‘I congratulate Rachel Reeves for what she’s doing’ on food tariffs, says Jacob Rees-Mogg

Sir Jacob Rees-Mogg has congratulated the Chancellor of the Exchequer for temporarily suspending import tariffs on supermarket staples like baked beans.

He said on GB News: “I will confess, I don’t actually like Heinz baked beans, but if what Rachel Reeves is proposing goes ahead, the tax on beans will go down. They will be zero rated, and if Mr ChatGPT is right, there’s currently a 16% tariff on baked beans imported from the United States.

“And this is marvellous news, because it is the promise that Brexiteers made. We said, ‘Vote for Brexit and you will have the opportunity to have cheaper food and clothing’. Removing tariffs leads to cheaper food, and Rachel Reeves has now delivered that.

“You might ask why we’ve still got so many of these tariffs, often on goods that we don’t produce in this country. We should also think about the principle of free trade, that if we can take 16% off a good from one country, the other countries we buy from have to meet that new price.

“So, not only do you get the savings on the goods you import now from America, but Canada, a competitor in providing beans, has to reduce its price accordingly, and it works through the supply chain, because once you reduce the cost of a raw material, when you go and buy an all-day breakfast, and it’s got baked beans in it, that discount plus the markup feeds through to a fundamentally lower price for what you’re consuming.

“It’s the most basic economics, and I must confess that on this occasion I congratulate Rachel Reeves for what she’s doing. It’s the right thing to do. It follows what the former Conservative Chancellor did in cutting 2,000 rates, just getting rid of them, of things we don’t produce domestically.

“There is much more to be done on this. We don’t want to have any tariffs on goods we don’t produce in this country, because the revenue those tariffs raise is trivial, but the consequence on higher food prices is high. But what really interests me is we’re getting the Brexit dividend, not just as it happens on baked beans and on tariffs being reduced, but also on the cut on VAT.

“VAT comes under complex EU rules, and some items are allowed to have 5% rates, but most have an agreed minimum rate of 15% and Rachel Reeves is going below that rate again using a Brexit benefit. If we were still in the European Union, we couldn’t do it, but how interesting that this is happening at a time when the Labour Party is flirting with returning to the European Union.

“Sir Keir Starmer has his reset. Andy Burnham said he wanted to go back into the European Union at the Labour Party conference in September of last year and Wes Streeting has said it even more recently, so they are flirting with one thing whilst doing the other, this is a definition of prestidigitation.

“You can’t watch what the hands are doing, because they’re distracting you with what they’re saying. What they’re doing is Brexit. What they’re talking about is rejoin.”