Negotiation of a free-trade agreement with the EU should be the Government’s “number one priority” MPs have said.

Members of Westminster’s Business, Energy and Industrial Strategy (BEIS) committee have made the call in their inquiry into the impact of Brexit on the processed food and drink sector. According to the committee, the UK’s export balance and hence the sector’s success have been “tipped” towards an “over-reliance” on trade with the EU. The committee describes the industry as being characterised by just-in-time delivery of products with short shelf lives, deeply integrated supply chains and manufacturing bases across the UK and the EU.

UK farming tariff warning

In the report, BEIS committee members warn that if the UK was to lower or remove import tariffs, the effects on UK farming could be “extremely damaging”, while the consumer benefit would only be limited. The committee recommends that the UK Government seeks “as few additional impediments to trade between the UK and the EU as can be negotiated”.

The majority of evidence submitted to the inquiry favoured alignment with EU regulation in order to facilitate exports.

FDF chief executive Ian Wright CBE described the report as an “extremely valuable contribution to the debate about the UK’s future trading relationship with the EU”.

“Any increased friction as a result of physical checks or paperwork at borders will prove costly for the entire supply chain and cause short-term disruption for businesses, consumers and shoppers,” said Wright.

Growth opportunities outside EU

The committee sees “substantial growth opportunities” outside the EU, however, representatives from the food and drink manufacturing sector asserted in their evidence that this would only be achievable if all existing EU trade deals with third countries are replicated and preferential agreements, including mutual recognition, with other countries are achieved.

Labour

According to the report, the Government should also seek an immigration deal that enables the sector to recruit and retain the skilled and unskilled staff it needs. Of the 400,000 workers the UK food and drink industry directly employs, one third are EU nationals.