The one area of trade which will be affected by moving to WTO trade arrangements in the event of no trade deal with the EU is the trade in food. This is the only area where high tariffs canĀ be levied, and are currently levied by the EU on imports from Ā outside the zone. Were we to adopt the EU schedule of food tariffs on leaving the EU, they would represent aĀ barrier to continental exporters of food to us.
Our trade in food is in massive deficit with the EU. They sell us the bulk of the Ā£6bn of meat we import, and much of the Ā£10bn of fruit andĀ vegetables. Since we joined the EEC/EU our home producers have lost substantial market share to the rest of the EU, and have found it very difficult to export to the continent. Our beef industry was banned from exporting for a long period, and our milk industry did not have enough quota to produce more. Since 1990 our meat output is well down, our milk output has flatlined and our potato output is down.
The Netherlands have been successful at taking market share for salad stuffs and vegetables. The Danes dominate the ham andĀ bacon market, continental cheese producers do well, and the French and German dairy industries also export large quantities to us.
If the EU decides against a free trade agreement with the UK then UK farms will have a great opportunity to produce far more fruit, vegetables and meat for the Uk market. We could return from Ā the 74% self sufficiency in temperate food to the 95% level we were at prior to the full impact of the Common Agricultural policy. We will also be able to remove tariffs from tropical food products which the UK cannot grow for itself, giving the consumer a better deal.
January 16, 2018
Bunkum..where are we going to get the agricultural workers in the numbers that would be required? and the foreigners will all have gone home..
January 16, 2018
Harry
If we had an immigration policy such as Australia or NZ has then we would ask for people to come as and when we needed those particular skills. At one time Australia was crying out for hairdressers – yes, hairdressers, firemen, midwives and pipe fitters. You just have to get in those you need at the time and not those who don’t add to the economy. All immigrants already here have been offered security so I don’t know what they are concerned about. Whichever party is in they are hardly likely to start throwing out thousands of people.
January 16, 2018
Fedupsoutherner..you don’t get it yet..people will not come here because they don’t feel welcome..the word has gone out loud and clear to the four corners that foreigners are not welcome
January 16, 2018
Harry
I see the so called refugees are growing in Calais again, and in many other Ports, clearly people still do want to come here.
I wonder why, given we are such an undesirable nation.?
January 17, 2018
I would tell the French Calais camps would not exist if they controlled their borders better, so do not put your problems on this country. Goodbye.
January 16, 2018
It is indeed unfortunate that people like you, Harry, are blaring out this message. You have all been doing it since you lost the referendum, in some kind of self-harming revenge. And you are harming us.
January 16, 2018
Harry, So why are there at least 9 million people (**) of foreign birth still resident in the UK? And why did even more (107,000 net) come here from the EU last year (to June 2017, ie in the year after the Referendum)?
(**) official numbers by passenger survey; NINos indicate a lot more even accounting for returnees.
January 16, 2018
Then explain please why we are still experiencing net immigration.
January 16, 2018
Harry, the only thing we have said is that uncontrolled immigration is not welcome. We have never said collectively that foreigners are not welcome. There are still large numbers of immigrants still coming and many who would give their right arm in Calais to come over. Does a strict immigration policy put people off moving to NZ, Australia, Canada or the USA. Of course not.
January 16, 2018
Firstly it is Remainiacs who say foreigners are not welcome is the message of Brexit not leavers so that is a problem of your own creation if it exists. I had lunch with a farmer recently who also told me as a fam manager & expert that robotics will take over such manual work soon and he has already seen strawberry picking machines that are amazing and work.
January 17, 2018
All the talk about existing EU workers having to go home, bargaining chips etc came from remainers like May, as advised by civil servants. All they had to do was read the leave and UKIP manifestos, where it was made plain that they would be welcome to stay. Unfortunately, the Remain slur has been picked up in the EU and repeated to the extent that most Europeans think, as the Yooflakes, that Brits are xenophobic racists.
January 16, 2018
History has shown that whenever we had a shortage of labour on the land it led to innovation and new methods. The steam tractor replaced horses when there was insufficient labour and in due course they were replaced by the modern tractor. Reaping the corn was once done with scythes, then my horse drawn machinery, and then by the combine harvester. In the US, when they no longer had slave labour to pick the cotton, a machine was invented.
The same will happen again if there is a labour shortage whether on the farm or in any other major activity. Whilst there is plenty of labour there is no incentive for change.
January 16, 2018
Don’t worry, with so much of the world so poor it will be a long time before there is any shortage of foreigners keen to come and live and work in the more prosperous UK, especially with the prospect of permanent settlement and citizenship. But in any case no doubt there are still major improvements to be made to further reduce the need for human labour in the fields if the present supply of cheap foreign labour was restricted, it would just need enough time for the adjustments to be made.
January 16, 2018
Visas.
Worked before. Can work now.
If not then students and unemployed – like they used to do.
January 16, 2018
Harry: “where are we going to get the agricultural workers in the numbers that would be required?”
Robotics threatens to make Taxi drivers redundant with the introduction of ‘driverless’ cars. Driving a vehicle is a pretty complex task that is now in the domain of the robot.
Robotics can do something similar in the agricultural sector too. Could you conceive of an agricultural sector that doesn’t need low cost labourers but instead the farmer employs highly qualified* technicians?
*Which our education system ought to be able to produce.
January 16, 2018
“Robotics can do something similar in the agricultural sector too. ”
Of course that implies fuel to run the Robots is cheap.
Another opportunity stymied by the high energy cost policies the government John Redwood supports, implement.
January 16, 2018
Harry, I am puzzled why Remains, such as yourself, try to win the argument by saying something(s) extreme which you know – or with a bit of research can find out – is not true. Do you think it advances your cause? And why do Remains, upon discovering a problem, throw up your hands in surrender and claim only the EU can solve it? How do you manage to solve problems in your own life, if that’s your outlook?
First: immigration is not going to stop. Instead we will be able to control it, and reduce it back to post WW2 levels. The numbers will be decided by us after weighing up the politics, the costs/benefits, and the suitability for our own country’s needs, not the EU’s.
Second: the foreigners will not all go home. Moreover the small total seasonal increase in agriculture/horticulture workers (est 75,000 by Parliamentary briefing CBP-7987) can be met easily in a workforce of 31 million with flexibility: pensioners; students; part time contractors; zero hours workers; some temporary foreign labour even; etc.
January 16, 2018
Harry,
We have 10 million part-time workers.
Have a wander down to your local Aldi or Lidl and ask the staff who are capped on 25 hour a week contracts, working 4-5 hour shifts, if they would like more hours.
Most would.
If we can get just 20% of those part-time workers employed for an extra 10 hours a week, we gain the equivalent of 500,000 full time staff.
NO need for training so a saving for employers.
Reduced need for in-work benefits, so saving for the Treasury.
More money in the pockets of workers and more effectively than nudging up the minimum wage.
It could be easily done.
Employers National Insurance is the main problem. o% to Ā£157 pw and then 13.8% thereafter means employers of low-skilled workers are incentivised to offer less hours per week and leave the tax credits / housing benefit to pick up the tab.
Flat rate Employers NI at say 8% would sort this and allow employers to offer existing staff more hours when other staff leave.
It would free up labour to take on more work.
That is without considering the large number that are still unemployed.
It seems incredulous that we can bring in coach loads of eastern Europeans to the farms of Lincolnshire, but we can’t get them down from Grimsby and Scunthorpe.
What we can do, if we had a Treasury attuned to what happens on the ground, is adapt tax policy in a neutral way as I have set out to try and adapt the behaviour of employers and employees.
January 16, 2018
Where are all the fruit pickers from last year or the year before or the year before that gone? Net immigration hasn’t gone down so they must be somewhere in the country.
January 16, 2018
Those who contribute are most welcome, those who do not are not.
If we have jobs that by the standards of immigrants’ home countries are well paid, and given that most Europeans speak fluent English there will be no shortage of workers.
My first summer jobs whilst at school were bean picking, tomato picking and apple picking. If farmers pay a decent rate home grown seasonal staff are there to be had.
January 16, 2018
Our internationally low productivity levels are there because of cheap labour rather than technology. What do you think is the future technology or cheap labour?
Slave labour got out performed by technology, you sticking with the EU cheap labour or the Global drive to technology and electrical power?
January 16, 2018
Unfortunately we have signed up to regulatory alignment with the EU in the event of no deal.
So EU ,including Irish ,exports to us have already been secured and our ability to do trade deals with others has been curtailed.
I look forward to trying chicken and beef during a forthcoming visit to the US to test the views of those railing about them already.
Please tell me Iām wrong but the prospect of a no deal outcome has effectively disappeared already.
January 16, 2018
What exactly is regulatory alignment. If it is supplying what the customer wants then we do this for all customers worldwide. It is normal business practice. If however it is the EU attempting to tell us and to control how we supply what they want beyond the quality of the product then they should be told no dice. I do not mind them having views on the use of slave labour, but if it is a matter of dictating how many health and safety officials we have per 1000 units of production then no way Jose.
January 16, 2018
Agricola, Regulatory alignment means the UK must apply EU rules to everything we do, not just for our exports to the EU. It is not-leaving called by another name.
January 16, 2018
JR: can you please clarify the point claimed here; that our ability to do trade deals with others has been curtailed because we have signed up to regulatory alignment?
Reply It is not clear that we have signed up to regulatory alignment. To do trade deals elsewhere we need to be in charge of our own affairs, and we need equivalence to trade services.
January 16, 2018
“It is not clear that we have signed up to regulatory alignment.”
I know it is not clear, and that it is supposed tobe an Irish-pleasing fudge but when you read it, it looks more like civil servants in Brussels and London working hand in glove to hobble us.
January 16, 2018
Reply to reply.
Then it needs to be made clear exactly what this means ?!?!
January 16, 2018
Man of Kent: No, the Joint Report of Dec. 7th (Art. 49 and 50) does not say that. It gives gives a hypothetical solution for NI: ” In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement.”
That is in the context of a future deal with the EU.
Nothing is agreed until everything is agreed.
In the case of No Deal, all the provisions of the negotiations so far would be null and void. If we walk away tomorrow, none of what has been negotiated so far (including EU Citizen’s rights, ECJ role etc) would have any validity.
January 16, 2018
So if there is no deal your wording applies .
The Irish political class are sure they have won !
January 17, 2018
No, if there is no deal, none of Art. 49 or 50 or indeed any of the Joint Agreement would apply.
Btw the ‘Irish political class’ of course includes the Northern Irish political class: history shows that they have very effective ways of resisting punching above their weight to ensure Northern Ireland remains an integral part of the UK, as enshrined in the Anglo-Irish Treaty.
January 18, 2018
Sorry, missing comma: “they have very effective ways of resisting, punching above their weight…” etc
January 16, 2018
I note today in a “leaked” EU memo the EU is demanding a veto on UK replacing existing EU trade deals with non-EU countries, āunless authorised to do so by the EUā.
It does seem that Hammond and May have sown up the Leave campaign to the extent that we will not really be leaving.
John , dump Hammond’s unnecessary and counterproductive extension period.
January 18, 2018
Comment missed for moderation here.
January 16, 2018
UK farms will have a great opportunity to produce far more fruit, vegetables and meat for the UK market, but they will have been shut out from the – much bigger – EU market because of your willingness to throw away all the trading benefits we have right now
January 16, 2018
I think JR is making the point that the increased share of the UK market would be greater than loss from the EU market. Basically the UK does’t benefit from the “much bigger” EU market.
At the end of the day the EU food market is still finite and many sectors are dominated by a few countries.
January 16, 2018
How can they be “shut out”?
Such action by the EU would be illegal under both WTO rules and EU law.
January 16, 2018
Tasman, did you miss this part of the article?
“Our trade in food is in massive deficit with the EU.”
There are just a few sub-sectors where the UK is a net exporter of food products to the EU, for all the rest the size of the EU market is of no particular benefit.
January 16, 2018
You should not believe Labour Party propaganda. Just recall how many Labour Party members are in the House of Lords then you’ll know where that party is coming from.Hypocrisy-Land!
January 16, 2018
Indeed leaving the EU cleanly and properly is clearly a win, win on food prices, food miles and for UK food production companies. As is leaving CAP and getting back to a sensible farming, fishing & energy regime.
Unfortunately Philip Hammond actually thinks that:- Britons āwant to the keeps European economic modelā. Why on earth would they want to keep this failed EU economic model of bloated government, expensive unreliable energy and over regulation & taxation of everything?
Another failed, big government know best, one size fits all system that has been a total disaster for Europe. Rather like Hammond’s absurdly damaging tax ’till the pips squeak tax lunacy.
January 16, 2018
Anyway, most people (and indeed myself) eat rather too much, as we can all see. With many rather easily avoidable and very expensive health consequences for the nation.
January 16, 2018
@Lifelogic,
You don’t give evidence to base your commentary.
Sweden, Denmark, Norway and Finland have relatively high taxation and government/nationalisation and relatively higher GDP per capita than the UK.
The Netherlands and Switzerland have far higher regulation than the UK but relatively higher GDP per capita.
Germany has far higher productivity and exports far more to both EU and non-EU than the UK (euro helps but not that much).
These are the facts. The evidence. In other words we need to be PRAGMATIC not ideological about Conservative economic policy, looking around the world at what works and doesn’t work.
Clearly, USA has strong economy but it serious social problems. And its successful economy rests, to an important degree, on its high tech sector – an industry that the Conservative Party should be talking about all the time but doesn’t.
Meanwhile Japan has very low nationalisation and relatively low GDP per capita compared to Sweden, Denmark, Netherlands and Germany.
And not forgetting, lastly, that the Brits see themselves, culturally (in work practise and everything else) as Europeans not Americans or Asians. We should be looking towards Sweden, Denmark, Netherlands and Germany far more to see what they are doing right and how we can learn more from them.
January 16, 2018
Perhaps the reason we don’t look towards Sweden, Denmark, Netherlands and Germany more is that their economic model is based more on soft capitalism and work ethic than hard capitalism and greed. Ouch. But that’s the truth.
January 16, 2018
Not forgetting Boris Johnson’s shameful ‘greed is good’ mantra at Tory conference year or two ago.
It was the Quakers and all the companies they created, and their sense of work ethic, that helped to make this country great.
January 16, 2018
Whether we remain in or leave the EU, whatever, this country is seriously going to have to work out how to bring back work ethic, patriotism and public duty into British life (and by patriotism, i don’t mean cheap flag-waving, i mean a real, genuine love for country which includes people not just culture and natural world important as that is). We’re too individualistic, whether it be people in business, neighbours not talking to each other, teenagers answering back to their elders, or politicians out for their own careers instead of thinking of their country (and i can think of two in particular in government – both of whom come with journalistic backgrounds – won’t say more).
Politicians can play their part in making this country great, but it also needs a radical shift in culture which depends on the Church, people in education, the arts world and so on. Politicians, however, can play an important role in calling for a cultural change.
January 16, 2018
Hammond works for the likes of the CBI which is an EU business club. He has no regard for what “Britons”, or the winning referendum voters want.
That Theresa May did not remove Hammond is an indication of what the final deal will be.
January 16, 2018
Our trade in food is in massive deficit with the EU. They sell us the bulk of the Ā£6bn of meat we import, and much of the Ā£10bn of fruit and vegetables.
Surely this is only the case because we have to so as to comply to eu laws, but once we leave the dreaded eu we can be nearly self sufficient in meat and vegetables milk and butter, I for one donāt give a dam if we have food mountains again
January 16, 2018
If UK farmers wanted to produce dairy, beef, pork and chicken in competition with producers on the continent they could have done so a long time ago. Somehow that did not happen to the extent people on this forum seem desirable. Whay not look at the causes of this apparent failure and the prossible effects of brexit on that industry, rather than exhibit primitive nostalgic notions that have no basis in facts. The best guess about what would happen after leaving the EU is that the UK would have no trade protection for agriculture, standard WTO terms or a trade agreement with another partner or bloc. In all these cases UK farmers would probably be selling less, rather than more, unless there were targeted subsidies. From your taxes.
January 16, 2018
Good morning.
This is the thing that the rEU 27 fear the most -competition ! And that is why regulatory convergence was absoluty vital to them. By use of regulatory means, the EU and the rEU 27 can keep not only competitors out of certain markets but, prevent the UK developing new markets, ideas and so on. If the UK were to discover some technological field in sicence, engineering and manufacturing that would give the UK the edge over competitors, you can bet that therEU 27 will seek either legislate and ban it or, create such a regulatory minefield that we would not only be unable to sell it to them, but use it ourselves and abroad.
Because of one country, RoI, which sells a great deal to the UK, we have put ourselves in a very bad position. The RoI has much to lose. Not only in terms of exports, but also the very favourable tax regime it employs. This favourable tax regime is exploited by large corporatin to the detriment of not only SME’s but also the UK taxpayer who has to ineffect subsidies them even further by making up the tax that they legally through the EU avoid. I’d hoped that the UK leaving the EU some people in government would see the advantages, but alas I was terribly mistaken.ā¹
January 16, 2018
One thing is for sure, the more people who live here, the more food we need and will get consumed, so better to produce here than import.
The more houses you build, the less farmland we will have available.
More people equals more water storage and treatment, bigger infrastructure requirement, more schools hospitals and probably ever larger Council Offices.
They all take up land !.
I assume we will stop paying famers to leave fields vacant, or will we ?
January 16, 2018
With the drive to produce higher and higher quality and welfare standards for animals, you have to accept that the price of such food will rise, and the quantity per acre will reduce, and the same will apply with organic produce.
More and more poly tunnels and green houses, also means more and more initial investment is also required.
Importing food from the developing Countries instead of developed World should seriously be considered, with no or low tariffs, as an encouragement to grow their own economy, instead of simply sending them Foreign Aid over which we seem to have little or no control..
January 16, 2018
Better would be to get rid of tariffs and import high quality cheaper food from countries around the world such as New Zealand. This would equivalent of a major tax cut in boosting the economy. Letās not lower ourselves to the EUs protectionist and mercantilist level, if they do decide against an FTA and go for imposing trade barriers.
January 16, 2018
Reading todays briefing paper for the next round of negotiations it would appear that a second punishment beating is being lined up.
Free movement after we leave. Brussels fishing quotas to remain. No FTA,s without their permission
True Vassal state. No doubt agreeable to Clarke Heseltine and company.
January 16, 2018
Ian,
I agree with your worries, it appears from the outside, that this Conservative Government has given away all and any advantages to the UK in leaving the EU.
We need a free hand to trade and we need a free hand to decide who comes in to this country and any benefits they may or may not receive.
January 16, 2018
They havenāt given away any advantages. There are no advantages. The quicker Brexiteers figure that out the better for everyone.
January 16, 2018
Negotiating to win usually does not involve an indulgence like punishment. The threat of “punishment” (ie a painful loss) tends to be more effective than the thing itself..
January 16, 2018
I entirely agree with you – that is the EU strategy. The UK needs to be fully prepared to call the EU’s bluff.
A (hopefully short) WTO-plus period would concentrate EU minds wonderfully. The WA and FTA should be signed and ratified in parallel.
“In negotiations, you are always more powerful than you think you are.”
January 17, 2018
Show us, they will say
January 16, 2018
It is immensely concerning. I hope JR will address it himself.
January 16, 2018
Ian, Yes, the government is complying with Remain demands that we stay subject to the EU for as long as possible, and pay lots of money for the “privilege”. Oddly enough the Remains then complain at the outcome of their own advice.
January 16, 2018
UK is the obvious place for produce that can be home-grown.
I am sure some importers will also be keen to invest in Africa where there is great potential for growing fresh produce for our market.
Trade not aid!
January 16, 2018
Kenneth: “invest in Africa where there is great potential for growing fresh produce for our market.”
Well, Rhodesia was a net exporter of food. Mugabe’s administration turned that into food shortages and malnutrition.
January 16, 2018
Ah the glories of Socialism.
January 16, 2018
First choice UK produce. Then fruit & veg from South Africa which taste fantastic. Lamb, beef, wine and butter from New Zealand and Australia. Beef from America. The Government need to be preparing for a No Deal by expanding ports like Liverpool to enable them to receive more imports, giving grants for new fishing vessels, removing all farming quotas from the date we leave, stopping set aside now. The Government really need to get on a war footing otherwise the EU will make us pay dearly and cause chaos unless we meet their demands. Can MPs not see the writing on the wall. Donāt they know that if you try to get back with a partner after a divorce it rarely works out. Anger and bitterness prevail. Time is running out
January 16, 2018
“Our beef industry was banned from exporting for a long period”
Forgot to mention Mad Cow Disease?
January 16, 2018
And wonderful british roast ribs of beef on the bone we had almost every weekend too at the time I recall (excellent value too). What happened to that scare?
Still no significant warming since 1998 despite the (mainly beneficial) increases CO2 concentrations and absurd computer predictions. How much longer before we fire (or better still arrest) all the climate alarmists and fraudsters?
January 16, 2018
LL. No significant warming since 1998 – you’re not wrong there. Here in Scotland we are having horrendous weather. Snow, wind and really cold. It is a real winter which many said we wouldn’t have anymore due to global warming. How wrong can they be? It’s just been reported that for all of Germany’s green energy commitment they have only saved one percent of carbon emissions!! What an expensive experiment.
January 17, 2018
An experiment that one does not need to do as the tiny saving (if any at all in reality) were entirely predictable from a simple paper calculation.
January 16, 2018
I don’t know of one person who contracted CJD. Nor bovine TB for that matter.
January 17, 2018
I do not think there are any significant increase in CJD rates despite the fact that they were all now looking hard for it.
January 17, 2018
I nursed 2 males in their 20’s with CJD at Salford Royal . It is a heartbreaking disease.
January 16, 2018
Where should we buy anything is the real question. The answer to that is obvious. From where ever or whoever offers the consumer the price and quality that is to their liking. Protectionists, the EU very much being one of them, would prefer that that is not the case and would deny the consumer a higher standard of living and the basic human right of the freedom to be able to choose what kind of life he/she wishes to live. The best protection unless it is to protect one group or individual from doing harm to another individual or group ‘s person or property is not by coercion but by giving advice which they are at liberty to accept or not.
Prohibition and coercion are the tyrants most effective tools with which both are used by all and sundry with considerable alacrity. Even by those who profess to be doing so only as being out of our best interests and to stop us from self harm. Nonsense of course even if some genuinely believe that is what they are doing as all they are in fact doing is achieving control and dominance over us to satisfy their ideological beliefs or for other nefarious reasons. Once free of the EU that will be one massive step in freeing us from the chains imposed by protectionism (prohibition and coercion). The next step then will be to cut governments and their agents down to size, to put busybodies, the self righteous and others who wish to impose restrictions upon us out of business. Also very importantly open up the world to free trade and free association(although we will have to rethink things like welfare and how to cope with very different cultures for that to be practicable) so we can enhance our lives by having the cheapest and the best.
January 16, 2018
Can we please immediately reverse the misguided policy and practice of planting trees on perfectly good farmland. We should go further and start chopping some down. It’s another ‘fashion’ that we will come to regret when people come to their senses and realise it serves no real purpose other than to satisfy the ‘warmists’ in government and elsewhere.
And if we maintained drainage ditches and rivers as we should there would be far fewer areas of waterlogging, bringing more land into productive use.
In Holland they use every scrap of land to grow things and good luck to them. They’ve got sense, they don’t spend their time virtue signalling to the world about ancient hedgerows and woodlands. No wonder they have stuff to sell and of course we buy it, thinking we are too superior as a society to grow it ourselves because we are ‘saving the planet’.
January 17, 2018
In holland they are (and have been for a long time, turning farmland into forest and, more importantly, wildernesses along the main rivers to prevent flooding. Makes perfect sense. You do not need a lot of land to produce food, as long as you have well educated and capitalized farmers. Holland is the world’s #2 net exporter of agricultural products (by value), after the US, with one of the highest population densities in the world and occupying only a very small fraction of the population. And much of that could be done by other EU farmers, like for instance UK farmers, if they had the motivation, the skills and the organization. Apparently they prefer doing things differently.
January 17, 2018
They are brilliant at fishing too. Just switch on the juice and up they float. The mass -produced tomatoes depend on electricity too, with lights and nitrogen in the liquid nutrients. Probably why they don’t taste of anything.
January 16, 2018
A trade deficit is not a real thing at all but leaving aside the baby level economics if you wish to make the case for protectionism you do it . If not – stop posting this stuff
January 16, 2018
If Hammond knew what he was doing he could offer a job guarentee to anybody willing and able to work.
Those people could be used for import substitution. We could easily move back to the days of full employment. We could replace the automatic stabilisers with a pool of employed instead a pool of unemployed. Then the private sector could hire from that pool of employed instead of not wanting to hire from a pool of unemployed.
How do you pay for the job guarentee ?
Simple the monopoly issuer of the currency credits banks accounts with digits from thin air. The people spend most if not all of their income pushing up aggregate demand and the currency is returned to the reserves where it is destroyed in the overnight interbnak market.
January 16, 2018
Once again, the GBP/USD movement that you mention here is strongly associated with EUR/USD strength. A sign that the currency markets believe that brexit will not result in a decoupling of UK economic development from the EU.
January 16, 2018
Rien, Yet Remains (yourself included?) maintained that the GBP sinking against the USD and the EZ Euro after the Referendum was a sign that the currency markets believed that Brexit would result in a decoupling of UK economy from the EU. You can’t have it both ways, try as you might.
January 17, 2018
Let me make this clear again: the GBP is a de facto derivative (ie tends to reverse back to the EU’s trend) unless there is a disruptive event. In 2016 there was a period of cdecoupling and since then it is becoming clear that the market believes that there will not be a hard, ie disruptive form of brexit, hence GBP is trending along the EUR again and sice the EUR is strengthening against the USD momentarily, so is the GBP. I did not suggest that the currency markets (currently, it was different in 2016) believe in a decoupling of the UK and EU economies. If I believed that I would be puzzled at the current GBP/EUR relationship.
January 16, 2018
The UK growing its own food would require pretty strong defenses against cheap imports because it is doubtful unprotected UK farmers would be able to raise productivity to US or even EU standards (take for instance vegetables from Holland: before the trade boycott as a consequence of the Ukrainian civil war, Dutch vegetables outsold everyting else and Russia is the most radical example of a third country you could imagine. Someone else here mentioned farm labour. All in all, I think UK farmers are led by the nose here..
January 16, 2018
Rien, From the Economist (ye gods!) Feb 2015: “The [UK’s] participation in the EUās Common Agricultural Policy might explain some of [the poor productivity]. Subsidies from Brusselsānow falling, but achingly slowlyāhelp to keep unproductive farms alive. By contrast, the sudden withdrawal of handouts in New Zealand in 1984 forced farmers there to invest in their businesses …. . They are now among the most efficient in the world.” So there you have it – leave the EU, and then we’ll see.
January 17, 2018
Rien Huizer
The world’s top five food producing countries are
1/China
2/United States
3/Brazil
4/ India
5/Russia..yes Russia, really!
Most European farming is small scale and well, primitive by comparison.
All those countries can sell us cheap food..much cheaper than any EU country, even the USA, which has a massive surplus of dairy products, beef and eggs
We like cheap food in the UK and will make do until we can produce more of our own
January 17, 2018
These are all countries with large populations. Of those, China is becoming a selective exporter (competing with Australian produce for instance in Australia, no mean feat) and China has strong potential by essentially copying European approaches (relatively small scale, trained labour, targeting niches like fruit&veg, etc. Protectionist to the core. US is simply the world’s largest exporter with high productivity (and subsidies). Brazil exports and imports and is extremely protectionist; EU about to do a deal with Mercosur that might exclude agro materially). India is not a long term exporter of food, has huge problems in that sector and a very large subsistance farming population. Russia (and Ukraine) are natural food exporters and growers but with weak technology (could change), poor farmer incentives and a lot of state interference.
So what is the relevance to a small European country like the UK?
January 16, 2018
This is a relevant recent article describing the origins of the EUās CAP:
http://www.telegraph.co.uk/news/2018/01/13/horrifying-true-story-france-used-eu-undermine-british-agriculture/
And the imminent loss of British subsidy is already having a beneficial effect which may lead to a more level playing field for UK Agriculture:
https://www.politico.eu/article/emmanuel-macron-breaks-french-taboo-on-farm-subsidies-cap-policy-eu-budget/
January 16, 2018
JR: “UK farms will have a great opportunity to produce far more fruit, vegetables and meat for the Uk market. ”
Well, Yes.
But seems to be at variance with the policy of the administration you support of building more new houses on prime agricultural land.
January 16, 2018
We have a free trade deal with the EU already. And you voted against it. If free trade ends it is down to people like you.
January 16, 2018
Andy, No, we don’t have a FTA with the EU. The EU is mainly about political control, not trade. What we have now is a single market for goods but not for services; and a customs union that favours the French and Germans but not the UK. The EU imposes harmonised rules from the centre (Brussels) which, even if the laws were democratically derived (they’re not), clearly cannot suit every EU state, and are often counter-productive to c89% of the UK’s economy.
January 17, 2018
Yes we will all starve to death. I’m stocking up on food. I have got ten sacks of apples, sixteen sacks of oranges, sixty gallons of milk, 500 cartons of double cream, and one cucumber…I’m not so keen on cucumber.. I just wish I had a fridge. I suppose I’ll just have to eat have everything warm.
January 16, 2018
Well, Harry – many (though not all, of course) of our students should be reminded of the days when students used to take holiday jobs from July to October, often fruit-picking, instead of passing their time in idleness, as though their family owes them a living wage and their keep while they’re not at ‘yooni’.
January 16, 2018
GB should consume less meat , but I am sure that meat producers would welcome home sales.The marketeers in Bury don’t seem to think it will make a difference . We have much produce from Spain and they tell me nothing will change, only the weather which dictates growing periods. Our fabulous fish market say that they would welcome our fishing industry back in home owned waters and they are not bothered about the changes ahead.
January 16, 2018
In response to Margaret Howard’s comment, perhaps she has forgotten that the French kept up their vendetta and banned British beet long after MCD was over.
January 16, 2018
“Dig for Victory”!
January 17, 2018
Summer veg are OK , fruit trees are easy to grow. I kept my small house as it had a reasonable sized plot and I planned how to survive if problems arose . I could survive with most problems with a tank to collect rain water , fruit and veg from the garden , fishing from local rivers, , the occasional wood pigeon , and hens but what I could not hope to grow are the cereals and wheat etc for bread. I would also miss salt. ! I thought of my willow tree for salicylic acid Aspirin)and could even experiment growing mould for penicillin . We are lucky to have home grown produce and should not take it for granted.
January 16, 2018
Looking forward to efficient food production from the RoW, and innovative differentiation from UK farmers. Not all can be lowest cost producer but all can differentiate.
January 17, 2018
You are very right. That is the most likely outcome. Wonder how many incumbent farmers would be able to make the transition. Why haven’t they done so before? Dutch farmers do not grow too many cereal crops except for bio-customers and animal feed. They import “efficient” stuff from the ROW and practice innovative differentiation, like you said. Come to think of it, one other outcome may well be that Dutch farmers, post Brexit would buy UK land and apply their skills there, similar to what the fishing people intend to do. Unless of course the UK would discriminate against forreign direct investors by origin.
January 17, 2018
Where should we buy our food? Not in the same place we buy our health care or there would be massive queues at the supermarket, rationing, 1950’s menus, poor service, and we would be being told “your food is the envy of the world”.
And we would be getting charged three quid an hour to park in the supermarket car park.
January 17, 2018
Still awaiting moderation. I would not have thought it was that contentious.
January 17, 2018
The important thing, surely, is to ensure that food prices do not rise after Brexit.
The growth of farmers’ markets and farm shops shows there is a healthy appetite for quality homegrown fresh meat, veg, fish and dairy. But most of the population choose on price, and if their wages do not rise, they will continue to look for cheap (poor quality) food.
January 20, 2018
Agriculture is a fascinating subject because of its many implications. Food price is an element, but the costs of production are insignificant for most UK residents. Farming has a significant impact on the appearance of our country and on the environment through things like water pollution (I won’t say eutrophication, in case it gets misunderstood). Michale Gove is saying interesting things about how farming will be subsidised, but no change ’til 2024! It looks like the UK will be able to set its own import tariffs for food and we will have to decide how we balance food prices versus the beauty of our countryside – ripping hedgerows out, and covering the Wokingham area in polytunnels would disturb many of Mr Redwood’s constituents even if it would please the free-marketeers. If we don’t allow farmers to farm efficiently then they won’t compete without tariffs.
Seasonal overseas workers will continue to be essential. I suggest anyone who thinks otherwise visits a market garden / fruit farm. The overseas workers work hard in all weathers doing a fairly skilled job while they live in dorms in temporary buildings. It’s hard to imagine it as a job for university students because it wouldn’t give most students useful work experience for their careers. Furthermore, much of the harvest is outside university holidays – for example, UK lettuces are available about 9 months of the year and they rely on agricultural labour. Apples and pears are harvested in the autumn, not in summer holidays. Agricutural labour is an unattractive career because you’ll only have a job for 6 months of the year – what do you live on the rest of the year from Nov through to April/May? Maybe a shop job ’til Christmas and then what? Will the state pay you benefits to live on?
For this reason, the Coservative government is saying it’ll still allow seasonal workers post 2021. My biggest worry with this is that some voters in the East of England will regard this as a betrayal of what they voted for in the referendum and turn to far-right parties.