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FUW President Glyn Roberts[/caption]
The Farmers’ Union of Wales is calling on urgent economic modelling work to be carried out, following the admission by Rt Hon. David Davis MP, Secretary of State, Department for Exiting the European Union, that the UK Government has done no economic assessment of crashing out of the EU with ‘no deal’.
Giving evidence to MPs (Wednesday, March 15), Mr Davis insisted it was not possible to calculate the impact of the Brexit talks failing – adding: “I may be able to do so in about a year’s time.”
The Brexit Secretary dismissed the Treasury’s pre-referendum forecasts of an economic crash if Britain left the EU with no fresh trade agreement.
However, when he was asked by the chairman of the Brexit select committee, if a new assessment had been carried out, Mr Davis replied: “Under my time, no.”
The admission came despite Mr Davis ordering Cabinet colleagues to prepare for what is widely seen as the growing prospect of negotiations with EU leaders breaking down.
FUW President Glyn Roberts responded saying: “This is extremely worrying. We are about 2 weeks away from triggering Article 50 of the Lisbon Treaty and our UK Government has no plan as to what will happen if we don’t strike a positive deal with the European Union.
“If the status quo remains and we continue to have tariff-free access to the EU, then of course there is not much the agricultural sector has to worry about from a trade point of view.
“However, if things don’t go to plan, and we know that Prime Minister Theresa May has already said she would walk away with no-deal, rather than a bad deal, we will find ourselves operating under World Trade organisation (WTO) rules.
“And that’s where it gets difficult, as we could face tariffs of up to 40%. Nobody knows what will happen if we don’t get a deal. Of course, we can fall of the cliff edge and operate under WTO rules but what will that mean for our economy?
“We urgently need some modelling work to be carried out to assess the potential impact on how many businesses will go out of business, how many jobs will be lost and how much money our rural economies will be losing out on.
“Both the UK and Welsh Government must do some spade work to assess the situation and explore different options. We have asked for this work to be undertaken even before the referendum result was announced. Comments like those made by David Davis are in that sense extremely unhelpful.”
“The recent Annual Farm Business Survey tells us that the average farm business income dropped by 23% to £22,000 in 2015-16 compared to the previous year. If we have the nightmare scenario of no access to EU markets that means that, for example, sheep meat producers will lose 35-40% of their market overnight.
“That can only cause severe pain to both the farmers concerned and also to other rural businesses. We must develop models to understand that impact. The economic and social cost of some scenarios could be enormous."