My latest piece on @ConHome on state aid, Brexit and the changing nature of the Conservative Party. To get a deal with the EU, at the very least the UK will need a robust & independent state aid regime. But is that what the red wall voters will want? /1 conservativehome.com/thecolumnists/…
As @pmdfoster reported this week, Dominic Cummings is leading the push for a minimalist state aid regime, saying once you have left the EU “you should just do whatever you want”. And red wall voters would favour an interventionist approach. /2
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Backing national champions & supporting businesses in the red wall might be popular, but it risks wasting taxpayers money & distorting the allocation of resources. Rishi Sunak should be making the case forcefully for a robust state aid regime. /3
And the EU won't agree an FTA unless they are reassured that the UK won't abuse state aid. It'd be very strange issue on which talks could breakdown - the freedom to subsidise private companies was never a priority for Thatcherite Eurosceptics. /4
It will be for the PM to decide. Go for the purist view of Brexit (“you do whatever you want”), embrace the new political alignment (with economically left wing voters backing Brexit-supporting Conservatives) and splash the cash in order to play to the Red Wall voters. Or ... /5
... keep open the possibility of a deal, look after the interests of taxpayers and maintain some kind of consistency with economic orthodoxy. Whichever way the PM goes, it will be a hugely consequential and revealing decision. /END
