Paul Mason, writing in the New Statesman last week, gave a nice rendition of Jeremy Corbyn’s rule-maker-not-rule-taker position. Mason, like Corbyn, focuses on the EU’s regulations on state aid, which both men claim conflicts with Labour’s plans.
Mason makes a kind of have-your-cake-and-eat-it argument. But unlike the sunny Tory-Brexit vision of the benefits of being in and being out both arriving effortlessly, Mason demands having the cake and eating it.
European law places substantial restrictions on subsidising and aiding individual companies, though there is considerable disagreement as to whether the measures in Labour’s platform would fall foul of this: for a view contrary to Mason’s see Biondi and Tarrant. What is clear to all is that the rules on state aid are evolving through the EU’s internal processes, and that leaving the EU would mean leaving losing influence over the evolution of the rules. It is also clear that the closer the UK remains to the EU – is in particular, the closer its integration with the Single Market – the more closely it will need to align with EU regulations, not least those on state aid. That’s the quandry. Now see what Mason does with it.
Mason says he wants the UK to be in the Single Market but with an agreement which allows the state to “subsidise, aid, restructure and, where necessary, nationalise companies”. He recognizes that it is not clear whether, as things stand, EU state aid regulations would conflict with Labour’s programme, but he raises two spectres: one is that Brussels even now is planning to exact vengeance on the UK because it’s leaving, and that Brussels’ wrath would be redoubled with the advent of the long-awaited left-wing Labour government; the other is that Brussels will fall under the sway of a “right/far-right coalition” (though the far right of course is also hostile to the EU’s state aid restrictions…).
So what does Mason want, in return for his support of remaining under single market rules? “I want an advance, legal and binding agreement that European rules will not now, and cannot in the future, sabotage a Labour government’s programme.” (the underlining is Mason’s)
Yes, and I want a unicorn for Chistmas.
Consider first that we’re talking about an international treaty. Treaties don’t work like commercial contracts – governments withdraw from them as they choose, and there’s really no way to hold them to account for it. And, as Mason correctly notes, the EU’s own treatment of the state aid problem keeps evolving. He frames the problem as one in which the UK, having renounced its right to help write the rules, should make its participation contingent on rules that are fixed for the UK, even as they evolve for other Single Market members. That simply won’t happen: “legal and binding” is a unicorn.
Second, even if HM Government could find and capture such a unicorn, Mason is writing as a partisan of a Labour party that does not have the privilege of negotiating the details. Whatever concessions this government does negotiate, they will certainly not be specially geared to facilitate the implementation of the Labour election manifesto. For the same reason, we can’t credit the Times’ report linked by Mason, of an anonymous “senior Brussels source” (how vague is that attribution) claiming that the “real battle” in the negotiations with Britain is over state aid rules due to Brussels’ fear of Labour: does the Times want us to think the reason for lack of progress in Brexit negotiations is that the Tories won’t let want Brussels protect Margaret Thatcher’s legacy from Jeremy Corbyn? The best explanation for the Times story is that it is an attempt to plant a meme helpful to the Tory soft Brexit camp, in their battle with the hard Brexit camp. But, Mason can use it to help the Lexit camp, too.
Third: even if there were to be a pre-Brexit general election which resulted in a Labour majority, soon enough that Labour could negoitate the final deal, and even if Brussels were not as determined as Mason claims it is to sabotage Labour, why on earth would the EU agree to allow any Single Market member to provide whatever state aid it wanted?
The fundamental reason for state aid restrictions in the Single Market is to prevent races to the bottom: mutually destructive subsidy wars. Countries can shield themselves from subsidy wars with trade barriers, but the Single Market abolishes those – that’s why the EU’s internal restrictions on state aid are so much more exacting than those of the WTO.
To accede to an unfettered right to “subsidise, aid…” UK companies, public or private, would be to let the UK act like a state or city in the USA, giving massive tax subisidies to particular companies in exchange for building (or not closing) a plant or an office. Read about the long-drawn-out beauty contest of American cities offering free everything to Amazon in return for the privilege of hosting its “second headquarters” (its home city of Seattle having become too small for the company), and bear in mind that this is just a high profile example of something that happens every day, all over the USA, starving public services of revenue, and undercuting small businesses that don’t have the bargaining power. Of course the EU would refuse to allow this within the single market: any any responsible government, Left or Right, would refuse it if it could, and the EU would have no reason whatsoever to offer it to the UK as it steps halfway out the door.
Mason is a clever and well informed person, who cannot possibly believe that his demand has any chance of being met. I believe that, technically, he is making what in the Trotsyist political tradition is called a transitional demand. That’s a demand that you know cannot be met. Often, of course, people make demands that won’t be met, as a bargaining position, expecting compromise. The transitional demand is different: it is made to be rejected, to demonstrate that the end you seek cannot be achieved within the current system.
Mason’s demand is meant to achieve nothing and, in its failure, to show Labour supporters that the UK has no place in the European single market. Unfortunately, Mason’s position is not far from that of the Labour leadership.