Richard Powell, in his reply (September 2) to my letter of August 23, on predictions that the price of cheese would rise by 20%, correctly quotes from evidence given to the House of Lords, but only in a very selective way.
Yes, the average EU tariff on food from outside the EU is 22% but he avoids four crucial points.
First, we don’t only eat cheese from the EU, indeed most of what we eat is home produced for which tariffs are irrelevant.
Second, any tariff on the wholesale price may have a lesser impact at the retail level.
Third, once we are an independent country we can choose what tariffs to impose on food and they can be nil or lower than EU tariffs. The Lords Committee minutes also quoted Professor Tim Benton, who summarised the evidence heard by the Committee as follows: “If we put tariffs on European produce, we will pay more for European produce”, but self-evidently we don’t need to.
Fourth, world food prices are below that of the EU, so in general we can expect the cost of living to fall.
George Eustice MP, Minister of State at Defra, reiterated that the Government’s ambition was for a free trade agreement with the EU.
Even if the UK were to trade under ‘Most Favoured Nation’ rules, the Minister argued that “the impact on food prices is quite marginal”.
He noted that “in a typical year food prices will go up or down by between 5% and 10%” due to fluctuations in energy prices, fuel costs and other factors.
Currently, British consumers pay an estimated additional £16 billion a year in tariff and non-tariff barriers to EU food producers outside the UK. For example, the EU increased the tariff on oranges to 16% in October 2016. There is no production of oranges in the UK and therefore no domestic industry to protect. The British consumer can buy Spanish oranges tariff-free, but must pay 16% tariffs on oranges imported from the rest of the world. The effect is that UK consumers have to pay 16% more for their oranges than if oranges were let into the UK at world prices, and Spanish and other EU orange growers can raise their prices to match world prices plus 16% on top. After Brexit we will have the power to lower food prices to world levels.
Richard also quotes gloomy predictions from the LSE for a no deal WTO rules scenario. Most of your readers will be aware of ‘Project Fear’ predictions from the Treasury and elsewhere.
In July this year Moody’s analysed some of these dire predictions. The UK’s actual GDP was only one point away from the pre-vote forecast; but the lower OBR and HMT forecasts were far wide of the mark.
Brexit is not an economic disaster waiting to happen but the restoration of democratic control to our nation, so that we can make our own decisions towards a successful economic future.
Grove Road, Seaford