Expert View

Brexiters yet to clock May’s surrender on competition rules

by David Hannay | 08.03.2018

David Hannay is a member of the House of Lords and former UK ambassador to the EU and UN.

One of the less noticed sections of the prime minister’s Mansion House speech last Friday said the UK “may choose to commit some areas of our regulations, like state aid and competition, to remaining in step with the EU’s”.

It was an example of this speech being a lot more pragmatic than its Lancaster House, Florence and Munich predecessors. And it probably represents a bow to the inevitable, since it is hard to believe that the other 27 EU countries would agree to the sort of deep free-trade agreement the government wants while leaving us free to do what we liked on competition issues and to hand out state aid as we wished.

But have the government’s Brexit supporters, who are so keen to avoid “nit-picking”, really understood the implications of this commitment? Doubtful.

Both the EU’s competition policy and its decisions on the legality (or illegality) of state aid are entirely in the hands of the Commission. It reaches its decisions in these policy areas autonomously, without any say for member states. If a company or government does not like what the Commission decides, then the only recourse is to appeal to the European Court of Justice whose rulings are final.

Moreover the Commission reaches its decisions in both these policy areas after holding lengthy enquiries behind closed doors. Once we have left we will have no representation in either the Commission or the ECJ. This hardly looks like an institutional framework that is even remotely consistent with taking back control.

And how, anyway, is it to be done? Only, one imagines by removing all autonomy from our own national competition authorities. That is what Norway does as a member of the European Economic Area, but in return they get the prize of being effectively part of the EU’s single market. Being outside that single market is one of the few red lines May seems determined neither to blur nor to dump. Odder and odder.

So, as we move into the key phase of the Brexit negotiations, it becomes ever clearer that the detailed outcome will be less beneficial to us than our present status. Being able to wear a badge saying “We are proud not to be a member of the European Union” seems to be coming at a high price.

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    Edited by Luke Lythgoe

    2 Responses to “Brexiters yet to clock May’s surrender on competition rules”

    • the UK competition authorities wont have “all their autonomy” removed if this happens; they will still decide on mergers that fall beneath EU thresholds and deal with national cartels and abuses of dominant position . But in the latter area it will be EU law that they will be following. The UK will have no say on its development because it cant be a member of the European Competition Network of competition authorities as it is not a member state ; nor can it have a judge at the ECJ for the same reason.

      unless of course the EU agrees to this in the ” treaty” the PM envisages

    • Is the point not that after the UK has “taken back control” any obligations made in order to get the brexit deal through parliament will be up for grabs? It seems to me that the hard brexiteers will let May away with almost anything provided it is all reversible after the transition period.