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Baroness Knight of Collingtree: My Lords, I am most grateful to my noble friend. Does he also recognise that many people come to this country for a brief time as seasonal workers to pick a crop or to work in the catering or hotel industry? I support what he is saying—it is not quite the be all and end all that it may appear.

Lord Higgins: My Lords, I am sure that my noble friend is right. It is a matter of the level of skill. Working in the catering industry one can probably survive with relatively little English; it is another matter if one wants to work as a doctor in this country. Those two matters clearly interact, as a number of speakers have pointed out.

I believe we can all agree about the argument on qualifications, as mentioned in the report. It is unfortunate that someone who is equally as good at carrying out a particular job as someone else finds him or herself immobilised—that is the strict way of putting it—from acquiring such a job in another country because his or her qualifications are not accepted. Surely, that is an area in which the European Union can take a positive line, as the committee suggests. As the committee points out, it is true that the language side—I am a victim of the English educational system in that respect—is a real problem.

I turn to a point on which a great deal of time was spent in the committee, although it has not been referred to at all in the debate. It concerns whether one should have a benchmark for mobility and whether the United States could provide such a benchmark. I believe it was suggested that the level of mobility in the United States may provide a benchmark for the European Union. By and large the committee is sceptical about that—I understand its view—not least because any such comparison is pretty invalid given

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the problem to which we have been referring, namely language. Given the level of immigration over the southern borders of the United States, on the whole it does not have a language problem in relation to mobility.

The committee makes an interesting point that the United States' market is somewhat different because in many places there is a kind of specialised local skill, say in silicon valley in California or wherever, that is not reflected to the same extent in the European Union. The committee was right to be sceptical about that matter. What I find more puzzling is the committee's very clear statement regarding lack of information about barriers to mobility. It categorically states that there is a need for greater study of that.

We are talking largely of geographical mobility. I have some experience in the study of that. A long while ago I was an economic adviser to Unilever. I had to look into the question of whether and where we should site a factory in Italy. I reached the conclusion—I was very young at the time—that it would be best situated in the southern part of Italy because that was an area of low labour costs. I returned to Milan and told them that that was the situation but that there would need to be a three-shift system of work. That was greeted with howls of laughter. It was pointed out that no lady in the southern part of Italy would be very happy if her husband was on the night shift. But, we have a lot of data—more than the committee says—about barriers to mobility.

The other point that I am not clear about is that the committee does not appear to have gone to any great lengths in academic circles to see what the literature says about barriers to mobility, although there is a large amount of academic study on these matters.

Baroness Whitaker: My Lords, does the noble Lord accept that our specialist adviser was recruited to do that very job? He looked everywhere. We certainly could have found out about professional and academic mobility to a degree, but not about lesser skilled mobility. So if the noble Lord has any sources it would greatly enlighten the House if he could produce them.

Lord Higgins: My Lords, I am out of date. But even 20 years ago there was a degree of information on this issue. The committee draws attention to some of the barriers, which we have been debating today. It will not do any harm to get more information on those barriers. One or two particular barriers have been mentioned this afternoon; for example, problems as to housing, childcare or the existing structure of pensions. There is a range of fairly obvious barriers which inhibit geographical mobility, and certainly more work in that regard is needed. But it might have been worthwhile to have taken rather more specific evidence on this issue, given the powers which the committee has to send for persons and papers.

I wish to make one or two other points. I said at the beginning of my contribution that it was important for the study to be placed in the widest possible context. A huge change will be taking place in the European

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Union with regard to immigration and to the extension of the Community to new countries. The same problems of language and disqualifications and so on will arise with regard to immigration, both legal and illegal and the extent to which those barriers affecting mobility within the previous size of the European Union will change. One has a slight feeling that to some extent immigrants to the European Union will be more mobile when moving from one country to another—and certainly that is suggested by the situation at the Channel ports and so on—than previously was the case, but the committee does not touch on that area.

There is also no discussion with regard to particular markets; for example, agriculture, where it is clear that the effect of the common agricultural policy, in terms of product markets, has a considerable impact.

Finally, there is the very important point made by my noble friend Lord Brittan as to the single currency issue. That matter is not touched on in the report. But the reality is that if one adopts a single currency over any given area—which area will vary a great deal with the accession of the new countries—it is apparent that mobility not only of labour but of factors of production generally are extremely important in the adoption of that currency. If there is the adoption of "one size fits all" interest rates, which are in existence in a large part of the European Union, although not of course in the United Kingdom, and if the factors of production are as immobile as this report clearly illustrates, there is a considerable transitional problem which may last a considerable time.

My noble friend Lord Brittan took an optimistic view that if one introduced a single currency, that is fine, everyone will adjust, Thatcherite-type deregulations will take place, and there will be nothing to worry about. The reality I believe is that, given the level of immobility suggested in the report, there will be a considerable period when those in the euro currency area will find that the stresses and strains are considerable. If, as a result of that, there is unemployment in one part of the European Union, it would obviously be greatly alleviated if the individuals concerned moved to another part. But, if they are, for whatever reason, immobilised, that unemployment is likely to remain for a considerable time before the immense but very strategic pressures, to which my noble friend has drawn attention, have the desirable longer-term effect.

None the less, this is an interesting report and we have had a fascinating debate. We look forward to hearing what the Minister has to say, in particular in relation to his own government report which appears to deal with these issues but to be unaware of the committee's report. At least now the Government are aware of the report, and the debate has been very useful in that respect.

4.37 p.m.

Lord Davies of Oldham: My Lords, I can certainly assure the House that the Government are well aware of the report. I shall seek to establish their awareness as I develop my speech in reply to the debate.

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I am in a little difficulty—not a completely unpredictable difficulty—because I did say to my officials after the debate had been tabled by the noble Baroness, Lady Harris, that it might operate on more than one level. There was the possibility of it being substantially about the report and the issues contained in it and the advantages which we could derive from that substantial body of work, to which I pay tribute, but it might also be an occasion where a number of our well known colleagues rode their hobby-horses into the European debate as yet another opportunity to brief the Government on the great decision that lies ahead of us with regard to the euro and allied matters.

I do not think that the noble Lord, Lord Brittan, rode a hobby-horse but a great white charger for his presentation and advocacy of the euro and its significance in the context of this debate. Of course he is absolutely right. The noble Lord, Lord Higgins, is right to follow the position that the nature of the macro-economy is absolutely crucial to the question of the labour market and other price factors in the development of our economies and the general European position.

So I am in no way critical of the introduction of that dimension to the debate. I merely stress that inevitably, given the nature of that introduction based on the report from the Committee, most of my remarks are directed at that point. The noble Lord will forgive me if I resile from this wonderful opportunity to engage from the Government's perspective on the exciting opportunities that lie ahead in resolving this debate, which certainly exercises members of his party with great frequency, both in this House and in another place. It is also a matter for government as to the decisions to be taken about the economic tests and the eventual referendum, if one takes place, on the euro. Suffice it to say that we are grateful to the noble Lord for having introduced that broader context to our debate. However, I shall primarily seek to respond to the other issues raised, predominantly by members of the committee.

I ask the noble Lords, Lord Higgins and Lord Brittan, this question. Is it not refreshing and a sign of changing times that we should have a debate about labour mobility, manpower, job opportunities and employment in which most of the participants in the debate are Baronesses rather than Lords? Both the noble Baronesses, Lady Harris and Lady Gibson, emphasised that in today's labour market, women play such an increasingly significant part that one cannot approach the matter without recognising the need to attune to those changes. The increased employment of women is reflected right across Europe, although our country represents a significant example.

Let me emphasise—I suppose that I am reflecting the element of gentle criticism made by the noble Lord, Lord Higgins—that a year has now gone by since the report, and things have consequently moved on. The Government are eager for work to develop in the context of the single market and the Lisbon agenda. The principle that the European Union should comprise an area without internal frontiers is long

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established. As the noble Lord, Lord Brittan, emphasised, we need the context in which that will be effectively advanced.

It is vital that we work to remove the clear obstacles to freedom of movement for workers and services between member states. The Government believe that if we are to achieve the Lisbon goals, we must concentrate both on removing the barriers to mobility—which have been so accurately identified in the report and today's debate—and on increasing the level and transferability of skills. Several contributions to the debate emphasised the necessity of improving skills, to which I shall turn in a moment.

The Government have placed the achievement of the Lisbon strategy at the heart of our European labour market policy. At the Spring Council in 2000, heads of government signed up to an ambitious objective for the EU, which is:

    "to become the most competitive and dynamic knowledge-based economy in the World by 2010, capable of sustainable economic growth with more and better jobs and greater social cohesion".

That is a significant objective to which to sign up—not least, as has been mentioned, because other markets of some significance, not least the United States, have some of the attendant advantages of a common language—or, perhaps increasingly, two languages—and a single state structure.

The European Union is aiming for an overall employment target of 70 per cent by 2010. That is a good measure of people's ability to engage in work and have valid skills for the job market. Let us not be too bashful about our achievements. The UK, alongside Denmark, the Netherlands and Sweden, already operates at that 70 per cent level of employment. We have met the target; more work needs to be done in other member states that fall considerably below it.

If Europe is serious about becoming the most competitive knowledge-based economy in the world, we must equip our people with the skills and knowledge that the digital age demands. That is why UK Ministers argued vigorously for education ministers as well as employment ministers in the European Union to take seriously the role that education has to play in meeting the Lisbon goals. That is also why the Government are, as will be recognised throughout the House, making such major investments in education, training, skills and lifelong learning, all of which are geared to achievement, attainment and the effective equipping of our people with the requisite skills.

We are engaged in many of the areas raised in the report introduced by the noble Baroness, Lady Harris. We are working in partnership at the national level with the devolved administrations and at the EU level with our counterparts. Working groups have been established at EU level to take forward work in the areas of education and training. We have been urging the Commission and our European counterparts to adopt an approach that is practical, timely, flexible, non-bureaucratic and responsive to the needs of our citizens. We have taken the initiative by pioneering an innovative approach in the field of basic skills for adults.

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The deficiencies in our society were rightly identified and should be recognised when there is such a high percentage of people who lack basic skills. In a sophisticated labour market, that significantly devalues their opportunities to engage in work and to contribute fully as citizens to their society. However, it was suggested that Britain was poorly placed in those terms—perhaps even uniquely so. That is not the case. Other European countries are as anxious as us—indeed, have every right to be more anxious than us—about that problem. Illiteracy and innumeracy are European-wide features. Other countries are desperately worried about that and, at times, have been only too keen to embrace the kind of strategies that we have been employing in the UK and apply them within their borders.

A few years ago, I recall attending a European meeting at which it was recognised that we in Britain had identified and taken the first significant steps to deal with what is a problem that goes back for generations—certainly decades. It was recognised that Britain was in the lead, first, in having analysed the issue and, secondly, in pursuing strategies to cope with it. I do not decry the significance of the role that we must play in improving basic skill levels; I am merely saying that we ought not to hide our light under a bushel. We should not suggest that the problem is unique to Britain—it is certainly not; it is one that we all need to tackle.

We should also recognise that a considerable amount of work has been done to improve movement of skilled people between countries. It is true that that tends to be at the higher levels of qualification, for all the reasons accurately identified in the debate, but we are also all too well aware that our health service—at high levels but also at some more basic levels—is dependent on significant contributions from those here from overseas. We should not underestimate the European contribution to that.

Following a pilot study, the Anglo-Spanish programme has recruited more than 520 Spanish nurses and more than 30 doctors to work in England, with more to come. A pilot campaign to recruit pharmacists has been initiated. Last year, nearly 10,000 nurses from outside the UK were accepted onto the Nursing and Midwifery Council register. Those health professionals have an opportunity to gain experience working in a different healthcare system and they, in turn, can share their experience and expertise with new colleagues.

As the House debated at considerable length on many occasions during the desperate days of the acute period of the foot and mouth disease crisis, we were able to bring in trained veterinary inspectors and veterinarians from Europe to assist our over-pressed colleagues working in that area.

The noble Lord, Lord Higgins, rightly alluded to the enlargement of the Community, which will bring a fresh dimension to the issue. We have co-operation agreements in place with the Czech Republic, Slovakia, Poland, Hungary and Estonia that are the

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basis for active exchanges of best practice in education, including higher education and lifelong learning. We also have good relations with the accession countries in the field of education, youth and training programmes. We are mindful of that important dimension, to which the report alluded.

The importance of lifelong learning was emphasised by nearly all noble Lords who participated in the debate. I emphasise that the Government are committed not just to extending the concept of lifelong learning at a European level but to extending opportunities in our own country as effectively and rapidly as we can. Tribute has been paid to the initiatives taken. The Learning and Skills Council is a dramatically significant body in the process of enhancing the skills level of our people. It is still in its early days, and it has much to prove, but, together with the sector skills councils, learndirect and the Union Learning Fund, it is part of our strategy to create opportunities for learning for mature people, people at work and those looking for work throughout the nation.

Today, as we all recognise, no one trains for a career for life. There is inevitable mobility between jobs for all our people. So, it is essential that the structure for lifelong learning and training is reinforced. I have also mentioned the extent to which the Learning and Skills Council will reinforce our strategy on basic skills, to ensure that we continue to address ourselves to that issue. That is another matter that was raised in the report and in our discussion this evening.

The committee rightly flagged up the importance of making information on mobility and skills available to our citizens. The UK has played an instrumental role in pushing for the development of a one-stop European information mobility site. Progress has not been as rapid as we might have wished, but the building blocks are in place, and most member states have now integrated the European Employment Services database into their employment service sites. The website receives 25,000 visitors a week. Vacancy information will be available to all job seekers throughout the European economic area—the 15 member states plus Norway, Iceland and Liechtenstein.

The prototype for the Portal on Learning Opportunities Throughout the European Space was launched by the European Commission in November and is being tested. The "Dialogue with Citizens" portal provides practical information on other member states, such as access to work, study, goods, services and travel. We are trying to meet the point that was made about our people being less than well equipped with the information that they need to obtain jobs in the European Community and recognise the opportunities there.

Language is the one great barrier that all noble Lords mentioned. That is the most obvious factor that differentiates our single market from that in the United States. Several speakers suggested that the Government were going the wrong way. I think that my noble friend Lady Whitaker suggested that we were

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pointing in the wrong direction. We do not think that that is so. We seek to extend language teaching to the crucial early years at the junior school stage—ages seven to 11—so that all our students will get exposure to languages, at the time when they are most enthusiastic about learning and most open to it. That has occurred in other countries but not this one. It is a major and significant step forward in encouraging enthusiasm for languages.

It is true that we suggest that language teaching after the age of 14 should be concentrated on students who choose to follow language courses at that time and have developed the necessary enthusiasm and commitment.

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