Since the treaty of Rome in 1957, member states have been banned from giving companies or industries special help that would distort competition. Governments cannot hand out subsidies, tax rebates or take stakes in companies “unless it is justified by reasons of general economic development”.
Some claim the UK is looking to bend these rules as it looks to invest in new technologies.
Matthew Lesh, the Head of Research at right wing think tank the Adam Smith Institute, warned this week that the Prime Minister would be making a “huge mistake”.
He added that “Britain is on the verge of punching herself in the face in order to have the freedom to shoot herself in the foot”.
Mr Lesh highlighted that Business Secretary Alok Sharma said recently that the UK would maintain flexibility to “intervene to protect jobs and to support new and emerging industries now and into the future”.
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