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

Volume 651: debated on Tuesday 11 December 2018

[Mr Philip Hollobone in the Chair]

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.

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?

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.

My hon. Friend is making a very important point about how water companies work. In Wales, we have Dŵr Cymru—Welsh Water—which is a publicly owned company that reinvests in the water network and reduces people’s bills. There are very real examples of how water companies can work for people, and we have the best example in Wales.

I thank my hon. Friend for that example.

In the name of efficiency, our public services have been handed to those offering the cheapest services, often at the expense of our public sector workers, who have paid the price with their pay, their terms and conditions and even their jobs. Public ownership does not just bring an end to such bad practices. Done right, it can be used to combat inequality, political disenfranchisement and underinvestment.

I congratulate my hon. Friend on securing the debate. If she wants a good idea of what workers’ rights will be like if we come out of Europe, she has only to look at the recent anti-trade union laws passed by the Government. That will give her a good idea of what will happen to workers’ rights. She talks about privatisation, and Crossrail will now cost an additional £2 billion. These are the issues that we have to consider. My third point is that there is no guarantee that the national health service will survive in its present form when it is opened up to predators from the United States. These are the issues that, at the end of the day, affect people’s jobs and livelihoods. There is no attempt whatever to provide future funding for university research and development, which affects manufacturing in this country in a big way—I asked the Chancellor a question about this this morning. Does my hon. Friend agree?

I agree with the points that my hon. Friend makes, and I share his concerns.

Economic democracy can empower groups and individuals who are otherwise excluded. Involving workers, the public and other stakeholders in economic decision making has both societal and economic benefits. Democratic participation can also enhance the effectiveness of publicly owned enterprises by tapping into grassroots forms of knowledge and the direct experience of employees and users of public goods and services. Democracy, if we are to view it as a vital part of popular sovereignty, must extend far beyond the ability to elect Governments every now and then. The active exercise of individual worker and community member ownership rights is a prerequisite of genuine democracy.

If those campaigning to leave the EU were at all serious about taking back control for the British people, they will recognise the role that democratic public ownership can play in tomorrow’s economy. It can be used to mobilise our economy in pursuit of other policy objectives. For example, democratic public ownership of our energy system could allow us to put tackling climate change at the heart of our energy system in a radical way, while protecting the industry’s workers throughout any energy transition. It is popular: opinion poll after opinion poll demonstrates that the public are crying out for more public ownership, even given the option of “whatever works”.

EU law specifically allows for the public ownership of a service provider, yet the treaty that contains that provision also sets out an economic policy based on an open market economy, with free competition and the liberalisation of services given special status. Some commentators have suggested that remaining subject to EU law will make the reversal of market liberalisation highly problematic for a UK Government who wished to do that.

To take the postal service as an example, the third postal services directive, adopted in 2008, established a clear floor for the postal market, ensuring that collection and delivery take place at least five days a week. At the same time, it has promoted competitiveness for its own sake, which has driven down standards and posed a threat. It fails to see the market as a natural monopoly, and insists that it must remain fully liberalised, restricting the UK Government’s ability to eliminate the market to sustain the publicly owned provider.

Although public ownership of the carrier is not prohibited, it is difficult to see how a UK Government who remain subject to EU law could create a public monopoly with workers and service users at its heart, and with the necessary cross-subsidisation to allow such services to thrive. As far as I am concerned, a true level playing field would establish regulations to ensure that private sector carriers could not undercut prices, and would include a re-establishment of collective bargaining, which I will mention later.

There are similar challenges in the energy sector. The European Court of Justice’s Essent ruling found that the Dutch ban on private ownership of shares in the energy sector amounted to a breach of free movement of capital. The experience in Germany shows that it is possible to create publicly owned energy companies to rival private energy suppliers, but only within the parameters of EU competition law. The recent fourth railway package poses similar challenges in the rail sector.

I briefly draw hon. Members’ attention to a recent dispute at Royal Bolton Hospital. In Alemo-Herron, the ECJ ruled that private employers that take on the provision of public services cannot be required to pay transferred staff the pay rises that they would have had if they had remained in the employment of the public sector. By prioritising the rights of private companies to business freedom over the rights of workers who find themselves in that situation, EU law creates a financial incentive to privatise our public services.

On state aid and public procurement, I recognise that the UK has not made full use of the flexibilities on offer to it as a member state. As with all other aspects of the debate, I do not blame the European Union for the pursuit of neo-liberal policies by successive UK Governments. This Government have certainly not needed any encouragement in that respect. I also accept that there will always have to be some rules to facilitate fair trade, but the EU state aid rules are far more stringent than those in the WTO subsidies regime.

Earlier this year, I called on the Government to provide funding to cover the cost of pay owed to care workers who were found to have been paid less than the minimum wage. The failure to do so risked bankrupting care providers and putting many vulnerable people at risk. The Government, however, had to discuss the issue with the European Commission because of concerns that state aid rules would prevent them from taking such action. I am not sure whether those discussions reached a conclusion before the Court of Appeal’s July ruling.

In addition to restricting the UK Government’s ability to react to certain economic events that threaten our industries, those state aid rules can restrict our ability to intervene proactively to support individual industries or domestic supply chains as part of a comprehensive industrial strategy.

I thank the hon. Lady for giving way and congratulate her on securing the debate. She is making some fair points, but I take issue with the last one. There has been a very effective deployment of state aid to expand broadband provision throughout the United Kingdom, which she surely welcomes as a positive boost to the UK’s infrastructure, and to help our public services. There are some good stories to tell, despite the general recognition that the level of state aid in the UK is much lower in comparison with that in many other EU countries.

I thank the hon. Gentleman for his intervention. I know everybody says this, but I will come to that later, when I address broadband specifically. I agree that improving that infrastructure is essential.

The recent research from the IPPR that I mentioned earlier concludes that the public place more weight on returning powers to expand the use of state aid than to deregulate, with 53% showing a preference for allowing the Government to support and protect our industries, while only 26% preferred conformity with EU state aid rules to secure a far-reaching EU trade deal.

The variation in WTO-plus agreements suggests to me that a bespoke trade deal could, in theory, include room for structural subsidies. Those could, for example, support industries of particular national value or natural monopolies, where cost reductions would be beneficial and would have no impact on other countries. In that sense, Brexit offers an opportunity to redefine what a true level playing field looks like.

The Communication Workers Union suggested that there would, in theory, be a strong argument for rolling out superfast broadband everywhere, supported by the state, which takes us back to the point made by the hon. Member for Central Suffolk and North Ipswich (Dr Poulter). Not only is that a natural monopoly, but it is a driver of social and economic wellbeing, as he pointed out. A similar argument could be made for our post office network.

With regard to the withdrawal agreement as it stands, the Attorney General has made it quite clear that in the backstop, restrictions on state aid are hardwired, and new restrictions could be introduced even if they are not in our national interest. I would be grateful if the Minister clarified whether he expects our future relationship with the EU to be substantially different or based on a parallel system. In the same way, the EU procurement directive is far more restrictive than the WTO agreement on government procurement. I would support, for example, limiting eligibility for public procurement contracts to companies that can demonstrate ethical maximum pay ratios and gender pay ratios, yet the EU procurement directive raises questions as to whether that would be compatible with single market rules.

There will undoubtedly be risks to workers’ rights if we leave the EU. Parliament is currently considering a deal that refers only to “non-regression”, when it would surely have been possible to ensure that British workers enjoy at least the same statutory rights as their European counterparts, as part of what I would describe as a genuine level playing field. We must also consider collective bargaining. I do not want to stray into a debate on the benefits of collective bargaining, but suffice it to say that I believe that rolling out sectoral-level bargaining will bring far more than just improvements to workers’ wages or employment conditions, and, alongside other reforms, it can give workers a real stake in their industries, and is another prerequisite for democratising our economy.

I thank my hon. Friend for giving way again, and she is making some important points. She has talked throughout about a level playing field for workers’ rights and state aid. Does she agree that it is extremely important that the UK Government work with both the Scottish and Welsh Governments where there are devolved responsibilities, to ensure that there is a level playing field? That applies particularly to future funding for communities such as mine, which received objective 1 and objective 2 status, and where Welsh Government Ministers are responsible, for example, for the NHS pay structure and, from next year, for teachers’ pay?

I am grateful once again to my hon. Friend, who makes some excellent points on devolved Governments.

Long before the formation of the EU, British workers’ rights were largely gained through industrial organisation and collective bargaining. Many statutory rights that have been introduced have simply extended those rights so that they can be enjoyed universally by workers not covered by those collective agreements and contractual rights. Although I do not blame the EU for the declining role of trade unions in the British economy, I am concerned that it is heading in the same direction.

The level of collective bargaining coverage is falling across Europe, under pressure from troika policies. To highlight the direction of travel, a report prepared by the European Commission’s directorate-general for economic and financial affairs lists the following “employment-friendly reforms”: decreasing bargaining coverage; decreasing extension of collective agreements; decentralising bargaining systems; removing or limiting the favourability principle; and overall reduction of wage-setting power by trade unions. The same report lists other reforms not related to collective bargaining, including loosening the conditions for dismissals and decreasing notice periods and the level of severance payments.

We must also consider the fact that under EU law the four freedoms of business—to provide services, establish business, move capital and move labour—trump all other rights. I have already highlighted the Alemo-Herron case, in which the right of workers to the benefit of collective bargaining found in the UN charter, the European convention on human rights and the International Labour Organisation declaration was not mentioned. Also, the more well known cases of Viking and Laval, amplified by the Holship ruling, reinforce the fact that under EU law the right to take industrial action will always be treated as subservient to the four freedoms. Furthermore, the directives passed by the EU on individual employment rights have been limited in scope. For example, the agency workers directive appears helpful in principle, but is reported to have led to a massive increase in the number of agency workers across Europe who do not enjoy the same full rights as their directly employed counterparts.

That is not to dismiss the significance of EU-derived employment rights and, as I have said, I am more than disappointed to see that the Brexit deal as it stands refers only to non-regression. Our existing rights must be protected, and safeguards should have been included to ensure that British workers never fall behind their European counterparts, as part of that truly level playing field. However, as hon. Members look for alternatives to the discredited deal, we should also be conscious that the EU is not the beacon of workers’ rights that it is sometimes made out to be.

To conclude, I ask that for a moment we consider the historic vote to leave the EU. The national turnout was the highest ever for a UK-wide referendum and the highest for any national vote since the 1992 general election. Despite the main parties campaigning to remain and interventions from all sorts of interested parties about the impact that leaving would have on our economy, the public voted to leave the EU, albeit by a small margin. In my constituency, that margin is estimated to have been somewhat wider, at 41% to remain and 59% to leave.

I am sure that everyone present is also aware of the research conducted by Lord Ashcroft that concluded that the three lowest social groups voted to leave by a majority of two thirds. In that same poll, the single reason most frequently given for voting to leave was the principle that decisions about the UK should be taken in the UK. One year later, more than 80% of voters cast their vote for parliamentary candidates representing parties promising to respect the result of the referendum—a promise that I also made to the constituents whom I represent.

Since June 2016, I have done a lot of reflecting about what the result really meant. In the end, I decided that many complex and interacting factors probably influenced it, and that making sweeping generalisations would be unhelpful. One thing I concluded, however, as I am sure everyone present did, is that to ignore the result would be a profound and unforgiveable mistake. The referendum was an extraordinary exercise of democracy. If the result in 2016 was anything, it was a demand for change by those who benefited the least from our economic status quo. What is more, it was an expression by a majority of the electorate—however small and for whatever reason—that that change was best achieved with the UK outside the EU.

Even if hon. Members do not feel that expanding public ownership, state aid or workers’ rights are desirable policies, I ask them to consider the long-term consequences of lending support to any deal that further hollows out our democracy or locks us into the economic status quo. I therefore strongly urge Members to reject the single market, along with its legal framework, should such an option appear before the House. To do so is not to retreat into isolationism, protectionism and nationalism; on the contrary, it could herald the beginning of a new internationalism.

Of course we want the fullest access to all markets for our businesses, but the expansion of international trade, including in services, has not required a single market or a similarly restrictive framework. We must be vigilant to ensure that any other deal includes the necessary protections, clarifications and exemptions, so that we can use such policy tools effectively to rebuild and empower our communities, our public services and our economy in every region of the UK. I believe that there is public support for a new type of economy, one in which the state plays a more active role, in which ownership by, and accountability to, the public is included, and in which those who work within those industries are rewarded properly for their labour.

It is, as always, a great pleasure to see you in the Chair for this afternoon’s proceedings, Mr Hollobone.

I warmly congratulate the hon. Member for Crewe and Nantwich (Laura Smith) on securing this debate. In some respects it is timely, because the actions of the Prime Minister yesterday have perhaps moved us a little closer to a no-deal scenario, which would be catastrophic for jobs and our communities, although my argument is that that is not a new phenomenon.

The British Government have left key Scottish industries without support for decades, and are now set to subject our firms to a Tory Brexit race to the bottom. Communities in Scotland, whether those of Linwood, Ravenscraig or Methel, know fine well that British Governments simply cannot be trusted to protect jobs and people’s livelihoods. I welcome the opportunity to shine a bright light on the stark contrast between the privatisation-obsessed British Government and a Scottish Government who believe in a thriving, healthy public sector. Westminster, not the EU, sold off our public services.

Thanks to the Scottish National party, Scottish Water, the island ferries and our NHS have all remained in public hands. In sharp contrast to the increasing health privatisation by Westminster Governments, the SNP Scottish Government have kept, and will always keep, Scotland’s NHS in public hands. Unlike water suppliers elsewhere in the UK, Scottish Water has remained a statutory corporation that provides water and sewerage services across Scotland, and it is accountable to the public through the Scottish Government.

Caledonian MacBrayne is the major operator of passenger and vehicle ferry services between the mainland of Scotland and the 22 major islands of Scotland’s west coast. Glasgow Prestwick airport is also operated on a commercial basis, at arm’s length from the Scottish Government, in compliance with European Union state aid rules, and Highlands and Islands Airports Ltd is a public corporation wholly owned by the Scottish Ministers, which operates 11 Scottish airports that are vital to the social and economic welfare of the areas that they serve—some of the most fragile communities in our country. The reality, however, is that they are loss making and supported by subsidies from the Scottish Government.

The Scottish Government are also pressing ahead with plans for a national investment bank and a public energy company, supporting our position as a leading EU mixed economy. Last September, the First Minster announced plans to establish a Scottish investment bank, and we may hear more about that later this week. On a personal level, as someone who wants to see much more state ownership, I am genuinely delighted that the Scottish Government are on track to deliver their ambition of a public energy company by the end of the Parliament in 2021. Even better, there will be a public sector bid to run the railways in Scotland—long overdue, in my view. In Scotland, we have a good story to tell about our commitment to workers’ rights, protecting jobs and putting more services in public hands.

I now turn to the real threats to workers’ rights as a result of our exit from the European Union. History shows us that the EU has forced successive Westminster Governments to improve workers’ rights. Such rights must not be put at risk by a Tory Brexit race to the bottom. It is important that we reflect on them and take stock of just how much EU membership has improved workers’ rights. For example, the EU’s working time regulations were introduced in the UK in 1998, meaning that employees cannot be forced to work more than an average of 48 hours a week and should get a rest time of at least 11 consecutive hours. Equal pay between men and women has been enshrined in EU law since 1957, and the 1992 EU pregnant workers directive guarantees women a minimum of 14 weeks’ maternity leave.

Make no mistake: leaving the European Union and allowing the British Government to take charge of those rights is a deeply retrograde step that will lead to a bonfire of workers’ rights. That is why, even at this late stage, I appeal to Members on the Conservative and Labour Benches to join us to end the Brexit chaos. If they do not, or will not, they should not be surprised when Scotland unhooks the tow bar and takes us on a different path of independence.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Crewe and Nantwich (Laura Smith) on securing this important debate. I declare my interest as a proud lifelong trade unionist.

This debate is especially important because when the Prime Minister addressed the House yesterday, she gave the impression that the only concerns about her deal came from her own Benches and related entirely to the backstop. Let me say clearly and loudly to the Minister that is not the case for my constituents and working people across the country who want an agreement that protects both their jobs and their rights in those jobs. I will focus my speech on that.

Equality for part-time workers, maternity and paternity leave, health and safety standards, protections from discrimination and harassment, equal pay terms and regulation of working hours are among the basic labour standards won by the labour movement—not just in the UK, but across Europe—that are under threat from a Tory Brexit. The Minister may deny that but his colleagues have given the game away. The International Trade Secretary—the last man standing of the Prime Minister’s original three Brexiteers—was clear about his vision when he said:

“we must begin by deregulating the labour market”,

and that it is

“intellectually unsustainable to believe that workplace rights should remain untouchable”.

The former Brexit Secretary, the right hon. Member for Esher and Walton (Dominic Raab), put it more bluntly when his book described British workers as

“among the worst idlers in the world.”

The track record of this Government speaks even louder than those words: a damaging and draconian Trade Union Act that attacks representatives of millions of working people across the UK, for instance. Tribunal fees caused a staggering drop in the number of workers able to bring claims against exploitative bosses. It is the same story even on an issue as basic as ensuring waiters can keep their own tips. If the Minister’s answer is to trust the Government, the people of Barnsley will regard that as little more than a joke. The withdrawal agreement gives us almost nothing in the way of legal safeguards; instead, it gives Ministers power to repeal, dilute and cut employment rights after we leave.

I will take the liberty of anticipating the Minister’s reply and deal with the so-called “non-regression” clause that my hon. Friend the Member for Crewe and Nantwich mentioned. Even during the transition, it leaves us exempt from any measure whose deadline falls beyond the end of the phase, leaving British workers falling behind our European counterparts even before we have fully left. Even worse, non-regression clauses of this sort have been found deeply flawed in a series of court judgments. I will not recite the legal precedents in full, but they have been described as a “fallen fig leaf” by leading legal commentators. The article in the agreement is for the stated purpose of

“ensuring the proper functioning of the single customs territory”

rather than protecting workers’ rights in itself, limiting it even further.

The Government could have given us a standstill clause, which would have given them a legally binding duty that workers and trade unions could enforce in the courts, but they decided not to. The Attorney General confirmed to the House last week that the

“non-regression clauses…are not enforceable either by the EU institutions or by the arbitration arrangements under the withdrawal agreement.”—[Official Report, 3 December 2018; Vol. 650, c. 559.]

He made clear that he thought that was a good thing. That is a stark and telling contrast to the far tougher and enforceable requirements on state aid that my hon. Friend referred to. No wonder the Institute for Public Policy Research, among others, concluded that the non-regression clause was

“not sufficient to maintain current protections”.

Then, there is the political declaration. We have often heard on Brexit that the devil is in the detail, but the problem with the political declaration is that there is no detail. It does not even have legal effects. Any new Tory Prime Minister—hardly an unlikely prospect, from what we see of the party opposite me—could just rip it up. Its only reference to workers’ rights is in the section on “open and fair competition”, which tells us exactly how they are seen—simply a way to maintain fair competition.

We have always said that we want a future relationship where rights and protections are defended, preventing a race to the bottom. This agreement threatens to do the very opposite. It opens the door to a future where labour standards come second to the interests of big business, rights at work are watered down and a Conservative Government can dismantle yet more protections for workers and unions. The people I represent in Barnsley voted very clearly to leave. I respect that decision, but I do not believe they voted for a reduction in workers’ rights, jobs and prosperity. The question is not whether we leave but how we leave.

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.

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.

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.

I am delighted to serve under your chairmanship, Mr Hollobone, particularly as I was not on the speakers list. I thank my hon. Friend the Member for Crewe and Nantwich (Laura Smith) for making such a strong case. I welcome my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) on the Front Bench and I welcome the new Minister. I hope he enjoys his portfolio for as long as it lasts.

I want to make three brief points that it is important to make, as they sometimes do not feature in debates. Although we are here in this important debate to escape from Brexit, it very much relates to Brexit or what might result from it. First, when I have been involved in trying to save companies and looking at how the public sector can get involved in that, I have always been told that we cannot do so because of state aid rules. I have never understood what those state aid rules are. I am sure that there are state aid rules that apply, and that the European Court of Justice or the European Court of Arbitration—whichever it is—can eventually adjudicate on whether public money was used properly, but that is at best years down the line.

My point is that the argument about state aid rules has always been used to effectively allow national Governments—in this case ours—a cop-out, when what they are really saying is, “We don’t want to help this company or industry, and we now have a wonderful excuse that gives some credibility to our rationale for so doing.” It was applied to steel in Redcar, and I can cite local cases where it was up to the national Government to put their money where their mouth was and where, if they had really wanted to save a company or industry, they could have.

I know a little about the agriculture industry and the different boxes—the amber, the red, the green and the blue. This relates not only to the EU, but to the WTO, and I was pleased to hear what my hon. Friend the Member for Crewe and Nantwich said about that. We know that the WTO rules are laxer, but this is about the framework within which the EU wants to operate. The most subsidised agriculture system in the world is in America. Where did the term “pork-barrel politics” come from? It is about putting money into the American mid-west to win elections. It is against any notion of free and fair trade, so I take it with a pinch of salt when I am told that state aid rules are so restrictive that we cannot do anything.

In many ways I see that in contract law. Perhaps the days are long gone, but when we put forward a contract, the Official Journal of the European Union was always waved in our face and we were told the contract had to go through a system of rigorous assessment, yet when it came down to it, we could employ local labour when we wanted to, but that was always seen as not being possible.

My second point is about fairness in the application of state aid. I am grateful for the Library’s papers on this. When we look at state aid as a percentage of GDP, we are always in the bottom quartile. We choose not to invest anything like the sums of money that other countries do in supporting our industry. That must be the case because so many of our railways, water companies, waste companies and energy companies are owned by foreign national concerns—even nationalised concerns. So something happens elsewhere within the EU that, again, we choose not to follow as a national state. I worry that we use the EU as an Aunt Sally. Other countries seem able to control our major companies through their public sectors. Nothing illustrates that more than Hinkley Point, which we have effectively handed over not only to the French state, but to the Chinese state, which is funding it. Of course, China is not part of the EU, but it is part of the WTO, and I would love to know why, when we try to do things in this country involving the public sector, we are so much more constrained.

Thirdly, I share my hon. Friend’s concern, and I worry about where we will go after the end of March if we are out of the EU or whatever state we will be in. There is an inclination that we could witness a race to the bottom. I worry, for example, that our regulatory framework will be overseen by the Competition and Markets Authority, which, from my experience, has no real interest in labour standards or trying to protect trade union rights, which my hon. Friend the Member for Barnsley East (Stephanie Peacock) talked about. We ignore that at our peril and might find not only that we have leapt from the frying pan into the fire, but that the fire has completely engulfed us. There will be the threat of a race to the bottom. The idea that we will become a global nation basically means that we will simply cut our wages and conditions, which will apparently yield a wonderful competitive advantage.

I have made those three points because the debate is important. It is apposite because it comes on the back of all the other shenanigans that have been going on over the past few days about whether we are leaving and on what terms. This is important. The British public might be asked for a second opinion on our relationship with the EU. It would at least help if we could put to them what really goes on, rather than some of the myths that seem to be continually put across about what we can do and what we choose not to do.

It is a pleasure to see you in the Chair, Mr Hollobone. As you can hear, I am going to battle through my speech this afternoon. My hon. Friend the Member for Glasgow East (David Linden) has called me a “wee sowl”—all I can say is that interventions will be very much encouraged during my remarks. First, I thank the hon. Member for Crewe and Nantwich (Laura Smith) for securing this debate, which is timely, given the game playing that we have seen over the past couple of days by the Government.

Yesterday I was expecting to address the House on the deal, but we found out that the debate was cancelled. Another reason why the debate is timely is that yesterday I was going to make the argument I made during the EU referendum campaign—to remain and reform. I understand the Lexit argument that the EU can be seen as a capitalist club, but my view was then, and is now, that the answer to neo-liberalism is not to leave for more neo-liberalism and deregulation. I fear that that is happening and very much regret that successive UK Governments, but particularly Conservative ones, have had a disgraceful record on applying for EU social funds. It is worth reflecting on that.

The hon. Member for Barnsley East (Stephanie Peacock), my friend and trade union comrade, made a point about people in lower income brackets—the same ones who would have benefited if former UK Governments had taken a more proactive approach on EU social funds. I am thinking particularly of the one for food poverty. However, the UK Government did not apply, so France and Germany got €450 million from the EU to help with food poverty, and because the UK did not apply it got the same amount of money as Malta, which was €12 million. Like many others who have spoken, I have a concern that we could end up with the UK leaving the EU and signing trade deals that would make the Transatlantic Trade and Investment Partnership look moderate.

The debate is timely also in relation to the current Government’s direction of travel on public sector delivery and the management of the economy. Already, Carillion, which was providing public sector services, has collapsed. I have previously warned here, and in written questions, about issues with Interserve, which looks like being the next Carillion.

We are also in the ludicrous position where the current Government are considering privatising veterans’ services. This must be one of few nations that would even consider that. We know the current Government’s approach to workers’ rights because of—to correct my friends in the Labour party—the “anti-trade union” Act, which is what we should call the Trade Union Act 2016.

The Government, following the passage of the 2016 Act, were forced to consider e-balloting, but almost three years down the line they have done nothing to help with e-balloting for industrial action ballots. That is relevant to the present debate because if the EU referendum had been conducted according to the same rules as a trade union industrial action ballot, it would not have been possible to prosecute Brexit. The result would have failed to comply with the 40% rule that the Government insist on applying to trade unions in industrial action ballots. I shall take a sip of water now, Mr Hollobone —if no one is keen to intervene on me.

As my hon. Friend the Member for Glasgow East has said, over the past few decades Westminster Governments have left key Scottish industries, and industries across the UK, without support. There is now a real fear that we face a Tory Brexit race to the bottom. In decades when Thatcherism, it has been said,

“swept like a wrecking ball through the mines, the steel industry, the car factories, shipbuilding and engineering and oversaw the demise of the communities which had built their livelihoods around them”

it was the Conservative Government who referred to miners as “the enemy within”. It was often felt that the same sentiment was directed towards many working communities. That Government’s attitude to many of those communities can be summed up by the classic Proclaimers song “Letter from America”:

“Bathgate no more

Linwood no more

Methil no more

Irvine no more”.

Let us not forget that the period from 1981 to 1983 was the worst recession since the 1930s, destroying one fifth of the industrial base and doubling unemployment. That was before war was declared on the miners. The Linwood car plant in Renfrewshire closed in 1981 with the loss of 4,800 jobs. Plessey Electronics in Bathgate closed in 1982. Leyland’s lorry factory in Bathgate closed in 1986 with 1,800 jobs lost. Ravenscraig steelworks closed in 1992 with the loss of 1,200 jobs. Various Clyde shipyards wound down or closed, including Scott Lithgow in Greenock in 1988.

I am grateful to that wee sowl my hon. Friend; my question is in 22 parts so he may as well take a seat, to quote “The West Wing”.

In all seriousness, my hon. Friend is rightly listing the communities decimated by the horrific economic policy of the Thatcher Government. Does he understand that there is a clear correlation between many of the communities he named and voting yes to independence in 2014? They realised that the only way they could get fairness in a rejuvenated local economy would be through their own Government having the power to act.

As someone representing the constituency with the second highest individual number of yes voters in the 2014 referendum, I think my hon. Friend is right. The reason why the issue is important is that European Governments supported their steel industries against cheap imports. They supported their industrial base at a time when the UK did not. There are fears at the moment, with the current Government refusing to match Scottish Government funding for the Tayside deal to support Michelin workers who face job losses. It just goes to show that the “nasty party” tag is still alive and well.

The Scottish Government have had to intervene to help commercial shipbuilding on the Clyde, finding a new buyer for the Ferguson shipyard, and they have also intervened in relation to securing a new owner for the steelworks. For the first time, following a campaign and the amendment of the law, the Scottish Government have secured the power to allow a public-sector bid for a rail franchise in Scotland. It was Westminster that sold off public services, not the European Union, as my hon. Friend the Member for Glasgow East described very well. It is the Scottish Government who are pressing ahead with plans for a national investment bank and public energy company.

Workers’ rights are a passion of mine. I was a trade union activist before I arrived in this place. It was the European Union that forced successive Westminster Governments to improve workers’ rights. The pregnant workers directive of 1992 guaranteed women a minimum of 14 weeks’ maternity leave, and that forced the then Labour Government to go further.

The European Court of Justice made it clear that any discrimination against a woman because of pregnancy or maternity leave is sexism and should be treated as such. It was EU law that provided that parents must be allowed 18 weeks’ unpaid leave from work to look after a child. The equal treatment directive led to UK law banning discrimination on the grounds of age, religion or sexual orientation. Indeed, that directive is helping many women, particularly in the public services, to make equal pay claims. I am grateful for that, and should declare that I am currently an equal pay claimant against my former employer—but I shall move swiftly on.

EU rules adopted in 2008 provide that temporary workers must be treated equally with directly employed staff, which includes the giving of access to the same amenities and collective services. We know from research that 41 of the 65 new health and safety regulations introduced in the UK since 1997 have come from the European Union. The Scottish National party takes the issue of tackling exploitative working practices extremely seriously, and we oppose the “anti-trade union” Act 2016.

My hon. Friend the Member for Glasgow East is campaigning for the UK Government to stop discriminating against young people and ensure they get a real living wage. My hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald) is promoting the Unpaid Trial Work Periods (Prohibition) Bill, and I recommend the well-crafted and beautifully written Workers (Definition and Rights) Bill that seeks to simplify the status of workers in law and eliminate zero-hours contracts. I thank everyone who has contributed to this debate. SNP Members oppose neo-liberalism. We do not see Brexit as a way to enhance neo-liberalism, and if it turns out to be it will be a disaster for this country—it will be a disaster for the United Kingdom.

It is a great pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate my hon. Friend the Member for Crewe and Nantwich (Laura Smith) on securing this important debate, which is now the only piece of Brexit business tabled today—not what I was expecting.

State aid, public ownership, and workers’ rights are the critical building blocks of our nation’s economic model, and getting them right will be crucial to our future prosperity and the nature of any post-Brexit settlement. As my hon. Friend expressed so clearly, the Brexit vote has exposed the flawed foundations of our economic model. After decades of crying that “there is no alternative” to neo-liberal privatisation, laissez-faire economics, and deregulated labour markets, it was a Conservative Chancellor who, after the Brexit vote, threatened to “change our economic model”. Of course, he was actually proposing an acceleration of neoliberal reform without the constraints of European law—a “race to the bottom” in workers’ rights and protections, as the Leader of the Opposition put it in Lisbon last week.

The European Union delivers and guarantees important rights to British workers that we cannot allow to be taken away, but it has not always fulfilled the promise of a social Europe. I was also in Lisbon last week, representing the British Labour party at the congress of the party of European Socialists. I told them that no matter what happens with Brexit, we must all fight for socialist values within Europe: strengthening the rights of workers and trade unions, and ending austerity and wage suppression.

Yesterday in France President Macron finally recognised that French working people need higher incomes, not lower ones, if France is to prosper. It should not take riots in the street for our leaders to get that point. Here in Britain the real issue underlying Brexit is that working people want and deserve real rights, a real voice, and better lives. The Brexit deal must therefore defend what we have won in a European context by upholding workers’ rights and social protections, and if Brexit does not mean that, it is a total fraud against working people. The deal must also allow us to make further gains in the context of our continuing economic relationship with Europe, whether by strengthening European works councils, or restoring public ownership of public goods. That is what the Leader of the Opposition meant when he said in Lisbon:

“As socialists and trade unionists, we will work together to help build a real social Europe, a people’s European socialist Europe”.

What should that mean in practice for state aid, public ownership, and workers’ rights? As many hon. Friends have eloquently said, Labour Members reject the Government’s position that the best the state can do for the economy is get out of the way of the private sector. In the words of the renowned economist Mariana Mazzucato, we believe in an entrepreneurial state that stands shoulder to shoulder with the private sector. We are not talking about uneconomic subsidies for dying industries or failing firms; we want targeted interventions that support a prosperous, competitive, growing, and technologically driven economy that works for all. Yes, that should include public ownership where there is a natural monopoly or important public goods are at stake. Mazzucato also observed that, much like taxation and regulation, state aid rules are often used as an excuse for no investment and general inertia, and as my hon. Friend the Member for Stroud (Dr Drew) pointed out, that is particularly true for the UK Government. One example of that is in my region, the north-east, where the steel sector was allowed to decline and suffer because of Conservative inaction.

The UK has never gone as far as European Union law allows to enable the state to support the UK economy. As a percentage of GDP, we spend far less on state aid than our European neighbours—roughly 0.3%, compared with 0.6% in France and 1.2% in Germany. Public ownership is common on the continent, guaranteed by article 345 of the Lisbon treaty, which allows countries to make their own decisions on ownership. SNCF is France’s national state-owned railway company, and the German energy sector is experiencing a return to public and communal ownership. In this country we have Scottish Water, which was mentioned by the hon. Member for Glasgow East (David Linden). Some French and German public companies even own parts of our privatised utilities, and in that far-left enclave, the Netherlands, private ownership of water companies is illegal.

Although it is true that European Union member states are bound by a requirement to provide aid only on the basis of a level playing field, public service compensation does not constitute state aid when it applies to services of general economic interest. Those are economic activities that deliver outcomes in the overall public good that would not be supplied by the market—or would be supplied under different conditions regarding objective quality, safety, affordability, equal treatment or universal access—without public intervention. That could refer to a number of services, so will the Minister commit to report back to Parliament on which of our services of general economic interest we need to protect?

Before entering Parliament I had a job as Head of Telecoms Technology for Ofcom, the communications regulator, and I spent many months comparing our use of provisions for services of general economic interest with the way they were used by our European neighbours. I can confirm to the House, and especially my hon. Friend the Member for Crewe and Nantwich, that we do not use such provisions. The Government do not even seem committed to protecting our public services in new trade deals. Will the Minister commit to ensuring that future trade deals do not threaten the public ownership of crucial national assets such as our NHS?

As my hon. Friend the Member for Barnsley East (Stephanie Peacock) remarked, regardless of whether people voted leave or remain in the European Union referendum, no one voted for worse rights at work. Well, at least not at their work. Members of the European Research Group may well have voted for worse rights for others, while wishing to retain and indeed expand their privileges as parliamentarians. They want working people back in the middle ages, but not the sanctions that MPs received at that time. A poll commissioned by the Institute for Public Policy Research in February this year found that more than 70% of people want European Union rights at work to be strengthened or maintained after Brexit—more than double the number who thought they should be watered down.

The Prime Minister has repeatedly promised to maintain workers’ rights post Brexit. For example, she said at her party conference in 2016 that

“existing workers’ legal rights will continue to be guaranteed in law—and they will be guaranteed as long as I am Prime Minister.”

Only last month, she assured the House that her deal successfully safeguarded workers’ rights. Yet, as colleagues pointed out, this Government repeatedly voted down Labour amendments to the European Union (Withdrawal) Bill that would have required primary legislation if future Governments sought to reduce workers’ rights. With that rejection, our rights are left vulnerable to deregulation by ministerial diktat.

By not allowing new European works councils to form or having a contingency plan to replace them, the Tories would leave British workers at a disadvantage to their European Union colleagues. Will the Minister commit to reversing the decision to scrap European works councils?

The Government’s withdrawal agreement contains significant flaws with regard to workers’ rights. As was pointed out, one of the provisions of the backstop is a non-regression clause on labour standards, which would prevent either party from lowering protections below their current levels. However, it allows for some divergence, meaning that a UK Government would still be able to water down workers’ rights—a worrying possibility given this Government’s track record on labour protections.

Moreover, the non-regression clause would not require us to update our labour legislation alongside the European Union, meaning that over time we could end up with significantly poorer protections. That is a real concern given the growth of the so-called gig economy. Only last month, Tory MEPs joined the UK Independence party in voting against new rights for gig economy workers in the European Parliament. Will the Minister commit to updating workers’ rights in line with European best practice following the end of the transition period?

My party has pledged to protect workers and their hard-won rights, reject no deal as a viable option, and negotiate transitional arrangements to avoid a cliff edge for the UK economy and workers. We have pledged to ensure workers are represented on company boards and to require firms with more than 250 employees to set up ownership funds, making workers part-owners of their companies.

My party will make full use of the powers the state has, and should have, to build an economy that supports workers’ rights, trade union rights, innovation and industry in every region of our country, and that works for my constituents in Newcastle and for the constituents of the hon. Member for Henley (John Howell)—in short, an economy that works for the many, not the few.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Crewe and Nantwich (Laura Smith) for securing this important debate. There were passionate and learned contributions from the hon. Members for Glasgow East (David Linden) and for Barnsley East (Stephanie Peacock), from my hon. Friend the Member for Henley (John Howell) and the hon. Member for Glasgow South—

Apologies—the hon. Member for Glasgow South West (Chris Stephens). I was deeply impressed by the hon. Gentleman’s ability to speak through his vocal impairment; he was cutting quite loudly through it by the end of his speech. We also heard from the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) and, last but not least, the hon. Member for Stroud (Dr Drew), whom I thank for his generous congratulations on my fifth day in my new role.

I regret that I did not take the opportunity to welcome the Minister to his new role and I wish him every success for the period he occupies it.

I am deeply grateful for those kind words. I am getting stuck into the job by appearing at this debate, but I am here to represent the views of my Department as a replacement Minister. My hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), the Minister for Small Business, Consumers and Corporate Responsibility, sends her profuse apologises that she has been unable to attend. She is representing the Department in the debate on the Accounts and Reports (Amendment) (EU Exit) Regulations 2018 in Committee corridor. I am here in her place to represent the Department’s views.

Let me start with what state aid rules are and why they exist, what is and is not state aid, and when it is allowed. Put simply, state aid is Government support or subsidy of an economic operator that gives it an advantage it could not get on the open market and distorts competition in the single market. The EU has tough rules governing the way subsidies can be given, to stop companies from getting an unfair advantage over their competitors and to ensure that countries with deep pockets do not subsidise their companies to the detriment of companies in other member states. However, where there are good policy justifications for state aid—where the benefit from giving aid outweighs the potential harm of a subsidy—the rules enable aid to be given.

Not all Government spending is aid. In fact, less than 1% of UK Government spending meets the technical definition of state aid. The state aid rules are about supporting fair and open competition, and the UK has long been a vocal proponent of them. The rules exist to stop countries from subsidising their industries unfairly, which would put businesses out of business and workers out of work.

A second misconception is that state aid rules prevent nationalisation. As long as the Government do not pay more than the market price for any assets acquired, the rules do not prevent that. However, the rules oblige the state to act as a normal market investor. That is good, because it prevents public authorities from unfairly distorting markets. State aid rules are neutral on public ownership and on the detail of spending decisions.

State aid rules are also fundamental to any free trade agreement. The political declaration on the framework for the future relationship between the EU and the UK recognises that. Free and fair trade is not possible if one party is able to subsidise without restraint. In a single customs territory that allowed the free trade of goods, as provided for in the draft withdrawal agreement, neither the EU nor the UK would be able to apply tariffs as measures against unfair subsidies by the other party. To ensure fair and open competition, it is absolutely necessary for the same state aid rules to apply consistently within the single customs territory, not to be frozen or disapplied for one bit of it.

I turn to workers’ rights, which have been the predominant topic of discussion. It is important to be clear that we are not making a choice between protecting state aid rules and protecting workers’ rights. As a responsible Government, we will work both to prevent unfair subsidies and to protect the rights of workers. The UK—we had several history lessons through some of the learned contributions to the debate—has a long-standing record of ensuring that workers’ rights are protected. Those include employment and equality rights, and protections for health and safety at work.

The decision to leave the European Union does not change that. This Government have made a firm commitment to protect workers’ rights and to maintain the protections covered in the Equality Acts.

Can the Minister tell us when the Government plan to publish their proposals in response to the Taylor review?

In terms of the Government’s commitment and the commitments I am giving today, I reflect that the Prime Minister said recently in the House that

“we already go further than EU minimum standards, including on annual leave, paid maternity leave, flexible leave, paternity leave and pay, and parental leave, because we know that the first responsibility for protecting those rights sits with…Parliament. As we take back control of our laws, we will not only honour that responsibility, but go further still…by implementing the recommendations of the Taylor review. So we will not just protect workers’ rights: we will enhance them.”—[Official Report, 4 December 2018; Vol. 650, c. 760.]

The Government have been clear that they will take the recommendations of the Taylor review forward.

Further to the intervention by the hon. Member for Glasgow South West (Chris Stephens), the Minister has not given the House a date. If he is that committed to the response, can he tell us when it will be?

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.

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.

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.

The Minister talked about state aid and workers’ rights. Can he explain why the rules on state aid are both tougher and clearly more enforceable, in contrast to those on workers’ rights?

I am not going to pre-judge what is taking place as we move towards a clear, definable free trade agreement with the European Union and the discussions that will happen after the political declaration. We have made that commitment, but actually we want to make sure that the United Kingdom has the ability to ensure that UK rights are clear, definable and stronger. They are already stronger than those in many European countries. We will continue to ensure that we have the reputation I mentioned: being the second best country in the EU for workplace wellbeing, behind only Sweden. It is important for our global reputation that we maintain that.

On the point about the EU workers council, if the EU withdrawal agreement is not approved we will still unilaterally protect workers’ rights in relation to European workers councils, as far as we can. However, to protect them fully, we require a deal with the EU, which sets the rules governing the establishment of a new European workers council. That is why I believe that the withdrawal agreement is so important to ensuring that we have no reduction in workers’ rights.

We will go further than the minimum labour market standards guaranteed in a withdrawal agreement. The Government will protect workers’ rights to ensure that they keep pace with changing labour markets. I hope the hon. Member for Crewe and Nantwich agrees that our approach on these vital issues will help secure the best possible deal for the UK as we leave the European Union.

Thank you to my hon. Friends the Members for Barnsley East (Stephanie Peacock) and for Stroud (Dr Drew), to the hon. Members for Glasgow East (David Linden) and for Henley (John Howell), and to all other hon. Members who made interventions. I thank the SNP Front-Bench spokesperson, the hon. Member for Glasgow South West (Chris Stephens), who is incredibly brave, battling through his cold—well done. I also thank the shadow Minister, my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), and the Minister for Universities, Science, Research and Innovation, the hon. Member for Kingswood (Chris Skidmore), who stepped in at the last moment.

There have been some excellent contributions on the importance of workers’ rights and the popularity of public ownership. I agree that it is UK Governments who are responsible for the privatisation of public services and the casualisation of labour.

On the points made by the hon. Member for Henley, my concern was precisely that the rights of workers in the charter in the European Court of Human Rights were not mentioned in the Court of Justice of the European Union ruling in the Alemo-Herron case. I was not criticising the ECHR or the Council of Europe—quite the opposite, in fact. I was pointing out that the workers’ rights afforded by the ECHR, which appeared to have no bearing in the Alemo-Herron case, were trumped by the four freedoms.

On the point about Birmingham prison, I stand by my view that the evidence is mounting up rapidly. The obsession with outsourcing and privatisation is a failed project that is costing the taxpayer and the workers in those services an awful lot, while letting down those who rely on the services.

Finally, the current withdrawal agreement means dynamic alignment with EU state aid rules, so it is important that we gain a full understanding of them and the likely direction of travel. I agree with my hon. Friend the Member for Stroud that the UK Government have made conscious decisions not to aid industry in the way that other EU countries have done. The point is that our national Parliament understands and is happy that the future state aid framework and regulations around public ownership allows for proper democratic debate.

Question put and agreed to.


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