Risk Food And Drink Prices Will Increase If There Is A No Deal Brexit, MPs Warn

Ned Simons

A no deal Brexit risks an increase in food and drink prices for consumers and would cause “seismic” damage to the chocolate, cheese, beef, pork and drinks industries, MPs have warned.

In a report published on Sunday, the Commons Business, Energy and Industrial Strategy Committee said striking a free trade deal with the EU must be the government’s “biggest priority”.

It comes following reports that the EU has suspended its internal talks about the future trade deal over a disagreement between Britain and Brussels about how to avoid a hard border in Northern Ireland.

Theresa May is facing a fresh parliamentary showdown next week after senior MPs tabled a motion on a continued customs union between the UK and the EU. 

Rachel Reeves, the chair of the BEIS committee, has said a free trade deal is a priority.

The processed food and drink industry is the largest manufacturing sector in the UK and contributes £28.8bn to the economy. Exports were worth £22bn in 2017.

The industry directly employs 400,000 people throughout the country, a third of whom are EU nationals.

“Defaulting to WTO tariffs would not be an acceptable outcome for the sector and would seriously jeopardize the competitiveness of UK exports and risk increasing prices for consumers,” the MPs said.

“Should the UK continue to export the majority of its products to the EU, a no deal scenario with WTO tariffs would have a seismic impact on the sector’s performance and the competitiveness of exports, especially for some of the UK’s top ten processed products, such as chocolate, cheese, beef, pork and soft drinks.”

The cross-party committee said a no deal Brexit “must be avoided at all cost”.

Rachel Reeves, the Labour chair of the committee, warned the “success of the industry has been highly dependent on participating in the single market and customs union”.

On Thursday, MPs will vote on a Commons motion, supported by Tory an Labour MPs, demanding the government secure an “effective customs union” between the UK and the EU.

May has ruled out the UK remaining in the EU customs union and single market.

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