Freedom for the City of London:
Neo-liberal straightjacket for the productive economy
Full details of the Chequers Agreement will only be known when it is published in full as a White Paper later this week and ahead of the next round of negotiations with the EU on Monday 16 July.
However, the outlines are clear from the statement by the prime minister and also the resignation letter from David Davis.
Britain will now offer the EU a customs arrangement that will cover manufactured goods and agricultural commodities but not services. Goods and agricultural products would be traded within the terms of the Single Market.
This will require compliance with EU Court of Justice decisions (including those that make it illegal to take strike to require overseas based contractors to pay locally bargained wages) and all requirements of EU competition law: no state aid, no public sector monopolies (comprehensive state ownership), no requirement for public sector contracts to exclude blacklisting firms or to require collective bargaining and local purchasing.
Financial services, however, would be free from EU regulation – particularly limits on leverage and taxes levied on transactions. Britain would also have the freedom to negotiate trade deals for services outside the EU – but not for goods.
The terms are effectively those outlined in the Financial Times on 17-18 May as being welcomed by the City and business and which have been independently developed by the Treasury ahead of the Chequers summit – triggering Davis’s resignation.
Barnier’s initial response indicates that he may accept this new position as a basis for negotiation. In terms of its wider political consequences it will address what the Times reported on 7 May as the major concern of ‘senior EU officials’: the impact on the EU’s internal cohesion of a Labour government adopting pro-worker developmental policies involving public ownership and state aid.
It is therefore incumbent on all who support radical options for Scotland and Europe, and who do not want to be tied into a neo-liberal future by either the Tories or the SNP’s Growth Commission report, also based on Single Market membership, to speak out now against this undemocratic deal.