8. What assessment has the Cabinet Secretary made of the difference between world food prices and EU food prices? OAQ51360

Thank you. Food price differences between countries or blocks like the EU and global prices are driven by currency values, supply and demand, trade rules and internal market regulations. The EU Commission monitors European food prices and the Food and Agriculture Organization of the United Nations runs an international food price index of major commodities. 

And that monitoring shows that food prices in the EU are substantially higher than outside the EU. Once we leave the EU, does the Cabinet Secretary agree that it will be for the UK Government to determine the extent to which we apply World Trade Organization tariffs against imports from outside the EU, and it's up to that Government whether to apply those at all or whether to negotiate free trade deals with particular countries? Does she also accept that, in the unlikely event of there being WTO tariffs between the UK and the EU, while that would be very difficult for some sectors of the agricultural economy, notably lamb, other sectors, notably beef and dairy, would potentially have significant opportunities as imports from countries such as the Republic of Ireland were restricted?

I think Brexit—it's a massive issue. It's really threatening our industry and I think it's causing a great deal of uncertainty. It is obviously for the UK Government to have those trade discussions and bring forward a trade deal. However, we've made it very clear to the UK Government the shape that we think these negotiations and these discussions need to take. 

I think everybody accepts—I'm sure, even on this side of the house—that the political situation we've got at the moment is creating a lot of tension. We are having those ongoing discussions. Obviously, the First Minister, the Cabinet Secretary for Finance and I primarily are having discussions around trade, and what tariffs will be imposed. You're quite right: I'm really fearful for the lamb sector, and some of our scenario planning is of great concern. We also know that the British Retail Consortium has suggested that, without a new trade agreement, if the UK and EU imposed WTO tariffs, the average cost of food imported by retailers could increase by 22 per cent. 

Unlike Mark Reckless, I'm not looking forward to the world of chlorinated chicken and hormone-fed beef, so I hope that we continue to have the high quality of food standards that we currently enjoy.

The messages coming from the British Ports Authority if we were to leave the customs union are not very optimistic, in the sense that whilst we currently have a free passport of goods to and from Britain, were we to crash out of the European Union this could actually bring all transactions to a horrible halt. And where we're talking about fresh produce, why would anybody bother to import fresh produce if they don't think they're going to be able to get it to market in time? I just wondered what assessment the Government has made of the impact of leaving the customs union, and the impact it would have on the food that we currently import, particularly fresh produce from the European Union. 

Thank you for that question. This forms part of our scenario planning, which I mentioned in my answer to Mark Reckless. Parts of this are indeed very, very scary. We are making our views very well known to the UK Government at every level that we should remain in the customs union. We need that free market that we've got right on our doorstep, and I would always hope that we will have a relationship with the EU. But from the discussions I had at the winter fair on Monday, people are very fearful at the uncertainty about the way the current discussions seem to be going, but we are, as a Welsh Government, particularly concerned that Brexit will drive food prices much higher unless we have a really excellent trade deal.

Thank you, Cabinet Secretary.