UK business and farming leaders implore Johnson to avoid no-deal Brexit

This article is more than 1 month old

Food industry says it is ‘bonkers’ that it does not yet know what trading conditions will be

lots of lorries and the English Channel in the background
Lorries queue on the route into Dover Port to board ferries to France on 11 December. Photograph: Dan Kitwood/Getty
Lorries queue on the route into Dover Port to board ferries to France on 11 December. Photograph: Dan Kitwood/Getty

Last modified on Sun 13 Dec 2020 17.12 EST

Business, food and farming leaders have implored Boris Johnson to rule out a no-deal departure from the EU, saying it would be “catastrophic” for employment, supermarket supply chains and farming.

The food industry said it was “just bonkers” that UK businesses did not know what the trading conditions would be in 12 working days’ time.

Ian Wright, the chief executive of the Food and Drink Federation, said the threat of tariffs “was not a trivial thing” and that if the UK left the EU without a trade deal on 1 January, consumers could expect to see price rises of between 5% and 15% in the supermarkets from mid-January.

“I know some of our members are planning to send out new portfolio price lists to their customers this week to take account of tariffs,” he said. “Obviously they are conditional and assume there is no deal and that the tariff regime comes in in January. Price rises driven by tariffs would start to appear in middle to late January as obviously anything already in the country by 1 January will not attract a tariff.”

The UK imports about 30% of its food from the EU, and 85% of the food imported from the EU would face tariffs, although the government could elect to delay their imposition through legislation.

In a no-deal scenario, 13,000 goods would attract import duties, but tariffs are known to be highest on agri-food – for example, 50% tax on cheddar cheese, 35% on boneless pork and 45% on wheat flour.

The environment secretary, George Eustice, said recently that tariffs were not the main driver of food prices. He said the average shopping basket could cost more, but the increase would be lower than that predicted by Tesco, which put the rises at 3% to 5% last week.

The British Retail Consortium has asked consumers not to “panic buy” after reports that the government had told supermarkets to stockpile for Brexit. One insider said that if that were true it was “an insult” to an industry that had kept the country in food supplies through the pandemic.

“Supermarkets know what they are doing,” they said. “They have had no-deal contingencies in place for two years and do not rely on out-of-touch politicians for out-of-date tips.”

The motor industry has said no deal would be catastrophic and implored the government to take it off the table. Production plans face a double shock of new checks and controls at the ports delaying deliveries of parts, and a 10% tariffs making exports uncompetitive.

Mike Hawes, head of the Society of Motor Manufacturers and Traders, said: “We welcome the commitment from both sides to continue talking and find a way through the political impasse. We now need negotiators to finish the job and agree the deal we all so desperately need, without further delay. No deal would be nothing less than catastrophic for the automotive sector, its workers and their families and represent a stunning failure of statecraft. Quite simply, it has to be ruled out.”

The former Labour party leader Ed Miliband accused Johnson of playing “Russian roulette” with people’s jobs, saying it was a “disgrace” that he was contemplating the possibility of Britain leaving the EU without a deal.

One industry leader expressed despair at what they felt was the disconnect between Johnson and business reality. “Either he doesn’t know or he doesn’t care. I suspect both,” they said.

British and French port and Eurotunnel representatives have said they expect the congestion seen on roads in Kent and the northern Haut-de-France region to continue over the next three weeks and then fall off in January, with many importers planning to cut deliveries because of the threat of delays in the immediate aftermath of 1 January.

At the weekend it emerged that there were 10-mile tailbacks in Calais, causing five-hour delays. Local leaders were expected to respond to public concerns at a press conference on Monday.

Rod McKenzie, the policy director of the Road Haulage Association, said the organisation had anecdotal evidence that some EU nationality drivers, who dominate the business, would “not bother” with driving in the UK in the new year in the event of no-deal chaos.

Honda and Jaguar have paused production because of disruption to their “just in time” and “just in sequence” production lines caused by congestion at the ports.

Welsh sheep farmers have said they face being wiped out because tariffs are so high they would prohibit competitive exports.

Plaid Cymru’s Westminster leader, Liz Saville Roberts, whose supporters including many in the agriculture community in Snowdonia and its environs, said Johnson was “playing fast and loose with people’s jobs” and called on him to agree a deal with the EU.