Blog: Dean BestUK food industry gives cautious welcome to Theresa May's Brexit speech

Dean Best | 18 January 2017

May gives speech on Brexit "objectives" at Mansion House, London, 17 January 2017. Credit: Jay Allen Copyright: Crown Copyright

May gives speech on Brexit "objectives" at Mansion House, London, 17 January 2017. Credit: Jay Allen Copyright: Crown Copyright

UK Prime Minister Theresa May has shed some light on what she wants from the country's negotiations to leave the EU and its post-Brexit future - and the food sector has given her speech a cautious welcome.

May has come in for some criticism for not providing more detail about what the UK government wants the country's future relationship with the EU to be. Opposing politicians have claimed May and the Government have had no strategy; fervent Brexit supporters within the Conservative Party itself have criticised May - a muted supporter of the UK to stay in the EU - for not, as they have seen it, getting on with the task of extracting the country from the bloc.

The Prime Minister's oft-repeated phrase of "Brexit means Brexit" has been widely parodied.

Yesterday, May stood up at Mansion House in central London to give a speech attended by UK politicans and European dignitaries to try to give some indication of what the UK would push for in its talks with the EU - set to start at the end of March - and how she say the relationship between the two developing once the country leaves.

Strikingly, May said her plans mean the UK cannot remain part of the EU single market. She said the UK would instead look for a new "comprehensive free trade agreement", giving it "the greatest possible access" to the single market.

May said the UK would also leave the EU customs union but would look to have "a customs union agreement" with the bloc.

The UK food industry, which relies heavily on foreign workers, would have taken some positives from May's position on the status of EU nationals already residing in the country, although the issue is set to be a central part of the negotiations.

"We want to guarantee the rights of EU citizens who are already living in Britain, and the rights of British nationals in other member states, as early as we can," May said.

"I have told other EU leaders that we could give people the certainty they want straight away, and reach such a deal now. Many of them favour such an agreement - one or two others do not - but I want everyone to know that it remains an important priority for Britain – and for many other member states – to resolve this challenge as soon as possible. Because it is the right and fair thing to do."

The UK food manufacturing sector employs 117,000 non-UK EU workers, benefiting from the free movement of labour between EU member states.

Her priorities also included "control" of migration between the UK and the EU, as well as maintaining the common travel area between the UK and Ireland.

The Prime Minister also indicated her hope for a "phased-in" Brexit, with a "phased implementation process" for its agreement with the EU after talks conclude.

Any deal will be put to a vote of both Houses of Parliament in the UK, while the European Parliament will also vote on the agreement.

Ian Wright, director general of UK industry association the Food and Drink Federation, said he "welcomed the fact that the Prime Minister has provided some much needed additional clarity".

Wright said: "The food and drink industry is worth GBP108bn to the UK economy. Two-thirds of food and drink exports go the EU. So we welcome the Prime Minister's commitment to securing the freest and simplest possible trade arrangements with the EU. We are also encouraged that the PM hopes to adopt a phased approach to Brexit which offers businesses time to prepare and plan as opposed to a potentially fatal jump from the cliff edge."

On May's remarks on migration, Wright said: "We understand the Prime Minister's wish to control immigration and attract the brightest and best global talent. Our industry also needs access to workers with a range of skills - some not widely available in the UK - so we welcome the assurances for current EU workers and look forward to understanding better how her proposals will impact on future access to skilled and semi-skilled workers from the EU."

Dr Judith Bryans, the chief executive of dairy industry association Dairy UK, said May had "lifted some of the uncertainty created by the Brexit referendum" but said her members had some "significant concerns" about the UK's trading relationship with the EU when it leaves the bloc.

"With 80% of UK dairy exports currently going to EU countries, any disruption to current agreements would have an extensive and costly impact on our industry. We support the Government’s commitment to put in place a strong, swift and effective transitional process and urge them to avoid any kind of interruption to current trade agreements with EU countries or the creation of counterproductive tariff or non-tariff barriers. What we absolutely cannot see is a fall back to WTO default terms as the tariffs within WTO arrangements would have disastrous consequences for dairy trade," Dr Bryans said.

“In addition to uninterrupted access to the EU market, our priority for the UK dairy industry is to avoid the creation of non-tariff barriers and to retain access to productive labour.”

Wright and Dr Bryans sought to emphasise the links between the food industries in the UK and Ireland.

“There is a complete co-dependency in food and drink production between the UK and Republic of Ireland," Wright said. "We urge the Government to find a practical solution which avoids the introduction of any kind of ‘hard’ land border which would damage both economies."

Dr Bryans added: "We welcome the Prime Minister’s decision to protect the Common Travel Area with the Republic of Ireland. The Northern Ireland dairy industry works hand in hand with the Irish dairy industry with common practices developed to improve efficiency and add value throughout the dairy supply chain.”

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