The government is under fire over a “secret” plan to cut up to 90% of tariffs in the event of a no-deal Brexit, after Liam Fox confirmed details would not be released until after MPs vote on Theresa May’s withdrawal agreement next week.
The international trade secretary is the second cabinet minister to say the tariff schedule, which will have huge implications for British business, and particularly farmers, has been delayed again.
Two weeks ago, the environment secretary, Michael Gove, said the tariff plan would be published within days, but now Fox and the business secretary, Greg Clark, have said it will be published only if the House of Commons rejects the prime minister’s agreement and decides the UK will crash out of the EU.
Fox said: “The government will set out the correct tariffs if indeed we get to a no deal. My personal preference is that we would know that information before we take a decision on a no-deal outcome. But I am not in a position to guarantee that would happen.”
In response, the independent MP Chris Leslie said it was wrong to “hold a gun” to MPs’ heads, begging them to vote for May’s deal while keeping details of the alternative no-deal scenario secret.
The Conservative MP Marcus Fysh said: “Can I encourage you as a member of the government to think hard about whether it is fair or even appropriate to be prioritising the commercial sensitivities of business and secrecy … over giving parliament the information about what the conditions of no deal would be when we are potentially being asked to vote on it next week.”
Sky News reported late on Tuesday that the government was planning to slash tariffs on 80%-90% of goods if the UK left with no deal, which would benefit consumers but damage the competitiveness of many British factories and farms.
Gove told the National Farmers’ Union conference last month, however, that tariffs would be introduced on meat to protect farmers from cheap imports.
Tariffs are border taxes charged on foreign imports. Importers pay them upon entry to the customs agency of the country or bloc imposing them.
Tariffs can be levied in different ways. It can be a flat-rate tariff linked to weight, or calculated as a proportion of the overall value of the goods. It can also be a mixture of both. A country can set a quota, enabling a certain volume of a product to flow in before a higher tariff rate kicks in.
Tariffs raise money for governments, but are primarily used to raise the price of foreign goods, protecting domestic producers from global competition.
Countries signed up to the World Trade Organization (WTO) must impose tariffs at the same level for all other WTO-member trading partners under the organisation’s “most favoured nation” rule – unless they secure alternative deals with particular countries or trading blocs.
Britain currently has tariff-free access to EU markets and benefits from the bloc’s trade deals with other countries. But UK exports will automatically face EU tariffs if it crashes out of the union on 29 March without transition arrangements.
Businesses want to know whether Britain, the world’s fifth-largest economy, will impose reciprocal tariffs on imports from the EU. If not, tariffs would have to be lifted on imported goods from most other countries under World Trade Organization rules.
Clark confirmed earlier on Wednesday that the new tariff schedules would be published only if MPs reject May’s agreement.
He acknowledged the changes would have “big implications” for some sectors, including ceramics.
“We have been consulting with different industry sectors on this. It has big implications for different sectors,” Clark told BBC Radio 4’s Today programme.
“Ceramics is an industry that I know very well. It has been subject to very unfair competition, to dumping of very cheap ceramic exports from the far east, from China.”
Car manufacturers, which on Tuesday renewed their warnings about a no-deal scenario, are also deeply concerned about tariffs on components.
BMW said it might be forced to stop making the Mini at its Cowley plant near Oxford, putting more than 4,500 jobs and more than 100 years of carmaking at the site at risk.
Anna Turley, a Labour MP on the business, energy and industrial strategy select committee, said the reported tariff cuts were “unbelievable”.
“Is the government giving up all pretence of Britain being able to make anything any more? This will open the door to floods of imports, from steel to ceramics,” she tweeted.
Fox was challenged over whether a Department for International Trade podcast, which cost more than £100,000 but was downloaded fewer than 9,000 times, represented value for money.
“If all the 9,000 who listened to it became exporters, I would say that’s a successful project. If none of them did, I would question its value for money,” he said.
He was also pressed on the failure to get all existing trading deals with the EU rolled over in time for 29 March.
Fox told them some countries were waiting until the last minute to sign, but the UK was making “good progress” with many nations.
