Historical Perspective on the State Aid Controversy

21 09 2020

One of the major stumbling blocks that has emerged in the negotiations over an EU-UK trade agreement is the UK’s government insistence on the end of the EU rules that restrict its ability to aid British companies (see here, here, and here). Some of us here in the United Kingdom are extremely concerned that that there will be an increase in “corporate welfare” once the European Union’s restrictions on state aid to private firms cease to apply to the British government, which will occur when British government policies are no longer subject to review by the European Court of Justice. Some of the more interventionist-nationalist Conservatives support Brexit because it will give British policymaker “subsidy freedom”.

In this context, the publication of new paper by David Clayton and David Higgins on the historical backstory is particularly timely. ‘Buy British’: An analysis of UK attempts to turn a slogan into government policy in the 1970s and 1980s.’

Abstract: This article uses newly available state and business records to investigate the effectiveness of Buy British policies when Britain was a member of the EEC between the early 1970s and the mid-1980s – a period of rapid import penetration and deindustrialisation. We show that government pursued a range of overt and covert measures to combat these economic problems. Overt measures sought to encourage domestic consumers to buy British; covert measures, involving nationalised industries and public procurement, attempted to encourage British firms to source domestically. The article contributes to the emerging business history literature on how Member States tried to exploit loopholes in EEC competition and commercial policy, and it provides new evidence on UK consumer preferences for domestic and imported manufactures.


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