Select committee inquiry
Brexit and the implications for UK business: Processed food and drink inquiry
Closed
What the inquiry looked at
“This is the processed food and drink strand of the Committee's Brexit and the implications for UK business inquiry . The Committee aimed to establish how the interests of different sectors should best be pursued both in the negotiating process and post-Brexit and attempts to examine a range of issues relating to market access, non-tariff barriers, regulation, skills, R&D, trade opportunities and transitional arrangements. Terms of reference: Brexit and the implications for UK business”
The committee's words, from the inquiry page on parliament.uk ↗.
What the government said
The government responded on 24 July 2018.
Summary written by Accountability Index from the government's response.
The government says securing a deep and special partnership with the EU, including a free-trade area for goods, is a "key priority", and sets out its responses to the Committee's recommendations on tariffs, borders, regulation, trade, skills and research.
- On customs, it prefers "a facilitated customs agreement with the EU" and "notes" the Committee's views on border resources, which it says "will be dependent on the outcome of negotiations".
- On regulation, it proposes a free-trade area for all goods with a common rulebook covering "only those rules necessary" for frictionless trade, and says it has "no intention" of lowering standards in pursuit of a trade deal.
- On Geographical Indications, it "shares the Committee's view" on their importance and says it will use the EU (Withdrawal) Act 2018 so that all 86 UK GIs are protected on "Day One of EU Exit".
- On skills and research, it says it will consider the Migration Advisory Committee's evidence "in full" once its final report is published in September 2018, and that "no decisions have been made" about the future relationship with EFSA.
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 14 September 2017 to 24 July 2018.
- Oral evidence 13 Dec 2017
- Report 22 Apr 2018
- Government response 24 Jul 2018
- Correspondence 10 Jan 2018
What it recommended 8 recommendations · 10 conclusions
1Should the UK continue to export the majority of its products to the EU, a...
Concluded (the committee's words)
Should the UK continue to export the majority of its products to the EU, a no deal scenario with WTO tariffs would have a seismic impact on the sector’s performance and the competitiveness of exports, especially for some of the UK’s top ten processed products, such as chocolate, cheese, beef, pork and soft drinks. A no deal scenario would be unviable and unacceptable to the sector as, at least in the short term, the EU is the UK’s main trading partner. It would also have serious repercussions for importers of UK products in the EU and the rest of the world.
2We welcome the Government’s intention to negotiate a new trading partnership with the EU as...
Concluded (the committee's words)
We welcome the Government’s intention to negotiate a new trading partnership with the EU as early as possible. Striking a free trade agreement with the EU should be the number one priority in order to protect the UK processed food and drink sector’s competitiveness in the short term.
3The current UK trade deficit in food and drink means that imports will continue to...
Concluded (the committee's words)
The current UK trade deficit in food and drink means that imports will continue to play a crucial role at least in the short term. We agree that leaving the EU creates new opportunities to import more low-price products from non-EU countries. However, the impact of removing external tariffs on imports could be extremely severe for British farming and have a limited impact on prices for consumers. However, the impact of removing external tariffs on imports could be extremely severe for British farming and have a limited impact on prices for consumers. The Government will have to carefully balance the impact that non-EU imports could have on the competitiveness of UK businesses and the cost of timely deliveries with the merits of continuing to rely primarily on EU imports.
4We did not hear any evidence suggesting that moving away from the current customs arrangements...
Concluded (the committee's words)
We did not hear any evidence suggesting that moving away from the current customs arrangements could be beneficial to UK manufacturers or consumers as it would inevitably incur some additional checks, delays and costs. If a solution that is as frictionless as possible is not agreed in time for after the transition, even a few additional non-tariff barriers could prove very challenging at UK border points and have a serious impact on small and medium suppliers, especially between Ireland and Northern Ireland. It will also affect the type and price of products available all year round to consumers.
5We welcome the fact that the Government managed to negotiate preserving the status quo during...
Recommended (the committee's words)
We welcome the fact that the Government managed to negotiate preserving the status quo during the transition period but the sector needs certainty beyond that point. We urge the Government to end the uncertainty regarding future customs arrangements by negotiating a new partnership with the EU as soon as possible. In order to minimise potential increases in food costs, it should prioritise securing as few additional border requirements as can be negotiated.
6The Government will have to put considerable resources into increasing customs capacity at UK border...
Concluded (the committee's words)
The Government will have to put considerable resources into increasing customs capacity at UK border points and should put forward proposals on the type of support it will provide for SME and large suppliers in transitioning towards a new customs model.
7In order to support trading communities on both sides of the border, the Government should...
Recommended (the committee's words)
In order to support trading communities on both sides of the border, the Government should prioritise developing proposals that provide businesses with clarity regarding future customs arrangements at the border between Ireland and the UK.
8We agree with the sector that overall the UK should stay as close as possible...
Concluded (the committee's words)
We agree with the sector that overall the UK should stay as close as possible to EU regulations after we leave the EU. This would facilitate exports to the EU market and build on consumer trust for EU-branded products. Key EU regulations like geographical indicators must be preserved to maintain the competitiveness of flagship UK products and to allow UK consumers confidence in what they buy (eg. Cheddar cheese).
9We conclude that large manufacturers are already used to dealing with different regulations for different...
Concluded (the committee's words)
We conclude that large manufacturers are already used to dealing with different regulations for different national markets and could probably adapt if they were given enough time and certainty to do so. Nevertheless, this is not something that all of them will welcome and it should only be done where it presents a clear advantage for British businesses and British consumers.
10We recognise that there are opportunities to diverge once we leave the EU that would...
Recommended (the committee's words)
We recognise that there are opportunities to diverge once we leave the EU that would make some UK products more competitive, although these gains need to be balanced against any consequent reduction in access to EU markets. We welcome the Prime Minister’s assurances against any race to the bottom in standards. Our biggest concern is the impact on the 96 per cent of food and drink SMEs for whom having to deal with another set of regulations will be burdensome and costly. They will need Government support and time to adapt. As a result, we recommend that the Government seeks to secure mutual recognition of standards as soon as possible to provide these businesses with the necessary certainty.
11The transition period that was recently negotiated with the EU is significantly shorter than what...
Concluded (the committee's words)
The transition period that was recently negotiated with the EU is significantly shorter than what the sector had hoped for. This may prove challenging for businesses that may struggle to find the time and have the necessary expertise to familiarise themselves and adjust to the system in place after we leave the EU.
12We welcome the Government’s Food & Drink Action Plan and any other initiatives to boost...
Recommended (the committee's words)
We welcome the Government’s Food & Drink Action Plan and any other initiatives to boost UK food and drink exports. We believe this cannot be done without seeking a free-trade agreement with the EU as a priority given the sector’s current reliance on the EU as an export destination. The Government should also prioritise the roll-over of existing EU trade agreements to the UK and then focus on establishing new free trade agreements with third countries.
13The processed food and drink sector is heavily reliant on EU (and EEA and Swiss)...
Concluded (the committee's words)
The processed food and drink sector is heavily reliant on EU (and EEA and Swiss) workers, especially workers from New Member States, for low-skilled and high/ medium occupations. The proportion of UK and Irish workers in the sector’s workforce has steadily declined since 2000. Staff shortages are already a problem in the food and drink sector and the sector’s skills gap is predicted to worsen as its ageing workforce retires.
14In the short term, the Government should ensure that once we leave the EU the...
Recommended (the committee's words)
In the short term, the Government should ensure that once we leave the EU the sector can continue to have immediate access to the skills it needs. A visa system will add costs and bureaucracy to a sector dominated by SMEs who lack the resources and expertise to deal with a new immigration system. The sector needs support as soon as possible to adapt.
15The Government must also continue to work with the sector to meet its skills gap...
Recommended (the committee's words)
The Government must also continue to work with the sector to meet its skills gap and ensure the sector is an attractive destination to UK nationals for a career.
16We welcome the Government’s commitment to match funding for all EU-funded R&D projects awarded before...
Recommended (the committee's words)
We welcome the Government’s commitment to match funding for all EU-funded R&D projects awarded before we leave the EU. The Government should now clarify the level of access to EU nationals and EU facilities that will be available to the food and drink R&D sector after the transition.
17We welcome the Prime Minister’s aim to retain some form of membership with some EU...
Concluded (the committee's words)
We welcome the Prime Minister’s aim to retain some form of membership with some EU agencies. We would welcome clarity on the type of associated membership that the EU would allow for the UK in the European Food Safety Authority and its future interactions with the Food Safety Agency.
18The Government should seek to maintain UK’s membership of collaborative EU R&D projects, while clarifying...
Recommended (the committee's words)
The Government should seek to maintain UK’s membership of collaborative EU R&D projects, while clarifying approval processes and the role of the Food Safety Agency beyond March 2019.
Evidence
Oral evidence sessions 1
- 13 Dec 2017No witnesses recordedparliament.uk ↗