Hours before MPs vote on stopping no-deal Brexit, ministers reveal stinging tariffs Britain would slap on European products if UK crashes out – but say they’d OPEN the economy to 87% of global goods and there’d be NO Irish border checks
-No deal economic plans revealed at 7am today set out how Government will manage trade and Irish border
-Products from the EU including beef, pork, chicken, butter, cheese and fish would be subject to tariffs
-Northern Ireland’s border would remain open and goods entering from the Republic would not face tariffs
-The Commons will vote on a no-deal exit tonight and could also vote tomorrow on an Article 50 extension
-Theresa May’s withdrawal agreement was defeated by 391 to 242 despite claims of ‘legally binding changes’
-Fatal blow came after Attorney General Geoffrey Cox said his legal advice was unchanged over backstop
The UK would slap tariffs of 10.6% on the cost of “fully finished” cars imported from the EU – hiking the price of an average family hatchback by £1,500.
The move would come under a new system applying to all countries with which the UK does not have its own free trade deals, including the bloc.
It comes as MPs vote tonight at 7pm on whether to reject a no-deal Brexit after Theresa May’s Brexit deal was voted down for the second time last night.
The cost of importing some goods from the EU would rise, because the UK currently enjoys a tariff-free relationship with the bloc.
But the cost of bringing in goods from most of the rest of the world would fall, as the UK exploited its freedom from Brussels to cut tariffs on certain products.
The planned regime, which would apply for an emergency 12 months, was announced by ministers ahead of tonight’s crunch Commons vote on ruling out a no-deal departure.
Currently, about 80% of imports to the UK arrive without tariffs.
That would rise to 87%, as the Government slashes tariffs elsewhere.
But the CBI’s Carolyn Fairbairn said: “This is a sledgehammer for our economy.”
She said businesses need time to prepare for new terms adding: “This is just not the right way to go about it.”
Adam Marshall, director general of the British Chambers of Commerce, said: “If the tariffs announced today were to come into effect, there would be winners and losers across UK industry overnight.
“The abruptness of changes to tariff rates in the event of a no-deal exit from the EU would be an unwelcome shock to many of the businesses affected.”
Under plans released at 7am today, there would be protections for the British ceramic industry, with tariffs of 1.2% levied on imports from the EU.
Other imports such as beef, “cheddar-like” cheese and butter would be subject to tariffs as a percentage of the EU’s “most favoured nation” level – a World Trade Organisation measure.
The tariffs are different for each product and levies would be designed to protect British farmers.
For beef, duties would be levied at a rate of 53% of the “relevant EU” most-favoured nation rate.
For “cheddar-like” cheese, it would be 13% of the relevant EU rate and for butter it would be 32%.
The new system would not apply to goods crossing from Ireland into Northern Ireland – removing the need for a customs border on the 310-mile frontier which forms the UK’s only land border with the EU.
It comes after Theresa May’s withdrawal plan suffered its second crushing defeat last night in Parliament.
Car manufacturers based in the UK and importing vehicle parts from the EU would not face extra tariffs as ministers, fearing a mass exodus of firms from the UK, battle to prevent disruption to vital supply chains.
The UK currently enjoys zero tariffs through its membership of the EU, which is due to end on March 29.
The Government insists the new system would be temporary, with a full consultation taking place with industries and businesses on a permanent arrangement.
The planned regime would create two different tariff zones within the UK in order to keep open the border between Northern Ireland the Republic.
For example, beef exported over the land border from Ireland to Northern Ireland would not be subject to tariffs to avoid customs checks and a hard border.
But beef exported over the Irish Sea to mainland Britain, for example from Rosslare to Fishguard, would be slapped with tariffs.
Officials would crack down on potential smugglers by monitoring any suspicious activity suggesting exports to Britain were being routed via Northern Ireland to dodge duties.
Trade Minister George Hollingbery said: “Our priority is securing a deal with the EU as this will avoid disruption to our global trading relationships.
“However, we must prepare for all eventualities.
“If we leave without a deal, we will set the majority of our import tariffs to zero, whilst maintaining tariffs for the most sensitive industries.
“This balanced approach will help support British jobs and avoid potential price spikes that would hit the poorest households the hardest.”
Northern Ireland Secretary Karen Bradley said: “The Government has been clear that a deal with the EU is the best outcome for Northern Ireland.
“But we will do what we can to support people and businesses across Northern Ireland in the event that we leave without a deal.
“The measures announced today recognise the unique circumstances of Northern Ireland.
“These arrangements can only be temporary and short-term.”
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