Hillery, Patrick J.

English

Archive of European Integration

European Communities Commission Press Release 20 Kensington Palace Gardens London  W8 4Q...Q__ Telephone: 01-727 8090 EMBARGO:  UNTIL  18.00 HOURS  February  19,  1975 THURSDAY,  FEBRUARY  20,  1975 Extract  from  a  speech by Dr.  P.  J.  Hillery, Vice-President of  the Commission,  to  the European Atlant1c Group  1n  the Grand  Committee  Room, House  of  Commons,  London,  February  20,  1975. Revolution  in Community  Social  Policy The  origins of  the Community's  concern with social  issues  are  to be  found in  the Treaties creating the  European Coal  and  Steel Community,  and  the European Economic  Community.  Both Treaties  included  a  number  of provisions which became  the basis  for  the Community's  social policy. The  major  assumptions  underlying  such  social  actions at Community  level, I  think,  as  follows.  Firstly, it was  assumed~t economic  progress  should constitute thz major  aim of the  Community  in its early stages  since  such progress would  automatically bring social progress  in its wake.  Secondly,  concrete social measures  at Community  level were  only felt  to be  needed where  the  free movement of  goods,  services or labour might  be  impeded  by  inconsistent  social provisions. Most  of  the main concerns  of  Community  social policy during  the  late  1950's and  1960's  reflected  these  assumptions.  There were  for  instance  : - Measures  linked  closely to the  promotions  of  the free movement  of labour,  such as  the measures  to protect  the  social security rights of workers  moving  from  one  Community  country to another; - Manpower  training and  adaptation under  the provisions  of  the ECSC Treaty  and  the original European Social  Fund  created under Article  123 of the Treaty of  Rome,  measures  which  in practice attempted  to  "Pick up  the  pieces" after industrial change  had  produced  employment casualties. It would,  however,  be  wrong  to  give  the  impression that Community  social policy during this period was  entirely dominated  by  economic  concerns.  Many people,  both  inside the Commission  and  outside,  particularly in the  trade unions, sought  to make  the European Community  into  a  positive  instrument for  improving the  standard  of  living  and  working  conditions of  the whole  Community  population. Concrete progress was  also made  within the  framework  of  the  Coal  and  Steel Community,  for  example,  in the field of industrial  safety and with  the housing of mineworkers. ISEC/19/75 2 Towards  the  end  of  the  1960's,  and  in the early 70's,  a  number  of  factors were  at work  to  bring about  a  significant shift in the orientation of Community social  policy.  There was  the  growing  awareness  that  economic  growth  is not  an automatic  catalyst for  social progress  - that  such  growth  creates  problems  as well  as  solving them.  There  was  increasing recognition that if social policy is  to  be  a  mere  after-thought  to  economic  policy,  social policy is  doomed  to play an  'ambulance'  role with little scope  for preventive  action.  There  was  the fact  that  the  'Customs  Union'  side of the Community  had  been more  or less completed  creating a  need  for  new  policy initiatives to sustain  the  impetus  of European  integration.  Finally,  there was  the  growing  recognition that the peoples  of  Europe,  particularly the  younger  generation,were  largely indifferent to  the  commercial  aspects  of  the  Community,  placing more  store by  its potential for  social development. We  saw  a  far more  comprehensive  view of  social  policy emerging  from  the summit  meeting held  in Paris  in October  1972,  prior to  the enlargement  of the Community.  At  that  summit  the heads  of  government  speaking  for  the  Community declared that  economic  expansion is not  an  end  in itself.  Its first  aim  should be  to enable disparities  in living conditions  to  be  reduced.  It must  take  place with the participation of all  the  social partners.  It should  result in an improvement  in the quality of life as  well  as  in standards  of living. In more  specific  terms  the  1972  Paris  communique  went  on  to charge  the Commission with the preparation of  a  Social Action Programme,  which was accepted by  the Council  of Ministers  in January,  1974,  together with  the European  Social  Fund. Social  Action Programme The  Social Action  Programme  presents  a  coherent  framework  for  Community policy in the  social field.  The  three  overall objectives  are  : - full  and better employment, - improved  living and  working  conditions, - greater participation in economic  and  social decisions. The  Council  of Ministers has  already adopted  a  number  of  proposals  sub-mitted by  the  Commission  last year.  These  include  two  important  pieces of social  legislation  : - the  "Mass  Dismissals Directive"  establishing m1.n1.mum  standards  for consultation and  negotiation between management,  public authorities and  employees,  prior to  any  large-scale redundancies, - the  "Equal  Pay  Directive" designed  to tighten up  the  application of equal  pay by  providing  certain legal  and  financial  guarantees  for women  contesting discrimination. Three  new  Community  foundations  will encourage  cooperation  and  research into  improved  industrial  safety,  vocational  training and  other  long-term aspects of living  and working conditions.  Within  the  Social  Fund  extra resources have been  set aside for  action on  behalf  of  handicapped people  and migrant workers and  their families. - 3  -A new  batch of major  proposals  has  recently been  submitted  to  the Council  and  we  hope  that during  the  next  few months  agreement  will  be reached  on  these.  Among  the  topics  they deal  with are  : - Poverty  :  (The  Commission  has  drawn  up  a  programme  of pilot projects  to develop  greater  awareness  of the  problems  of chronic  deprivation), Migrants  :  (The  Commission  has  suggested  a  series of  actions to  improve  the  social  situation of migrant  families  and  to develop  a  common  Community  approach  to  immigration), - Women  at work  :  (The  Commision  has  proposed  a  new  directive to  end  all  forms  of  legal  discrimination and  has  put  forward recommendations  on  how  to  abolish  the  more  intangible  forms of  social  discrimination), - Labour  conditions  :  (Proposals  on  minimum  standards  for working hours  and  holidays  and  legal protection for  employees in firms  threatened with  take-over bids). The  Employment  Crisis The  Commission  has  never  proposed  the  transfer to  Community  level  of those  responsibilities and  functions  carried out more  appropriately at other leve·  .. s. However,  there are  some  problems  which must  be  dealt with on  the widest possible base  and  the  number  of these  grows  with  the  increasing  interdependence of our  economies.  The  present  economic  situation illustrates this well.  From the point of  view of  employment,  the  current crisis has  been  seen primarily as  a  slowing down  of  economic  activity,  but  the crisis is  affecting  the various  industrial  sectors unequally.  These  new  structural  problems  have  come on  top  of existing problems  in declining industrial  areas which were  the result of  longer  term structural  trends .. Within  the  European Community,  the  impact  of  the  cr1s1s varies  consi-derably in each country - according  to  the degree  of energy dependency  - and the state of the industrial  structure  and  its flexibility.  It is possible to identify those  sectors where  growth will  level  out,  but it is not  yet  clear which  sectors will  emerge  as  areas  for  expansion  as  soon  as  the  economy  picks up  again. In  spite of  this  uncertainty,  it is  clear that  the  member  states  should work  together  to develop  a  common  strategy for  the  redevelopment  of  activities and  resources.  The  Commission,  in actively promoting  the  co-ordination of employment  policy,  emphasises  the  need  to  involve  employers  and  trade unions closely in the process  of elaborating common  guidelines.  The  meeting  of  the standing  committee  on  employment  on  Monday,  bringing together  the ministers of  labour,  and  the European  federations  of  employers  and  trade unions,  was  an important  example  of  this  process  of  consultation,  which must  be  an increasingly  important  characteristic of  Community  activity in the  social policy field. 4 Forms  of Community  Action The  instruments  of  Community  social  policy are still limited.  Social legislation at Community  level is appropriate only in exceptional  cases, given  the diversity of  the social  structures  in the  Community.  Directives can be  used  to  establish certain minimum  legal  standards.  A classic example is the  case  of  equal  pay whereby member  states voting unanimously  agreed  to exact  their  own  national  legislation to  achieve  specified results. The  Community  also  acts  as  a  valuable  clearing house  for  ideas, encouraging  the  spread  of  new  techniques.  This  is  done  in various ways,  by recommendations,  by  promoting  and  coordinating research,  by organising pilot projects. Furthermore,  the Community  offers financial  incentives.  The  funds currently at its disposal  are  small  in  comparison with  the vast  sums  spent on  social benefits  and  social  infrastructure at national level.  Nevertheless they  do  serve as  a  valuable catalyst  - highlighting specific types  of action which might  otherwise be neglected by  member  states, or subsidising projects which  form part of  a  wider  Community  strategy.  This  applies most particularly to  the Social Fund  in its role  of  promoting  a  Community  employment  policy. Social Fund The  new  emphasis  which  the Community  places  on  social policy,  par-ticularly employment  policy,  is best illustrated by  the  growth  of  the  Social Fund  Budget.  Between  1960  and  1968,  the "old"  Social  Fund  spent  a  total of £25  million in support  of training activities in the original Six.  In  1974, the new  ESF  budget  was  £137  million,  and  the  fund will  spend at least £157 million in  1975,  representing about  7  % of  the  total  Community  Budget. This money  is  spent  in the  form of grants  towards  projects  submitted via member  governments  by  both public  and  private bodies.  The  projects are closely examined  on  the basis  of  specific criteria and  then  grants  are  awarded by  the  Commission  after extensive  discussion with  the representative  of employers,  trade  unions  and  governments  in  the Social  Fund  Committee.  As  with all the other financial  grants made  by  the  Commission,  assistance  from  the Social Fund  is aimed  at  specific  groups  of  people  in specific areas  and industries.  It is  intended  to facilitate a  particular type  of  social adjustment. Reflections  on  the  Future Since  1945,  governments  throughout  Western Europe  have  introduced policies  to  deal  with a  wide  range  of  economic  and  social problems  - policies designed  to protect  individuals  and  promote  their economic  and  social wellbeing in a  variety of ways  that would  have  been  unthinkable before  the  last year. Both  the extent  and  nature of  this public  intervention in socio-economic affairs have,  of  course,  differed  substantially as  between  the member  states of the Community.  Thus  the  UK  has  developed  a  comprehensive  array  of  social measures  covering the fields  of  employment,  housing,  social  security,  health and  education.  Other member  states have  placed most  emphasis  upon providing the  socially deprived with at  least a  minimum  level  of  social  security -'safety nets'  for  those  in need.  We  also  see  significant difference in the 5 nature  of public  intervention.  The  UK  has built up  a  large  stock of publicly-owned  housing  and  has  adopted  public  funding  of its health  servce.  In West Germany,  on  the  other hand,  the  emphases  have  been  on  provision of  incentives to  individuals  to build their  own  homes  and  on  compulsory health  insurance  via a  choice  of private  insurance  companies.  However,  the  growth  of  public  inter-vention  in socio-economic  affairs has  been  inexorable  throughout  the Community.  As  a  consequence,  many  individuals  now  look  to  the  state,  first and  foremost,  as being  the guarantor of their social welfare. As  long  as  the  Community  was  experiencing  a  rapid  rate of  economic growth,  the  growth  of  state intervention in social  affairs  together with  its budgetary  implications  proceeded  largely unopposed.  Indeed,  there was,  I  think, a  general  consensus  in favour  of a  more  dynamic,  interventionist state role  in social affairs.  Sufficient additional  resources  were  being created to permit large  (by historical  standards)  increases  in both private and  public 'consumption'  of goods  and  services,  including social services.  However,  the serious  economic  recession  through which all member  states are now  passing  and the prospect of  somewhat  slower  economic  growth  over  the medium-term is going to  force  us  to think more  deeply  than hitherto about  the  implications  of  the social developments  set in train since the war. I  see  the basic problem as  follows.  The  total  Community  resources available for private and public  consumption,  for  investment  and  exports will grow  little if at all during  1975  and  more  slowly  than we  have  been used  to  in the  years  immediately  thereafter.  On  the  other hand,  rising expectations  and the  spiralling costs  of  the social measures  already  implemented  are placing increasing demands  on  the  resources  available.  Rapid  post-war  growth,  the spread of education  on  a  large  scale  and  the wider dissemination of information via the mass  media have  produced  a  West  European  society which has rapidly rising expectations  about  living standards  and  the quality of life. The  great majority in the  Community  now  aspire  to  things which  have hitherto been  the  preserve of a  privileged minority - steadily rising real  incomes, secure  jobs,  comfortable working conditions,  home  ownership  and  so  forth.  At the  same  time we  are witnessing the  semi-automatic way  in which  the  costs  of existing welfare measures  rise in real  terms  in the  face  of an  increasing number  of claimants  as well  as  more  articulate  demands  for  improvements  in per-capita welfare  standards.  In short,  large  and  growing numbers  within the Community  want  to  increase  their consumption  of  private and  public  goods  and services  which,  under  conditions  of  no-growth  or  slow-growth,  means  the maintenance  or expansion of  their share  of  the  cake. In  the light of these developments,  I  think you will  agree  that  the broad  consensus  which  has  hitherto  fostered  the  growth  of social welfare expenditures  as  part  of  the  general  raising of  living standards  threatens  to come  under  strain during  the next  few  years.  Signs  of  the strains produced by  competing claims  on  limited  resources  are  already  emerging  - the  problems we  are  now  facing  in reconciling near-full  employment  with price stability, the deterioration in standards  of  some  public services  such  as  transport,  and the erosion of the  financial  independence  of local  or regional  authorities from  central  governments  are just  three  examples  which  are  unrelated on  the surface,  but which  can,  I  think,  be  traced back  to  the basic problem of increasingly ambitious  socio-economic  objectives  and  limited means. 6 Conclusions What  conclusions  can be  drawn  from  these reflections  about  the  issues facing  those of  us  concerned with social policy?  I  should like  to suggest three - two  of a  general nature  and  one  concerning the  role  of  the  Community in particular. Firstly,  and  perhaps  most  important,  I  think we  have  to bury  once  and  for all the  idea that  there is any  clear dividing line between  the  economic  and  social policy responses  to  the kind of problems  facing our  societies  over  the  next few  years.  I  have  said  enough,  I  hope,  to  indicate  that  I  do  not  attribute strains  to which  West  European  societies are  now  being subjected  simply  to the rise in oil prices,  mismanagement  of  the money  supply or  some  other purely economic  factor.  I  am  convinced  that  social  policies dealing with matters  such  as  job  security, worker  participation,  the distributions of income  and wealth,  and  living conditions have  a  fundamental  role  to play in overcoming what  we  choose  to call our  current  'economic'  problems. Second,  the situation we  face  is going to  force  us  to  re-appraise  the  scale and  nature  of public  intervention in social  affairs  - not  with  a  view to concluding that  such intervention is  'too great'  or  'too little', but with a  view  to  strengthening the consensus  within our societies  about  an equitable balance between private  and  public  consumption,  with  a  view to concentrating the welfare  resources  available on  the areas  of  greatest social deprivation and  with a  view  to using social policy to prevent  or remedy  social problems  rather than  simply alleviate  the most  obvious  hard-ships  to  which  they give rise. Finally,  we  should  recognise  that  we  are not  dealing with  socio-economic problems  which  are peculiar to  one  country but with  problems  which are,  to a  greater or  lesser extent,  common  to all nine member  states of  the Community.  A major  preoccupation  of  the Community  over  the  coming years will be  to understand  and  seek  to  remedy  these  common  socio-economic  problems without,  however,  in any  way  seeking  to  impose  common  solutions  against  the wishes  of  individual member  states.  The  mere  act of  coming  together at Community  level  can  avoid  a  situation in which  social  expenditures  in the member  states are  'bid-up'  against each  other  instead of being determined in the light of real social needs.  We  all have  a  great  deal  to gain  from a  Community  approach  to  social policy. ++++++++ 

Revolution in Community social policy. Extract from a speech by Dr. P.J. Hillery, Vice-President of the Commission, to the European Atlantic Group, House of Commons. London, 20 February 1975

European Communities 
Commission 
Press Release 
20 Kensington Palace Gardens 
London W8 4Q...Q__ 
Telephone: 01-727 8090 
EMBARGO: UNTIL 18.00 HOURS February 19, 1975 
THURSDAY, FEBRUARY 20, 1975 
Extract from a speech by Dr. P. J. Hillery, 
Vice-President of the Commission, to the 
European Atlant1c Group 1n the Grand Committee Room, 
House of Commons, London, February 20, 1975. 
Revolution in Community Social Policy 
The origins of the Community's concern with social issues are to be found 
in the Treaties creating the European Coal and Steel Community, and the 
European Economic Community. Both Treaties included a number of provisions which 
became the basis for the Community's social policy. 
The major assumptions underlying such social actions at Community level, 
I think, as follows. Firstly, it was assumed~t economic progress should 
constitute thz major aim of the Community in its early stages since such progress 
would automatically bring social progress in its wake. Secondly, concrete social 
measures at Community level were only felt to be needed where the free movement 
of goods, services or labour might be impeded by inconsistent social provisions. 
Most of the main concerns of Community social policy during the late 1950's 
and 1960's reflected these assumptions. There were for instance : 
- Measures linked closely to the promotions of the free movement of 
labour, such as the measures to protect the social security rights 
of workers moving from one Community country to another; 
- Manpower training and adaptation under the provisions of the ECSC 
Treaty and the original European Social Fund created under Article 123 
of the Treaty of Rome, measures which in practice attempted to "Pick 
up the pieces" after industrial change had produced employment 
casualties. 
It would, however, be wrong to give the impression that Community social 
policy during this period was entirely dominated by economic concerns. Many 
people, both inside the Commission and outside, particularly in the trade unions, 
sought to make the European Community into a positive instrument for improving 
the standard of living and working conditions of the whole Community population. 
Concrete progress was also made within the framework of the Coal and Steel 
Community, for example, in the field of industrial safety and with the housing 
of mineworkers. 
ISEC/19/75 
2 
Towards the end of the 1960's, and in the early 70's, a number of factors 
were at work to bring about a significant shift in the orientation of Community 
social policy. There was the growing awareness that economic growth is not an 
automatic catalyst for social progress - that such growth creates problems as 
well as solving them. There was increasing recognition that if social policy 
is to be a mere after-thought to economic policy, social policy is doomed to 
play an 'ambulance' role with little scope for preventive action. There was the 
fact that the 'Customs Union' side of the Community had been more or less 
completed creating a need for new policy initiatives to sustain the impetus of 
European integration. Finally, there was the growing recognition that the 
peoples of Europe, particularly the younger generation,were largely indifferent 
to the commercial aspects of the Community, placing more store by its potential 
for social development. 
We saw a far more comprehensive view of social policy emerging from the 
summit meeting held in Paris in October 1972, prior to the enlargement of the 
Community. At that summit the heads of government speaking for the Community 
declared that economic expansion is not an end in itself. Its first aim should 
be to enable disparities in living conditions to be reduced. It must take place 
with the participation of all the social partners. It should result in an 
improvement in the quality of life as well as in standards of living. 
In more specific terms the 1972 Paris communique went on to charge the 
Commission with the preparation of a Social Action Programme, which was 
accepted by the Council of Ministers in January, 1974, together with the 
European Social Fund. 
Social Action Programme 
The Social Action Programme presents a coherent framework for Community 
policy in the social field. The three overall objectives are : 
- full and better employment, 
- improved living and working conditions, 
- greater participation in economic and social decisions. 
The Council of Ministers has already adopted a number of proposals sub-
mitted by the Commission last year. These include two important pieces of 
social legislation : 
- the "Mass Dismissals Directive" establishing m1.n1.mum standards for 
consultation and negotiation between management, public authorities 
and employees, prior to any large-scale redundancies, 
- the "Equal Pay Directive" designed to tighten up the application of 
equal pay by providing certain legal and financial guarantees for 
women contesting discrimination. 
Three new Community foundations will encourage cooperation and research 
into improved industrial safety, vocational training and other long-term aspects 
of living and working conditions. Within the Social Fund extra resources have 
been set aside for action on behalf of handicapped people and migrant workers 
and their families. 
- 3 -
A new batch of major proposals has recently been submitted to the 
Council and we hope that during the next few months agreement will be 
reached on these. Among the topics they deal with are : 
- Poverty : (The Commission has drawn up a programme of pilot 
projects to develop greater awareness of the problems of 
chronic deprivation), 
Migrants : (The Commission has suggested a series of actions 
to improve the social situation of migrant families and to 
develop a common Community approach to immigration), 
- Women at work : (The Commision has proposed a new directive 
to end all forms of legal discrimination and has put forward 
recommendations on how to abolish the more intangible forms 
of social discrimination), 
- Labour conditions : (Proposals on minimum standards for 
working hours and holidays and legal protection for employees 
in firms threatened with take-over bids). 
The Employment Crisis 
The Commission has never proposed the transfer to Community level of 
those responsibilities and functions carried out more appropriately at 
other leve· .. s. 
However, there are some problems which must be dealt with on the widest 
possible base and the number of these grows with the increasing interdependence 
of our economies. The present economic situation illustrates this well. From 
the point of view of employment, the current crisis has been seen primarily 
as a slowing down of economic activity, but the crisis is affecting the 
various industrial sectors unequally. These new structural problems have come 
on top of existing problems in declining industrial areas which were the result 
of longer term structural trends .. 
Within the European Community, the impact of the cr1s1s varies consi-
derably in each country - according to the degree of energy dependency - and 
the state of the industrial structure and its flexibility. It is possible to 
identify those sectors where growth will level out, but it is not yet clear 
which sectors will emerge as areas for expansion as soon as the economy picks 
up again. 
In spite of this uncertainty, it is clear that the member states should 
work together to develop a common strategy for the redevelopment of activities 
and resources. The Commission, in actively promoting the co-ordination of 
employment policy, emphasises the need to involve employers and trade unions 
closely in the process of elaborating common guidelines. The meeting of the 
standing committee on employment on Monday, bringing together the ministers 
of labour, and the European federations of employers and trade unions, was an 
important example of this process of consultation, which must be an 
increasingly important characteristic of Community activity in the social 
policy field. 
4 
Forms of Community Action 
The instruments of Community social policy are still limited. Social 
legislation at Community level is appropriate only in exceptional cases, 
given the diversity of the social structures in the Community. Directives 
can be used to establish certain minimum legal standards. A classic example 
is the case of equal pay whereby member states voting unanimously agreed to 
exact their own national legislation to achieve specified results. 
The Community also acts as a valuable clearing house for ideas, 
encouraging the spread of new techniques. This is done in various ways, by 
recommendations, by promoting and coordinating research, by organising 
pilot projects. 
Furthermore, the Community offers financial incentives. The funds 
currently at its disposal are small in comparison with the vast sums spent 
on social benefits and social infrastructure at national level. Nevertheless 
they do serve as a valuable catalyst - highlighting specific types of action 
which might otherwise be neglected by member states, or subsidising projects 
which form part of a wider Community strategy. This applies most particularly 
to the Social Fund in its role of promoting a Community employment policy. 
Social Fund 
The new emphasis which the Community places on social policy, par-
ticularly employment policy, is best illustrated by the growth of the Social 
Fund Budget. Between 1960 and 1968, the "old" Social Fund spent a total of 
£25 million in support of training activities in the original Six. In 1974, 
the new ESF budget was £137 million, and the fund will spend at least £157 
million in 1975, representing about 7 % of the total Community Budget. 
This money is spent in the form of grants towards projects submitted via 
member governments by both public and private bodies. The projects are 
closely examined on the basis of specific criteria and then grants are awarded 
by the Commission after extensive discussion with the representative of 
employers, trade unions and governments in the Social Fund Committee. As with 
all the other financial grants made by the Commission, assistance from the 
Social Fund is aimed at specific groups of people in specific areas and 
industries. It is intended to facilitate a particular type of social 
adjustment. 
Reflections on the Future 
Since 1945, governments throughout Western Europe have introduced 
policies to deal with a wide range of economic and social problems - policies 
designed to protect individuals and promote their economic and social wellbeing 
in a variety of ways that would have been unthinkable before the last year. 
Both the extent and nature of this public intervention in socio-economic 
affairs have, of course, differed substantially as between the member states of 
the Community. Thus the UK has developed a comprehensive array of social 
measures covering the fields of employment, housing, social security, health 
and education. Other member states have placed most emphasis upon providing 
the socially deprived with at least a minimum level of social security -
'safety nets' for those in need. We also see significant difference in the 
5 
nature of public intervention. The UK has built up a large stock of publicly-
owned housing and has adopted public funding of its health servce. In West 
Germany, on the other hand, the emphases have been on provision of incentives 
to individuals to build their own homes and on compulsory health insurance via 
a choice of private insurance companies. However, the growth of public inter-
vention in socio-economic affairs has been inexorable throughout the 
Community. As a consequence, many individuals now look to the state, first 
and foremost, as being the guarantor of their social welfare. 
As long as the Community was experiencing a rapid rate of economic 
growth, the growth of state intervention in social affairs together with its 
budgetary implications proceeded largely unopposed. Indeed, there was, I think, 
a general consensus in favour of a more dynamic, interventionist state role in 
social affairs. Sufficient additional resources were being created to permit 
large (by historical standards) increases in both private and public 
'consumption' of goods and services, including social services. However, the 
serious economic recession through which all member states are now passing and 
the prospect of somewhat slower economic growth over the medium-term is going 
to force us to think more deeply than hitherto about the implications of the 
social developments set in train since the war. 
I see the basic problem as follows. The total Community resources 
available for private and public consumption, for investment and exports will 
grow little if at all during 1975 and more slowly than we have been used to in 
the years immediately thereafter. On the other hand, rising expectations and 
the spiralling costs of the social measures already implemented are placing 
increasing demands on the resources available. Rapid post-war growth, the 
spread of education on a large scale and the wider dissemination of 
information via the mass media have produced a West European society which has 
rapidly rising expectations about living standards and the quality of life. 
The great majority in the Community now aspire to things which have hitherto 
been the preserve of a privileged minority - steadily rising real incomes, 
secure jobs, comfortable working conditions, home ownership and so forth. At 
the same time we are witnessing the semi-automatic way in which the costs of 
existing welfare measures rise in real terms in the face of an increasing 
number of claimants as well as more articulate demands for improvements in 
per-capita welfare standards. In short, large and growing numbers within the 
Community want to increase their consumption of private and public goods and 
services which, under conditions of no-growth or slow-growth, means the 
maintenance or expansion of their share of the cake. 
In the light of these developments, I think you will agree that the 
broad consensus which has hitherto fostered the growth of social welfare 
expenditures as part of the general raising of living standards threatens to 
come under strain during the next few years. Signs of the strains produced 
by competing claims on limited resources are already emerging - the problems 
we are now facing in reconciling near-full employment with price stability, 
the deterioration in standards of some public services such as transport, and 
the erosion of the financial independence of local or regional authorities 
from central governments are just three examples which are unrelated on the 
surface, but which can, I think, be traced back to the basic problem of 
increasingly ambitious socio-economic objectives and limited means. 
6 
Conclusions 
What conclusions can be drawn from these reflections about the issues 
facing those of us concerned with social policy? I should like to suggest 
three - two of a general nature and one concerning the role of the Community 
in particular. 
Firstly, and perhaps most important, I think we have to bury once and for all 
the idea that there is any clear dividing line between the economic and social 
policy responses to the kind of problems facing our societies over the next 
few years. I have said enough, I hope, to indicate that I do not attribute 
strains to which West European societies are now being subjected simply to 
the rise in oil prices, mismanagement of the money supply or some other 
purely economic factor. I am convinced that social policies dealing with 
matters such as job security, worker participation, the distributions of 
income and wealth, and living conditions have a fundamental role to play 
in overcoming what we choose to call our current 'economic' problems. 
Second, the situation we face is going to force us to re-appraise the scale 
and nature of public intervention in social affairs - not with a view to 
concluding that such intervention is 'too great' or 'too little', but with 
a view to strengthening the consensus within our societies about an 
equitable balance between private and public consumption, with a view to 
concentrating the welfare resources available on the areas of greatest 
social deprivation and with a view to using social policy to prevent or 
remedy social problems rather than simply alleviate the most obvious hard-
ships to which they give rise. 
Finally, we should recognise that we are not dealing with socio-economic 
problems which are peculiar to one country but with problems which are, to 
a greater or lesser extent, common to all nine member states of the 
Community. A major preoccupation of the Community over the coming years 
will be to understand and seek to remedy these common socio-economic problems 
without, however, in any way seeking to impose common solutions against the 
wishes of individual member states. The mere act of coming together at 
Community level can avoid a situation in which social expenditures in the 
member states are 'bid-up' against each other instead of being determined 
in the light of real social needs. We all have a great deal to gain from 
a Community approach to social policy. 
++++++++ 


Revolution in Community social policy. Extract from a speech by Dr. P.J. Hillery, Vice-President of the Commission, to the European Atlantic Group, House of Commons. London, 20 February 1975

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