Robert Peston

David Davis’s latest Brexit red line could cause trouble

David Davis’s latest Brexit red line could cause trouble
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I am confused by what David Davis’s new principles to ensure fair competition between Brexit Britain and the EU are supposed to achieve – especially the part on consumer protection. The Dexeu secretary said:

'The UK will continue to be a leading advocate of open investment flows after we leave the EU. But it cannot be that an EU company could merge with a UK company and significantly reduce consumer choice'.

Does this mean that he and the Government now regret the sale of our airports, trains, airlines, telecom companies, energy suppliers and so on to huge businesses from Spain, Germany, France and the rest of the EU? Is he saying that the Competition and Markets Authority, created by the coalition government, doesn’t already have the powers to prevent takeovers that harm competition and damage consumers? Is this a coded threat to the rest of the EU that if Brexit talks go badly the UK Government will shut EU companies out of the important UK market? Or is it a tedious truism, that any future Tory government would do its best to protect households from the rapacious habits of over-mighty companies? Answers, please!

I am clearer on why Davis also made the argument for both the EU and an independent UK to continue to oppose state subsidies of businesses – given that there is a respectable case that subsidies distort competition, harming both consumers and innovation. To be clear, it is not open and shut, in a world where commercial finance is too short-termist. But it is consistent with orthodox government policy for 40 years.

That said, this new putative red line might be seen as eccentric if he and Theresa May want Parliament to back whatever outline deal they succeed in negotiating on the UK’s future relationship with the EU. Because pretty much Corbyn’s and Labour’s only problem with the UK remaining in the EU or its single market is their fear that, in doing so, they would not be able to subsidise favoured industries in the way they would like. So if May’s version of Brexit would also prohibit such subsidies, at that point Corbyn has nothing to lose from conceding to the pressure of his members – and shifting his party to full-blooded and full-throated support for single-market membership and another EU referendum. Which in turn makes it more likely that MPs and Lords will eventually reject the Brexit deal May and Davis hope to woo them with in the autumn.

Davis, perhaps more than any other minister, knows that delivering Brexit means sacrificing ideology and theology on the altar of what is possible. So it is slightly odd, and perhaps self-harming, that he has suddenly got religious on subsidies.

P.S. a friend of Davis has now got in touch to provide the 'why'. He says:

'It’s not about going religious on subsidies it’s about tabling that level-playing-field issues go both ways. It also helps reassure some of the supportive member states, who fear the direction of the EU after we leave – and it shows we are aware of their fears and will use any influence we have (to continue to promote competition both in the UK and in the EU)'.

Makes sense.

Robert Peston is political editor of ITV. This was originally posted on his Facebook page.

Written byRobert Peston

Robert Peston is a British journalist, presenter, and founder of the education charity Speakers for Schools. He is the Political Editor of ITV News and host of the weekly political discussion show Peston.

Topics in this articlePoliticsbrexituk politics