Tag: Jacob Rees-Mogg

Brexit red tape to send UK food prices soaring even higher

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LONDON — A new system of border checks on goods arriving from Europe is expected to force rocketing U.K. food prices even higher as businesses grapple with hundreds of millions of pounds in extra fees.
British business groups last week got sight of the U.K. government’s long-awaited post-Brexit border plans, via a series of consultations. One person in attendance said the proposals will “substantially increase food costs” for consumers from January.
That could spell trouble in a country which imports nearly 30 percent of all its food from the EU, according to 2020 figures from the British Retail Consortium, and where the annual rate of food and drink inflation just hit 19.2 percent — its highest level in 45 years.

Government officials told business reps at one consultation that firms will be hit with £400 million in extra costs as a result of long-deferred new checks at the U.K. border for goods entering from the EU.
Ministers have argued that the full implementation of the new post-Brexit procedures — which will eventually include full digitization of paperwork and a “trusted trader scheme” for major importers in order to reduce border checks — will more than offset these costs in the long-run as they will also be rolled out for imports coming from non-EU countries as well.
Supply-chain disruption caused by the Ukraine war, poor weather and new trade barriers due to Brexit have all been blamed for the U.K.’s surge in food prices.
A member of a major British business group, speaking on the condition of anonymity, said that incoming post-Brexit red tape will mean “some producers on the EU side will find it is no longer possible to trade with the U.K.” and that “some small businesses will find themselves shut out.”
“It will add to the costs, and probably inflation, but I think we need to go through this so we can work with the EU to find advantageous improvements,” they said.
“We can’t keep running away from the fact we need to implement our own border checks.”
‘Not business as usual’
Britain has delayed the implementation of full post-Brexit border checks multiple times, while the EU began its own more than two years ago.
The government’s new “target operating model,” published last month, will see the phased implementation of new border and customs checks for EU imports from October.
This will include a new fee that must be paid from January for all goods that are eligible for border checks, including items like chilled meat, dairy products and vegetables.
A new fee will be applied from January for all goods that are eligible for border checks, including items like chilled meat, dairy products and vegetables | Paul Faith/AFP via Getty Images
Each batch of goods that could be subject to checks, even if they are ultimately not chosen by border staff for inspection, will be hit with a fee of between £23 to £43 at inland ports.
The first business figure quoted above said the scale of the new fees came as a surprise, after firms had been previously assured by the government that these costs would be dependent on whether goods had actually been checked.
“[Former minister] Jacob Rees-Mogg said there would be minimal costs. Initially we thought it was business as usual, but it’s not,” they said.
“There were people at this [consultation] saying that this is not a massive increase, but it will substantially increase food costs.”
William Bain, trade expert at the British Chambers of Commerce, said there is a “strong prospect” of higher inflation due to the new Brexit checks.
“EU suppliers may be less willing to trade with British based companies, because of increased costs and paperwork. The costs of imported goods would almost certainly increase,” he said.
But he added: “We knew this day was coming and that inbound controls on goods would be applied. It’s a part of having a functional border and complying with the U.K.’s international commitments.”
Reality check
The U.K. has seen trade flows with the EU disrupted since leaving the bloc’s single market and customs union.
Recent analysis by the Financial Times found that Britain’s goods exports are dropping at a faster rate than in any other G7 country.
Recent figures from the Office for National Statistics meanwhile show that U.K. trade in goods with EU countries fell at a much faster rate than from non-EU countries in January.
Conservative MP Tobias Ellwood told POLITICO that he fears his party will pay a price at the next general election, due to be held by January 2025, if the government does not seek better trading arrangements with the EU.
“There’s certainly a revision across the nation when it comes to Brexit — people are realising that what we have today isn’t what they imagined, whether you voted for Remain or for Brexit,” he said.
“The reality check is that it has become tougher economically to do business with the Continent and quite rightly there’s an expectation that we fix this.”
A government spokesperson said: “The target operating model implements important border controls which will help protect consumers and our environment and assure our trade partners about the quality of our exports.
“It implements these important controls in a way which minimises costs for businesses and prevents delays at the border.”

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( With inputs from : www.politico.eu )

April 26, 2023
Rishi Sunak picks his way through budget minefield

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LONDON — “Better than the last guy” might not be quite the tagline every world leader hopes for. It could yet be Rishi Sunak’s winning formula.
The British prime minister, swept into office late last year by wave after wave of Tory psychodrama, has cleared several major hurdles in the space of the past month. His success has even sparked a shocking rumor in Westminster that — whisper it — he might actually be quite good at his job.
That was the murmur among hopeful Conservative MPs ahead of this week’s U.K. budget, anyway — many of them buoyed by the PM’s recent moves on two long-running sources of angst in Westminster.
First came an apparent resolution to the intractable problem of post-Brexit trade arrangements in Northern Ireland. Sunak’s so-called Windsor Framework deal with Brussels landed to near-universal acclaim.
A week later, Sunak unveiled hard-hitting legislation to clamp down on illegal migration to the U.K., coupled with an expensive deal with France to increase patrols across the English Channel. Tory MPs were delighted. The Illegal Migration Bill sailed through parliament Monday night without a single vote of rebellion.
Then came Wednesday’s annual budget announcement, with Sunak hoping to complete an improbable hat trick.
It started well, with Chancellor Jeremy Hunt making the big reveal that the U.K. is no longer expected to enter recession this year, as had been widely predicted.
But a series of jaw-droppers in the budget small print show the scale of the challenge ahead.

The U.K.’s overall tax take remains sky-high by historic standards — an ominous bone of contention for skeptical Tory MPs and right-wing newspapers alike. Meanwhile, millions of Britons’ living standards continue to fall, thanks to high fuel bills and raging inflation. U.K. growth forecasts remain sluggish for years to come.
“He’s chalking up some wins,” observed one former party adviser grimly, “because he’s going to need them.”
‘Workmanlike’
Among all but the bitterest of Sunak’s Tory opponents, there is a palpable sense of relief about the way he has approached his premiership so far.
“It doesn’t mean everything will suddenly turn to gold,” said Conservative MP Richard Graham, a longtime Sunak-backer. “But like Ben Stokes and England’s cricket team, his quiet self-confidence may change what the same team believes is possible.”
Nicky Morgan, a Conservative peer and former Treasury minister, praised a “workmanlike” budget that would reassure voters and the party there was a “firm hand on the tiller” after the “turmoil” of the preceding year with two prime ministers stepping down, Boris Johnson and then Liz Truss.
UK Chancellor Jeremy Hunt meets children during a visit to Busy Bees Battersea Nursery in south London after delivering his Budget earlier in the day | Stefan Rousseau/POOL/AFP via Getty Images
Most of Wednesday’s biggest announcements, including an extra £4 billion for childcare and a decision to lift the cap on pensions allowances, were either trailed or leaked in advance. This may have made for a predictable budget speech, but as Morgan put it: “I think that’s probably what businesses and the public need at the moment.”
An ex-minister who did not originally support Sunak for leader said that the general tone of the budget, together with the Northern Ireland deal and small boats legislation, meant that “increasingly it’s hard for hostile voices to pin real failure on Rishi.”
Others, however, fear key announcements could yet unravel. An expensive change to pension taxes was instantly savaged by critics as a “giveaway for the 1 percent.” Headline-grabbing back-to-work programs and an expansion of free childcare will take years to kick in.
Hiking corporation tax was the “biggest mistake of the budget,” Truss ally and former Cabinet minister Jacob Rees-Mogg complained.
Doing the hard yards
Observers note that in the wake of the rolling chaos under Truss and Johnson, the bar for a successful government has been lowered.
“[Sunak] could stand at the podium and soil himself, and he’d be doing a better job than his predecessors,” noted one business group lobbyist on Wednesday evening, having watched budget day unfold.
But even Sunak’s fiercest critics praise his work rate and attention to detail, in sharp contrast to Johnson. Most accept — grudgingly — he has set up an effective Downing Street operation.
Having returned from his Paris summit last Friday evening, the PM kicked off budget week with a whirlwind trip to the west coast of California to launch a defense pact with the U.S. and Australia, arranging a bank bailout along the way. He landed back in the U.K. less than 24 hours before Hunt unveiled the annual spending plan.
“It turns out working like an absolute maniac and being forensic is quite useful,” one of his ministers said.
Another Tory MP added: “He’s got the brainpower and will do the hours. He’s not good at barnstorming politics or old school dividing lines — but he is good for the politics we have right now.”
There has also been a clear effort to run a tighter ship behind the scenes at No. 10. One veteran of Johnson’s Downing Street said the atmosphere seemed “calm” in comparison.
There are tentative signs that voters are starting to notice.
James Johnson, who ran a recent poll by JL Partners which showed Sunak’s personal ratings are on the up, said the PM’s growing reputation as a “fixer” seems to be behind his recent rally, and that the biggest increase on his polling scorecard was on his ability to “get things done.”
It remains to be seen if this will shift the dial on the Tory Party’s own disastrous ratings, however, which languish some 25 points behind the opposition Labour Party. “Voters have clearly lost trust in the Tories,” Johnson said. “But if government can deliver … I would expect it to feed through.”
Anthony Browne, a Tory MP elected in 2019, expressed hope that Sunak had begun “changing the narrative” which in turn “could restore our right to be heard.”
Trouble ahead?
Sunak will be well aware that plenty of recent budgets — not least Truss’ spectacular failure last September — have unraveled in the 72 hours after being announced.
And while expanding free childcare, incentivizing business investment and ending the lifetime pensions allowance were all crowd-pleasers for his own MPs, they were not enough to conceal worrying subheadings.
The tax take is predicted to reach a post-war high of 37.7 percent in the next five years, while disposable incomes are hit by fiscal drag pulling 3.2 million people into higher tax bands. Right-wing Tories are not impressed.
Ranil Jayawardena, founder of the Conservative Growth Group of backbench MPs, described it in a statement as “an effective income tax rise,” which will be “a concern to many.”
Net migration is set to rise to 245,000 a year by 2026-27, and will add more people to the labor force than all the measures intended to make it a “back to work” budget, according to the Whitehall’s fiscal watchdog, the Office for Budget Responsibility (OBR). The message is not one Conservative MPs want to hear.
Already singled out by Labour’s Keir Starmer as a “huge giveaway to the wealthiest,” scrapping the lifetime allowance on pensions will cost £835 million a year by 2027-28 while benefiting less than 4 percent of workers. Conservative MPs reply that NHS doctors are one of the main groups to benefit.
Perhaps most worrying of all, the government’s own budget expects living standards to fall by 6 percent this year and next — less than the 7 percent fall predicted in November but still the largest two-year fall since records began in the 1950s.
There are some problems that can’t be solved by pulling an all-nighter. Ironically for Sunak, whose career was made in the Treasury, his may prove to be the state of the U.K. economy.
Rosa Prince, Stefan Boscia and Dan Bloom contributed reporting.

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( With inputs from : www.politico.eu )

March 15, 2023
Brexit: UK and EU strike deal on Northern Ireland protocol

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LONDON — The U.K. and the EU finally reached a deal after months of talks over contentious post-Brexit trade rules for Northern Ireland.
Already, both sides are pitching it as a major reset in frayed relations — but U.K. Prime Minister Rishi Sunak still has to sell it to skeptics in his own party and beyond.
The so-called “Windsor Framework” comes after a final day of talks between Sunak and European Commission President Ursula von der Leyen in Windsor.

In key developments Monday:
— Sunak and von der Leyen talked up the deal as a “new chapter” in EU-U.K. ties at a Windsor press conference.
— The U.K. PM urged his MPs to get behind him in a Commons statement, as key Brexiteers gave supportive early comments.
— Northern Ireland’s Democratic Unionist Party (DUP) vowed to study the text closely before deciding whether or not to back it.
— And Brexiteers in the U.K. hit out at No. 10 Downing Street over a meeting between King Charles III and von der Leyen on the same day a deal was struck.
‘New chapter’
Details of the new agreement are now being pored over by lawmakers on both sides of the English Channel, but the plan is aimed at easing customs red-tape, equalizing some tax rules across the United Kingdom, and giving Northern Ireland’s lawmakers more of a say over the future of the arrangement.
“The United Kingdom and European Union may have had our differences in the past, but we are allies, trading partners and friends, something that we’ve seen clearly in the past year as we joined with others to support Ukraine,” Sunak said at the joint press conference. “This is the beginning of a new chapter in our relationship.”
That line was echoed by von der Leyen, who said the plan would allow the two sides “to begin a new chapter,” and offer up “long-lasting solutions that both of us are confident will work for all people and businesses in Northern Ireland.”
Sunak — under pressure to hold a House of Commons vote on the agreement — told MPs Monday evening that the arrangement would end “burdensome customs bureaucracy” and “routine checks” on goods moving from Great Britain to Northern Ireland, and claimed he had “delivered what the people of Northern Ireland asked for … We have removed the border in the Irish Sea.”
He now faces the sizable task of convicing Brexiteer lawmakers on his own Conservative benches, many of whom will be closely watching the verdict of Northern Ireland’s fiercely anti-protocol DUP, to get on board.
“Our judgment and our principled position in opposing the protocol in Parliament and at Stormont has been vindicated,” said DUP leader Jeffrey Donaldson Monday night. “Undoubtedly it is now recognized that the protocol does not work. When others said there would be no renegotiation and no change, our determination has proved what can be achieved.”
Stormont brake
The protocol has been a long-running source of tension between the U.K. and the EU, and the two sides have been locked in months of talks to try to ease the way it works.
Under the arrangement, the EU requires checks on trade from Great Britain to Northern Ireland in order to preserve the integrity of its single market and avoid such checks taking place at the sensitive land border between Northern Ireland and the Republic of Ireland.
The DUP has been boycotting the region’s power-sharing government while it pushes for major changes to a set-up it sees as driving a wedge between Northern Ireland and the rest of the U.K.
Speaking at the press conference, Sunak and von der Leyen talked up a host of changes to the protocol that they hope will be enough to restore power-sharing in Northern Ireland.
Under the revised plan, goods moving from Great Britain but destined only for Northern Ireland will travel through a new “green lane” with fewer checks, while a separate, more stringent, “red lane” for goods at risk of moving on to the Republic of Ireland — and thereby entering the EU’s single market — will now operate.
Sunak said food retailers would “no longer need hundreds of certificates for every lorry” entering Northern Ireland, while food made to U.K. standards will be able to be freely sent to and sold in Northern Ireland. He also vowed that the new pact would scrap customs paperwork for people sending parcels to family or friends or shopping online.
UK PM Rishi Sunak and EU Commission president Ursula von der Leyen hope that the host of changes to the Brexit protocol announced today will be enough to restore power-sharing in Northern Ireland | Dan Kitwood/Pool/AFP via Getty Images
The two sides have also amended the text of the protocol, Sunak said, to allow U.K. VAT and excise changes to apply in Northern Ireland — while a “landmark” settlement on medicines will mean drugs approved for use by the U.K. medicines regulator will be “automatically available in every pharmacy and hospital in Northern Ireland.”
And London and Brussels are now jointly pitching a new “Stormont brake,” claiming this will allow the devolved assembly in Northern Ireland — currently on ice amid a DUP boycott over the protocl — to prevent changes to EU goods rules “that would have significant and lasting effects on everyday lives” from applying in the region.
“This gives the institutions of the Good Friday Agreement in Northern Ireland a powerful new safeguard based on cross-community consent,” Sunak promised.
DUP’s next move
As he departed for London, DUP leader Jeffrey Donaldson said he and senior party colleagues would “take time to look at the deal” – a process likely to run at least through the weekend and to involve specially-commissioned analysis by constitutional lawyers. Early word from some Conservative Brexiteers was positive, with David Davis — who quit Theresa May’s government over her own EU deal-making — hailed it as a “a formidable negotiating success.”
Before flying out of Belfast, Donaldson briefed his party’s 25 members of the Northern Ireland Assembly about the expected key points. The DUP lawmakers met at Stormont, the seat of the power-sharing legislature that the DUP has blocked since May.
Donaldson said the DUP’s legal counsel would produce a detailed analysis for consideration by the party’s executive officers.
“It is vital that Northern Ireland’s place within the U.K. and its internal market is restored. We will have lawyers assess the legal text to ensure that this [is] in fact the case,” Donaldson told the Belfast News Letter, the main unionist newspaper in Northern Ireland.
Later, Donaldson told the BBC he was “neither positive nor negative” when assessing whether the DUP should accept the compromise package on offer.
“We need to take time to look at the deal, what’s available, and how does that match our seven tests,” he said, referring to the DUP’s July 2021 list of demands for “replacing” the protocol.
Other DUP officials said the party’s senior leadership would convene at party headquarters in Belfast, possibly on Saturday, to review the party’s legal verdict on the deal – and whether concessions won by the U.K. government were sufficient to end the DUP’s obstruction of power-sharing at Stormont.
Donaldson will seek maximum support at that meeting before committing to any policy pivot on the protocol. Other senior officials, including former deputy leader Lord Dodds, have explicitly rejected the idea of reviving Stormont if the revised protocol agreement retains any oversight role for the CJEU. Both Donaldson and the DUP’s “seven tests” have stopped short of drawing this red line.
Ever since narrowly losing May’s assembly elections to the Irish republicans of Sinn Féin, the DUP has refused not only to form a new cross-community government – the assembly’s central function under terms of Northern Ireland’s 1998 peace accord – but also has blocked the election of a neutral speaker for the assembly, preventing it from sitting.
This developing story is being updated. Annabelle Dickson and Noah Keate contributed reporting.

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( With inputs from : www.politico.eu )

February 21, 2023