Spring Statement 2019: government confirms import tariff reductions to cut costs for consumers in the event of no deal Brexit

13 March 2019

The government has announced plans for a new temporary tariff regime, designed to reduce the risk of economic damage should the UK leave the EU without a deal.

The announcement comes ahead of tonight’s crucial vote that seeks to take a no-deal Brexit off the table.

Under the new arrangement British businesses would not pay any import tariffs on the majority of goods if the UK leaves the EU without any agreement.

This could lead to reduced prices being paid for many consumer goods imported from outside of the EU, from countries such as China, India and the USA. 

As much as 87% of imports would be tariff-free.

Tariffs would remain in some areas including some meat and dairy imports to protect farmers in the UK as well as some finished vehicles to support car manufacturers.

Preferential access to the UK for developing countries would also be protected by maintaining import tariffs on products including raw cane sugar and bananas.

The government has also confirmed that it will not, in the short term, introduce any new checks or controls on goods at the Northern Ireland border.

George Hollingbery, trade policy minister says: “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.”

Commenting on the announcement, Ian Wright, chief executive of the Food and Drink Federation says: “Business cannot adapt to this new regime in just two weeks. It is disgraceful; that we are, only now, getting to see these. There must be proper consultation with business before a change of this magnitude is introduced.

“We were promised that business would only have to adapt to one new change of rules; it’s now clear that promise has not been kept.

“This new system is confusing and complex. It includes some zero tariffs, some new tariffs and some quotas. Some foodstuffs qualify for partial protection and some not for any protection at all; with little logic to explain the difference.

"New tariffs will apply to some foods that are currently imported tariff-free, yet no tariffs will be applied to goods that cross the border between Ireland and Northern Ireland. This is likely to result  in massive trade distortions.

“In a world where it is costly and complex to export finished goods to the EU, and costly and complex to import key ingredients, many food and drink manufacturers who trade with the EU will surely question whether the UK is the right place for them to be."

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