Employment and Corporate Social Responsibility Inquiry
I welcome colleagues and guests to the second meeting this year of the European Committee. I have received apologies from Nora Radcliffe and John Home Robertson, and I understand that Lloyd Quinan is going to be a little late. I welcome Stella McArdle, from the Committee of the Centre in the Northern Ireland Assembly. She will be with us for a few days to see how we do things here in Scotland.
The first item on our agenda is to take evidence as part of our employment and corporate social responsibility inquiry. I am pleased to welcome Rona Fitzgerald of the Equal Opportunities Commission in Scotland. Thank you for coming along, Rona. I invite you to address the committee for a few minutes, after which we will put some questions to you.
Rona Fitzgerald (Equal Opportunities Commission):
Thank you very much for giving me the opportunity to be here. Many of you will know the work of the Equal Opportunities Commission. Many of our statutory or enforcement powers relate to employment; to equal pay in particular, and to sex discrimination in the labour market. An important range of issues is covered in the employment strategy, including the pay gap, the work-life balance, the need to break free from male and female stereotypes, and occupational segregation. One of the reasons why women are paid less is that they tend to be clustered in certain professions and at certain levels, often as a result of lack of flexibility, in particular in more senior positions. That is something that we have to address head-on.
All those issues have to be addressed as part of a good corporate social responsibility strategy. Increasingly, as we have been examining the issues around equal pay, we have found that, unless we address all the issues around labour-market flexibility and unless people really see gender as a factor in structuring opportunities, we will not address systematically some of the issues that we need to address. I will, in my brief introduction, mention some of the things that we have done, although I will not go into detail.
When we raised the issue of the gender pay gap, especially as it exists among graduates, we found that people were shocked that there is still such a gap after more than 30 years of legislation. It is important that we try to get to grips with why that gap exists and how we can tackle it. Recent evidence from a Department of Trade and Industry publication and Joseph Rowntree Foundation publications shows that a more flexible work environment that builds in flexible working, the work-life balance and issues around equal pay promotes greater productivity. Such a work environment also has other benefits; for example, it can result in improved staff retention, which can save huge amounts in many industries, and it cuts down sick leave and employees being absent for various reasons. If employers show that they are responsible and that they take their employees' situation seriously, they are rewarded with increased productivity and they become employers of choice.
The Equal Opportunities Commission has promoted a toolkit to help employers to address equal pay and to conduct pay audits. We have been considering aspects not just of pay, but of other areas that are linked to pay, and we have tried to provide evidence and guidance for employers.
Initially, we thought that pay audits should be voluntary, but a question has arisen as to whether there should be legislation on them. When the subject has been broached, many employers have said that although they would do pay audits, they do not know how to do them, which is why we produced a toolkit. The toolkit is meant to build capacity and give a greater understanding of what is happening. It addresses a number of issues, in particular those related to assessing work of equal value. We think that the next stage is consideration of matters such as how jobs are valued. Obviously, women tend to get stuck in sectors in which the payment or reward for a job is less than it is in other sectors that are dominated by men, so we must consider that.
As I said, we considered first how to close the pay gap. It is notable that the Executive launched the initiative on that in Scotland and that there is now a Europe-funded project in which the Equal Opportunities Commission has just assumed the lead partner role. We have a broad range of partners including the Scottish Executive, Scottish Enterprise, Highlands and Islands Enterprise and the Scottish Trades Union Congress. Uniquely, we are trying to work with employers, employees, trade unions and other advisers to reach an awareness of the gap and get people used to the idea of gender-based pay reviews.
I hope that what I have said has been satisfactory for openers.
Colleagues want to pick up on a number of points that you have raised, but before they do so, I would like to ask some questions. I know that you used to be an adviser to the European Commission. Perhaps you could give the committee an insight into a matter, or we could pick your brains a little. Do you think that the equal opportunities pillar of the European employment strategy has worked? Has it promoted equal opportunities in a way that might not otherwise have happened? Given that we are reviewing the strategy, do you have any suggestions to make about the direction in which you would like the strategy to go?
The European employment strategy has brought equal opportunities on to the agenda. Last week, I was at the European Parliament's Committee on Women's Rights and Equal Opportunities, which discussed gender budgeting. People said that a number of years ago we did not understand mainstreaming and did not know what it was, although we do now. We might still be confused about how to put it into practice, but there have been gains. The work on the employment strategy has been important in establishing mainstreaming as a crucial area to be tackled in employment and something that requires specific intervention.
If the equal opportunities pillar has not worked, that is because major players, such as enterprise agencies, do not mainstream equality—gender equality, in particular—in their work. The Kingsmill report followed the Equal Opportunities Commission's initial work on the pay gap. Denise Kingsmill has said in public that, although many employers say that employees are their greatest resource and that human social capital is vital to their firm's survival and growth, what they say is not always put into practice. I referred to issues relating to flexibility in the workplace and the availability of more senior jobs that would involve shorter time or job-share work. Such flexibility and availability have a crucial impact on women's access to the labour market.
The direction of enterprise policy has been very much geared towards matters such as turnover and numbers of employees. All the research on women in business has shown that they tend to think on a smaller scale and to operate on a slightly different business cycle. If policies that exclude women entrepreneurs are designed, it is hard to see how their number will increase.
The draft "Joint Employment Report 2002" brought up issues about the gender pay gap, flexible working, work-life balance and tackling the female ghettos that result from occupational and job segregation. We require an explicit analysis that shows what happens to men and women in the labour market. Jill Rubery—from the University of Manchester institute of science and technology—and the European Commission expert group on gender and employment have produced a number of reports that point out that gender impact assessment models or other models are not being used explicitly to tease out the issues. Although there is an equal opportunities aspect, the issue of gender as a factor in constructing opportunities for access to the labour market is not explored, which means that it is harder to establish that relationship.
It is crucial to factor in mainstreaming and to build in equality issues at the analysis stage. After some enterprise schemes and regional incentives had been put in place, people realised that they were supposed to see them through an equal opportunities lens, but they had not thought about gender, race or disability and they wondered how to do that. UK enterprise agencies have been considering such issues post eventum, after their strategies and schemes are in place.
To consider the marketplace more broadly, mainstreaming requires transformation in the employment strategy policy process. Instead of thinking of women, people with disabilities and people from ethnic minorities as a problem to be sorted out, we must think how to make employment strategies more flexible and responsive to the needs of a variety of people. In some cases, we might not understand or know what those needs are. We must find out what happens to men and women and challenge some of the issues.
One important issue for the Equal Opportunities Commission is whether we should legislate so that it is mandatory for bodies to carry out equal-pay audits or reviews. Another issue is that the phrase "work-life balance" is often seen as shorthand for caring responsibilities and as relating only to women, but we should see it much more broadly. In relation to people who do not have caring or family responsibilities, we should see the work-life balance as being about getting the best out of them when they are working and allowing them to flourish by not putting undue strain on them. We must change the thinking that putting in long hours is a sign of commitment to, and aptitude for, a job. It will be difficult to challenge that thinking—it will require political leadership from Governments, Executives and Parliaments. The Scottish Parliament has set a good example on working hours, but that issue must be challenged and returned to continually.
When I was in the European Parliament last week, a Dutch woman said that the point is not so much that we want women to be equal to men, but that we want men to be equal to women. That is quite a good way of looking at the matter.
The employment strategy requires a much more explicit analysis of how gender affects participation in the labour market. Employment strategy is focused quite broadly and tries to ensure that everybody has access to a job that they feel they can do well, for which they will get reasonable remuneration and in which they will work reasonable hours: we have to instil that sense in people. That will require a challenging approach; we will have to say that work in itself is not the only thing and that long hours are not the only sign of commitment. That is important for women, who tend to be segregated in certain occupations because they allow that flexibility. Private sector jobs often entail longer hours and greater commitment and if the employee has other responsibilities it is very difficult to meet those needs.
I have one question, but I would like to split it into three parts, if I may. First, what are the roles of the European social fund and the Equal community initiative in developing equal opportunities?
The European social fund and the Equal initiative have important roles to play; they allow people to try to develop good practice by examining projects that have included gender considerations in particular. It is important that gender mainstreaming is extended from the social fund—where it has been seen as a human resources issue—into the other funds, such as the European regional development fund and the common agricultural policy. That will be challenging, but it is important.
The Equal initiative is about developing good practice and unusual and different kinds of activities. It is based especially on the notion of partnership. The idea is not that a project is one organisation's project involving other organisations, but that a number of organisations come together in partnership. We hope that because the close the gap partnership involves a range of organisations, we will be able to exchange experience and develop good practice together.
Only when we get the engagement of senior actors and players will gender mainstreaming in particular be taken seriously, and only then will we see equal opportunities being mainstreamed throughout employment policy. The perception has been that the social fund is tackling disadvantage and focusing on people who have been excluded from the labour market because of a lack of skills or because industries are changing and are concentrating on training and capacity building. In the Equal initiative, we have an opportunity to forge new practice, develop awareness and build capacity.
In the Scottish context there is another driver in the equality strategy. The Executive has committed itself to mainstreaming equality and there is a broad definition of equal opportunities in the Scotland Act 1998. It is positive that many people are saying that we should take that seriously. That political ownership, in the broadest sense, combined with getting key employers to see that the issue relates to good practice and corporate responsibility, will make them more attractive employers and will ensure that they will not lose out on productivity. An evidence-based approach is important, which is why the Joseph Rowntree Foundation's work and the Department of Trade and Industry's work are important. The current implication is that people who work fewer hours are less productive and that those who want more flexible working patterns are less committed and have less drive.
We found in the Equal Opportunities Commission that a reasonably senior position was open to job sharing. One of the applicants said that having small children had meant working in jobs for the previous 10 years in which none of the applicant's skills had been recognised. The commission did another European study that showed that, in many cases, the sort of skills, talents and qualifications that women have are under-utilised across the board, particularly in science and technology.
The second part of my question is: does Scotland use those funds to develop quality projects throughout the country?
I used to work at the European policies research centre in the University of Strathclyde, which is how I got involved in work with the European Commission. I did the report on the United Kingdom. Scotland emerged very favourably in relation to the development of innovative projects.
The social fund has offered huge benefit in allowing people to experiment with more flexible working practices. For instance, a project on men into child care in Edinburgh—partly funded by the City of Edinburgh Council—is also receiving social fund funding. Initial take-up of the course was not high, so it was decided to offer it to people who were in employment, so that they would not have to leave their jobs to do it, without knowing whether they would like it. The course offers a qualification and training in a new area and take-up has increased. The ability to be flexible makes a difference to the forging of new practice. It allows people to obtain experience of what it is like to work in a different sector, without being disadvantaged by losing their existing job.
There is a lot of good practice in Scotland at that level. It is a question of allowing such good practice to permeate throughout the whole of practice. That is why I referred to organisations such as the enterprise agencies and big players, particularly private sector companies. Until good practice becomes part of their practice, it will continue to be isolated to certain sectors and certain types of jobs. That is why women are concentrated in public sector or voluntary sector jobs or in jobs in which flexibility and those kinds of things are built in. That is also why they get stuck in occupations in which they are paid less and in which their skills might be undervalued.
To some extent, you have dealt with the final part of my question, which I will ask in case you want to add anything. How could we stimulate best practice throughout Scotland?
To an extent, best practice has been stimulated. The work of the committee and of the Parliament in general is very important. The Parliament's inquiries help to underline the issues and to get more publicity for them.
The next step is to develop a way in which to lever people who are important in the sector and to put pressure on them to ensure that they are on board. When I examined some of the structural fund programmes, I found that the programme management executives and the partnerships had in place very good structures for mainstreaming equality. However, that does not always transfer into the projects themselves.
The issue is partly about capacity building in all organisations. There are hopeful developments, notably the legislation on best value in local government, which includes statutory guidance on mainstreaming. That will improve practice and will mean that people have to take the issue seriously. There are a number of positive drivers.
It is always important for the Government to set an example. The fact that the Scottish Executive is undertaking a gender pay audit is to be welcomed. At UK level, because of the scale, it takes longer for initiatives to permeate into practice. For many departments, mainstreaming is a voluntary activity in terms of how they assess their policies, so mainstreaming will not be taken equally seriously by all departments. We are dependent on either the capacity of people in departments or the interest of various departments. The Treasury has considered a gender budget initiative in a couple of policy areas. That is another matter that will be a stimulus for thinking a bit more about the gender impact assessment of policies. I hope that that will develop in the next while. From that point of view, the push from Europe is welcome because it is about setting an agenda. However, member-state Governments need to take that on board in their circumstances and to make the agenda their own.
That brings us nicely to Dennis Canavan's question about transnational practices.
Policies on equal opportunities may vary or be at different stages of development throughout the European Union. For example, I understand that in Sweden there is compulsory training on equal opportunities for Cabinet ministers and bishops. How can we best develop equal opportunities policies through transnational projects?
That is another apposite question. The equal opportunities project that the Executive is part of has partners from Sweden and the Czech Republic. The idea is that we can learn from the things that they are good at, and vice versa. The Czech Republic is keen, as an accession state, to understand what is going on. The Swedish, to whom Dennis Canavan referred, have a high level of gender equality legislation. I suppose that such legislation is a real issue, but it is a reserved matter. However, I do not know whether we need to legislate more at United Kingdom level for some of the things that we want to happen. In the Scottish context, there has been an attempt to change practice and to be encouraging, but perhaps there is a real issue about legislation.
In terms of sharing experience, transnational projects are important and are one of the benefits of the EU. Many structural fund programmes have built in exchange of experience and transnational working. Such practice allows people to get many ideas from other countries, in particular when they examine practice that works. In my previous job, I used to do a lot of that.
An interesting example is the Republic of Ireland, which had a gender pay gap of 28 per cent in the 1980s, but which now has the lowest such pay gap—14.6 per cent—in the EU, which is only partly because of economic success. The other reason why that has happened is that the social partners and other senior policy people took the equal opportunities issue seriously, particularly because of a push by the EU. In addition, child care and the requirement that the social infrastructure provide access to the labour market for women and other people were taken seriously.
There is now greater flexibility in the workplace and flexible working is available in many more senior jobs. That underlines the fact that lessons were learned in Ireland because it was an objective 1 country and because it shared experience with other countries. Ireland had to take the equal opportunities issue seriously. Ireland's equal opportunities policy is not working perfectly and many people would be critical of the Irish Government's approach, but things have improved dramatically. The Equal Opportunities Commission has, in many cases, codified good practice and it has produced, for example, best practice manuals—some of which I contributed to.
Perhaps where the commission falls down, however, is in the need for home-grown examples. We need examples of things that work in the Scotland or UK contexts and we perhaps need a bit more detail. I am sometimes intrigued when I read about a best-practice project, but can see only headlines and a little information. I ask: "How did they get all those people together? How did they convince those people? What did they do? Did they develop a checklist for themselves? What kind of approach did they have? Did they monitor things to make sure that they really did something? How did they put in place those systems?" It is important to have more information about such matters. The EU has a role to play in capacity building and in the exchange of experience.
When we met the Swedish environment minister, we learned that, while having her children, she remained in the north of Sweden and conducted her Cabinet business from there—to the distress of some of her colleagues, I must say. That seemed to be an interesting and worthwhile precedent.
I was going to ask what you saw as being the major barriers to the promotion of equal opportunities in the workplace, but you have answered that question to a degree, although you might want to develop the point a little.
I understand that the glass ceiling is not a fiction. Will you talk about that? I would also like you to talk about promotion. A long time ago, I had a day's course on equal opportunities for head teachers. The most significant message that I came away with was that women will wind themselves up to apply for a promoted post because they think that they are ready for it but, on not getting the post, will bury themselves for ages, never to re-emerge, whereas the male of the species assumes that the system is wrong and keeps applying, which is what I did. Have you addressed that in a systematic way?
You have hit on an important point about norms, values and our expectations. We must change people's expectations of what men and women do. Sex stereotyping in schools starts early. A professor in Cambridge conducted a survey using the UK as a comparator with Spain, Portugal and Greece. She expected the UK to come out a lot better than the other three countries, which are seen as being less developed, but, in terms of what people in the teaching profession expected of boys and girls and men and women, the situation was quite similar.
School is important in the creation of expectations. People develop role models at school and seeing someone doing a job is important. The Equal Opportunities Commission has been examining the area of skills. The situation in the professions has changed in the past 30 years and there are a lot more women in more senior and professional jobs, but little change has happened in the skilled sector. Women are not becoming plumbers and electricians even though there are skills shortages in those areas.
What are the barriers to women taking part in those sectors? Sometimes they are to do with expectations and sometimes they are to do with issues of access, such as the availability of courses. Role models are always a good idea and it is important to see people who are the same sex as you doing certain jobs.
You mentioned the glass ceiling. People are beginning to talk about the sticky floor, which relates to the fact that women get stuck at a certain level. There has been welcome and significant change in my working life, which has been more than 25 years long. The rate of change is slow, but I think that that might have to be the case for change to be sustained.
The issues that I talked about earlier, such as the fact that women tend to take responsibility for family matters and caring, mean that women lose ground through having interrupted careers. Further, some jobs are not flexible and people who leave for whatever reason cannot return to them. That is about changing the mentality that surrounds the labour market, taking work-life balance seriously and seeing it as something that affects men and women.
One of the good lessons to be learned from Sweden is that its child care strategy was intended to benefit everyone in the labour market. It was not just aimed at getting women into the labour market; it was meant to be a resource for parents. We need to make it clear that work-life balance is about men as well as women.
For many people, the term "gender" is used as shorthand for women, but it is not. "Gender" means both men and women, and the fact that they might have different needs and situations. If we can take account of those, we can overcome the barriers and people can make a real choice.
Today someone was telling me about a school that made sure that second-level engineering was available to all school pupils. Three girls in the school are now going to university to study engineering. The subject was made broadly available and it was not just aimed at women. By making it broadly available, people have been empowered to make an informed choice about their career. That is crucial.
There was one other point but it has skipped my mind.
It was about encouraging people to persist in trying to get promotion and not just capitulating.
That is a difficult one. I was impressed by the ads for a confident Scotland. I think that a lack of confidence is something that Caucasian people do. When I was growing up in Ireland, the worst thing I could do was to be outspoken. You were considered to be a hussy of the highest order if you had an opinion. Women are easily discouraged and that has happened to me.
We have to get tougher. People have to believe that the system is transparent enough for them to get by on merit and they need to understand what the criteria are for promotion. It makes a difference if that is explained. People also have to know that capacity building is available to them if they want to develop their skills.
Some of that is obvious in the mentality of an organisation. I worked in an organisation where if someone was interviewed for promotion but did not get it, they were told what they did wrong and how they could address it, instead of being told, "You were rubbish and I don't know why you went for that promotion."
That is about changing practice and building up people's confidence and it really goes back to the schools. At lot depends on people's experience in school. Family is important, but schools and peer groups also seem to be important.
We have always thought that improving child care is one way to eliminate barriers to women returning to work, and you mentioned that. We have an increasingly elderly population and people are living longer, so many women have caring responsibilities at the other end. They go from looking after their children to looking after their parents. Is that aspect of women's caring responsibilities being recognised enough?
That is another important question. I would like the situation to change, so that caring for the elderly is seen as the responsibility of the whole community. If there is more flexible working and we can convince men that working four days a week does not diminish their status or virility, they could spend time caring for elderly people as well. They might benefit from feeling that they are making a contribution.
Caring for the elderly will drive some policy changes in the next few years because there will be more demand. Populations are living longer and there will be a need to take responsibility. I am concerned that a lot of that responsibility will fall on women, who traditionally have taken that role. We should encourage men to share the burden.
An issue that has come up in the submissions that we have received and in the discussions that the Parliament has had is the growing gender pay gap. A number of organisations have raised the issue and the EOC is doing a lot of work on it.
You have talked a lot about some of the reasons for the gap, but let us focus on how to tackle them. I was interested to hear about the gender pay audit that the Scottish Executive is carrying out and the checklist that you have developed. How do you see such initiatives being developed through policy made by the Parliament, not just the Executive?
Initially, we have tried a strategy of awareness raising to get people to believe that there is a pay gap. As I said, there was a great deal of incredulity about it, which is why we tried to produce evidence of it. We also have what we call the toolkit, which we are trying to get organisations to use voluntarily. We have tried to work more and more with organisations and to get their feedback to see how they are using the toolkit and whether it is useful, so that other kinds of guidance can then be developed. That has been an important element for us.
The next stage is to consider whether we need legislation for a compulsory pay audit, and whether people should consider their pay systems in relation to gender and report on them to justify differentials in pay. Once problems are recognised, strategies can be introduced to rectify them.
The broader issue about the structure of the labour market and the way in which women are segregated has a real impact. The Information Data Systems report that came out last week showed that the pay gap widened ever so slightly last year, although recent trends have shown the gap narrowing. That report was skewed by the fact that men in senior positions received huge pay rises. Pay differentials among women with lower incomes improved, so women are also doing better. The pay gap is down to about 18 per cent, which is not very good, but it is an improvement.
There are other issues linked to that. If people want flexibility in their jobs, the choices available to them are limited. A major report on women in science and technology in the UK and some other states showed that a huge number of highly qualified women leave at post-doctoral level because there is not enough flexibility. One of the things that the French Government has done is to change the age limit for post-doctoral fellowships—previously, women over the age of 28 did not qualify for them, even though they might have had a baby in their mid-20s and have taken time out. The problem also applies in the skilled sector. The age limit for apprenticeships is 25, but a woman might have children at an early age and, at 25, decide that she would not mind being a plumber. However, there is no flexibility. Such age barriers are artificial.
Child care is always fundamental. A woman who wants to return to the labour market after having children will need out-of-school care—women, particularly women entrepreneurs, tend not to return to the labour market until their youngest child is about six. If provision is not locally available or affordable, there is enormous pressure on the system. We need a child care strategy that recognises that, and I know that the committee is considering that.
Transport has come up in several studies. Women are more dependent on public transport and will take that into consideration when they are looking for places of work. A United States study showed that about 78 per cent of women who worked part time worked within a 3-mile radius of their home. It is easy to see why. It is crucial that employers have the sense that their employees are a resource. They need to recognise that having more flexible approaches to working hours, taking the gender pay gap seriously and ensuring that statutory requirements for maternity and paternity leave are adhered to makes them more attractive as employers. The pay gap will be narrowed as a consequence.
The Irish case shows that more jobs in a variety of sectors have become available to women because of a shortage of labour and skills, and that they are getting a better return than before, even if they are working part time. Sectors are opening up, so that women who have skills and want to develop them can. They can work in a variety of jobs that pay better, and not get stuck in the part-time, low-skill sector.
I have one final question: what are the problems in equal opportunity terms for older workers who are trying to get back into the labour market?
There are a number of problems. In many ways, age should not be a problem, but there is a mentality that says that if you are a certain age and you do not have the skills, you will not be able to learn them. The European social fund and some of the other funds have tried to tackle that. Lifelong learning has been provided, and is viewed as important. The issues are to do with mentality and how people are treated.
Once again, the Irish case is useful. Older women are one of the most valued commodities in the Irish work force, because they seem to be reliable, literate and often have a reasonably high level of skills. A friend of mine who was recruiting for a very big company in Dublin said, "I hope some older women apply." And I said, "Well, that's a change for the books." Some of it is a change in attitude and some of it is to do with the labour market.
Over the years, some of the European funds have tried to invest in people who are long-term unemployed or older and to give them new skills. They have then been able to come back into the labour market. There is legislation about not discriminating against people because of their age, but societal and attitudinal changes are required. We need to see people being in and out of work over a lifetime, or even changing occupations, and view that not as a negative thing but as something quite positive.
Thank you. We are grateful to you for coming in today. You have really helped us to flesh out the detail of an important part of our inquiry.
Thank you for the opportunity to be here.
I suggest that we have a short five-minute break to allow us to change witnesses.
Meeting suspended.
On resuming—
I welcome Mik Woolley from the Department for Education and Skills. We appreciate your attending. I gather that you have had a rather long journey here. It took me three and a half hours to reach Edinburgh from Ayrshire this morning. We would be pleased if you took a few minutes to give an introduction.
Mik Woolley (Joint International Unit, Department for Work and Pensions and Department for Education and Skills):
I will make a brief statement to underline a few elements of my written submission. One key element is the fact that the Scottish Parliament has taken the important opportunity to discuss the employment strategy at a good time, because, as members know, the strategy is being revised. We are into a year that marks the start of a new term for the employment strategy, so the future is important. I hope that we can explore what could happen.
The basis for revising the employment strategy is in the past. The aim is to re-establish the intent in the treaty of Rome—that the employment strategy should concern member states' strategic policies—and to focus on the Lisbon strategy, which was launched in 2000. The future focus is on reaching the target of full employment by 2010, which defines everything that we will do under the employment strategy in the next six or seven years.
The other elements that I want to underline are the process and our message about the new strategy. We have tried to get over to other member states and at the European level the message that the guidelines must change, because they have become detailed and multilayered over the years. They have been too much about means and not enough about ends. The process has become too bureaucratic and burdensome. To achieve the aims of the Lisbon strategy, the challenge is to create jobs, not to write employment action plans.
There is an awful lot of consensus among member states. We have tried to get over to them the message that the guidelines and the strategy need to be simplified and to focus on outcomes. That should help to ease monitoring and to improve implementation. The committee might be interested to note that the message is going down well in accession countries. I hope that it will also be received positively by the devolved Administrations, as we get round them, because some of the issues for accession countries and Scotland are similar.
Above all, we must expand the time that is available and, therefore, the effort that we can put into co-operation and exchange, because they were the basis of the employment strategy. Even before 1997, those were the key words, so they should guide us.
I am interested in what you said about focusing on outcomes. Several Commission documents place an emphasis on delivery, and you mentioned implementation. There is an emphasis on the role of local and regional government in effective delivery and outcomes. As we revise the strategy and reconsider where we should go, how should that role be developed?
The starting point is that the employment strategy relates to national strategies—they are indivisible. What is achieved through the employment strategy is affected by what Governments and their partners do nationally to design, develop and implement policies and programmes. Therefore, it is inevitable that in the UK, as in other member states, not only the national Parliament at Westminster, but the devolved Administrations, the Scottish Parliament, the National Assembly for Wales, the Northern Ireland Assembly, the regional development agencies in England and other wings of the process will have a role, because an increase in employment cannot be sought without flexibility and adapting to local needs.
If the employment strategy were taken away, that would still happen, because the UK would have to do it. We do it not so much because it is in the employment strategy, but because it is an inevitable element of our national strategy, which both informs and is informed by the European employment strategy.
I will leave it at that. I would like to pick up on some of those points, but I would be treading on the territory of some my colleagues' questions.
I have a question about the involvement of devolved Governments in the preparation of the national action plans. What is their role in that work? Is there scope through the construction of the plans to debate and discuss UK policies so that we can draw best practice from different parts of the UK and be part of the big picture?
I will answer the second question first. The employment action plan is not at all an opportunity to debate national policy; it is a report on what is happening and what has been announced. It is a tool for helping to exchange good practice, but it is not the only tool. The employment action plan is necessarily produced within a number of limits. In most of the previous years, for example, the Commission has put a 25-page limit on the length of the plan. The UK has an awful lot of information to try to fit into 25 pages. Looking to the future of the employment strategy, from 2003 onwards, I think that there will be some specific priorities on which we will have to report, which will be at a strategic national level.
On the first question, the devolved Administrations must certainly be one of the partners in constructing the content of the plan because it is a UK plan. How that is reflected in the final content is something that we know as we write the plan. We have very good communications with the Scottish Executive, the Welsh Executive and the Northern Ireland Executive. We talk all the time. We talked about the construction of the last plan and we have talked about the future of the employment strategy. We will talk again in April when we know the focus of the guidelines. We will start to take decisions then about what might be in the next plan.
I welcome that response.
I seek your response to a quotation from a written submission that we received from Scottish Enterprise:
"Our first point is that the current summary of the Scottish contribution contained in the National Action Plan underplays, and in places misrepresents, the actual contribution from Scotland to the aims of the UK plan and therefore the EU Employment Strategy."
Will you respond to that quotation?
Yes—it would be rude not to do so. I have to say that from here on in, our focus is on what we can do under a new employment strategy in the next series of employment action plans. I am always ready to accept that those plans can be improved, within the limits that I have outlined. The 2002 plan was the fifth and last in a series—the first was in 1998—and it summed up where we had got to after five years of the first term of the employment strategy. We tried to pitch the plan at a fairly strategic level and to make it consistent with, and complementary to, our evaluation of the impact of the European employment strategy and the developing ideas on where the employment strategy was going. The 2002 plan was necessarily much more selective and strategic than some of the previous plans, which were able to go into a bit more detail about things that were happening. That may be one of the reasons why Scottish Enterprise responded in that way.
Another issue is that the plan does not, and cannot, describe everything that the UK is doing. The plan is not a policy; it is a report on what is happening. As far as the linkages are concerned, I assume that Scottish Enterprise has involvement in the areas of policy that are of particular concern to it. The trick in the plan is to reflect, where possible, what is happening and then to draw the relevant links back to organisations such as Scottish Enterprise. How explicitly we can do that depends on each case.
The 2002 plan was about strategy; it was a matter of summing everything up after five years. That may have been one of the reasons why we did not meet Scottish Enterprise's expectations. I hope that, if the employment strategy comes to be redesigned in the way that we would like it to be, there would be scope during some years in the cycle to focus on particular themes. That might offer a way of dealing with the expectations of organisations such as Scottish Enterprise.
What would be the practical process? Would you consult? Would you hold meetings? Would you invite people to respond?
The process would not be as wide a process as you suggest. The process to which you are alluding would be a little more suitable for the social inclusion action plan, which uses a different process and is a different model. If we were to consult on the employment action plan, we would be careful not to call it "consultation", because that would raise expectations that we could not meet. There would be a big question mark over what we were consulting on. We would not consult on the guidelines because they are determined at a European level between the Council and the Commission. Under the new strategy, the guidelines should be set early on and should change very little.
We would not consult on the policy because it is not our job to do so; there are separate strands for policy and related lines of communication. We could consult on the content, but that would have to be done within the boundaries that are set by the Commission on the structure and length of the plan. Issues such as the amount of information that we have to squeeze in and the priorities for the year concerned also create boundaries.
We have spoken to organisations in the past, and we will do so again in the future, but those discussions have to be fairly flexible. I could not say now what model will be followed for the next six years. We would have to determine that in relation to the plan—or the report—that was being written for the next year.
The nature of the beast—the employment action plan—is such that, in order to represent the devolved Administrations, we would have to stick fairly closely to the lines of responsibility and communication that are laid down. We would talk to the Scottish Executive but, if we went beyond that, the plan would become something that it is not at present and the process would become so uncontrollable that our minister could not, I suspect, sign it off in the end—and it is our minister who has to do that.
In part, the process that you set out will take place, but within certain limits and with a recognition that the plan is a report on what is in place. It is about identifying and gathering information.
So the emphasis would be on the Scottish Executive to undertake such a wide search for information across Scotland and to analyse it in order to ensure that regional variations were taken into account.
From our perspective, it would be easier if we were talk to the Scottish Executive. I would not want to commit the Scottish Executive to doing all the work that you describe—it is not my job to do so. Let me put it fairly simply: we will talk to the Scottish Executive about how best to represent the Scottish dimension, in the same way that we would talk to the National Assembly for Wales or the Northern Ireland Assembly and its Executive.
Thank you. We will explore that a bit further with the minister in our next session.
A number of local and national economic development agencies have commented that the employment guidelines are useful in providing a gap analysis in the development of their employment policies. How does your department use those guidelines and how useful do you think they are?
I could say a little about how we have used the guidelines up to now, but the employment guidelines that were in place from 1998 until 2002 have not been very useful in respect of gap analysis. They were too detailed and too multilayered—they said too much about the means to an end and not enough about the ends in themselves. It would be easier for me to come back in six months' time and answer that question again. I would be happy to do that once a new set of employment guidelines is in place.
I can speak only in hypothetical terms: if a set of employment guidelines were agreed with other member states, the process to which Helen Eadie referred should become a little easier. If we had fewer guidelines, we could focus on specific outcomes, which are about priority objectives that Europe as a whole needs to achieve in order to have full employment by 2010 under the terms of the Lisbon agreement. The guidelines will be underpinned by indicators that are based on comparable and available information. We need as few indicators as possible, and they should be tightly linked to the objectives in the guidelines.
Thereafter, we need to put in place an annual process in which the plans can be made more focused and which gives the peer review process more time to analyse where member states are. That would create more opportunities for peer pressure. At the moment, the peer review process—that is, the process of evaluating the national action plans and producing the joint employment report—between the member state and the Commission is too bilateral; member states would like the process to be much more multilateral.
If all those things happen, we will be in a better position to look across Europe and see more clearly the stages that member states have reached and to undertake the gap analysis and see what lies behind it. That said, that is just the start of the process. As previous witnesses have said, we need to get under the surface. Lots of other things need to happen in specific areas of policy, such as the exchange of information. We need to look in much more detail at what happens.
The committee can tell me if I am wrong, but my guess is that Scotland would be quite interested in seeing what happens in the way that I have outlined. It is not possible to do the whole job with employment action plans, joint employment reports and all the work that is driven by the employment strategy. In the end, they are just bits of paper, and it is much better to start talking to people.
The national action plan is very much a UK national action plan, although there is a Scottish annexe to it. Is the intention to develop or extend the Scottish annexe? Is there a case for a Scottish national action plan?
In reply to the first part of your question, I can say yes, without commitment. Until we see the guidelines in 2003 and then what is agreed—a lot of elements of the annual cycle of the employment strategy are still to be decided—we will not know what impact those decisions will have on what we do with the UK plan. In principle, we would like to see as much equitable reflection of Scotland—and of Wales and the north of Ireland—as possible.
You will excuse me if, in reply to the second part of your question, I feel inclined to answer with a blunt no. There are no such plans, and we would be very sceptical about them for two broad reasons. First, we need to keep the process focused on what happens to get people into work, which we will not do by producing lots of plans. Up to now, an awful lot of burden has been embedded in the process, which has not helped us to focus on what works and what is happening. I do not see an immediate case for adding an extra level of reporting, as that would only add to the bureaucracy and take away from the effort that is being put into producing results.
Secondly, the action plans are reports about national strategies that are in place or have been announced. In effect, we already have them at the regional level across the UK in the strategic documents that all the devolved Administrations have produced—they might as well be called regional employment action plans, if you so desired. I suspect that to produce something else purely for the European process would be to reproduce some of what is in those documents. The process is about reporting at the European level on where the UK is as a whole, measured against the objectives and what more we should be doing. When people want to get underneath that, they can go down the various strands. If they wanted to look at a specific area of policy and were particularly interested in what Scotland was doing in that area, it would be fairly easy to set something up to allow that to happen.
My second question relates to the funding of the European employment strategy. The major European Union funding instrument is the European social fund. How should the European social fund develop in relation to the European employment strategy?
That is a very good question. Unfortunately, I cannot do it justice. I have colleagues who deal with the European social fund and I cannot claim to be anywhere near as informed about it as they are.
The European social fund has existed for much longer than the European employment strategy. Its role in adding value to the action that has taken place under the European employment strategy has come along after its inception. It has been in operation for some time and therefore it has had to be realigned. As some of the committee's previous witnesses from the ESF in Scotland have said, the fund is not yet sufficiently aligned, as everybody recognises. The best answer that I can give to your question is that there is more work to do on developing that relationship. I suspect that the best opportunity for doing that will be in 2005-06, when the employment strategy—in its new form—will undergo a mid-term review. At the same time, the ESF will have a full-term review and there should be an opportunity—which I hope will be exploited—to bring the two even closer together. I hope that I have answered your question as well as I can.
How important for the UK Government are the comments in the joint employment report, and how does it respond to the report's recommendations?
That part of the process is very important. Indeed, some of our ministers would be surprised if I had not said that, because I think that it was partly a UK idea. The recommendations are unsettling and uncomfortable—I could probably use better words, but I cannot think of any at the moment. However, the recommendations are a necessary part of the way in which the European employment strategy works.
That said, it is certainly part of the member state consensus that that aspect of the process could be improved. For example, it could give more scope for the member states multilaterally to apply pressure on one another to identify the priorities that they need to address in forthcoming years. That would help to underpin the exchange of principle behind the European employment strategy, as member states would be able to give one another feedback and exchange information. There would be much more of a focus on member states discussing with one another what they have done to address particular challenges and meet particular priorities and finding out what can be learnt from the process. By doing so, it is hoped that we can extend the reform process across Europe, especially after 2004 when the new countries are admitted to the EU.
That is my main answer to your question, although I should point out that the UK also responds by addressing the elements that it has already put in place or is thinking about putting in place. A good example of that is the issue of gender inequality in pay, which has cropped up in the UK for a number of years and which the Government has had to consider in the context of the employment action plan. That issue will clearly remain a big priority.
For some time, the European Commission has commented on the role of social partners in the development of employment. As social partners play a different role in the UK in comparison with the role that they play in other EU member states, how will the UK Government act on recommendations on that issue?
You are quite right to identify that the UK has a different model from that of many other European member states. For example, it has a much more voluntarist tradition and does not fix national agreements—at any rate, it certainly does not have a fixed structure for such agreements. In broad terms, the involvement of social partners in policy generally happens on a case-by-case basis. Although they are involved in the new deal task force or the national minimum wage, their involvement in implementation and operation is at a more regional and local level. That could be a problem for us in our discussions with the Commission and other member states about the way forward on social partnership. The employment strategy should not be a tool for us to rip up and reform national traditions, cultures, structures and institutions. In fact, the treaty of Rome almost explicitly forbids that.
As a result, we must use what is already in place in order to go forward in future. I have certainly heard people in the Trades Union Congress and the Scottish Trades Union Congress argue that the existing mechanisms must be improved—indeed, I would be surprised if they did not argue that. However, any improvements or changes to social partnership must be made within the domestic context and in response to national need, not because we need to adapt ourselves to the European employment strategy. In the context of the UK employment action plan, we will continue to reflect what exists and try to put our case in the best way we can.
We have had the four pillars of the European employment strategy for some time now and we understand that the Commission is considering three objectives and 10 priorities. Have you or your department been involved in those discussions? You said that you think that the system is overly bureaucratic and complicated. What is your view on the way forward?
We have been talking across a collective of member states about this. There is a fairly strong consensus and we have come up with about ten headlines that could translate into guidelines. The list is included in my written statement. The main forum for discussing these changes is the employment committee, and its opinion states that the horizontal objectives and the pillars should be reviewed. Indeed, its language suggests that they should not reappear. Certainly, the need for the horizontal objectives is quite openly questioned. If you have only about ten guidelines that you want to see as a package of reform to achieve the targets agreed in Lisbon, the notion of the pillars starts to become unhinged.
You mentioned the three objectives that the Commission has put forward. The United Kingdom certainly has some views on them, and we shared those with other member states. That is the Commission's version of the Lisbon objective for
"more and better jobs with greater social cohesion."
The UK reads that as one concept rather than three, and does not see why it should be split up. To split it up dissipates the effort on achieving Lisbon targets on full employment, so we prefer to see the guidelines as one pillar—namely the employment strategy to achieve the Lisbon targets. We will have to see what happens over the coming months, but certainly that is the message that Malcolm Wicks relayed at a recent informal meeting of the employment ministers in Greece.
Thank you. That concludes our questioning this afternoon. It is always helpful to have an understanding of the thinking of UK colleagues involved in developing these strategies, so your attendance at the committee meeting has been very welcome. Thank you also for your written submission.
Thank you for the opportunity.