Brexit: Duty hikes for EU goods would be ‘sledgehammer’ to UK

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Business, unions and farmers have responded with dismay to government plans for changes to tariffs on imported goods if the UK leaves the EU without a Brexit deal.

The CBI said the new rates would hit the UK economy like a “sledgehammer”. Unions warned zero tariffs on steel would “destroy” jobs.

Lorries queue at the entrance to the Port of Dover. Business leaders have warned of the effects of government plans for changes to tariffs. Picture: Gareth Fuller/PA Wire

Lorries queue at the entrance to the Port of Dover. Business leaders have warned of the effects of government plans for changes to tariffs. Picture: Gareth Fuller/PA Wire

Large reductions in levies on food from outside the EU were “worrying” to UK producers and could lead to “a greater reliance on food produced overseas”, the National Farmers Union said.

There was widespread anger that details of the proposed unilateral regime were released just 16 days before the scheduled date of Brexit on 29 March, with some business groups complaining they had not been consulted.

Under the government’s plans, tariffs will be slapped for the first time on a range of EU imports, including cars and food products like beef, chicken, lamb, pork, butter and “Cheddar-like” cheese.

A 10.6 per cent levy on “finished vehicles” could add £1,500 to the cost of a typical family hatchback. But car parts are zero-rated to avoid disruption to supply chains.

Tariffs will be slashed or eliminated on a wide range of imports from outside the EU, potentially lowering prices on goods from countries like the US and China.

Ministers said that overall the changes would represent a “modest liberalisation” of the UK’s tariff regime and would remain in place for up to 12 months after a no-deal Brexit.

Some 87 per cent of imports to the UK by value would be eligible for zero-tariff access – up from 80 per cent at present – while many other goods will be subject to a lower rate than under EU rules.

The EU said it would impose the same levies on UK goods as on imports from other countries with which it has no trade deal, making British producers less competitive on European markets.

CBI director-general Carolyn Fairbairn told BBC Radio 4’s Today programme: “This is no way to run a country.

“What we potentially are going to see is this imposition of new terms of trade at the same time as business is blocked out of its closest trading partner.

“This is a sledgehammer for our economy.”

The Federation of Small Businesses’ national chairman Mike Cherry accused ministers of “leaving businesses in the lurch”.

The sudden reduction or elimination of import tariffs would mean UK producers being “undercut in a heartbeat by artificially cheap foreign imports” at a time when exporters will face new obstacles to selling into European markets, he said.

NFU president Minette Batters described the timing of the announcement a fortnight before the new rates may come into effect as “appalling”.

It would mean the UK loses control of animal welfare standards, she warned.

Scotland’s Brexit secretary Mike Russell warned the plans would “make trade with our European neighbours far more expensive and problematic than at present”.

PROPOSED LEVIES

Going up

10.6 per cent: Fully-finished EU cars, equivalent to £2,100 on a new VW Golf

12.6 per cent: EU-built buses

*53 per cent: Beef (EU-produced rump steak up c.£2 to £5.50-£6.50)

60 per cent: Poultry meat

100 per cent: Sheep meat, including lamb

100 per cent: Protected fish and seafood

0.9 per cent: Textiles and textile products

* 1.2 per cent: Ceramics

£18p per kilo: Cheddar

52p per kilo: Butter

Going down (all reduced to zero per cent)

* 24 per cent: Jams, jellies, marmalades

* 16 per cent: Oranges

* 14 per cent: Televisions (Samsung UHD TV down £43 to £307)

9.6 per cent: Onions

8 per cent: Peas

8 per cent: Carpets

4.7 per cent: Batteries