Bosses’ EU alert: Do NOT take us over cliff-edge
Coalition of food chiefs urges the Government to secure free trade
A COALITION of farmers, retail groups and food companies has this weekend issued a dire warning of the consequences of failing to secure a free trade agreement with Europe.
As Prime Minister Theresa May prepares to trigger Article 50 on Wednesday signalling Britain’s intention to leave the European Union, the group said failure to secure a free trade deal will damage the financial stability of an already struggling farming sector – and would force up prices on shelves.
The warning comes in a letter to the Government signed by the British Retail Consortium – whose members include Tesco, Marks & Spencer and Boots – the National Farmers’ Union and the Food and Drinks Federation, representing companies including Unilever, Nestlé and Coca-Cola. Between them, the groups employ 3.9million workers in UK businesses worth more than £100billion a year. The coalition also called for a transitional deal to be put in place in case talks on a full trade agreement do not succeed within the two years allowed for negotiations. The call was echoed by bosses’ group the CBI, which told The Mail on Sunday that the Government must ensure there is a safety net for the UK if a trade deal cannot be reached.
Demands from business that it is vital for Britain to avoid a cliff-edge exit fly in the face of statements from Ministers in recent weeks that no deal would be better than a bad deal.
The food industry groups warned of ‘huge detrimental effects’ of failing to secure a free trade agreement aimed at keeping levies on imports and exported British goods as low as possible.
The coalition handed an eight-point plan to a number of Government bodies last night including the Department for Exiting the European Union, the Department for International Trade, the Treasury and the Department for Business.
Helen Dickinson, director general at the British Retail Consortium, said: ‘This is new territory and it is significant in its consequences for the food industry if we get it wrong.
‘In the context of food, the European relationship is absolutely the most important. Most of the
food we import comes from the EU, so it is really important that we get this right.’ She said substantial World Trade Organisation tariffs would damage industry and consumers.
‘To keep prices low for consumers, it is particularly important that we don’t have any new tariffs and we maintain frictionless movement of goods and put consumers at the heart of this,’ she added.
‘It’s hard to say exactly how increased tariffs would translate – they can be 60, 70 or 80 per cent of the cost of goods – but it would certainly have an upward pressure on inflation and shelf prices paid by consumers.’ Meurig Raymond, president of the National Farmers’ Union, said: ‘If we get this wrong – or we end up at the cliff-edge situation with WTO tariffs – it could have huge detrimental effects.’
The manifesto makes a number of key demands which include undertaking detailed economic impact assessments when trade negotiations are opened and before offers are made.
CBI director general Carolyn Fairbairn told The Mail on Sunday that she wanted to see a very early commitment from the Government that even if no trade deal could be agreed within the two-year time limit, the Government
would ensure there was an ‘interim agreement’.
She said: ‘We must make sure the voice of the economy and prosperity continues to be heard above the voice of politics.’
British industry was spooked earlier this month when David Davis appeared in front of the Brexit committee and admitted that his department had not researched the effects of not securing a deal.
The coalition’s other demands include securing existing preferential trade arrangements, adopting the EU’s current schedule of ‘Most Favoured Nation’ tariff rates, sidestepping customs duties and avoiding costly customs checks.