Baffling Brexit plan undermines the UK, says M&S chief
Outmoded customs labels ‘would raise costs, harm farmers and reduce choice for buyers’
THE chairman of Marks & Spencer has called plans to ease post-brexit trade “baffling” and “overbearing”, as he became the latest business leader to attack the Government over its economic policy.
In a broadside on proposals for solving the Northern Ireland Protocol stand-off, Archie Norman said the approach could raise prices and give EU companies an advantage over British competitors.
The comments from Mr Norman, a former Tory MP, come after fellow industry leaders also raised the alarm about the direction of the Government.
Sir James Dyson last week criticised the Government’s “stupid” economic approach, while the director-general of the Confederation of British Industry questioned its lack of “strategy”.
Mr Norman made his criticisms in a letter to James Cleverly, the Foreign Secretary, excerpts of which have been seen by The Daily Telegraph, and singled out proposals for packaging changes.
Forcing companies to put “Northern Ireland only” or “UK wide” labels on packages to avoid burdensome customs checks would drive up costs for supermarkets and producers, Mr Norman argued. He said: “The overbearing costs of a labelling regime would raise prices and reduce choice for consumers, further disadvantage UK farmers and suppliers, and impact UK retailers’ competitiveness in other international markets. Retailers already operate in real-time digital information – day or night, at the click of a button, we can locate our products. Be that in a depot, in transit or in a store.
“In a digital era – when one tap of a mobile can check-in a customer at a store and locate their order in under 60 seconds – it’s baffling that the Government and EU have rewound four decades to discuss an expensive ‘solution’ involving stickers and labelling.”
Today, Rishi Sunak will attempt to rally ministerial support behind his five recently announced promises, including halving inflation by the end of the year, in an “away day” with his Cabinet.
Tomorrow, Jeremy Hunt, the Chancellor, will double down on that inflation target, using a speech to push back on Tory MPS demanding tax cuts by insisting that getting prices down is the key to growth, a debate that is likely to dominate discussion ahead of the Budget on March 15.
Mr Sunak and Mr Hunt have repeatedly said they want to cut taxes when they can, but argue the priority must be bringing down inflation, which is at an annual rate of about 10 per cent.
Government figures continue to point to the implosion of Liz Truss’s taxcutting mini-budget last autumn, which led to the pound sinking and interest rates soaring.
A Treasury source said: “The single biggest barrier to economic growth is 10 per cent inflation. You’re not going to grow the economy with inflation that high. It is the cause of industrial unrest, it is eroding the pound in people’s pockets and squeezing public services. You can have a thousand policies to promote growth, but without tackling inflation not one of them will work.”
Trying to ensure Northern Ireland can trade freely with the mainland UK while also avoiding physical checks on the border with Ireland, in the EU, has been one of the thorniest Brexit issues.
A customs border down the Irish Sea was effectively created when the UK signed the Northern Ireland Protocol, which set out the province’s terms of trade after Brexit.
Since then, both Liz Truss and Mr Sunak have attempted to renegotiate that deal, with the UK threatening to unilaterally change the trade terms
unless a new agreement is reached. Mr Sunak, who is facing pressure from the White House, is hoping to agree a new deal by April, in time for the 25th anniversary of the Good Friday Agreement.
Using product labels could ease the need for customs checks at the border. But Mr Norman argues that it would send costs soaring for producers.
At one point he warns: “A costly labelling solution will mean customers will be hit by reduced ranges, higher prices – at a time of huge inflation and when the economy in Northern Ireland is already disadvantaged – and a worsening of availability.”
The exact labelling changes being proposed by London and Brussels is unclear, as talks remain behind closed doors, though some form of change has been floated in public.
The Treasury’s attempts to tackle the twin challenges of lowering inflation and trying to minimise a forecast recession have faced criticism from senior businessmen. Sir James spoke out against tax rises and new regulations, labelling the approach “as short-sighted as it is stupid”.
Sir Martin Sorrell, chief of advertising group S4 Capital, backed Sir James, saying: “We need a long term growth plan.” Tony Danker, of the Confederation of British Industry, has warned: “Money is leaving the UK. Investors are freezing up and the heart of the problem is that we don’t have a strategy.”
A Treasury source said: “Halving inflation this year is our primary mission, and the Chancellor will not do anything that makes that job harder.”
Responding to Mr Norman’s letter, a government spokesman said: “The Protocol is causing real problems in Northern Ireland.
“It’s our preference to resolve these problems through talks, and the Government is engaging in constructive dialogue with the EU to find solutions.”