Brexit has reopened a divide within the Tories that cannot be bridged
Splits over food standards are really the latest front in the age-old battle between free trade and protection
If one issue down the decades has been guaranteed to cause upheavals in the Conservative Party, it is protectionism. The great schism of 1846, following Robert Peel’s repeal of the Corn Laws, kept the Tories out of office for 20 years as free traders and landowning farmers split. In the early 20th century, efforts to secure preferential tariffs for British and Empire agricultural products caused another rift. The UK’S entry into the Common Market in the early 1970s was dominated by arguments over the impact on Commonwealth farmers of the EEC’S trade barriers.
Now that we have left the EU and are negotiating trading arrangements with the bloc and other countries, these internal arguments have broken out once more. Cabinet ministers have reportedly been at loggerheads over how to honour election commitments to uphold food production standards in a trade deal with the United States.
This has been sold to the country as a determination to keep “chlorinated chicken” off the supermarket shelves, as though the rows and rows of cheap, home-bred poultry, all weighing in at 4lbs 2oz, have been leading the life of Riley before getting the chop. In reality, it is protectionism masquerading as a food standards issue since nothing associated with the US processes will harm anyone. This is about backing British farming against the might of America.
Minette Batters, president of the National Farmers’ Union, has gone so far as to warn of an existential threat to the entire industry if it faced unfettered competition from the US, because domestic producers would find it impossible to compete on price.
The most annoying thing about this debate is the attempt to pretend it is something else. Ministers fall over themselves to deny it has anything to do with protectionism even as MPS are targeted for failing to “stand up for British farmers”. Why not admit the intent and take the argument from there? Protecting domestic agriculture from cheap imports is hardly new. Free traders must acknowledge that farming is no less vulnerable to competition from outside than steel or coal or shipbuilding, all of which have gone under in the past 30 years.
At issue is which is more important: the industry or the consumer? Free traders following the Ricardian principles of comparative advantage maintain that an overall increase in economic welfare is achieved by importing from countries that produce goods more cheaply. But there is no point pretending this does not harm specific sectors. After the Corn Laws were repealed, domestic agriculture went through a period of depression in the late 1800s up until the First World War. Since the Second World War, farming has been shielded first by UK tariffs and then by membership of the Common Agricultural Policy.
We left the EU to forge free trade deals with other countries and yet at the first hurdle the old protectionist questions are being asked once more. One battleground is the Agriculture Bill which is to be given a second reading in the House of Lords today. In the Commons a few weeks ago, 20 Tory MPS rebelled by backing an amendment to enshrine in law existing welfare standards. The Government fought it off but it is likely to be revisited in the Upper House, where the Conservatives do not have a majority, and reinserted in the Bill, whereupon it will come back to the Commons. A major celeb-backed campaign is under way to ensure these protections are given statutory force.
The Government opposes this but insists it has no intention of watering down animal welfare regulations and will not accept imports from countries that do not observe our standards. Yet that may well scupper a trade deal with the US. Why would Donald Trump, or Joe Biden for that matter, want to sign an agreement that kept American livestock producers out of UK markets while allowing our lamb and beef farmers access to theirs?
It’s either free trade or it isn’t. A half-way house, whereby some goods that do not conform to UK regulations are subject to tariffs, is being explored but does not look promising. A leaked letter from No 10 instructing ministers to have “no specific policy” on animal welfare in US trade talks has heightened concern among farmers that a sell-out is on the way.
One reason why the proposed US-EU trade deal never materialised was because the Europeans would not allow tariff free access to American chickens which cost 20 per cent less to produce. Farmers say that is because they are kept in dreadful conditions so there is no level playing field. But we also have intensive poultry farming, if not on the same scale. World Trade
Organisation rules do not differentiate between the methods of production when it comes to trade deals.
Moreover, if US chickens are sold here and are properly labelled, no one has to buy them. But price is important for many consumers. Free-range chickens can cost four or five times as much as a broiler sold in a cut-price supermarket. The American birds may be cheaper still. In any case, a deal with the US also opens a huge market for UK farmers whose higher quality and ethical standards will be a marketing advantage in pitching for the custom of better-off Americans.
Under the Agriculture Bill, farmers will continue to receive most of the support they were paid under the CAP until 2022 through a series of transition arrangements that will also protect the environment and ensure high production standards. But, they ask, what will be the point of these if they are then left to the mercies of cheap imports from the US and elsewhere? In addition, if there is no UK-EU trade deal by the end of the year, their exports to Europe will become more expensive.
Are we really looking at the possible extinction of British agriculture? Aside from the impact on the livelihoods of farmers and the countryside they manage, it would be a serious matter, given how vulnerable this country – which imports 40 per cent of its food – is to a breakdown in supply lines.
If the vaunted free trade deal with America looks like foundering over agriculture, which way will Boris Johnson jump? He needs to land this deal, especially as talks with the EU are not going well. But he faces the age-old choice for Tory prime ministers: farmers or consumers? It will be hard to placate both, as Peel discovered.