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It has been routinely asserted that Labour's 2017 election programme is incompatible with 'neoliberal' European law. Here, two senior European competition lawyers take issue with this assessment. They offer a comprehensive legal analysis of the 2017 manifesto, grounded in a historical and politicaleconomic argument that European rules are not hostile to nationalisation, and seek instead to promote the 'social market' economy favoured by German and Scandinavian social democrats.
In recent years, a socialist critique of the European Union has returned to prominence on the British left. The Bennite heritage of the Labour leadership, the difficulties of the Eurozone and the ideological exhaustion of neoliberal globalization have broken a tacit pro-European consensus, exposing divisions that continue to frustrate the formation of a coherent long-term European policy. An account of the European Union that portrays it as a single-mindedly free market institution, implacably hostile to a transformative politics in Britain, has been put forward by a range of influential figures - from the Guardian's Larry Elliott to Harvard University's Richard Tuck and Renewal's own Joe Guinan.
As part of this argument, it is commonly asserted that the radical moves towards public ownership in key utility sectors, demanded by Labour's popular 2017 manifesto, would be incompatible with EU law. A 'hard' Brexit, completely separating the UK from the legal framework of the European economy, would therefore represent the only path towards the implementation of Jeremy Corbyn's social democratic agenda for Britain.
As lawyers specialising in European competition and state aid rules, we have undertaken a study of the manifesto that leads us to disagree with these assessments. Addressing the specific history, content, and application of EU rules, as well as their relationship with the longstanding policy preferences of other member states, leads us to conclude that EU state aid laws do not prevent a future Labour government from introducing necessary radical reform of the British economy.
This article seeks to offer a more complete explanation of the nature and purpose of EU state aid rules. Their primary goal is not to embed neoliberalism, but rather to protect a European-scale single market. Their genesis lies in a post-war response to the ruinous beggar-thy-neighbour policies of the 1930s. Their design requires that state aid is channelled to support the...