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

Debate between Chris Skidmore and Chris Stephens

Tuesday 11th December 2018 Westminster Hall

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

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—

[Chris Stephens]

South West.

[Chris Skidmore]

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.

[Chris Skidmore]

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.

[Chris Stephens]

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

[Chris Skidmore]

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.