Examination of Witnesses (Questions 1-19)|
WEDNESDAY 12 MARCH 2003
MP, JOHN FLETCHER
1. Good morning, Minister. Thank you very much
indeed for coming and talking to us. We know that you have a very
busy schedule. We are particularly grateful to you for responding
and we thank you for the written evidence, which was set to a
very tight deadline. We have a very short deadline for this quick
inquiry that we are doing, but it is a fairly crucial one and
we are grateful to the Government for giving us the evidence.
We are looking at the social aspects of the Convention on the
Future of Europe. It is a short inquiry, designed to contribute
to the debate in the Convention on what is a very difficult and
controversial area. We are planning also, while we have you here,
Minister, to talk about those parts within the Convention related
to our other, rather longer inquiry on proposals to establish
a European border guard. I wonder if you would like to make an
(Peter Hain) Thank you very much for
inviting me. I look forward to the grilling. I circulated to you
yesterday two brief statements, one of which was an article in
the Financial Times, which I think would obviate the need
for an opening statement, except to say this. First of all, my
two officials here are John Fletcher from the Foreign and Commonwealth
Office, European Union Department, Internal, and Tim Goodship
from the Department for Trade and Industry. We are joined-up government
here! Our objective in social policy is neither to achieve an
American free market model nor an old-fashioned protectionist
model; but in a European Union of 25, with some 18 million unemployed
and 77 million people of working age who are economically inactive,
the objective of full employment and creating more employment
opportunities, as well as maintaining high social standards, has
to be paramount. So we see social policy in that context.
2. I wonder if I could start the ball rolling
with one or two questions? You say in your response to us that
you believe that the existing competences of the Union are adequate.
Could I ask you if you believe, specifically in the social policy
field, that they are adequate to meet the needs of the Union in
the future, looking particularly at the goals set at the Lisbon
Council in 2000?
A. Yes, we do. In fact, the working group on
the Convention of which I was a member agreed with that conclusion,
that the existing competences are adequate. We have a situation
with competences which support national action as a general rule,
and then competences which are shared between the Community and
Member States. For example, shared competences would be on employment
relations law or on discrimination. I think that the alternative,
where you just have more and more harmonisation which does not
take into account the diversity of different social systems could
actually undermine the Lisbon objectives of creating many more
jobs and of modernising and reforming the European economy. Social
policy has to be pursued with, obviously, a priority of decent
social standards otherwise, Europe does not stand for anythingbut
at the same time with making sure that we get the Lisbon agenda
in place to reform the European economy, to create more jobs.
3. Do you feel that the concept of the European
social model is a helpful one? If so, what does it amount to?
A. There are different academic definitions
of it, which I will not trouble you with myself; but I do think
that it is helpful. In fact, I supported it within the context
of the working group. It derives from the language used by the
presidency conclusions of the Barcelona European Council last
year, which referred to a European social model. If I could quote
from it, it stated that it should be based on, ". . . good
economic performance, competitiveness, a high level of social
protection and education and social dialogue". I think that
we can see in the European social model genuine social values
that are distinctively European. So, yes, I do think that it is
a helpful model in that context.
Lord King of West Bromwich
4. May I first of all declare my interest in
various things? I am a member of the Sandwell local authority,
an alternate member on the Committee of the Regions and vice-president
of the Local Government Association. I do not want to get on the
wrong side of the standards committee! My question is how much
diversity between the Member States' social models can be expected
under the new constitution?
A. I think that this is crucial, because we
are talking about very diverse states in the existing 15 members,
and even more so with 25 from next year. As the working group
agreed, therefore, the shared values and objectives could be achieved
using the diverse traditions of the Member States. I think that
is the best way to ensure a Europe of social justice, if we all
develop adaptable and flexible rules and arrangements. Obviously
there is no usethis is an important pointin proposing
a European social model with protectionist measures which exclude
the unemployed from the labour market, all 18 million of them,
not even taking into account the 77 million of working age who
are economically inactive, creating a bias in favour of those
already in jobs. You could almost say that there has been a dominant
tradition in Europeunderstandably and, as a former trade
union official myself, I fully subscribe to itof a trade
union objective of protecting those within jobs and making sure
that they have decent standardsthat goes without saying.
But when that is at the expense of those who do not have jobs
getting into employment through business creation and more flexibility,
I think that has been a problem. On the other hand, we do not
support the neo-liberal free market model, which is characterised
by very poor social standards, by weak communities and by high
levels of poverty. It is within that objective that we expect,
and will certainly be working flat out to secure, the new Constitution's
call for diversity in Member States' social models and systems
of industrial relations. For example, co-determination is an essential
part of the German business model but not of most other Member
States, where voluntary collective agreements or other forms of
employee participation are the norm. Then you have a situation
where firefighters can strike in Britain but they cannot strike
in Germany under the Constitution. This diversity is a strength
of Europe and we ought to support it rather than undermine it,
but proceed in a way which reflects those diverse traditions.
5. Your statements that you have let us have
are very robust in terms of positive policies to create jobs and
to have high levels of employment. Do you think that there is
agreement across European countries about what is meant by full
employment? Related to that, do you see any possible tensions
between policies needed to reduce unemploymenthigh levels
of employment in the European Unionand some of the economic
policies that might be followed either by Brussels or by individual
A. This is a key issue. I remember, in my undergraduate
days as an economics student, all sorts of economists differing
on what full employment really meant, except that I do not think
anybody suggested that it literally means 100 per cent employment,
which is a rarely achievable goal. I see our aim as being job
opportunities for all and full employment is the best signal of
that intention. It also signals that economic policy should aim
for full employment alongside our own objectives. With that in
mind, therefore, I support full employment being in a Treaty and
I think that it is better than a high level of employment, which
is currently a Treaty objective. However, it has to do it in a
way which I think is behind the second part of your question,
which complements our agenda which is for skills and opportunities
for people to obtain and progress in employment, and our own record
as a Government on that is pretty good.
6. Is it possible that there could be real tensions
between policies needed to increase the number of jobs in the
European Union and economic policies which may be followed to
achieve other objectives, those economic policies then being in
conflict with high levels of employment?
A. Do you mean by Member States?
7. Yes. We are not in the euro. If we are in
the euro, we talk about the European Central Bank. There are two
elements to it. One is pre our joining the euro, and the other,
if we join the euroso both.
A. Obviously, different Member Statesand,
I would argue, for most of the previous Government's 18 yearspursued
policies not geared to full employment. The issue that then arises
is, could this be challenged? Could those Member States' policies
be challenged? That, I guess, is behind your question. It is theoretically
possible that, say, the European Court of Justice could be evoked
to challenge Member States if they are judged to have failed to
achieve a Treaty objective such as this one. In practice, however,
if you look at what has happened since the Treaties were agreedthey
were revised in Maastricht to include the promotion of a high
level of employment, which we are currently proposing to replace
by full employment (I think that it is Article 2 of the Treaty)there
has been no challenge in this context, even though no doubt somebody
could argue that some Member States' policies do go against that
objective. As long as full employment remains an overarching objective,
I do not think that it would make Member States vulnerable to
any action at a European level to change their domestic policies
against their wishes.
8. Minister, can I first declare an interest?
I am a vice-chair of the Britain in Europe Campaign.
A. I am a very strong supporter of Britain in
9. I know you are. I want to ask you about the
part in the working group's report which looks as if there might
be an extension of the rules relating to services of general interest
to public services in the social sphere. The Government objects
to that, and I would like to know what the Government's reasons
are for these objections.
A. It was actually a source of quite a lot of
argument in the working group, with myself and a number of others
taking a view which was probably different, I guessif it
had ever been put to the testto the majority. We obviously
attach a lot of importance to high-quality public services, and
I would be very happy with a Treaty objective along those lines.
We agree that the contribution of those services to the European
social model should be recognised. The way the redraft of the
rules was suggested, however, would entail a pretty substantial
expansion of European Union competence in fields such as social
security and education, even though the working group has recommended
against significant extension of competence elsewhere in this
report. We were therefore concerned about the definition of services
of general interest and seeking effectively, almost by the back
door, an extension of European competence into areas which we
would not want and, at least in principle, the working group did
not seek to do it. The redrafted rules could also, for example,
give the European Union control over setting public service conditions,
which we believe should remain at a national Member State level.
The public services are an intimate part of the relationship between
national governments and their citizens, and so individual Member
States should have the right to define their own services of general
economic interest and the way in which they are delivered, rather
than a change in the competence. I think that the existing Treaty
base for Community action in services of general interest is sufficient;
it does not really need amending. "If it ain't broke, don't
fix it" is the principle there.
Lord Corbett of Castle Vale
10. In your written evidence, Minister, you
say that what is unhelpfully described as "the open method
of co-ordination" is a helpful development. What do you see
as the advantages and disadvantages of making specific provision
in the Constitution for it?
A. First of all, yes, I do think that the open
method of co-ordination is a very useful development. It was highlighted
by the European Council of Lisbon in 2000 and has been progressively
introduced in the fields of employment and social affairs. It
allows common European Union values and objectives to be achieved
through the diverse systems of Member States rather than imposing,
through legislation, effectively a Brussels' diktat from the centre,
or giving the European Union competences it should not have. I
would like to see the Treaty refer to the open method of co-ordination,
as long as it gives flexibility for how it is applied. I think
that account should be taken in any Treaty reference of the different
variations of the open method. As to the specific advantages and
disadvantages which you have asked about, the advantages are that
it would emphasise the importance of the open method in helping
Member States to achieve common objectives through diverse means.
It would also improve the transparency of the open method, as
the working group reported knowledge as being a deficiency so
far. The disadvantage is that there is a riskan outside
risk, we judgethat the Treaty reference could lead to inflexible
application of the open method. However, I think it is unlikely
because there is a broad consensus in the Convention working group
not to specify detailed procedures or areas or areas of application
in the Treaty. To summarise, there is almost a reflex action very
often at a European level to go for legislation as the best way
of achieving an objective. We are saying that, especially in the
context of economic and social policy that could and should apply
elsewhere, it is better to have a common policy to co-ordinate
that policy in an open way and to give it a Treaty base than always
to reach for legislation, which then implies a rather rigid straitjacket
to the whole thing.
11. From what you have said, I think that there
is no attempt by Member States to try to lay down one single open
method of co-ordination. Did you end up saying that you would
want this referred to in the Treaty?
12. Laid down as an objective, as it were?
A. I am very relaxedI am not opposed
to giving the open method a Treaty base, as long as it is done
in a way that gives flexibility to its application. That is the
important thing, depending on which field it is applied in. I
think that paragraph 37 of the Lisbon Council conclusions could
provide useful language for a Treaty reference. It recommended
specifically, "a fully decentralised approach", which
should be applied in line with the principle of subsidiarity to
which the Union operates. I think that is the way that we would
like to see it proceed. Provided it is on that basis, yes, I think
a Treaty base for it would be a good thing.
13. Against that background, could I ask you
how can actions taken under this method be made accountable and
subject to scrutiny by national parliaments? Can you also meet
the point put to us in a letter from the Local Government International
Bureau, saying that it is extremely important that there is consultation
during the formulation of the policyright the way through
the process and not just a single part of it?
A. This is an important point. I do not think
the open method is sufficiently transparent at the present time.
I would certainly welcome any advice that your Committee had on
that and would want to look at it very carefully. We would be
happy to explore options for improved scrutiny if there is a general
concern, which you may share, that it is not sufficiently accountable.
We have become involved in open method processes through the reviews
of key EU documents related to employment and social inclusion
spheres, such as the explanatory memorandum procedure. That is
therefore giving some scrutiny. National action plans produced
under the open method are sent to our Parliament, including to
the House of Lords. There is also a range of key actors, including
the devolved administrations and social partners, involved in
the process of drawing up national action plans. I am not sure
where local government comes into this, except perhaps through
the Committee of the Regions. I proposed a strengthened role for
the Committee of the Regions and, elsewhere in the discussions
on the Convention, we have also proposed much greater national
parliament scrutiny over proposals from the European Commission
for new legislation and new policies: specifically to see whether
they infringe the principles of subsidiarity and proportionality.
This may also stray into that field.
14. One of the points made by the Local Government
International Bureau was that any obstacles to efficient implementation
can be identified at an early stage by those responsible at the
point of delivery, and that is extremely important. Also, that
the authorities should be involved in the evaluation process.
It is the formulation, thereforegetting in upstream and
A. I think that there is a lot of logic to that.
The thinking of the old days, where the Commission just initiated
a proposal and that was that, has now been superseded, including
in the Commission itself, in that it actually makes for much better
legislationif that is what is involvedto have an
element of pre-scrutiny and consultation to get it exactly right.
Lord Wright of Richmond
15. I wonder if I could ask you a supplementary
on this? As someone who has come rather new to this concept of
OMC, can you explain to me how it differs in essence from the
procedure which the European Council has used for years to reach
A. There is an overlap, but I think that it
has established a more formal basis and a recognised alternative
to just reaching for legislation. That is what it is about, in
a nutshellproviding for concerted co-ordination under the
eye of, and driven by, the European Council. So that, for example,
in the case of the Lisbon agenda for economic performance, which
is crucial to Europe's competitiveness in the future. The Spring
Counciland I think that there will be one next week in
Brusselswill review the progress of the Lisbon agenda.
There is therefore that degree of co-ordination, which is a new
thing. In the past, the Council tended to pass the policy or agree
a conclusion and there was no proper monitoring, except insofar
as the Commission picked it up for implementation.
Lord King of West Bromwich
16. I understand that the Government is not
opposed to some extension of Union competence in the area of public
health. Where would you draw the line on that?
A. I think that there may well be some extension.
There may be a case for some extension of Union competence in
the field of public health protectionas long as we protect
national Member States' responsibility over their own health systems,
given the diversity of national circumstances and what I think
would be judged to be our own patch, if you like, at Member State
level. For example, bioterrorism or communicable disease controlcross-border
public health issuesare very clearly in this category.
The Convention working group drew similar conclusions. There may
also be benefits of rationalising existing Community powers to
deliver health objectives more effectively, such as on tobacco
control. We do believe, however, that further discussion of specifics
is necessary to nail down the detail, before we can decide on
an extension of Community competence in the health field and,
if so, where to draw the line. These are quite complex and tricky
areas. The High Level Process of Reflection on Patient Mobility
and Healthcare Development in Europe provides a valuable forum
for further discussion of these kinds of complexities. The informal
group, as I think you know, is made up of health ministers and
representatives of key stakeholders. It therefore offers an opportunity
to consider issues of competence and possibilities for co-operation
to clarify these issues.
17. You mentioned tobacco control. Is there
not a difficulty, in that it is a legitimate public health objective
to reduce smoking? We give effect to that in Britain by a number
of means, including putting a high level of duty on cigarettes.
Most of our European partners do not see it that way. They do
not believe a high duty on tobacco, or as high as we impose, is
the way to deal with it: hence smuggling or imports of cigarettes
on a large scale. Is there not a problem there, unless duties
on cigarettes are in line with public health objectives, as we
have them here?
A. I think that you are then getting into harmonisation
of tax policy, which is not an area I would invite you to stray
intoand certainly would not invite you to invite me to
Chairman: I think that we will take that advice very
18. I understand the difficulty. On the other
hand, our present policies about tobacco are being significantly
and seriously undermined by the vast amount of tobacco that is
brought in. We lose a lot of money and it undermines our health
policy, because we see in the streets of London people illegally
selling cigarettes that have been brought in this way. So there
is a difficulty there. Maybe they should adopt our policies rather
A. Maybe they should, but I think that this
is not really a public health competence issue; it is an issue
for wider European Union policy. I think that could be discussed
in the high level process to which I referred, if this is an issue
that people are concerned about. There is a logic to your point,
but I do not think that it should be dealt with in the context
of a Treaty, in a constitutional revision, but through other routes.
19. This is connected with that last question.
What about prevention? Would you think that there is a case for
widening this to vaccination and immunisation policies? You could
say that it is cross-border.
A. I would have to think about that and perhaps
in your own deliberations you could consider it. Obviously, we
want to ensure that standards of vaccination are high and so on,
but it is not something, to be frank, to which I have given detailed
consideration. If you wanted to explore it and if you wanted me
to write to you about it, however, I would be happy to do that.
Chairman: That would be extremely helpful, Minister,
if you are able to do that.