Leaving the EU: State Aid, Public Ownership and Workers’ Rights Debate

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Department: Department for Business, Energy and Industrial Strategy

Leaving the EU: State Aid, Public Ownership and Workers’ Rights

John Howell Excerpts
Tuesday 11th December 2018

(5 years, 3 months ago)

Westminster Hall
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Laura Smith Portrait Laura Smith (Crewe and Nantwich) (Lab)
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I beg to move,

That this House has considered state aid, public ownership and workers rights after the UK leaves the EU.

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to have been selected to sponsor this important debate. I welcome my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) and the Minister. Their presence underlines the importance of this issue.

I do not need to spell out that we are having this debate in the context of what appears to be gridlock in Parliament. There is no clear consensus about what priorities should shape our future relationship with the EU. Today was supposed to be a day on which we made at least one decision, but even that is no longer the case. I wanted this debate to take place outside the main Chamber to ensure that its content was not considered purely in the context of the withdrawal agreement and the political declaration. Instead, I wanted it to inform the wider, ongoing debate about what the future relationship might look like.

I have chosen to consider these three policy areas for three reasons: first, because they are tools with which the UK Government could transform our economy and society for the better; secondly, because I believe that there is public support for their use by the UK Government; and, thirdly, because I am concerned that there is some friction between the effective use of these tools and EU law. This year, research by the Institute for Public Policy Research concluded that the public want to take back control and expand the role of the state, not reduce it. It suggested that there is no mandate for a buccaneering Brexit based on a race to the bottom in pursuit of even freer markets. Instead, the public want higher environmental standards, tougher regulation and a greater use of state aid, even at the cost of freer trade.

For balance, I want to make it clear that I am not suggesting that EU law bans all forms of public ownership. Nor am I suggesting that the EU prevents all forms of state aid. Indeed, there are several exemptions, and where there are no exemptions a member state can seek the approval of the European Commission. I will come on to workers’ rights later in my speech, but I acknowledge that the EU has sought to create a floor for minimum employment standards. In theory, it should prevent a race to the bottom. Those are, without doubt, important safeguards.

I was more than troubled to read that the withdrawal agreement referred only to the non-regression of labour standards. I am deeply worried that exiting on that basis would leave the British workforce exposed to the risk of seeing their statutory rights gradually eroded or falling behind those of their European counterparts.

John Howell Portrait John Howell (Henley) (Con)
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I thank the hon. Lady for giving way. She is right to have secured this debate in this Chamber. Before she moves on to employment rights, I want to take her back to state aid. How does she think it will be different, given that the UK helped to develop the EU’s state aid rules, and the withdrawal agreement says that there will be a level playing field, which suggests that the sort of things we see now will be incorporated?

Laura Smith Portrait Laura Smith
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I thank the hon. Gentleman for that intervention. I will come on to that issue, and specifically the level playing field, later in my speech. I hope that I will answer his question shortly.

One would have to be wilfully blind to argue that there is no tension between EU law and the pursuit of a heightened role for the state in our economy. For now, I want to move on to discuss public ownership, which can take various forms. I am not advocating organisations that are owned by the Government but behave in the same way as for-profit companies, focusing on financial goals and insulated from democratic control, but the dogmatic obsession with privatisation in the UK in recent years has been exposed as a failed and outdated ideology. Hon. Members no doubt represent workers in their respective constituencies who were affected by the collapse of Carillion, which cost the taxpayer at least £148 million. There were also the failures of the east coast main line and Northern rail services, and the emergency takeover of Birmingham Prison—the list goes on.

Our public services have been siphoned off and are run by private companies interested only in extracting profits to line the pockets of their shareholders, instead of reinvesting them to improve the service or reduce consumer bills. The privatised water companies have paid out £18 billion in dividends to shareholders over the past 10 years.

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John Howell Portrait John Howell (Henley) (Con)
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It is a great pleasure to serve under your chairmanship, Mr Hollobone. I will not hold up the hon. Member for Stroud (Dr Drew) for very long, but I have just a couple of points that are too long to make as interventions; therefore, I felt the best thing to do would be to speak.

To pick up on the question of rights, a number of hon. Members spoke about a bonfire of rights that will come about as a result of our leaving the European Union. However, there is another organisation responsible for protecting those rights: the Council of Europe. We ignore that at our peril. I know that it is seen as a great thing in this country that we send no journalists along to Council of Europe meetings—we send along our delegation, if they can be spared by the Whips Office, but it is always a secondary thing—and yet the hon. Member for Crewe and Nantwich (Laura Smith) mentioned a case that was heard by the European Court of Human Rights. That does not belong to the European Union; it belongs to the Council of Europe, an independent organisation set up in 1948 with the aim of protecting human rights in Europe. The ECHR, which the Council of Europe looks after, is a unique body. It is one where we, as council members, elect the judges to serve for individual countries, so it has a democratic legitimacy.

I think back to the various meetings that we have held over the past few years, and I can assure the hon. Lady that employee rights, whether in specific circumstances or more generally, have been on the agenda for discussion on many occasions. For example, on at least one occasion we have looked at the rights of employees to access information about themselves and their cases, in order to take forward what they want to do. This conversation seems to be a bit one sided. So far it has not looked at the bigger picture or taken into account what the Council of Europe does.

Stephanie Peacock Portrait Stephanie Peacock
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I think I am right in saying that the hon. Gentleman is arguing that the Council of Europe can help to protect workers’ rights, but the people I represent, and a lot of those who voted to leave, voted so that this place could protect workers’ rights. Surely, it is the democratically elected Government’s responsibility to ensure that workers’ rights are protected.

John Howell Portrait John Howell
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That is an interesting question. We give up our rights to decide things for ourselves in a number of situations. We give up the right to our own sovereignty by belonging to the United Nations and to NATO. To a certain extent, we give it up by belonging to the Organisation for Security and Co-operation in Europe. Most importantly, we give up our rights to some aspects of our sovereignty by being members of the Council of Europe. It is not right for the hon. Lady to look at this issue solely in terms of one or two organisations; she needs to look at a third organisation—the Council of Europe—which is there to provide just that sort of reassurance to people about their human rights, which I think she and her colleagues are, and have been, looking for.

I want to touch on Birmingham prison, which the hon. Member for Crewe and Nantwich opportunely mentioned in passing. This morning I participated in a Justice Select Committee sitting in which we questioned senior members of the Prison Service about what happened at Birmingham Prison. A key point relates to provisions in the contract with G4S not to hold it to account in many ways that we would normally expect. All of us, on both sides of the political fence, questioned those witnesses about the legitimacy of excluding those areas from the contract and how they could manage them.

Birmingham Prison is a good example of the mixture of public and private collaboration, in that we have public collaboration through the Ministry and the Department, which hold those running the prisons to account rather than having to run them themselves. We asked about the extent to which windows had been broken and not fixed, and why no one had been held to account and what had happened. At the end of the sitting we specifically asked the Minister of State, Ministry of Justice what would happen at the end of that examination. We got a firm statement that the contract would possibly at some stage go back to G4S when we could all be assured that it would be able to keep prisoners in the state in which we would expect them to be kept and look after them properly. That is a good combination of private and public sector partnerships in action.

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Chris Skidmore Portrait Chris Skidmore
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I appreciate the hon. Members’ request for a specific date. I will have to fall back on a position of ensuring that my hon. Friend the Member for Rochester and Strood, the responsible Minister in this policy area, will write to both the hon. Lady and the hon. Member for Glasgow South West setting out clearly the next stages and the time frame for them.

Given our record in comparison to the EU standards in many areas, it is not surprising that Eurofound, the EU agency for work-related policy, ranks the UK as the second best country in the EU for workplace wellbeing, behind only Sweden, and the best country for workplace performance.

There has been some discussion about the EU withdrawal agreement. That will ensure that workers’ rights enjoyed under EU law will continue to be available in UK law after we have left the EU. That includes rights derived from EU law, such as the working time directive and the agency workers’ directive. Specifically within the withdrawal agreement, the UK is seeking a stringent and legally binding agreement with the EU not to roll back on employment standards. A joint committee would ensure that the UK was keeping to the agreement at a political level. There will be no roll-back of rights, including collective bargaining rights, when we leave the EU.

John Howell Portrait John Howell
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I remind my hon. Friend of the European Social Charter, which we signed up to in 1961. Of the rights guaranteed by that charter, there are the

“the right to work, the right to organise”—

that is to be part of a trade union—

“the right to bargain collectively, the right to social security, the right to social and medical assistance, the right to the social, legal and economic protection of the family,”

and so on. Those are just some of the rights protected by this Council of Europe treaty that we signed up to in 1961 and it stands completely outside whatever is agreed in the withdrawal agreement.

Chris Skidmore Portrait Chris Skidmore
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I thank my hon. Friend for putting that on the record. I listened to his speech on the Council of Europe and know he is a dedicated member of it. I pay tribute to his work, which often goes unheralded in this place. We know that there are many colleagues from across all parties who do a great deal of work on behalf of the United Kingdom at the Council of Europe, and it is right that that is recognised in this debate.

I hope the Government’s commitment, in both the withdrawal agreement and statements that we have made, will give certainty and continuity to employees and employers alike, creating stability in which the UK can grow and thrive. The political declaration on our future relationship makes it clear that we will build on this for the future deal with the EU. We want to ensure that the future economic partnership of the EU is underpinned by measures that ensure fair and open competition. Obviously, a rigorous approach to state aid is a critical component of that and provides a foundation for ensuring smooth trade and a partnership based on high market access. That is reflected in the political declaration, which establishes state aid as a crucial part of the level playing field commitments. The text makes clear that the precise nature of these commitments will depend on the scope and depth of the future relationship and the negotiations to take place.

There is no choice between taking the state aid rules or protecting workers’ rights; the Government recognise the fundamental importance of both.