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Prices, property, pensions: 30 EU referendum questions answered

Posted in Property1 week ago • Written by newsdebekComments Off on Prices, property, pensions: 30 EU referendum questions answered

David Cameron says families would face increased food bills of more than £220 a year if Britain left because so much of our food is imported from the single market. His claims are based on a belief that the pound would fall in value by 12%, making imports more expensive.

But critics say food prices would fall as Britain would be able to buy its groceries from anywhere in the world without EU duties. Currently food from outside the single market faces an average duty of 12.2%, but it can be as high as 70%-90% for different types of meat, according to the National Farmers’ Union.

If Britain exited, rules agreed with the World Trade Organisation (WTO) would prevent us from setting import tariffs higher than the current default rates, but we would be free to cut them as much as we liked. The results would be likely to be very uneven. For example, we import 12% of our chickens from Thailand and Brazil, but the duty on them is zero.
The in campaign says: “The former bosses of Tesco, Sainsbury’s and Marks & Spencer, and the current chairman of John Lewis, have said shop prices would be likely to rise. This would happen partly because the fall in the pound would make imports more expensive, and partly because of more restrictions on trade with the EU.”

The out campaign says: “The CAP and the common fishery’s policy both increase food bills for consumers, devastate the environment and damage African agriculture by imposing punitive tariffs against less developed countries.”

Will I be able to buy beef cheaper from, say, America or Argentina?

The wholesale price of beef in the US is currently about 40% less than in the EU, and can be even lower in parts of South America. Brexit is likely to see supermarkets dump Irish beef in favour of meat from Brazil or Argentina, with steak prices possibly dropping heavily, according to some industry sources. Quality fillet steak could fall in price from around £35/kg to below £30/kg.

But before “les rosbifs” get too excited about a new era of cheap meat, there are other considerations. We may not want to import cheap food such as US beef injected with hormones, which is banned by the EU. The domestic UK beef industry would also be under such threat from cheap imports that complete tariff reduction is unlikely.

In says: “In the longer term rules for imports from non-EU countries would depend on the trade relationship a post-Brexit UK had with them. This would have to be negotiated … The director general of the WTO has said the whole process might take decades.”

Out says: “The independent House of Commons library has concluded that EU membership increases the costs of consumer goods, stating that its common agricultural policy ‘artificially inflates food prices’.”

Will French wine become pricier, and Australian wine cheaper?

Not really. French wine is unlikely to go up in price, but wine from outside the EU may become a shade cheaper – it is subject to complex tariffs, but these work out at little more than 20p a bottle.

Whisky and vodka from outside the EU are not subject to EU tariffs (although there’s a bit on rum) so again expect no price differences. But the Scotch Whisky Association is concerned about Brexit. Scotch represents 10% of all Scottish exports to the EU, with France its second biggest export market in the world. “The EU’s single market, including its regulation of food and drink, and its single trade policy, are central to Scotch whisky’s success,” says David Frost of the SWA.

In says: “The likely fall in sterling would make all imports more expensive.”

Out says: “Both will be cheap! After we vote to leave Britain will be able to negotiate free trade deals with both the EU and countries outside it.”

Will cheap flights to Barcelona and Berlin disappear?

Ryanair’s boss, Michael O’Leary, is the loudest voice among the budget airlines campaigning for Britain to stay in the EU. “If Britain leaves the single market, Britain may be forced out of the open skies’ regime, and air fares and the cost of holidays will rise,” he says.

At easyJet, the chief executive, Carolyn McCall, says the common aviation area created by the EU has kept airlines’ costs low and any new, more restrictive arrangements would push up fares.

But Europe’s third largest budget airline is Norwegian.com, and isn’t in the EU.

In says: “Ryanair boss Michael O’Leary has said that if we leave the EU common aviation regime, ‘airfares and the cost of holidays will rise’.”

Out says: “There is no prospect of holidays becoming more expensive. We could also reintroduce duty free for flights to the EU.”