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May's white paper is a deeply dangerous document

THERESA MAY’S white paper on EU withdrawal is a deeply dangerous document which should ring alarm bells for everyone on the left. It should do so equally for anyone concerned with the future of the British economy.

The white paper locks manufacturing, agriculture and fishery products within EU regulations in perpetuity. It keeps services, above all financial services, outside. This can only lead to a continued run-down of Britain’s productive economy and a further rise in an ultimately unsustainable finance sector.
The political consequences are equally disastrous.

The white paper would block the Labour Party’s radical industrial programme. Labour’s promise of public ownership and state aid for industry has done more than anything else to galvanise support for Jeremy Corbyn and for the reborn Labour Party.  

It has also raised political hopes for the left across the EU — at a time when the right and the extreme right are in the ascendant. As revealed in the Times on May 7, a key concern of “senior EU officials” involved in the negotiations has been the potential impact of Labour’s programme of state aid and public ownership on internal political cohesion inside the EU.

They fear the ability of a Labour government to regenerate regional economies, use public procurement for public betterment, require regional purchasing, impose collective bargaining and ban blacklisting employers.  

This is the kind of the political alternative wanted by the left and the trade union movement in Spain, Italy, Greece, Belgium and France.
And it is precisely what Theresa May’s white paper will stop.

Nothing could be more misleading than her statement yesterday that the white paper “absolutely delivers on the Brexit people voted for. They voted for us to take back control of our money, our law and our borders and that’s exactly what we will do.” For virtually all that matters in the economy, “our law” will remain EU law.

On financial services the white paper boasts that Britain has more than any other nation. It does. It transacts 37 per cent of all global foreign exchange trade, 16 per cent of cross border trading and 38 per cent of interest rate derivative trading.  

But the great majority of this is done by banks and finance companies owned and controlled from outside Britain. Britain also hosts a disproportionate number of hedge fund operators.

A last minute change in the white paper, made on Wednesday, delaying the printing and causing the Commons’ chaotic suspension yesterday, has removed the obligation to follow EU directives on financial services.  

According to the Financial Times last week, a powerful lobby had developed that was fearful of tougher EU regulations in the future, once Britain’s vote was removed, that would curb speculative profits. This last minute change shows its political power.

Will the new commitments ease the immediate problems of manufacturing industry? Perhaps. For the big, mainly externally owned, companies in motors and aerospace it will make it easier to manage supply chains. But at what cost?

It is a total myth to say that all is well in British manufacturing. Productivity is lower than in 2007, currently still falling, and much lower than in most competitor nations.  

The reason is a lack of investment as profits are sucked out of industry into the financial sector. Only state intervention can reverse this.

May’s white paper is truly undemocratic. It will effectively reverse the referendum result and will end our freedom to elect a government committed to public ownership, to an effective industrial policy and to reversing a generation of neoliberal attacks on working people. 

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