Issue of the week: staring no deal in the face
A period of chaos is a given. But at what point do companies’ warnings turn into threats?
Food retailers have finally begun waving the “red flag”, said Jonathan Eley in the FT. “In the latest plea by big business against leaving the EU without an agreement”, the bosses of supermarkets including Sainsbury’s, Asda, Waitrose, M&S and Lidl wrote to MPS this week urging Parliament to avoid “the shock of a no-deal Brexit”. The letter doesn’t pull its punches, warning of “inevitable pressure on food prices” and supplies. Even if the UK Government doesn’t undertake checks on products at the border, wrote the retailers, the French government’s decision to enforce sanitary and customs checks on exports from the EU will mean “major disruption” and “long delays” at Calais. Owing to the time of year, potential shortages of fresh food would be “more acute” because so much UK produce is out of season. In March, “90% of our lettuces, 80% of our tomatoes and 70% of our soft fruit is sourced from the EU”.
One of the chief concerns of retailers is the impact of tariffs on prices were Britain to revert to “WTO most-favoured-nation status”, as envisaged in a no-deal scenario, said Ben Chapman in The Independent. Some hard-line Brexiters have advocated slashing the UK’S own tariffs to zero to ward off the threat. But this could have a ruinous impact on our farmers. Sadly, all these forecasts sound “entirely plausible”, said Nils Pratley in The Guardian. What a pity they arrived so “late in the day”. In private, supermarket bosses have been issuing “even starker warnings for ages”, but “the corporate fear of going out on a limb” stopped them from airing them in public. “It’s a shame. A lesson from the industry front line in WTO tariffs”, and their potentially “devastating” effect on UK farming, would have been welcome many months ago. The grocery chiefs should have taken a lesson from Airbus: “Shout early and often.” Chief executive Tom Enders was at it again last week, warning that a no deal could force “potentially very harmful decisions” for the plane-maker’s operations in Britain. He’s right. Commercial logic will dictate it.
Enders’ threat to quit Britain was “symbolic of all that’s wrong” with bullying, self-interested multinational corporatism, said Jeremy Warner in The Sunday Telegraph. But how did he come by such powers of “gun-to-the-head persuasion”? Essentially because in 2006 the Labour government sanctioned BAE Systems’ sale of its 20% stake in Airbus: “an act of almost criminal negligence”, which surrendered Britain’s right to a share of Airbus’s work and jeopardised its long-term future in this country. Hence Enders’ ability to hold us to ransom. “Britain has shafted itself.”