Leaving the EU: State Aid, Public Ownership and Workers’ Rights — [Mr Philip Hollobone in the Chair]

Part of the debate – in Westminster Hall at 2:30 pm on 11th December 2018.

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Photo of Laura Smith Laura Smith Shadow Minister (Cabinet Office) 2:30 pm, 11th December 2018

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 benefitted 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 and those who work within those industries are rewarded properly for their labour.