The prices of cars and fresh food in the UK are expected to rise should a no deal Brexit take place, according to plans revealed by the UK government this morning.
by Lloyd Bent
A temporary scheme was announced, outlining tariffs which could be slapped on products imported from the EU as the UK leaves the bloc and ceases its tariff-free relationship.
The plans reveal that, although the government is trying to limit price spikes on consumer goods, the cost of some items imported from the EU could go up.
However, the cost of importing goods from the rest of the world could go down as the UK slashes tariffs on 87 per cent of imported goods.
The announcement follows the rejection of Theresa May’s second attempt at pushing through a Brexit deal by Government last night. Tonight (13 March), at 7pm, MPs vote on whether to allow no deal to remain on the table.
Here are the changes to product prices, should a no deal Brexit happen
Lamb prices would likely stay similar, as Ministers seek to maintain existing protections for the lamb industry, by applying the full tariff rate to sheepmeat products entering the UK.
Other EU imported food products - such as beef, poultry, pork and some dairy - will face a reduced rate compared with the rest of the world, but prices would still be expected to rise for shoppers.
Imported cars would also be slapped with a tariff of 10.6 per cent, which could see the average price of a family hatchback rise by £1,500.
Meanwhile the temporary scheme, which would last for a maximum of 12 months, outlined that tariffs would be slashed to zero across 87 per cent of imported goods. This would reduce the price of some goods imported from outside of the EU which previously faced higher tariffs.
Some UK industries would therefore face intensified competition from cheap imports.
Tariff-free products in a no deal scenario include footwear, cheese other than ‘Cheddar-like cheese’, wood, paper, machinery and ammunition. Tariffs on aluminium and steel would also be dropped.
‘Preventing potential price spikes’
Trade Policy Minister George Hollingbery said, “Our priority is securing a deal with the European Union as this will avoid disruption to our global trading relationships. However, we must prepare for all eventualities.
“If we leave without a deal, we will set the majority of our import tariffs to zero, whilst maintaining tariffs for the most sensitive industries.
“This balanced approach will help to support British jobs and avoid potential price spikes that would hit the poorest households the hardest.
“It represents a modest liberalisation of tariffs and we will be monitoring the economy closely, as well as consulting with businesses, to decide what our tariffs should be after this transitional period.”