The EU Internal Market Sub-Committee launches a short inquiry into the role of the level playing field in UK-EU negotiations, with a particular focus on state aid.
The Commission’s draft mandate for negotiations with the UK shows that the EU is likely to seek strong ‘level playing field’ commitments as part of a future UK-EU agreement. From the EU’s perspective, these would act as safeguards against the UK deregulating in areas such as state aid and labour standards, and so competing on unfair terms with the EU. The Government has indicated that, while the UK will maintain high regulatory standards, it will not accept any level playing field commitments beyond those generally included in trade agreements.
A key focus of the level playing field debate is the future of state aid control in the UK. There is, as yet, no legislation in place establishing a domestic regime after the end of the transition period. At the same time, if the Protocol on Ireland / Northern Ireland were to enter into force, EU state aid rules would continue to apply to the UK in respect of aid measures affecting trade between Northern Ireland and the EU.
Scope of the inquiry
As part of this short inquiry, the Sub-Committee intends to explore three related themes:
- What level playing field commitments are and how they operate in EU free trade agreements, especially as regards social and labour rights and state aid;
- The EU’s approach to state aid rules and possible reforms at EU level; and
- What opportunities are open to the UK in formulating its own state aid policy, in particular for supporting wider objectives such as "levelling up" the country and meeting climate targets.
The Sub-Committee expects to take oral evidence from late February through most of March, with a view to publishing a long letter to the Government in April.