Labour’s ‘Buy British’ policy isn’t nostalgia – it’s a smart response to new realities | James Meadway

A pledge to use the state's 290bn procurement budget to buy from British companies is all about a future outside the EU

Whatever the patriotic gloss and 1960s-sounding slogan, the shadow chancellor Rachel Reeves's Buy British policy announcement is a genuinely smart response to a newly emerging economic consensus. Pledging that a Labour government would use the state's 290bn procurement budget to buy from British companies, provide funds for bringing supply chains back to the UK and seek improved agreements with the European Union on key trade pressure points such as professional qualifications, Reeves's package is the surest indicator yet that both parties have accepted the previous assumptions of decades of free-market, neoliberal" globalisation are shifting. Government intervention is back, in a big way, and the political arguments of the future will be about who can do it best, not whether it should be done at all.

Strikingly, this is the first major economic announcement under Keir Starmer's leadership that directly confronts Britain's future outside the EU. By insisting that government spending could be deliberately targeted to create secure, high-paying jobs and support domestic supply chains, the policy would run up against the EU's level playing field rules if Britain were still a member. When Jeremy Corbyn's Labour launched a similar initiative in summer 2018, promising to Build it in Britain, the howling from certain quarters about red Ukip" or worse pushed the party into a retreat. Now the country is decisively outside the EU, Starmer's Labour faces no such constraint.

James Meadway is director of the Progressive Economy Forum

This article was amended on 9 July 2021 to make clear that a government decision on Nvidia's bid to buy ARM awaits the outcome of an inquiry.