Jeremy Corbyn told the BBC’s Andrew Marr Show today that he is worried single market rules on state aid would stop Labour pursuing its policies. This isn’t true.
The party could pursue virtually everything in its 2017 election manifesto without running up against EU rules. So this is not a good argument to stop Labour embracing the single market as a permanent arrangement, as more than 40 senior party figures argued this morning – or even staying in the EU completely if voters change their minds.
A report published in Renewal last week by two experts in EU law analysed the manifesto’s economic measures and found that 17 don’t even fall within the state aid rules. Another seven, such as the promise of more infrastructure spending, are likely to be exempt from the rules. Only two, the proposed state investment bank and regional energy suppliers, would even have to be notified to Brussels; and these could probably be structured in such a way that they got the green light.
Corbyn told Marr that he would have wanted to subsidise the steel industry. While that might have fallen foul of EU rules, he should realise that state aid could also contravene World Trade Organisation rules. If we sprayed subsidies at failing industries post-Brexit, we’d be rapidly shut out of both world markets and the EU’s market. That would be bad for jobs.
The Labour leader should also understand that the EU’s rules are designed to ensure fair play. They make it harder for multinationals to shop around to find the country willing to give them the biggest bribe.
The rules also make it harder for foreign countries to dump their subsidised goods on our market. It’s true that the EU didn’t stop Chinese steel dumping. But that’s because the Tory government blocked its proposals. The idea that the UK on its own would be better able to stand up to Beijing is for the birds.
Corbyn explained his concerns about the state aid rules by pointing to Greece’s inability to spend money as freely as it wishes to. But even he knows this is a bad argument. Athens is under special supervision, because the eurozone bailed it out after a massive debt crisis. This example is totally irrelevant to us. We are not even a member of the euro.
The Labour leader also said the EU pressurised countries to privatise their industries. He has got the wrong end of the stick here too. There are over 800 companies with state ownership in the EU, according to the Renewal report. The UK is the outlier in having so few.
Corbyn says he doesn’t want Britain post-Brexit to become an offshore tax haven or to see a race to the bottom in protections for consumers, workers or the environment. What he doesn’t seem to realise is that EU membership is the best guarantee against this happening. By standing shoulder to shoulder with like-minded countries, we are better able to resist the worst ravages of globalisation.