Brexit, the Tories, Labour: what sort of “State Aid”?

Submitted by AWL on 16 September, 2020 - 10:33 Author: Luke Hardy
EU flags

In the propaganda the government is putting out about their conflict with the EU over a Brexit Trade deal the Tories are making much of “State Aid” being a point of contention.

The EU’s State Aid rules are often a crux of Lexiter arguments for Brexit. They argue that State Aid rules will be used to stifle attempts to nationalise industries or intervene actively in the economy.

Another Europe Is Possible and socialist remainers like John McDonnell argued that the existing State Aid rules need to be reformed or scrapped as part of the “reform” programme of “Reform and remain”. But as of now is very little evidence these rules do stop such actions. The British government actively nationalised banks and parts of the rail network while part of the EU. The French government under Emmanuel Macron nationalised a shipyard in trouble.

Meanwhile Tory Brexiters have made very little noise about State Aid — until now we are told it’s one of their key sticking points.

This is complete hypocrisy. British governments of all stripes over the last 30 years have consistently being amongst the governments handing out the least State Aid in the EU, much less than Germany, France, and Italy.

There has been no evidence this is likely to change under Johnson.

In fact, according to the Financial Times, the UK trade deal with Japan signed on 11 September and loudly lauded by the right wing press has more stringent State Aid rules than the EU is proposing for an EU-UK trade deal.

How should the unions and Labour Party respond?

Of course we should call out the government’s hypocrisy and empty posturing. However we should call the government’s bluff, asking what specific State Aid they propose that would be denied by such a deal.

We should push our priorities for that “State Aid”, such as taking into public ownership transport, energy, communication and water as per Labour policy, and demand those priorities be included in talks with the EU. And nationalising the banks in line with TUC and FBU policy.

The government postures about State Aid because they think politically it puts pressure on Labour. Let’s make it instead pressure on the government to carry through with public ownership and interventions to save jobs and build public infrastructure.

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