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Single Market access prospects grow - but at a cost

2nd Dec 2016 / By Alistair Driver

Brexit Secretary David Davis has revealed the Government might be prepared to pay to access the Single Market, after we leave the EU.

David DavisThe question mark over Single Market access is one of the biggest Brexit concerns of the pig sector, given that 74 per cent of the pork we export goes to the EU or is routed through it. Losing the current tariff-free access could, for example, see new restrictive tariffs imposed on sow carcase exports to Germany.  

This concern is shared by the wider food and farming industry, as highlighted in a letter to the Prime Minister signed by 75 businesses covering the entire food supply chain calling for tariff-free access to the Single Market, alongside continued access to a 'competent and reliable workforce' post-Brexit.  

The letter signalled that food security, food safety and hygiene, stewardship of the countryside and affordable food would be at risk if Ministers fail to deliver continued access to labour and the best possible Single Market access.

Signatories include Sainsbury’s, Marks and Spencer, Dairy Crest, Morrisons, Müller and Weetabix, and other organisations representing food production from farm to fork.

As the businesses, with a turnover of over £92 billion and employing almost a million people, made their call yesterday, Mr Davis appeared to shed new light on the situation in response to a question in the House of Commons. 

He told MPs the 'major criterion' was getting the best access for goods and services to the European market.

And if that included the possibility of having to make a payment, 'then of course we would consider it', he said.

See the NPA's Brexit policy and priorities in our comprehensive briefing here

Norway model 

While his words provided reassurance for some - the vlaue of the pound immediately rose by 1.1 per cent in response to his statement, although it slipped back later in the day - they inevitably infuriated others.  

Conservative MP and Brexit supporter Peter Bone said 'people would be absolutely outraged' if the UK continued to pay the EU.

The approach suggessted by Mr Davis would be similar to that taken by Norway, which pays €869m a year to trade in the single market, take part in EU research programmes and for criminal justice cooperation. Similar access could cost the UK €5bn a year, according to some MEPs.

Later, Chancellor Philip Hammond backed Mr Davis' comments, saying the Brexit Secretary was 'absolutely right' and stressed that the UK would need to make concessions to secure the most favourable deal. 

Labour concerns 

In a speech on Thursday evening, Mr Davis also addressed concerns about the availability of labour post-Brexit, an issue raised by the pig and poultry sectors on the same day.

He revealed yesterday the Government is considering plans to allow low-skilled migration, a priority for the pig sector. Speaking to a CBI dinner in Wales, Mr Davis said the Government did not want to end up with labour shortages.