“But EU state aid is very flexible. At the moment the UK is in the lowest quartile for state financing of economic actors. It would increase state aid four-fold to £61billion about twice the size of the defence budget and still be within EU rules.
“EU rules do not prevent member state governments from focusing aid on their own legitimate policy objectives including regional development which could help the so-called ‘red wall’ seats in de-industrialised regions of the north and Midlands.
“As it is, the EU has increased state aid to €2.9trillion (£2.6trillion) to be spent on 288 programmes in response to the COVID pandemic’s hit on the economy. It is surely possible for Barnier and Frost to find words that allow the UK far more leeway in increasing state aid in response to COVID to meet Johnson’s and Tory MPs’ demands and he can then proclaim this as a victory for his tough line and bring back a bit of paper to declare he has won the Battle of Brexit with Europe.”
The same is true for fishing, Mr MacShane added.
A crude extension of UK territorial waters to 200 nautical miles around the UK coast won’t work, Mr MacShane noted, as most British fishing boats are owned by foreign firms and 30 percent of on-board fishing workers are EU citizens.
He explained: “In any event 60 percent of all the UK catch is sold to Europe so there is little point in having a fishing war with the EU if UK based trawlers cannot sell their catch.
“For centuries British, French, Belgian, Dutch, Danish, German and Spanish fishing communities have co-existed even with some friction at the edges. The need to preserve fish stocks, which is what the EU Common Fisheries Policy now mainly does, iis important to British fishing communities and 12,000 men and women who work in fishing as any other country. Again, it should be possible to set up a new regime based on quotas and regular reviews that can satisfy most fishing communities.
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