Brexit or Bremain: David Cameron on why we should stay in the EU

You can read our feature on the impact of Brexit on the food & drink industry here.

The suggestion Brexit would see grocery retail prices rise has been dismissed as scaremongering. Would they go up and why?

It’s a fact that more than a quarter of the food we buy comes from the EU. Obviously that gives us an excellent range of choice in the shops, and value. Because we’re in the EU there are no tariffs on food coming in, or indeed the food we export back. Campaigners who want to leave the EU and walk away from the single market claim they’ll somehow negotiate a new deal but the trouble is they can’t explain what it would be or how long it would take. And, frankly, if they think EU member states are going to give us a better deal than they have themselves, they’re living in a fantasy land.

Plus, let’s not forget a vote to leave would also put pressure on the pound, something that in itself would drive up the price of many household goods. So on the issue of grocery prices, as in so many other areas, voting to leave is a vote for risk.

Minister of state for farming George Eustice says Brexit would mean a great deal of “stifling” regulation being abolished. Isn’t that a good thing?

I know that George has a very longstanding position and he wants to stick by that, but I think when you look at the pros and cons of our membership in the round, it’s clear we benefit hugely from being in. That’s why the NFU of England and Wales, NFU Scotland, and the Ulster Farmers’ Union have all been clear that the interests of their members are best served by our continued membership of the EU. It’s also why businesses across the country, in all sectors, are sounding the warnings about us walking away. And it’s why Elizabeth Truss, the Cabinet minister in overall charge at Defra, has been clear she believes the brightest future for British farming lies with us remaining in a reformed EU.

There is no-one more keen to get rid of pointless red tape than I am. That’s why, in my new deal for our membership of the EU, I’ve secured commitments to reduce the EU’s regulatory burden. But the fact is, whether we’re in the EU or out, if we want to trade with EU countries we will need to follow their rules. As members of the EU, with a seat around the table, we can influence what the rules are. If we leave, not only will trade become much more costly but the regulations will be dictated to us.

British farmers and food producers rely on the single market. It gives them access to 500 million consumers, to whom they can sell their goods on an open, unrestricted basis. No tariffs, no barriers, and no bogus health and safety rules designed to keep our products out. A leave vote would put that all at risk

Many point to positive legislation the EU has introduced - what are some examples that have benefitted the food and drink industry?

Well, I think that a prime example has to be the special status granted to unique British food and drink products. Welsh lamb; Scotch beef; Stilton cheese, Gloucestershire cider; Cornish pasties; dozens of other key food and drink exports for this country - they are protected by the EU, meaning they cannot be recreated anywhere else. It doesn’t matter where you are in Europe, if you buy Cumberland sausages or a Melton Mowbray pork pie, you know that product can only come from one place.

If we left the EU, of course we could impose our own protections, but they would apply only within the UK - and that would cause a major headache for a lot of our food and drink exporters. More broadly, I would say that there is great benefit from having common standards across Europe that protect the safety and security of the food we eat.

Common standards mean our businesses have a level playing field with their European competitors, preventing welfare and quality standards being eroded in a sort of race to the bottom. British companies also know that, wherever they are selling in the EU, the label requirements will be exactly the same. If we were to leave the EU now, our businesses could face re-labelling costs of around £3,000 for each product line they export there. Brexit would end UK involvement in the Common Agricultural Policy.

Various broad estimates suggest CAP costs the UK £6bn a year of which farmers get £3bn back in subsidies. So if we accept those figures, and the government ensured farmers received the same amount post-Brexit, it would mean a net gain of £3bn for UK plc. Isn’t that a Brexit benefit? No, because as well as getting money from the CAP, UK farmers have access to a market of 500 million consumers across Europe, with no tariffs or other barriers, as part of our membership of the EU.

“If we were to leave the EU now, our businesses could face re-labelling costs of around £3,000 for each product line they export there”

The CAP does need reform, but no one can deny it is important to UK farmers, who have been allocated more than £20bn in support between 2014-20. If we leave the EU, that support will not be available to our farmers and there is no guarantee any replacement subsidies will be to the same level. Of course, as long as I am prime minister I will want to continue to support farmers, but who knows what future governments might do? And if, as forecasts suggest, the economy suffered and became permanently smaller, we may be unable to afford such payments.

The important question is what the alternative to the CAP would be, something the leave campaign seem unable to give any details about, apart from some accepting that leaving the EU would see less money going to farmers in subsidies. Our farmers have often spent generations building up their businesses and what they don’t need is the economic uncertainty that would come with leaving the EU, putting all those years of hard work at risk.

Remain warns the migrant labour the food and drink industry relies upon would be restricted outside the EU. Is that a serious concern when we’d likely remain in the single market even outside the EU, which requires free movement of people?

Leaving the EU, but remaining in the single market, would see us following the rules set by the EU, but with no say over them. So, yes, we would have to accept free movement of people, and we would also still have to pay in to the EU budget. But you have to ask yourself, if we’re going to do that, then what exactly is the point in leaving the EU?

Of course, our farmers and food and drink industry need access to seasonal labour, which the EU gives us. And we should remember many migrants are very hard-working people who play by the rules. But at the same time we need to end the artificial draw of the something for nothing culture, and that’s what I’ve achieved with the new emergency welfare break, which means people need to have lived here for four years before they get full access to our welfare system. Remaining in the EU gives us the best of both worlds - an end to that something for nothing culture but still giving our agricultural economy access to the seasonal labour it needs. 

How is the reform package you have negotiated set to benefit UK food & drink? Which aspects of our relationship with the EU will become easier as a result?

The renegotiation was about ensuring that Britain can have the best of both worlds in its relationship with the EU - in the parts of Europe that work for us and out of those that don’t. So we’re in the Single market and free to trade with a market of 500 million people and part of an organisation where co-operation on trade can make Britain and its partners more prosperous. But at the same time we have guarantees that we will never be part of the Euro; never be part of the Schengen no-borders zone; never be forced to bail out the Eurozone with taxpayers’ money; and never be part of a European superstate. I’ve also secured agreement the EU will reduce red tape, including introducing reduction targets for certain sectors. That could be good for all businesses, including the food and drink sector.

As with the Scottish referendum, industry has been relatively reluctant to come out publicly with a position on Brexit. Are you sensing a “culture of fear” around the Brexit debate? Why is it important for food & drink companies to make their stance clear?

This is the most important decision our country will face for a generation, and so I think we all have a duty to speak up for what we believe - and that includes informing people of the consequences we are likely to face if we leave. It’s not about businesses ‘telling their staff or customers how to vote’, it’s simply being honest about the implications for trade and for jobs.

Many in this industry have made their opinions clear, from the farming unions to the wine and spirits trade association, that Britain is stronger, safer and better off in a reformed EU. I was in Wales a few weeks ago talking about this industry and this figure stuck in my mind: over 90 per cent of Welsh food and drink exports went to the EU in 2014. Can you imagine the impact there if suddenly all those exports were subject to punitive tariffs? It almost doesn’t bear thinking about.

Which key investments/government work streams related to food and drink would be at risk of being discontinued if Brexit happened?

We now know leaving the EU would have a significant long-term impact on our economy, leaving it 6% smaller in 15 years. That means Britain will be permanently poorer - to the tune of some £4,300 per household. That is the last thing our economy needs when we want to continue the work we’ve done to grow the economy and increase jobs, and it’s likely to be bad news for all businesses.

I was in Wales a few weeks ago talking about this industry and this figure stuck in my mind: over 90 per cent of Welsh food and drink exports went to the EU in 2014. Can you imagine the impact there if suddenly all those exports were subject to punitive tariffs?

Of course, a smaller economy also means fewer tax receipts, and so leaving the EU would leave us with a £36bn black hole in the public finances, which means less money to spend on our priorities.

Compared with this, in the last five years there have been more than 2,600 direct investments in the UK by companies from other EU countries, creating close to 100,000 jobs. It goes without saying that, outside the EU, we’re going to be a less attractive place for that sort of investment.

What impact would Brexit have on food safety and the UK’s ability to protect itself from Horsegate-style fraud and other crime?

The EU is our biggest export market, and one of the important aspects of our membership is that we have a seat round the table when decisions are being made. This means we have a say in the standards from food safety to labelling, and can represent the specific interests of UK businesses. If we left the EU we would lose all of this. We’d be a rule taker, not a rule maker.

Which part of the UK food & drink sector do you fear would stand to lose most from Brexit?

The economic shock of leaving the EU, and that reduction in GDP, will affect all parts of the UK economy, and no one is likely to be immune from the consequences. Clearly, though, those food and drink producers who export to other EU countries have a significant amount to lose if we come out of the single market and tariffs and other barriers to trade are imposed.

“Treasury analysis shows leaving the EU will reduce Britain’s GDP by around 6%, the equivalent of £4,300 for every household in the country”

Neither the FDF nor the NFU have felt able to campaign on the Brexit debate, despite clearly supporting your side of the debate. What would your message to them be?

Let’s be clear about the NFU’s position: its president said being part of the single market is “crucial to the long-term prosperity of farming in this country”. And as for the FDF, when it polled its members recently, only 12% of them advocated leaving the EU. I understand different organisations have different rules about being able to actively campaign - that’s just how these things work sometimes. But I am pleased we have such a huge number of respected organisations, from across our economy and from across the political spectrum, saying clearly that Britain is stronger, safer and better off by staying in a reformed EU.

Where do you sense the food and drink industry is on the stay/leave barometer?

I think most readers of The Grocer are probably better placed to make a judgement than I am! Of course, as well as the implications for the sector, people will also be considering their own personal situation. Treasury analysis shows leaving the EU will reduce Britain’s GDP by around 6%, the equivalent of £4,300 for every household in the country. Clearly that’s going to affect everyone, wherever they work. I just hope everyone in the industry thinks long and hard about what this decision will mean for their job, their business, their family - and most importantly, gets out and uses their vote on 23 June.