Cut the crap Mrs May and answer some straightforward questions, like what happens to the 40% of lamb exports to the EU after Brexit?

Another day in Parliament and yet another version of what may or may not happen before and after Brexit from that master of the unanswered/unasked question, our Prime Minister. And as with almost everything May says one comes away more confused than before. What appears clear is that by accident or design (and increasingly it would seem it’s the latter) the UK is going to crash out of the EU without a deal. But even if we don’t, the degree of uncertainty now in play is only set to increase, with potentially devastating consequences.

The reason for this is simple. In the real world – the UK in which organisations and people produce goods and services – we are now passing the point at which decisions have to be made on production and service plans for 2019 and beyond. Anyone who works outside the Westminster and Whitehall bubble – in real organisations of almost any type – knows this. I could explain how that uncertainty will soon impact on decisions made in my university, where, as in all others, the prospectus for the 2018-19 academic year has already been published and we will soon be asked for input into the 2019-20 version with all the questions that remain unanswered about what the relationship between the UK and EU will be and likely outcomes for student recruitment, fees, status, placements, and so on.

But instead let’s consider a far more graphic example of the consequences of the never-never land situation we now find ourselves in. Currently 40% of UK lamb production is exported to the EU. Because we’re in the single market and customs union that happens tariff free. But as ‘Bio-Waste Spreader’ in Private Eye noted recently, after Brexit lamb from the UK will be subject to the same tariff as applies to non-EU countries. A charge that currently sits at £2,689 per tonne. It doesn’t take a genius to work out that if this cost is added to what farmers currently sell their lamb for it’s almost certainly priced out of the market (unless we assume that other EU farmers will sit on their hands and not move to fill the gap in the market left by UK lamb – which is presumably what Brexiteers assume). The question is therefore, how are the UK’s sheep farmers to deal with this situation? Is the government going to initiate a mass campaign to force us to eat the surplus lamb? Will the government implement a compensation scheme for sheep farmers? And if so, what about schemes for beef, cereal and other farm products currently exported in significant amounts – tariff free – to the EU, or elsewhere under EU export agreements.

Answers to these questions are crucial because the production cycles for agricultural products such as lamb and beef typically span more than a year. And therefore, as with university prospectuses, plans have to – have to – be made this autumn/winter for 2019.  If one thinks that with every week that passes this situation applies to more and more organisations, thus creating an ever-larger environment, and ever more vicious cycle of uncertainty (as the uncertainty in one organisation spills over into their supply and logistics networks, and on into other related networks) we begin to see the reality of Brexit. Its impact will build in severity and reach as the months pass and will stretch well into the future. It will not benefit most of those of working age who voted for it and will not result in any form of ‘freedom’ of any significance to any but the few. Indeed, as crops and fruit rots without EU seasonal worker to pick it we may see sections of the population coerced by government into undertaking this work.

Of course, May, Fox, Davis and co would rather continue talking about the haggling and deal making that may or may not be taking place with the EU, or blaming ‘the enemy’ across the channel for our woes. Much easier that than answer straightforward questions regarding production plans that are now immediate and crucial issues for farmers, manufacturers and services providers alike and for their futures. The time has now passed when these issues could be ignored or wished away. So, stop the crap and let’s start having some answers. Reality demands it.

Comments

  1. Sean Danaher -

    This is sadly a statement of the “bleeding obvious” but why are these questions not being asked more forcefully?
    We seem to have fallen into some weird alternate reality where cheap sophistry passes for substance
    I find it extraordinary also that so many farmers voted for Brexit my bet would be on the reintroduction of a cheap food policy and stuff the farmers
    Very few votes and agriculture is less than 1% of UK GDP

    1. Ivan Horrocks -

      Great final analogy, Peter. It made me smile. But maybe they do.

    2. Ivan Horrocks -

      Indeed, Sean. They’re certainly being raised inside a whole array of organisations, as I see on a regular basis from assignments my postgrad students submit. Personally, I’ve a hunch that the senior management of a lot of organisations don’t raise the matter in public because they’re Tory supporters or sympathisers and therefore don’t want to be disloyal. But there’s coming a point very soon now where we’re going to see an increasing number of organisations break ranks. For example, and one from your neck of the woods, what deal has Nissan in place and did it really cover a hard Brexit? And if Nissan, what about Toyota, or Mini, or any other manufacturer where components for the things they sell, go back and forth across the EU, or where they’re located here precisely because it afforded tariff free entry to EU markets?
      And picking up on something smaller in scale but no less important, what about the export of artesan products where the export is covered by an EU treaty? There’s no automatic transference (Private Eye had the example of Kingdom Cheddar’s export to the US in a recent issue). Again, lead times are often long – development (R&D) times even longer. So what chance of ‘equivalence’ trade treaties being in place? Indeed, many need to be in place now. Has Fox announced/signed any? If he has then I’m not aware of it and as he’s a man who likes to promote himself widely I’m damned sure we’d have heard.

      1. Sean Danaher -

        Has your VC had a letter from Chris Heaton-Harris (Tory MP for Daventry) asking for a copy of your syllabus and lecture notes? I suspect you are not sufficiently pro Brexit and are corrupting your students?

      2. Ivan Horrocks -

        I assume he has, Sean, but haven’t seen a response from the OU. I note this morning that said MP says he was ‘just conducting research’. No doubt the late Senator McCarthy claimed the same.

  2. Peter May -

    Agreed about the farmers. They were probably thinking no EU no office work…
    And we only produce 60% of the food we consume so it might yet be lamb every day.
    But I’m sure the government is even now planning to cover the countryside with hydroponics and glass houses.
    Because they can’t really think that farming is like the mustard and cress on blotting paper they grew at school where it’s all over in a week and ready to start again – or can they?

  3. Andrew -

    Leavers will no doubt bluster we will be able to export our lamb to the rest of the world free of the shackles of the EU (but also without access to the free trade agreements negotiated by the EU). What is our cost of production compared to say New Zealand or Australia? No doubt they will be ready to replace UK lamb if it is priced out of the EU market, and keep us out of new markets.

    Perhaps the UK can introduce its own customs duties on foreign lamb to keep to out of here: will economics force the British consumer to return to the 1950s habit of eating home-produced lamb rather than the frozen chicken pieces they seem to prefer today?

    The other side of it will be the ending of EU payments to UK farmers. The UK government may keep them in place until say 2020 but what then? I know who will win when it comes to “schools and hospitals” versus farmers. I fear it is going to get ugly.

  4. Andrew -

    Some numbers here. http://beefandlamb.ahdb.org.uk/markets/industry-reports/uk-statistics/

    It seems the UK exports about 50,000 tonnes of lamb and mutton each year. That is said to be about 40% of UK production, which must be about 125,000 tonnes. Over 90% goes to the EU, without about half to France alone. The UK sends a few thousand tonnes elsewhere each year, mainly to Hong Kong.

    The UK imports about 65,000 tonnes of lamb and mutton each year. So we could just replace most of the imports with home-produced lamb. But I expect the UK product retails for a higher price.

  5. Ian Stevenson -

    When I was at school in the early 60s we had a text book which showed government expenditure. It was around six billion (but we used a different definition of billion then ) and support for farmers was, I recall around 200 million pounds.
    Farmers and govt. set prices for various products. Food from abroad was usually cheaper and sold at the lower price. The British food was also sold at those prices and the difference was paid to the farmers.
    Unless we go back to that, many of our farmers face ruin. If we do go back to deficiency payments, we might have cheaper food and higher taxes. Not sure we’d be any better off-unless we have below tax incomes.

  6. andy blatchford -

    As it happens tariffs are pretty meaningless (even though they look big) the problem is as a third country are the non tariff barriers, vet certs etc, but these will have to be presented at a BIP on entering the EU, this all goes through Dover/Calais and guess what there is no BIP at Calais it’s at Dunkirk. This trade will be stopped dead in its tracks. It is according to info I have already too late as the lead time is about 3 years.

    What will happen is all this lamb will have to be released into the domestic market, prices will drop through the floor…great for a while but all those sheep farmers will quickly go under.

  7. Nile -

    The decisions are being made, already, by all overseas investors and companies with a physical presence in the UK.

    The logic is simple: a government this indecisive and ineffective in a critical area of policy is cause to disinvest and repatriate the economic activity, whether we Brexit or or not.

    1. Nile -

      In short: the uncertainty is as damaging as the worst-case of a disorderly Brexit crash-out.

      1. Ivan Horrocks -

        Agree entirely, Nile. The damage is being done now regardless of the actual outcome of the process.

  8. Jeni Parsons aka havantaclu -

    For upland sheep producing areas, there’s an alternative land use, being currently championed by George Monbiot. Rewilding – which would involve reforestation with native species on the slopes and hilltops, and (perhaps) the re-introduction of the beaver in the upland valleys. It would cut down erosion in the uplands (I was worried by the increasing amounts of scree on the Welsh hillsides this year), runoff would be slowed (woodland has been shown to do that), and flooding further down the main river valleys reduced. Expensive at the start, and no doubt the hillwalkers wouldn’t be so happy, but it might pay for itself quite quickly.

    1. Ivan Horrocks -

      I’ve followed Monbiot’s arguments on rewilding for a while, Jenni, and I agree, freed from the need to keep sheep this could well be an alternative (I watched the example of Beaver reintroduction featured on Autumnwatch this week. It seemed very effective).

  9. Peter Dawe -

    As pro Brexit, Yes, world markets will take up the slack. Exit will cause short term disruption of markets, Especially as Brussels is doing nothing!
    CAP is wrong on so many levels it is why farmers have consistently voted for leaving, regardless of the “subsidy” and “cheap labour” we are supposed to enjoy.
    The appalling Greek debt débâcle demonstrates the impossibility of negotiating with Brussels. We are heading for a Hard Brexit, and the sooner it is acknowledged the better.

    BTW I cannot understand why Progressives are so wedded to the EU. To me it epitomises the capture of policy by anti-democratic, misanthropic organisations.

    1. Peter May -

      This is late in the day to comment I know but the reason is that the EU is often bad, but the alternative is worse. See Yanis Varousakis’ views for example.

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