Britain could triple state aid spending to industry without breaching EU rules, according to a study that compares government subsidies to promote economic growth across Europe.
EU state aid rules “do not prevent an active industrial policy”, the report found, giving the green light to the UK government for an increase in its £7bn of state aid to nearer £21bn.
The report by the left-leaning IPPR thinktank found that the EU’s state aid rules would apply to the UK once it had left the union because officials in Brussels would enforce the measures through a trade deal.
The IPPR director, Tom Kibasi, said: “If the UK government decided to match Denmark, it could invest £250bn over a decade in a more active industrial policy. That would give it huge scope to support key areas of the economy, whether we remain in the EU or leave it.”
The IPPR has not taken a view on Brexit, but its intervention in the debate over state aid will be keenly examined by Labour party supporters who voted to leave the EU.
Like the Labour leader, Jeremy Corbyn, many of them believed that rules imposed by Brussels would constrain a leftwing government from nationalising parts of…