also thanked the Committee for bringing the consultation to the attention of other Parliamentary Committees and he explained that the Government is engaging with the Devolved Administrations. He promised to inform relevant Parliamentary Committees of any UK response to the consultation. The Minister went on to remind the Committee of the economic governance safeguards secured by the Government in its now obsolete re-negotiation of the UK’s relationship with the EU.

4.4In his most recent letter, the Minister recognises concerns about the potential for future legislative change that might affect the EU as a whole. He goes on to explain that the Government will take time to analyse the proposals in full and that he will keep the Committee informed of any response to the consultation. The Government will raise with the Commission the Committee’s query about the legal form of the Social Pillar.

4.5Since the Minister wrote, the UK has voted to leave the European Union. The context in which this consultation must be considered has therefore fundamentally changed. The consultation’s degree of relevance depends on the nature of the UK’s relationship with the EU once it has withdrawn. While the terms of that relationship are unknown, some desire has been expressed—in debates in this House following the Referendum—for the UK to retain access to the single market. EU social legislation initially evolved in order to complete the single market. Indeed, several measures that form part of the social acquis rely on an internal market legal base. These include the Posting of Workers Directive9 and the Collective Redundancies Directive.10 Social policy is included as one of the single market “flanking measures” in the European Economic Area Agreement.

4.6The Minister has not as yet provided any detail to Parliament on the Government’s position. This, he explains, is due to the size and complexity of the issue and the time required to undertake a full analysis. We note this rationale for the lack of a clear position so far.

4.7We have expectations as to the nature of detail that we expect to receive from Government once it has completed its analysis. It is imperative that Government addresses the following matters, which include those that arise from the Referendum outcome:

4.8We retain the Communication under scrutiny and look forward to further detail from the Government by the end of September. We drew our Report of 20 April to the attention of various Committees with an interest in this cross-cutting matter. In order to update them on progress, we accordingly draw this Chapter to the attention of the Business, Innovation and Skills Committee; Education Committee; Health Committee; Women and Equalities Committee; and Work and Pensions Committee.

Full details of the documents

Commission Communication—Launching a consultation on a European Pillar of Social Rights: (37614), 7276/16 + ADDs 1–3, COM(16) 127.

Background

4.9The Commission’s Communication was clear that the consultation process towards the establishment of the Pillar has three main aims:

4.10The consultation process should be concluded by 31 December 2016, as the basis for the Commission to put forward a final proposal for the Pillar early in 2017.

4.11Further details on the consultation and on the Commission’s outline of a possible Pillar of Social Rights were provided in our Report of 20 April.

4.12In our Report of 20 April, we put the following queries to the Government:

4.13We also expressed surprise at the Government’s disinclination to consult the devolved administrations or others at this early stage when it may be possible to influence the initiative. We therefore asked the Government to explain the basis on which it would conduct its intended discussions with the Commission if it did not consult.

4.14Following receipt of the Minister’s letter of 10 May, details of which we set out below, we noted that the Government had largely failed to respond to our queries and we therefore repeated them.12

Minister’s letter of 10 May 2016

4.15In his response to our Report of 20 April, the Minister agreed that the consultation has “the potential to include a number of policies of interest to the UK Government”.

4.16He went on to set out the Government’s views in the following terms:

“We agree that this issue should be taken seriously. In fact, the Commission itself has recognised both the range of topics to consider and the level of seriousness by providing a generous consultation period. The government welcomes this to allow full consideration of the consultation proposals, undertake analysis and gather views from interested parties. Of course, once the consultation process has concluded, we will take the opportunity to influence the proposals at the relevant committees (e.g. EMCO and SPC), and Council of Ministers (EPSCO).

“We have already spoken with the Devolved Administrations and will continue to engage with them over the consultation period as we consider any possible response. We will also keep the relevant Parliamentary Committees informed of any response to the consultation we provide.

“At this stage the Commission has been clear that the Pillar of Social Rights is for the euro area, for other Member States to join if they so wish. What this means in practice will be for the Commission to set out following the consultation. The UK has secured important protections through the recent agreement with the EU, which will come into force following a vote to Remain in the EU on 23 June. These will protect the UK’s rights as a country within the Single Market, but outside the Eurozone, to keep our economy and financial system secure and protect UK businesses from unfair discrimination.

“We have secured agreement to a set of legally-binding principles that will make sure the UK is not penalised, excluded or discriminated against by EU rules because we have chosen to keep the pound. This agreement builds on the UK’s existing opt-outs and acknowledges that ‘measures, the purpose of which is to further deepen economic and monetary union, will be voluntary for Member States whose currency is not the euro’.”

Minister’s letter of 9 June 2016

4.17The Minister responded to our further queries in the following terms:

“First, you ask about what the intention of the Commission is in terms of legislation and whether it would affect the Eurozone or all Member States. I recognise this concern and it is an area that we will be looking at carefully when the Commission releases proposals following the consultation. President Juncker has said himself that this is an initiative for the Eurozone and for other countries to join in if they want to. What this means in practice will be for the Commission to set out following the consultation.

“Second, you ask how we will respond to the consultation. We both agree that the question of the current social ‘acquis’ is a large and complex one. We will take time to analyse the proposals in full, but I want to reassure this and other interested Committees that we will keep them fully informed of any response to the consultation. I can assure you that we will be working closely with interested parties in the UK, and of course with other Member States, over the coming months to ascertain views and opinions which will inform our overall approach.

“Third, you ask how the Commission intend to establish the Pillar of Social Rights. At this stage of consultation it is not clear. But we will engage with the Commission and raise the Committee’s questions with them in due course.

“I would also like to repeat that the UK has secured important protections through the recent agreement with the EU, which will come into force following a vote to Remain in the EU on 23 June. These will protect the UK’s rights as a country within the Single Market, but outside the Eurozone, to keep our economy and financial system secure and protect UK businesses from unfair discrimination.

“We will continue to keep the Committee informed as our analysis develops and we welcome its views as part of that.”

Previous Committee Reports

Twenty-ninth Report HC 342-xxviii (2015–16), chapter 2 (20 April 2016).


9 Directive 96/71/EC of 16 December 1996 concerning the posting of workers in the framework of the provision of services.

10 Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies.

12 Letter from Sir William Cash MP to Nick Boles MP, 25 May 2016.




© Parliamentary copyright 2015

18 July 2016