Boris Johnson launches new plan to woo Labour voters but is warned it risks trade deal with EU

Prime minister warned that new promise to reform state-aid rules 'incompatible' with agreeing comprehensive EU deal

Boris Johnson has launched a fresh bid to win over Labour voters, as he promised to make it easier for the government to step in to help failing companies after Brexit.

Speaking in London, the prime minister laid out a series of changes that a Conservative government would ensure were in place for 1 January 2021, when the Brexit transition period ends.

They include replacing the European Union’s state-aid rules, which govern how and when governments can step in to support failing companies and industries.

However, experts warned that the proposals would put the prospect of a comprehensive trade deal with the EU at risk.

Under the EU’s rules, which are designed to ensure fair competition, governments must seek permission from the European Commission if they want to step in to directly help struggling firms or industries.

This can slow up the process, with the Tories pointing out that it took the commission 50 days to approve UK government plans to cut tariffs for the steel industry in 2015.

The Tories said their proposals would allow decisions to be taken “within days”, although they said any interventions would be limited to industries that are struggling through no fault of their own.

Mr Johnson said the “ramifications of state-aid rules were felt everywhere” and gave the example of school bus services.

Announcing the Tories’ proposed changes at a press conference in Westminster, he said: “We’ll back British industry by making sure we can intervene when great British businesses are struggling.”

He added: “I’m not in favour of distorting competition, I don’t want to see unfair practices introduced. I want to see a level playing field.

“But when I look sometimes at what EU rules have meant for UK companies – and I saw examples the other day up in Teesside of how fantastic British business was finding it very difficult to develop our potential in wind-turbine technology because of EU rules – there will be ways in which we can do things differently and better.”

However, experts warned that the change would make it difficult to strike a comprehensive trade deal with the EU.

Marley Morris, associate director for trade and EU relations at the IPPR think tank, said the state-aid plan was “one of the more outlandish proposal of the general election campaign” so far.

He said: “It’s just so directly opposed to what the EU’s expectations would be in relation to a future trade agreement.

“This proposal is saying, as far as I can see, that the actual treaties that govern state aid would be changed dramatically and we’d no longer be following the EU’s rules on state aid.

“That’s exactly what the EU are concerned about and exactly what the EU said wasn’t possibly under Theresa May’s withdrawal agreement. It’s very clear that they would do the same in any future trade agreement.”

He added: “If Boris Johnson wants a zero-tariffs, zero-quotas trade deal with the EU, I really can’t see how it’s possible to alongside these proposals because ultimately he’d have to sign up to the EU’s state rules to get that trade deal. State aid is the thing the EU is most concerned about.”

The other changes that Mr Johnson promised to have ready to come into effect at the start of 2021 include introducing a points-based immigration system, scrapping the so-called tampon tax and changing public procurement rules.

The announcement will be seen as a fresh attempt to win over Labour voters in seats in the midlands and the north of England that the Tories are targeting. A major poll published earlier this week suggested that Mr Johnson’s party is on course to win dozens of seats in traditional Labour areas.

However, the plans are also likely to go down badly with many of his Tory colleagues, who will demand that a Conservative majority government would allow for a greater shift towards free markets as opposed to more state intervention.