Select Committee on European Union Fourteenth Report


CHAPTER 2:VALUES, OBJECTIVES AND COMPETENCES

Values

8.  As mentioned above (paragraph 6), we have already considered the provisions of the draft Constitutional Treaty on the values of the Union in the context of our examination of Articles 1-16. These are important provisions. It is essential to have clarity in the Treaty on the values and objectives of the European Union—not least on those relating to social policy—and to avoid overlap between them. The Working Group recommended inclusion in the Treaty, as values of the EU, of social justice, solidarity, and equality, in particular equality between men and women. This list of values was supported by most of our witnesses.[7] Article 2 of the draft Treaty, however, includes only "solidarity" from this list. The omission of equality was criticised by the European Disability Forum, which also called for explicit reference to non-discrimination and disability to be included in the first part of the Constitutional Treaty.[8] Equality between men and women appears as an objective (see below) but the inclusion of equality in the list of values merits further consideration in the Convention.

Objectives

9.  The Working Group saw a need to establish a better balance between the economic and social policies and processes of the Union.[9] It recommended that this aim should be reinforced in the Constitutional Treaty, in both the initial constitutional principles which underpin the objectives of the Union and the later substantive clauses setting out the policies of the Union. The inclusion in Article 3(2) of the draft Treaty of sustainable development "based on balanced economic growth and social justice" as a Union objective is an important step in this direction.[10]

10.  Article 3(2) of the draft Treaty includes, as objectives of the EU, social justice, social cohesion, equality between women and men, social protection, equal opportunities for all and "full employment". This list is much narrower than that proposed by the Working Group.[11] Although the inclusion of full employment (in place of the current term "a high level of employment") was welcomed by many of our witnesses including the Government,[12] we are concerned as to how the objective of full employment can be defined. It would be very difficult to establish a common definition of "full employment" in Europe, given differences in cultural attitudes towards participation in the paid labour market, labour market policies, economic structures, migration patterns, and policies towards migrant labour in Europe. We note in this context that at the Lisbon European Council the target of full employment was defined as raising the employment rate as close as possible to 70 per cent by 2010 and increasing the number of women in work to more than 60 per cent by 2010. There is a need for greater transparency, however, about how (and by whom) these targets are defined, what is meant by "work", and the means of ensuring that the Member States achieve the targets.

11.  We also note that full employment may be impossible to achieve at some stages of the economic cycle. There is therefore a risk that, if, for example, there were a need—say for economic reasons—to take measures that had the effect of increasing unemployment in the short or medium term, the EU could find itself pursuing policies that ran counter to its own constitutional objectives.

Competences

12.  The Working Group's Report concludes that, broadly speaking, the existing EU competences in the field of social policy are adequate. This view has been endorsed by witnesses as diverse as the Government,[13] the CBI[14] and the TUC, which also suggested that existing competences should be streamlined and updated.[15] Peter Hain told us that the Government saw the present mix of competences as useful in maintaining diversity between the different social systems in the Member States; and that further harmonisation that did not take account of that diversity could undermine the Lisbon objectives of creating more jobs and reforming the European economy.[16]

13.  The Working Group did, however, recommend a specific extension to existing competences in one area, that of public health. This recommendation has been cautiously welcomed by the Government, which acknowledge that there may be a case for enhancing Community action in areas such as bio-terrorism and communicable disease control, and that it would be beneficial to rationalise existing Community powers to deliver health objectives more effectively, such as on tobacco control.[17] It may, however, be difficult to determine what is included under EU action in "public health"—whether, for example, it should cover areas such as tobacco advertising and the mobility of patients across the EU—and clarity will be needed when drafting the relevant Title of the Treaty. This is particularly important in view of the legitimate concern of Member States—expressed in the Government's evidence to us—to retain control over the way that their national health systems are run.[18] The Commission was, however, confident that a provision on public health could be drafted "to make clear that Union action would in no way impinge on the competence of the Member States to manage and finance their own health systems".[19]

14.  We regret that the Working Group missed an opportunity to make recommendations for clarifying and simplifying the legal base of social policy in the EU, especially by drawing distinctions between employment and social policy matters, and we hope that even now this can be picked up in the Convention. There is a pressing need for clarification. The legal base for current Community competence for social policy is complex, resulting from longstanding disagreements about the need for Community competence in this area and the purpose of a Community social policy.

15.  Without such clarification the legal base is likely to be further complicated by the delimitation of competences in Articles 11-16 of the draft Treaty. At present "social policy", "economic and social cohesion" and "public health" appear as areas of shared competence in Article 12(4). "Employment", on the other hand, is an area of "supporting action" under Article 15(2).[20] Article 15(3) further states that the Member States "shall co-ordinate their national employment policies within the Union". There are three issues that may be controversial here:

·  The distinction between what comes under "social policy", which is a shared competence, and what comes under "employment", which is an area of supporting action. The distinction is significant, as it has a considerable impact on the discretion of Member States to legislate.

·  Whether all or only some aspects of "social policy" are areas of shared competence. At present Article 137 EC grants the Community supporting—rather than shared—competence on a wide range of issues (including social security and the protection of workers). On the other hand, Article 141 EC enables the European Parliament and the Council, acting jointly, to adopt measures to ensure the principle of equal pay for male and female workers (a shared competence).[21] A shared competence may mean that Member States are not free to act in these matters if the Union has already done so. As we pointed out in our earlier report, the division of competences in Articles 10-15 of the new Constitutional Treaty is sometimes unclear and confusing.[22] This is of particular concern in relation to social policy as it is not clear from the wording of Article 12 whether it is the intention to make all matters currently falling under the heading of "social policy" the subject of shared competence (thus limiting Member State action) or only some of them. We hope that this issue is clarified when the relevant Articles in Part Two of the new Treaty are published.

·  In relation to public health, Article 152 of the EC Treaty provides for a mix of shared competence and supporting action. Now it appears that shared competence is proposed in all cases.

These are issues that need further careful examination in the Convention.


7   Including the Government (p 1), the Equal Opportunities Commission (p 11) and the TUC (p 17). Back

8   p 14. Back

9   Paragraphs 48-52 of the Final Report. Back

10   As we noted in our Report on Articles 1-16, the wording signifies a departure from Article 2 EC, which refers to "harmonious, balanced and sustainable development of economic activities" (paragraph 17).  Back

11   The Working Group's list also included social justice "leading to social peace", quality of work, lifelong learning, social inclusion, children's rights, a high level of public health and efficient and high quality social services and services of general interest. It also included a reference to "social market economy", which is replaced in Article 3(2) by a reference to a "free single market". Back

12   p 1, Q 5; and also the TUC (p 17). Back

13   p 2. Back

14   p 9. Back

15   p 17. Back

16   Q 2. Back

17   p 2. Back

18   p 2. While the Court of Justice continues to accept that the Member States retain sovereignty over the organisation, funding and delivery of national health services and social security systems recent challenges to the Member States' sovereignty in this area have questioned the compatibility of this exercise of sovereignty with the internal market and competition law rules of the EC Treaty. See Vassilis G. Hatzopoulos, "Killing National Health and Insurance Systems but Healing Patients? The European Market for Health Care Services after the Judgments of the ECJ in Vanbraekel and Peerbooms" (2002) 39 Common Market Law Review 683; E. Steyger, "National Health Care Systems under Fire (but not too heavily)" (2002) 29(1) Legal Issues of European Integration 97. Back

19   p 13. Back

20   Under draft Article 10(2), where competence is shared "both the European Union and the Member States have power to legislate but the Member States shall exercise their competence only if and to the extent that the Union has not exercised its". Under draft Article 10(5) supporting action "does not supersede Member State competence". Back

21   Anti-discrimination measures under Article 13 EC would also be a shared competence. Back

22   Op cit, paragraphs 62-70. Back


 
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