Brexit U-turn on food would drive up prices, supermarkets warn Tories

The Conservative plan to reverse Labour’s likely Brexit reset deal risks pushing up food prices and creating uncertainty for businesses, the industry has warned. Senior Tory Shadow Cabinet members have committed to reversing any deals Andy Burnham agrees with the EU, including a food and drink deal that will see the UK aligning to Brussels law to reduce cross-border checks on trade and bring down supermarket prices. Shadow Chancellor Andrew Griffith said the Tories would not accept following EU law without having a say over it, describing it as a “red line” for the party, after deputy leader Alex Burghart vowed to reverse all aspects of Labour’s “disastrous” Brexit reset. Shorts The Prime Minister is poised to finalise the food and drink (SPS) deal before the end of the year, amid speculation that the UK and EU could hold a summit to sign off on a series of Brexit reset deals as soon as 20 November. Tory Brexit redlines But if the Tories win the next election, scheduled in 2029, this agreement could be overturned soon after being implemented, with trade barriers with the EU re-erected. Griffith told reporters at Tory conference in Birmingham on Monday: “A red line is becoming a rules-taker from Brussels. “So formal dynamic alignment, whereby without any choice or decision making, the UK would automatically have to follow EU rules. That is dynamic alignment. That would not be something that we would find acceptable.” Industry chiefs warned that the Tories’ commitment to overturning the proposed deal was damaging to business certainty and that changing the rules so soon after the UK aligns to EU law would push up food price inflation. Senior Labour figures said it was an “anti-business” position that the Tories would likely be forced to U-turn on. However, others in specific sectors like fresh produce – which risks losing some trade with global markets outside the EU as a result of the reset deal – said the Tories were right to oppose Labour’s approach. Trade has ‘suffered’ since Brexit Karen Betts, chief executive of the Food and Drink Federation (FDF) said the EU was the UK’s largest market for British companies in her sector but that trade has “suffered” since Brexit, with exports down a third compared to 2019. She backed Labour’s deal as a “sensible thing to do” to help boost exports. Betts went on: “But, above all, what businesses need from politicians is certainty – to know what rules they need to follow, and for these to be stable for a reasonable period of time. “Every change to food rules, whether that’s a new labelling requirement or additional reporting, costs businesses. At a time when food inflation is a real concern and the industry is under strain, what manufacturers need most is a clear and consistent direction of travel.” Andrew Opie, director of food at the British Retail Consortium, said that Labour’s proposed deal would only have a “small impact” on supermarket prices, but suggested that choice for consumers could be reduced by the lack of certainty. He said: “What matters most for supermarkets and their suppliers is certainty. Frequent changes to SPS controls can create unnecessary friction, increase compliance challenges and risk disrupting availability.” But Nigel Jenney of the Fresh Produce Consortium said the Tories were right to highlight the problem of “dynamic alignment” – keeping UK law in lockstep with evolving Brussels regulations on food and drink – because it would hit imports from outside the EU, which make up 54 per cent of all imported fresh produce in the UK. “Whilst we would like a closer relationship with Europe, we don’t believe that closer relationship should be at the cost or the penalty of trading with the rest of the world, which would impact materially food inflation in the UK for fresh produce.” “We would probably welcome the Conservatives’ position on having a more pragmatic solution that doesn’t damage trade or drive UK food inflation.” ‘More uncertainty and friction’ But David Henig, director of UK trade policy at the European Centre for Political Economy (ECIPE), said of the Tories’ position: “I’m afraid this shows the Conservatives still don’t understand international trade or business. “Following the rules of partners is the way we reduce barriers and encourage trade. “UK food exports to the EU are down significantly because of barriers but will recover to a degree with an agreement. “What it means for UK business if the Conservatives are in power is more uncertainty and friction.” Nick Thomas-Symonds, who was Labour’s chief negotiator with the EU until July, said: “If the Tories want to argue in favour of paperwork at the border and higher costs at the tills, they are an anti-business party. “They know perfectly well that many British businesses exporting to the EU follow their practices and rules in any case. I can’t see this position working for them in the long-run.” Tory leader Kemi Badenoch said she was acting on farmers’ concerns, telling 5News that some of Labour’s plans are “going to be a problem” for them. A UK Government source said: “The public want a relationship with Europe that safeguards our security, creates jobs and delivers good growth – not the petty squabbles and red tape on offer from Reform and the Tories.”