Firms could be “destroyed” by foreign competition after a no-deal Brexit, say industry leaders, as ministers confirmed almost all tariffs could be slashed to zero.
Trade Secretary Liz Truss said on Tuesday that zero tariffs could be applied to 88% of all imports in a bid to protect the consumer from price inflation if Britain crashes out of Europe.
Key figures who have lobbied the government over the risk of cheap imports say the schedule, largely unchanged since March, will decimate businesses and see farmers “betrayed”.
The regime may also apply for as long as 12 months, with a consultation on permanent arrangements not starting until January.
There have been just three amendments to the schedule, despite a raft of key industries such as food and drink and ceramics begging for higher tariffs.
The government will lower tariffs on HGVs entering the UK market, adjust tariffs on bioethanol and apply tariffs to additional clothing products.
The new HGV tariff will be 10%, having been set at between 10% and 22% in March, while additional clothing was 0% in March and is now 8%-12%.
The tariff rate for bioethanol is unchanged but will apply to fewer products.
National Farmers Union President Minette Batters said ministers must act immediately to protect farmers and growers.
She added: “Without the maintenance of tariff protections, we are in danger of opening up the UK to imported food which would be illegal to be produced here, produced at a lower cost because it may fail to meet the environmental and animal welfare standards which are legally required of our own farmers – flooding our market and resulting in unsustainable price falls.
“Not only could this be terrible news for farmers, whose very businesses will be under threat, but also for consumers who enjoy the high-quality and affordable British food they produce.”
Batters added: “Farmers are going to feel betrayed by this government’s failure to act now in making sure that all that can be done is being done to help mitigate the damaging effects of a no-deal Brexit.”
The government said honey from New Zealand will see its tariff fall from 17% to zero, grapes from Brazil will reduce from around 15% to zero and other products, such as tennis rackets and wines, will no longer face a tariff.
Laura Cohen, chief executive of the British Ceramic Confederation, who represents firms in the Stoke potteries industry, was angry at the news.
“Government says ‘they’ll see how it goes for a year’ and will run a consultation,” she said, adding: “That just isn’t good enough.”
Any period with a zero tariff schedule would mean jobs are hit, said Cohen.
“Government is closing the stable door after the horse has bolted,” she said. “Our successful businesses have already tied up much cash in Brexit preparations, in stocks or raw materials and finished goods, in paying overtime to deal with a spike in export orders, with resulting sparse order books later this year.
“If they have a flood of imports on top of this, it’s going to be really challenging. At the same time, in a no-deal Brexit our British manufacturers’ products would suddenly be more expensive in Europe and in places like Japan and Canada where we will have lost our preferential access. It’s a double whammy.”
The Food and Drink Federation said prices will go up regardless of the new schedule because of how much food firms have already invested in preparing for no deal.
Policy manager Dominic Goudie said: “As FDF said in March, adjusting to this new schedule is both confusing and complex for businesses. This is not going to create a big win for consumers.
He added: “These changes to tariffs facing both imports and exports will lead to massive trade distortions that will be bad for business and consumers alike.
“Many food and drink manufacturers who trade with the EU will now question whether the UK is the right place for them to be.
“Government must avoid a catastrophic no-deal scenario that would result in these tariffs entering into force, so that they can undertake an open and transparent consultation on future UK tariffs.”
Duncan Buchanan, policy manager for the Road Haulage Association – the trade body for freight – called the tariff changes for HGVs “spin”.
Dr Adam Marshall, director general of the British Chambers of Commerce, said businesses “will be frustrated” at so few changes after six months of delay as he accused the government of “needlessly extending uncertainty around the entire future tariff schedule”.
He said: “The delay has real-world impacts for businesses trying to plan for the unwanted prospect of a no-deal in a matter of weeks.”
Federation of Small Businesses (FSB) national chairman Mike Cherry said two-thirds of small businesses still need answers.
“Fundamentally, small firms are crying out for two things at this point: a pro-business Brexit deal and financial assistance to help manage the costs of uncertainty,” he said, adding: “What small businesses really want – with confidence currently suffering an unprecedented losing streak – is a return to an environment where they can plan three, five and 10 years in advance.”
Shadow Trade Secretary Barry Gardiner said the government was “fiddling while Rome burns” and failing to listen to businesses.
He said: “The few adjustments that have been announced today still fly in the face of the demands of the vast majority of business groups and farmers who are extremely concerned that slashing tariffs for imports could see a flood of cheap imports undercutting their sector.”