(1 year, 9 months ago)
General CommitteesThat is a very good question. I was just getting on to that. Sensitive sectors are areas of economic activity in which there is a record of international trade policy disputes, evidence of global overcapacity within the sector or evidence that one or both of these features will apply to the sector in future.
If the right hon. Gentleman looks at the last part of the regulations, he will see that it lists the sectors that would be defined as sensitive, and those include automotive, steel and other sectors. Subsidies in those sectors have greater potential for substantial distortion, even at lower values. That is why those sectors are subject to a lower monetary threshold, of £5 million, to be defined as a subsidy of particular interest. The Government have set out a list of these sectors in the regulations.
The monetary thresholds are cumulative. As such, a subsidy of £5 million may be above the threshold for a subsidy of particular interest if the recipient had already received a related £6 million subsidy within the last three financial years. This avoids public authorities salami-slicing subsidies to avoid scrutiny. In addition, the regulations set out a minimum value for referral of £1 million. That means that where related subsidies cumulate above the £10 million threshold for subsidies of particular interest, public authorities will have to refer only the most recent subsidy if it exceeds £1 million.
The second element of the criteria is specific categories of subsidy. Subsidies designed to rescue an ailing or insolvent enterprise are subsidies of interest, and restructuring subsidies are subsidies of particular interest. That reflects the fact that both rescue and restructuring subsidies have greater potential to cause undue distortion, but rescue subsidies are often time-critical, since the enterprise may need the subsidy urgently if it is not to go out of business. The final specific category of subsidies is those that are explicitly conditional on relocation. Such subsidies are prohibited entirely, unless they have a beneficial effect on economic or social disadvantage in the UK as a whole. Subsidies in that category are subsidies of interest if they are £1 million or below, and subsidies of particular interest if above that value.
The regulations also apply to subsidy schemes. A subsidy scheme will set out the parameters under which subsidies may be given. The assessment of compliance with the subsidy control requirements will be carried out for the whole scheme, rather than for each subsidy given under that scheme. As such, if a subsidy of particular interest can be awarded under a scheme, that scheme is a scheme of particular interest and is subject to the referral procedures. The same applies to subsidies and schemes of interest. The referral can occur once, at scheme level. Subsidies given under schemes will never be referred to the SAU.
I thank the Minister for bringing these matters to our attention. Now that we have left the EU, where does all this fit into the big scheme of things? Do we now have greater freedoms with regards to state subsidies, or is an element of liaison still required to ensure we meet our obligations?
That is a good question, and I thank my hon. Friend for it. The trade and co-operation agreement includes some oversight; clearly, we made some commitments in that agreement regarding subsidies, which is what the statutory instrument and the previous legislation have both sought to address. However, we believe that the approach we are taking to subsidies is far more effective and quicker to deliver than the European Union one. Under that approach, we would have to take a scheme to the European Union, have it approved and then have it come back, which might take several months. Our approach sets out a broad set of principles: a local authority or central Government can set out a scheme and, as long as it adheres to these principles, the subsidy can be delivered far more quickly. In our view, that is a far more effective process.
Finally, a distinct approach will apply to tax schemes. All tax schemes will be schemes of interest and may be referred to the subsidy advice unit. The cumulation rules will apply differently to subsidies given under tax schemes. Only subsidies given as part of the same tax measure within the last three financial years will count towards the cumulative threshold for subsidies of particular interest.
(2 years, 5 months ago)
Commons ChamberThe right hon. Member knows that I am supporting her amendment tonight, but may I suggest that we need to look innovatively at how we fund these agencies? Perhaps they should be taking a share of successful prosecutions. Initially, we need a big increase in funding for these enforcement agencies to get them off the ground and make them fit for purpose, then we can explore longer-term funding solutions.
It always seems to me absurd that it costs £12 to establish a new company in Companies House. Obviously we want to make it easy for new businesses to enter the market, but £12 is absurd. We know that that gets exploited in relation to shell companies, but does it also facilitate economic crime? If we quadrupled that figure to £50, it would still not be a fortune, but we would then have a massive investment that we could put into our enforcement agencies without raising any further money through taxation. There are a whole range of mechanisms that would not have a direct impact on public spending. They may mean that the Treasury gets a little bit less than it thought it would, but they would not have a direct impact on public expenditure and we could employ them to make these enforcement agencies fit for purpose.
(5 years, 6 months ago)
General CommitteesIt is a real pleasure to serve under your chairmanship on this sunny day, Sir Graham.
The instruments are all made under the European Union (Withdrawal) Act 2018 and were laid before the House on 30 January. I apologise to the Committee for the fact that they have been bundled together, but I commend my parliamentary team, the drafters and the scrutiny Committees for doing a very efficient job of preparing these necessary instruments to assist in our preparation for a no-deal Brexit, in what I hope the Committee agrees was a timely and efficient manner.
I assure the Committee that my Department is working to ensure that our energy legislation continues to function effectively after exit day, regardless of whether there is a deal or what form it takes, so that consumers continue to benefit from reliable, affordable and clean electricity and gas. A significant part of the legislation that underpins our energy market takes the form of direct EU legislation. The instruments will transpose that legislation directly into domestic law after our departure as retained law under the terms of the 2018 Act, as we have done with so many pieces of EU legislation.
As in many other instruments considered by Committees like this one, we have had to make certain minor amendments to the legislation to ensure that it continues to function when transposed into UK law. Following the continuity principle that we have set out for our legislation from day one after exit day, we are maintaining continuity where appropriate but making the necessary tweaks to ensure that the legislation remains effective.
The instruments address a range of highly technical issues, from cross-border trade to the energy market objectives of regulators. In the event that we leave the EU without a deal, they will remove inoperabilities in retained EU law, such as references to the EU or EU institutions that would make no sense following EU exit. They will ensure that in the event of no deal, we will retain the regulatory functions and frameworks that we need to keep Great Britain and Northern Ireland’s electricity and gas markets working effectively, facilitating continuity. We have prepared them extensively to minimise disruption and uncertainty.
The instruments will make similar—although not always identical—amendments to legislation applying to Northern Ireland and to Great Britain. One of our aims is to ensure continuity in the retained EU legislation that applies right across the UK, while recognising the unique nature of the single electricity market on the island of Ireland, which is constituted as an integrated market north and south of the border. I want it to be absolutely clear that although the instruments will not provide insurance against all the risks that we would run in a no-deal exit that would undermine the legal basis of the single electricity market, they will facilitate the necessary steps to ensure that such a situation is not prolonged. I reassure the Committee that we have worked closely with Ofgem in England, Wales and Scotland, and with the Department for the Economy and the Utility Regulator in Northern Ireland.
As the European Statutory Instruments Committee recognises, the instruments are
“technically modest”
and
“the changes are necessary to prepare the statute book for the possibility of a no-deal”.
Let me focus on the most significant changes that they will deliver.
Is the Minister basically confirming that should there be no deal, we will be fully prepared—at least from the point of view of her Department’s responsibilities—for such an outcome?
I assure my hon. Friend that my Department has been at the forefront of preparation across Whitehall for the event of a no-deal Brexit. We have introduced a number of legislative instruments, some of which I have taken through the House myself, and we have done lots of work with third parties and stakeholders. The inescapable fact is that we do not have an agreement about an ongoing legal basis on which the single electricity market in the island of Ireland will operate, and that is a real concern. We can take legislative powers to mitigate the worst impacts of that, but they will not be taken before exit day because other even more urgent things are ahead of them in the queue. So to the extent of our ability, I agree that we are as prepared as we can be, quite rightly, for a no-deal Brexit.
The hon. Gentleman states very succinctly why there are
many uncertainties associated with a disorderly Brexit, only some of which the Government can mitigate with legislation such as that before the Committee. That is the reason for my strong view that the best way to avoid such consequences is to avoid a no-deal Brexit. I have said before and will say again that it is therefore incumbent on us all to vote for the deal before us, so that we can leave with a deal on 29 March, as we promised to those we represent. That offer remains on the table.
The Minister talks of a disorderly Brexit if there is no deal, but she has been part of a Government who for two years have made the promise that preparations for no deal are ongoing and will be met on time. Is she now saying that there is a problem with that, and that the assurances we have received at the Dispatch Box have been false?
I am happy to assure my hon. Friend that the Government’s policy has always been to leave with a deal on 29 March, and that the Government, and indeed the civil service, have busted every sinew to ensure that dozens of pieces of legislation have been brought forward, and dozens of contingency planning meetings have happened. However, he will know that the unpicking of 40 years of legislation and co-operative economic relationships after the triggering of article 50, with a two-year ticking clock, would test the resolve of any Government. It is extremely unfair of him to suggest that no-deal preparation has not been done effectively. What has been done effectively is mitigation against the worst impact of a disorderly Brexit.
No, I will not give way. I encourage my hon. Friend to read what has been published today in response to a request from the House of Commons about the economic impacts of a no-deal Brexit, to see how very damaging a disorderly Brexit would be. Of course, as I say to him and all Members, the way to avoid a no-deal Brexit is to vote for the deal and deliver the Brexit that so many people voted for—as it has been Government policy to honour the referendum—so we can leave with a deal on 29 March.
I am sure that the Minister did not mean to, but she inadvertently put words into my mouth. I was not suggesting that efforts had not been put into making sure we did not leave in a disorderly way. I just referred her to the fact that Minister upon Minister—and indeed the Prime Minister—assured us that we had two years of no-deal preparation and would be prepared on 29 March for no deal, should that be the logical conclusion of triggering article 50. I hope that the Minister is not going against the Prime Minister and suggesting that we will not now be ready.
I fear that we are splitting hairs about definitions of readiness. Of course what we are doing today, as we have done on many other occasions, is ensuring that we have the necessary regulations and preparations in place to mitigate the worst impacts of a no-deal Brexit. Unfortunately there are some aspects of a no-deal Brexit that we simply cannot resolve, despite the efforts of the Government, or efforts in this House. I refer my hon. Friend again to my comment that the best way to avoid having to face any of the impacts of a disorderly no-deal Brexit, prepared or not, is to vote for the deal. I am assured by many colleagues that sensible people like him understand that prospect, and that we face a disorderly Brexit or no deal, which would be an absolute derogation of our parliamentary duty. I look forward to voting on the deal with him in due course.
With that, I feel, if you will forgive me, Sir Graham, that we are well outside the boundaries of the debate, and on that basis I shall conclude.
On a point of order, Sir Graham. I have to put it on record that the Minister suggested that I would support the withdrawal agreement with her in the Lobby, and that I will support it as she suggested, provided that we sort the backstop out, as has been my position and that of many of my hon. Friends for some time—with your help, of course.
That is not a point of order.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Electricity and Gas etc. (Amendment etc.) (EU Exit) Regulations 2019.
Draft Electricity Network Codes and Guidelines (Markets and Trading) (Amendment) (EU Exit) Regulations 2019
Resolved,
That the Committee has considered the draft Electricity Network Codes and Guidelines (Markets and Trading) (Amendment) (EU Exit) Regulations 2019.—(Claire Perry.)
Draft Electricity and Gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019
Motion made, and Question put,
That the Committee has considered the draft Electricity and Gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019.—(Claire Perry.)
(5 years, 6 months ago)
General CommitteesIt is a joy to see you in the Chair, Mr Evans. I begin by thanking the Minister for agreeing with the recommendation of both the House of Lords and the European Statutory Instruments Committee, which considered this collection of eight different measures and asked the Government to think again about using the negative procedure. If the Government had their way, there would have been no debate whatsoever about any of these important matters.
The Minister told the Committee that these are just technical amendments, that there is nothing to see here and that we should all be happy not to be bothered by a series of tiny law changes. However, those of us who have been in the House a long time and know all about the general approach of the Conservative party to workers’ rights legislation want to check it out anyway. A little later, I will outline some things that it would be helpful for the Minister to clarify in her response.
Let us look at what these two sets of statutory instruments do. The first is for Northern Ireland, which of course does not have a functioning Executive at the moment, and therefore legislation is effectively being made for it without its direct say-so. The second set applies to the rest of the country: England, Wales and Scotland.
The European Statutory Instruments Committee noted that the regulations amend four employment Acts to remove the power of the Secretary of State to make secondary legislation implementing EU employment directives. That is good, one might think, but that is four employment Acts changed by this collection of legislation. The Committee also felt there is a policy vacuum in what will replace the powers being taken away.
Section 79(3) of the Employment Rights Act 1996 is about the parental leave framework, and it will be repealed. Section 19(4) of the Employment Relations Act 1999 is about part-time work, and that will be repealed. Section 45(4) of the Employment Act 2002 is about conditions of employment, framework agreements on fixed-term work and the application of terms and conditions of employment and matters that arise because of the UK’s obligations under that particular EU directive. That will be repealed. Section 42(5) of the Employment Relations Act 2004, which has provisions about information and consultation, will be repealed.
The Government could have done other things. They could have tweaked rather than repealed all those things. Why have they decided to repeal? Why have they decided to tweak in other ways, such as by saying “TUPE-like”, rather than just cutting and pasting existing requirements and protections into UK law? I am alarmed that the Government felt they could bring forward this legislation without the Minister coming here to give us a lot more information about the Government’s approach.
It is about not only putting the same rights into UK law, but saying a bit about the loss of updating rights for the future. What, for example, is the Government’s intention, as the hon. Member for Glasgow South West has noted, on shadowing future rights that the EU may decide to grant its citizens, particularly in the gig economy? We know from experience that this Government have done little in the nearly nine years they have been in existence to aid and assist those who work in the gig economy. That has been left to unions such as the GMB, which has pursued Hermes through the courts to get those who work there the employment rights they should have been granted at the outset.
We know that other unions are pursuing employers such as Pimlico Plumbers and various other non-gig employers that are attempting to say that they do not have anyone working directly for them. Somehow all those people are self-employed and therefore have to pay for their own pensions and holiday pay. They do not get any sick pay or any other access to the basic protections we would expect every worker in the UK to get as a matter of common decency. Again, the Government have stood by and done absolutely nothing to protect those rights. They have made clucking noises about it and released the odd press release about how they are very concerned, but they have not done anything to make those rights accessible and available.
In fact, the coalition Government introduced employment tribunal fees, which effectively made it impossible for those with issues to enforce the rights they thought they had under UK law. They effectively dismantled what was left of the employment tribunal system by starving it of resources, so waiting lists were massively long and the only people who could really afford to get their statutory rights enforced at all were trade unions members who could afford to wait for a very long time and those who could risk their own money simply to try to get their basic rights enforced in the UK.
Of course, the Government also introduced the Beecroft report, which basically said that all maternity rights, and most employment rights, are a burden on business and ought to be abolished, and that everyone should fend for themselves.
It is very hard, looking at these transitions of EU regulations into the UK statute book, to take the reassurance of anyone from a Government with such a record that we can rely on the blandishments they might issue on the Floor of the House. We want to see proper law, proper debates and proper employment rights. We also wish to see an enhanced capacity for those organisations to allow workers to access their rights, thereby making those rights a reality.
So we come again to the Government’s record in that respect. The Trade Union Act 2016 made it virtually impossible for trade unions to operate without being caused enormous organisational problems and expense, which is a particularly vindictive approach to organisations that were created to ensure that workers can access their rights.
Many Conservative Members have said that, somehow, there will be freedom when we leave the European Union, but I could be forgiven for thinking that that will inaugurate a race to the bottom on rights. There will be competition in how exploitative we can be to those who work in what is already—let me put it this way—a very flexible economy, in which many people now struggle even to achieve basic pay, conditions, pension entitlement, sick pay, holiday pay and the rest of it.
We will look at the colour of the legislation, but I note that the Minister initially tried to get these statutory instruments through without even having a debate. Labour Members continue to look very closely, with a great deal of scepticism, at what is actually happening here, and whether there will be another attempt further to ratchet down the rights that people enjoy in our labour market.
I gently say that those of us on the Government Benches have listened to these allegations that we all have it in for workers’ rights, but nothing could be further from the truth. We are actually very proud of our track record on workers’ rights, and we stand by it. Although we may be silently listening to this long line of allegations, it does not mean that those allegations are true. We can stand proudly on our track record. I thought I would put that on the record, because otherwise a person listening in from outside this place might go away with the wrong impression. At the end of the day, actions speak louder than words.
I am glad to have provoked the hon. Gentleman to get to his feet and make that fairly fantastical claim, when 60% of people in poverty are actually in work, and when we have seen a huge increase in the number of people on zero-hours contracts, or on contracts so flexible that they cannot put food on the table at the end of the week.
Absolutely. We all remember the horror with which the Thatcherites perceived the appearance of Monsieur Delors at the Trades Union Congress, when he actually said that there was a social justice aspect to the European Union and that, of course, if there is a free market in the EU, there also has to be cross-border workers’ rights. Anyone who looks at the record will know exactly what to expect from the deregulators who form the core of the Brextremist Members of the Government party. They are positively salivating at the chance to cut further people’s entitlements in the labour market. They have always hated the idea that there was a floor below which they could not take workers’ rights, even when they were in government.
The hon. Lady talks about social rights, yet she tends to turn a blind eye to the fact that within the EU—certainly on the continent—unemployment is nearly twice the level that it is here, and youth employment in certain countries runs up to 50% and above, which is an absolute disgrace. That is not social justice. There has to be an element of balance in the hon. Lady’s remarks if she is comparing our track record with that of the EU on the continent.
The hon. Gentleman makes an interesting comment. He looks at countries such as Spain, which has had a particularly difficult time with youth employment, and southern countries, but does not mention Germany or Sweden or any of the other places—[Interruption.] Let me finish the sentence. He does not remember any of the other places where there is a much less exploitative approach to skills, training, work and opportunities, and where they manage to create a much more productive economy, with a much happier workforce, which does not feel that it is being exploited.
I am afraid the hon. Lady was being selective again. I quoted the EU average unemployment rate, which includes Germany and France and the northern countries. Even taking them into account, the EU unemployment rate is twice the level of that in this country. When the hon. Lady talks of productivity, she has got to be careful. If we are employing a greater share of the workforce, productivity will go down. Halving the unemployment rate is often done among low-skilled workers.
Order. Before the hon. Lady responds, I would just say that the discussion is going a bit wide of the mark. We could turn this into a general debate, but that is not what we are here for. If we could focus on the statutory instruments, that would be really useful.
(5 years, 7 months ago)
General CommitteesIt is a pleasure to serve under your chairpersonship, Sir David. It is with deep regret that we find ourselves in a situation in which we are even considering leaving the EU with no deal—a decision that would have enormous political, social and economic impacts on the UK. There is no majority in the House for such a course of action. With 40 years’ worth of intertwined regulation and policies, the proposals introduced by the Government risk cutting the vital cross-border work that is so fundamental to the protections that our citizens enjoy.
Will the hon. Lady give some concrete evidence, rather than speculating, that leaving on WTO terms, on which we trade profitably with the rest of the world, would mean us being unable likewise to trade profitably with the EU, given that all the projections of fear and economic gloom predicted when we simply voted to leave have transparently been proved to be wrong?
I think it has been made clear by many experts, including at the Bank of England, that, should we crash out with no deal in a few weeks’ time, the economy will shrink by about 8%. We are here today to look at spending many millions of pounds.
This is the same Bank of England that predicted economic woe if we voted to leave the European Union, suggested there would be 500,000 extra unemployed people by December 2016, and then had to apologise very publicly for getting it so wrong. I would caution against the hon. Lady quoting the Bank of England, because it got it so wrong last time.
Before this continues, I remind Members that this is not an opportunity for a general debate on whether we should be leaving the European Union. The circumstances of this delegated legislation are very tight, so I remind hon. Members to keep their remarks specifically to the legislation we are discussing.
The statutory instrument before us talks about UK enforcement, and that, through our UK enforcement agencies, which are already registered under EU law, will be retained under UK law. As always, this Government and our enforcement agencies are committed to the protection of consumers in this country and will do whatever they can, in the event of no deal, to ensure that the relationships with our European neighbours will be maintained as far as possible, but obviously a lot of that will rest with the EU and how it wants to deal with us after EU exit.
The additional point, in answer to the SNP, is surely that we will have control over our own laws more and therefore can even enhance consumer protection within these shores—rather than following on the tails of the EU—and no doubt there will be many areas in which we do that.
I thank my hon. Friend for his comment; he is quite right. There are examples of where UK consumer law is superior to EU law in some elements, and this Government are committed to doing that. We will be able to maintain and, obviously, change our laws. Any EU provider selling into the UK market—whatever the product or services—will still have to comply with UK law and therefore be subject to UK enforcement agencies.
Question put and agreed to.
(5 years, 8 months ago)
General CommitteesI thank my hon. Friend for his intervention; he raises a very good point. Although the statutory instrument will remove the shared jurisdiction, part 28 of the 2006 Act still places a duty on the UK to co-operate with any country or territory on mergers. While the SI will remove the reference to the EEA, we will not remove the continued co-operation of the UK regime with other countries and territories.
The panel is currently consulting on the application of the takeover code in the light of the loss of the shared jurisdiction regime. It proposes to supervise takeovers concerning only companies that meet the residency criteria set out in the takeover code.
The second feature of the draft regulations relates to the duty to co-operate. Section 950 of the Companies Act places a general duty on the Takeover Panel to co-operate with its counterparts and certain other regulatory agencies in any country or territory outside the UK. It also imposes a specific duty to co-operate with supervisory authorities in the EEA, which is derived from the takeovers directive 2004. After our exit, EEA member states will no longer be bound to co-operate with the UK under the directive. The draft regulations will therefore remove the specific obligation to co-operate with EEA supervisory authorities, as it will no longer be reciprocal. However, the Takeover Panel will still be required to co-operate with the authorities of EEA member states under the broader duty to co-operate with any international supervisory authority with an equivalent role. This change will not, in practice, constrain the panel’s ability to co-operate.
The final feature of the draft regulation relates to restrictions on the disclosure of confidential information. Section 948 of the Companies Act restricts the disclosure of confidential information obtained by the Takeover Panel during its duties and sets the conditions under which information can be shared. It applies to both the panel and the organisations with which information is shared. Breaching the section 948 restriction is a criminal offence.
The Companies Act provides an exemption from the section 948 restriction for EEA public bodies using confidential information disclosed by the panel for the purpose of pursuing an EU obligation. These EEA public bodies are bound by their own national laws and by EU law to prevent the inappropriate disclosure of information passed to them by UK authorities. After our EU exit, these reciprocal protections will no longer apply to the UK. The draft regulation will remove the specific exemption from the section 948 offence for EEA public bodies and ensure that there is a sanction to deter inappropriate onward disclosure of sensitive information.
Just for clarity, once we leave the EU, will whatever duties there are on the UK to co-operate in a takeover situation be reciprocated by the EU, so that there is an element of co-operation on matters of this sort? In other words, will there be reciprocity across the divide?
I thank my hon. Friend for his question. My understanding is that we are obviously bringing the EU regime as it stands into UK law, including the duty to co-operate with countries, and I expect that that will be the case.
I thank the Minister; she is being very generous. I get that we will be taking EU law into UK law. We will co-operate, because we will have taken that legislation into our own, but I want clarity on whether the Minister is confident that there will be reciprocity when it comes to the EU co-operating with us? As the Minister well knows, takeovers can go both ways.
It is my understanding that that will be the case. If I am incorrect, I will of course correct the record. As I have outlined, we currently have an obligation to co-operate, which is in the interests of those countries. However, we are talking about a small number of organisations that would fall under this requirement.
The regulations before the Committee are the product of close working with the Takeover Panel to provide a free-standing statutory underpinning for the UK takeover regime in the event of a no-deal exit. Corporate mergers and takeovers are an important part of a healthy economy. By encouraging efficiency gains, spreading knowledge and promoting innovation, they drive economic growth and job creation.
It is vital that we seek to safeguard the legal framework that gives companies and their shareholders the confidence to engage in merger and acquisition activity. The regulations achieve that goal by making only the changes needed to fix deficiencies in UK law arising from EU exit. They do not otherwise alter the operation of the UK’s takeover regime. They will have a negligible overall net effect on our economy. I commend the regulations to the Committee.