Downing Street now thinks that the chances of a Brexit deal are down to 30 or 40 per cent, I say in The Times today. The sticking point is, rather surprisingly, state aid.
Since Margaret Thatcher’s election in 1979, the UK has been sniffy about the idea of government ‘picking winners’. It doesn’t use much state aid (less than half the EU average, according to the Commission’s figures), but the Johnson government doesn’t want to commit itself to something similar to the EU’s regime – it wants to use the power of the state to develop what it sees as the industries of the future. One figure with intimate knowledge of the negotiations and how they link to domestic policy tells me ‘state aid is critical if you are going to try and shape markets in technology’.
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