Get ready for a diet of even cheaper beer and burgers! The fierce Brexit supporter Tim Martin, founder and boss of the J.D. Wetherspoon pub chain, has defied the consensus of economic experts and industry leaders by forecasting cheaper food and drink after Brexit.
Martin has already printed a fiercely pro-Brexit manifesto on half a million beer mats in Wetherspoon pubs to try to sway public opinion. Now he has used his company’s latest trading report to predict a fall in the cost of food and drink in his down-market pubs, which would be a surprise windfall given that almost all independent analysts and respected think-tanks, let alone the leaders of the food and retail sectors and his own pub industry, have blamed Brexit for a fall in British living standards this year with worse to come.
Sadly Martin’s optimism reads like it was dictated by some pre-noon customers of Wetherspoon, dismissing expert analysis and hard data as media hype without offering any evidence to the contrary.
“Fake News”
“Statements have been made by some senior directors and trade organisations which are factually incorrect and highly misleading,” Martin insisted.
“Unsurprisingly, the misinformation has been adopted by many among the media, investors and the public, as if it were true.” He rejected claims by Sainsbury’s chairman David Tyler and dozens of trade experts that a “no deal” Brexit could increase food prices.
“That is completely untrue,” he declared. “The lowest food prices can be obtained by the UK without the need for the agreement or consent of any third party by avoiding a ‘transitional deal’, which would keep EU tariffs in place, and leaving the EU in March 2019.”
“This would enable the UK to scrap EU food tariffs as permitted under WTO rules on food imported from outside the EU. Under WTO rules tariffs would not then be charged on imports from the EU either. Wetherspoon calculates that this approach would reduce the average cost of a meal by about 3.5 pence and the cost of a drink by 0.5 pence.”
Martin claimed that leading media publications had misrepresented the food tariffs that would result from leaving the EU without a trade deal. “This sort of misinformation has also resulted in articles such as the one in the Guardian and the Financial Times in which the writers wrongly assume that reversion to WTO rules, on leaving the EU without a deal, would axiomatically result in the imposition of tariffs,” he said.
“It is not true, for example, as the Financial Times states, that tariffs of 13% on salmon, 14% on wine, 40% on cheese and 59% on beef must apply to all countries outside the customs union, unless a free-trade agreement is in place.” Martin did not explain how or why the newspapers were wrong.
Alternative Facts
Martin’s confident optimism was a stark contrast to economist Garry Young’s analysis in the economic journal the National Institute Economic Review that Brexit has already increased the cost of living and will hit the poorest in society hardest.
“It is almost certain that the relative deterioration in the UK economy and the accompanying fall in living standards over the past year are a consequence of the vote by the British people to leave the EU,” Young said.
“Had sterling not depreciated and the economy continued to grow at its previous rate, as would have been likely with an improving global backdrop, real household disposable income per head might have been more than 2% higher than now, worth over £600 per annum to the average household. The effects of a higher cost of living caused by Brexit might weigh more heavily on unemployed, single parent and pensioner households.”
Meanwhile Wetherspoons reported good growth as like-for-like sales increased by 6.1% and total sales by 4.3% in the quarter to October 29. Brexit gloom may have helped by leaving consumers badly in need of a cheap drink and the chain’s burger and pint deals could be the only chance that many Brits have of dining out in the future on a tightened budget.
by Stewart Vickers
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