Tesco’s chairman has predicted that any changes to food prices after Brexit will be ‘very modest indeed’ due to the future EU trade terms sealed by Boris Johnson this week.
John Allan said that any increase caused by the UK’s departure from the European Union would be ‘hardly felt in terms of the prices that consumers are paying’, he told the BBC.
Mr Allan called the Brexit deal a ‘good outcome’ compared with a no deal and retracted his comment last month that food prices could be set to rise from between three per cent to five per cent in the case of a no deal Brexit.
The chairman said that only negligible price changes were expected following the deal, as the risk of tariffs had been what led him to previously predict a surge in food prices.
Tesco’s chairman John Allan, who previously warned that food prices were ‘very likely’ to rise as a result of Brexit
On Friday Mr Johnson made history by sealing future trade terms to avert a chaotic split when the transition period ends on January 1, after Lord Frost and Michel Barnier thrashed out a 2,000-page text.
The Prime Minister has assured that the deal is ‘tariff-free’.
Speaking to BBC Radio 4’s The World This Weekend Mr Allan said that although prices are likely to remain steady the process of importing and exporting food will become more burdened with admin.
He said: ‘There’ll be a little bit more administration associated with importing and exporting. But in absolute terms, I think that will hardly be felt in terms of the prices the consumers are paying.’
Prior to the news of the deal the Tesco’s chairman had predicted that certain food items, like Brie, would see a price hike of up to 40 per cent – potentially changing the eating habits of Britain.
Graph showing the origins of the UK’s food, with 55 per cent of it produced in the UK and 26 per cent imported from the UK
Shoppers in Tesco Extra, South East London, currently Tier 4
Mr Alan now predicts any changes in shopping habits will be ‘marginal’, with Brits still reaching for their favourite European produce.
Despite remaining optimistic that the deal will not pass on any noticeable expense to shoppers Mr Alan also added that leaving the EU did not hold any new freedoms or benefits for the supermarket industry – except freeing up the government to tackle ‘challenges’ in our economy ‘in a much more full-blooded way.
The Tesco boss was speaking on a day that also saw Boris Johnson promise to focus on ‘levelling up’ Britain, in the wake of securing the country’s departure from the EU.
The Prime Minister said he wants to ‘spread opportunity’ as he hopes to take advantage of his new freedoms.
He claims the deal will help him ‘deliver for people who felt left behind’, despite some criticising the agreement he struck at the eleventh hour.
Boris Johnson has promised to focus on ‘levelling up’ Britain in the wake of securing the country’s departure from the EU
Johnson told The Sunday Telegraph: ‘This government has a very clear agenda to use this moment to unite and level up and to spread opportunity across the government.’
MPs are due to vote on the deal in the Commons on Wednesday and Sir Keir Starmer has confirmed his party will support the Government in a bid to avoid a no deal scenario.
The Labour leader said it was a ‘thin deal’ that would need more work to secure jobs and industries in the UK.
And Johnson even acknowledged that the deal ‘perhaps does not go as far as we would like’ on financial services.
But he said Britain can now diverge from the EU and go its own way in areas such as animal welfare, data and chemicals.
But Rishi Sunak congratulated the PM on securing the trade deal in what he hailed an ‘enormously unifying moment for our country’.
Rishi Sunak congratulated Johnson on securing the post-Brexit trade deal with the EU in what he hailed an ‘enormously unifying moment for our country’
The Chancellor, who was accused of being ‘absent’ in the run up to Christmas, said the agreement was a good deal for British families, businesses and jobs.
He also addressed concerns over the future of financial services, saying Brexit would offer ‘a chance to do things differently’ in the City of London after no agreement was reached for ‘equivalence’ on selling financial services into the single market.
Speaking from Richmond, Yorkshire, Mr Sunak said: ‘I think this deal represents one of the most comprehensive free trade agreements ever signed and it’s a good deal for British families, businesses and jobs.
Former Irish PM Leo Varadkar warned that the UK’s access to the European market is ‘not unconditional’ and they must continue to follow some EU rules. Rishi Sunak: Brexit deal is a ‘unifying moment’ for the UK
‘It gives us a fantastic platform to go forward, maintain tariff-free access to European markets but also capitalise on new opportunities.’
But former Irish PM Leo Varadkar warned that the UK’s access to the European market is ‘not unconditional’ and they must continue to follow some EU rules.
Responding to the Prime Minister’s announcement of a deal being reached with the EU, Sir Keir Starmer said: ‘It is not the deal that the Government promised – far from it.’
‘A better deal could have been negotiated. But I accept that option has now gone. At a moment of such national significance, it is just not credible for Labour to be on the sidelines.
‘That is why I can say today that when this deal comes before Parliament, Labour will accept it and vote for it.’