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Ed's Brexit round-up - one of those weeks

22nd Feb 2019 / By Ed Barker

It has been one of those weeks where a lot has happened and very little has happened both at the same time.

Further concessions? 

EdBarkerNPAIn a week where our PM and various other Ministers have been trying to get further concessions from the EU on the backstop (they haven’t) and speaking to individual countries, we are in effect in exactly the same place we were a week ago. Only now, we are nearly less than one calendar month before the UK’s planned exit date. Unsurprisingly, the EU have not changed their position at all in the last week, and it appears as if they will continue to maintain this approach until the last minute. Whether or not they will choose to be more flexible at the 11th hour remains to be seen.

Disaffected MPs

In other developments this week, you would have done well to ignore the fact that we now have a new grouping of 11 ‘independent’ MPs, formed of disaffected Labour and Conservative party MPs over their leaders’ handling of Brexit.

This does not change the status quo all that much; they were rebels regarding Brexit and were unlikely to vote with their party. It does however create a few more opposition MPs and general addition to the talking points of Westminster.

Despite their genuine intentions, history has not really looked favourably on MPs who choose to go their own way. Memories of the SDP are but one example, as are those many MPs who crossed the floor or quit their parties over key events or issues of principle. More often than not, at the next election, such acts of principle are not rewarded and they are not heard of again. That said, conventional wisdom does not always apply at the moment.

No deal tariffs

There were some interesting highlights to come from Defra this week. After having met with Defra last week, we were led to believe that the Government may not in fact apply zero tariffs on all food imports under a no deal scenario.

Despite the fact we have been waiting for an announcement from the Government over the UK’s tariff approach for some time now, we understand that some level of protection will apply to British producers in the event of a no deal. Part of the reason behind a delay is that some Ministers advocate a low tariff approach to keep all consumer prices low, whilst others including Michael Gove, are advocating the need for some protections to be in place for domestic producers, given how exposed they will be in the event of a no deal as a result of reduced export access.

We are anticipating that Government will seek to implement tariffs after a fixed volume of product is imported, that reflects current levels. In other words, if anything deviates from the norm, and domestic producers are being unduly affected, then Government is more than willing to step in. It is worth remembering that the UK will have a lot of product it has to import without tariffs anyway (these are known as Tariff Rate Quotas) – but we understand that the number crunchers in Defra will look at domestic incomes and be prepared to use mechanisms as they see fit.

The aim of the game is to ensure that food continuity, prices and availability are comparable to what they are now, whilst balancing the interests of domestic producers. In any case, this represents a win for us, and is much more favourable than what we had anticipated – if it comes to pass.

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