Brexit: Trade in Food — [James Gray in the Chair]

Part of the debate – in Westminster Hall at 2:21 pm on 14 June 2018.

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Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs 2:21, 14 June 2018

Yes, I understand, and I was going to come on to that. Although, of course, we have done other, more detailed work, not all of which has been published, I think I pointed out in evidence to the Committee that in March 2016 the National Farmers Union commissioned a detailed piece of work by a Dutch university, which looked at precisely that issue—what would happen under a most favoured nation trading scenario for a range of sectors. I probably cannot go much further, except to say that I recommend that research to anyone with an interest in this area because its analysis was broadly correct. In summary, it showed that some sectors are indeed more exposed than others to our trade with the European Union.

Notably, as the shadow Minister pointed out, the sheep sector is quite dependent on our trade with the European Union. The analysis commissioned by the NFU bore that out. It also identified that there might be some impact on barley producers that export for the lager industry in Europe in a most favoured nation scenario. However, broadly speaking, for most producers in every other sector there would actually be a slight firming in farm-gate prices, because most sectors would have less import competition. It is hard to predict exactly what would happen in a no-deal scenario, but in a scenario in which it was slightly harder to export lamb to Europe and harder to import beef from Ireland, some mixed beef and sheep enterprises likely would diversify a little more into beef to substitute for Irish imports and put a little less into sheep, particularly if they were exposed to the export market in countries such as France, Greece and Belgium.

There would obviously be changes under such a scenario, but it is worth reflecting on debates in the House in the late 1950s on whether we should join the European Union or remain a member of the European Free Trade Association. I am afraid that, given the nature of the debates we are having now, I revisited some of those debates to understand how we got into this pickle in the first place. It is telling that in the late 1950s and early 1960s there was cross-party agreement that joining the European Union would be bad for agriculture. One reason we did not join early was that it was recognised that that would be negative for agriculture. It is interesting that the NFU analysis largely bears that out to this day.