Saturday 16 December 2017

People who think UK needs EU trade deal are 'foolhardy' says Wetherspoons boss

Tim Martin, chairman of JD Wetherspoon, and Boris Johnson Photo: Bloomberg
Tim Martin, chairman of JD Wetherspoon, and Boris Johnson Photo: Bloomberg

Ben Chapman

The pub chain founder and chairman is well-known for his staunchly pro-Brexit stance and has repeatedly used his company’s trading update to launch broadsides against groups with other views.

In a colourful statement, Mr Martin singled out Carolyn Fairbairn, head of the Confederation of British Industry for her comments last week that Britain “leaving the [Brexit] negotiating table without a deal shouldn't be Plan B, but Plan Z”.

“It is hard to believe that such foolhardy advice could emanate from a business organisation,” Mr Martin said, comparing the CBI’s stance to that of a housebuyer telling a seller that they must have the seller’s house at any cost.

The approach will mean that the buyer - the UK, in the case of Brexit - will “pay the maximum the seller believes he can afford”, the pub chain boss said.

The UK must instead stress that it is willing to walk away from a deal with the EU and trade under World Trade Organisation terms, Mr Martin recommended.

Analysis by The UK Independent found that trading under WTO rules would cost at least £4.5bn per year in extra tariffs alone, and would in all likelihood cost much more, once non-tariff barriers to trade are factored in.

A Treasury report leaked in March warned that WTO rules would cause a “major economic shock” and be worse than any other option.

Mr Martin said the scenario would benefit the UK if the country unilaterally abolished tariffs on goods coming into the country. He claimed such a move would reduce consumer prices and increase living standards.

“The current desperation of the CBI and others for a 'deal' is only encouraging the absurd posturing of the unelected 'President' Juncker and his acolytes,” Mr Martin said.

It emerged on Wednesday that the UK could be slapped with a €100bn (£84bn) “divorce bill” when it leaves the union, according to an analysis of additional demands from EU member states. The amount had previously been put at around €60bn previously by Jean-Claude Juncker in February.

Wetherspoon said it would be hit with “significantly" higher costs due to higher business rates, utility rates and excise duty. Labour costs will also be higher, following increases to the minimum wage. Like-for-like sales will need to increase by 3 to 4pc over the next quarter to make up for the higher expenditure, Wetherspoon said.

Despite fears that rising inflation is making consumers cut back on spending, the pub chain’s sales for the 13 weeks to 23 April increased 4pc. The company's shares rose 3.4pc in morning trading.

The latest pay data from the ONS shows average nominal wages rising at an annual rate of 2.2 per cent in the three months to January, while inflation was up 2.3pc in February and March, meaning that on average real wages are falling again.

Independent News Service

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