Richard North, 02/08/2017  

"Following the EU Referendum result and Mrs May's election of the Conservative Party", says the Policy Exchange in its 2016 report to the Charity Commission, "the Trustees agreed that the priorities and character of Policy Exchange's research agenda should be adjusted to take account of the radical change in the UK's political landscape". It continues:
At the heart of this is the nexus of policy issues thrown up by the UK's departure from the EU. These range from constitutional and legal questions, to issues around trade and the future of UK foreign policy and Britain's place in the world.

The new political landscape and change of administration has redefined the objectives and purposes of policy. They will now principally focus on matters relating to Brexit, the economy and industrial strategy, and social reform Central to this readjustment is a much greater emphasis on economic research.
The no doubt accidental omission of a couple of words in the first sentence, those referring to Mrs May's leadership status, is rather a poor show for a supposedly leading think-tank, as is the erroneous assertion that Mrs May was elected to the office. After her rivals fell away, her candidature was uncontested and no election was held.

Small things sometimes tell their own story, and the lack of attention to detail from a think-tank reporting a £2.5 million income for the year could be considered revealing.

It is certainly something to bear in mind as we begin to see the fruits of the "research" on Brexit this organisation is producing, the latest of which is a report called Farming Tomorrow, offering views on a post-Brexit agricultural policy.

Here, though, the think tank avoids making small mistakes, such as leaving out a few words. Instead, it goes for the grand slam, filling 70 pages with what could easily be described as unmitigated trash – if one was of a kindly disposition. It includes a turgid repetition of the CAP hagiography, which could have benefited from a read of The Great Deception, helping them understand the politics of the EU's agriculture policy.

This report isn't just trash, though, it's Tory Boy trash, that unique meld of arrogance and ignorance in which the London Tory think-tank scene excels, churning out the same tired nostrums which are treasured by the bubble they inhabit. 

Page 29, for instance, takes us to this classic piece of dissimulation where lead author Warwick Lightfoot and his seven co-authors tell us:
In the case of a UK/EU FTA, assuming it is the wish of EU27 to reach an agreement with the UK, then negotiating an FTA should be straightforward. The UK and EU are deeply integrated with completely free trade as the starting point, and the UK's rules and regulations are currently based on the EU acquis.
Once again, we are seeing the classic Tory myth, the blithe assumption that, because we have regulatory convergence, hooking up with the EU in an FTA is going to be easy. These people are children.

Recently, Oliver Norgrove picked up this theme, calling in aid Professor Grey at Royal Holloway University, to debunk the myth.  But not for one minute does Policy Exchange look beyond their simplistic mantras and explore the real situation where, as I wrote recently, regulatory convergence is just a starter for ten. Their idea of "research" is to collect up the mantras from their peers and to regurgitate them.  

The point one should not evade is that Lightfoot and his colleagues are the cream of the Tory think-tank research establishment. And even though none of them can claim any agricultural experience, they regard themselves as competent to write a report on the highly specialist and complex area of agricultural policy. This takes arrogance into new dimensions. 

Predictably, all you get is the repetition of discredited myths and not the slightest attempt to verify their assertions. The factoids have become the perceived wisdom, cast in stone. 

The arrogance is their undoing. For instance, they know of my work, and occasionally they read it. But they ignore it. They know better than me with my 30 years experience in the food, farming and related industries, and years working on EU policies. Sixteen years ago, I wrote Death of British Agriculture, which is still ahead of the game on policy, much of which is reflected in Flexcit. But we have superior beings here. They need nothing from us lesser mortals.

And then there's the tribal loyalty. The regulatory convergence myth has been perpetrated by none other than Liam Fox and, since he is one of their own, he cannot be contradicted. By such means is error reinforced and disseminated, to be repeated by all the derivative Tory Muppets and wannabes, as the gospel from on high. And this is why the work from Tory think-tanks is worthless, even where, in this case, the over-generous donors have spent £2.5 million on it.

For that money we also get another of their treasured little mantras, to the effect that a "significant cause of higher prices" of food in the UK "has been the combination of tariffs and agricultural support", from the CAP, "increasing costs and subsidising inefficient methods of production".

Lightfoot and his team particularly vent their spleen on the high rates of agricultural tariffs protecting EU produce, point out that it averages 8.5 percent across the board. Against this, they compare tariffs with Australia and their poster child, the subsidy-free New Zealand, which applies the equivalent of only a 0.4 percent tariff to agriculture.

What these precious little Muppets never seem to do, though, is look at the comparative price of a grocery basket between their heavenly New Zealand and the subsidy-ridden, protectionist UK, in the thrall of the CAP. Yet, only in June, the New Zealand Herald was complaining that a typical grocery shopping bag in Auckland was twice as expensive as it was in London. A comparison two years earlier came out at 46 percent higher on nine basic items.

This compares with the cost of living generally in New Zealand, which is only 17 percent higher than in United Kingdom. And New Zealanders in Australia are united in saying that Kiwis pay too much for food.

The way Lightfoot et al get round this inconvenient problem is by comparing UK prices with global commodity prices, claiming that UK consumers also pay above the odds for food indirectly through the tax system and wider income support. In the European Union, they say, this is equivalent to another 20 percent boost to farm prices.

The fact is, though, that global commodity prices bear little direct relationship to supermarket prices, which are affected by so many other factors that actual raw material costs can be the smaller part of the finished price. Furthermore, there is considerable variation between retail food prices throughout the EU, even where the subsidy system is supposed to be uniform.

And, outside the EU and the CAP, Norway, Iceland and Switzerland all pay higher subsidies than Brussels allows for its farmers, deciding that it is in their national interest to keep the countryside populated, and traditional farming methods alive. 

While the EU average total subsidy is about 18 percent of farming income, Norwegian farmers gain just short of 60 percent, slightly ahead of Switzerland, while Iceland farmers are paid just short of 50 percent. All three are at the top of the list for food prices, yet consumers pay less in the shops than New Zealanders do for their food.

Across Europe, retail price indices range from 58 (Macedonia), where the EU-28 = 100, to 173 (Switzerland). Denmark, with its country name synonymous with bacon, comes in at 148, compared with the UK at 98, slightly below the EU average. Eurostat offers further interesting statistics.

In short, the subsidy argument, in the way presented by the Tory right, is utterly crass. The removal of subsidies, per se, will not necessarily – or at all – see a reduction in retail prices. With other factors taken into account, we could in fact see major increases in some commodities.

What will certainly be a consequence of precipitate tampering with the subsidy system, though, is considerable damage to farming. Furthermore, Lightfoot and his friends talk glibly of the CAP "subsidising inefficient methods of production". Yet, it is the more inefficient methods which produce the most spectacular scenery, which underwrites a £12 billion rural tourism industry. It keeps the countryside populated and provides much-needed jobs.

Not once in 70 pages does the Policy Exchange report mention the economic value of scenery, or that this is a tangible by-product of farming. It is created by farmers, for which they receive no direct compensation. And not only does scenery have a significant economic value, it shapes our perception of ourselves, and contributes to the quality of life. 

Instead, they quote Matt Ridley, prattling on about "gardening", completely failing to understand that the scenery that makes England (Scotland, Wales and Northern Ireland) stems from its farming practices. To preserve the countryside, you must preserve "inefficient" farming - not turn farmers into gardeners.

Without more than a sideways look at such issues, which should actually be driving a post-Brexit agriculture policy, the Policy Exchange argues that "the UK should work to phase out direct subsidies and tariff protection for production, and instead look to create a more productive, innovative and ultimately sustainable sector". Do they not realise that production subsidies have been almost completely phased out already? Forgive them Lord, they know not what they do. 

And in that category, nowhere at all do we see any reference to the probable impact of Brexit on agricultural exports to the EU. This is a huge lacuna, as the impact of border controls could bring UK exports to an end for a considerable period, and have a massive effect on the economic health of both agriculture and the food industry.

Unbelievably, there is not a single reference to border issues, or inspection requirements or any of the related issues. And Ireland, it seems, is to be addressed in the next report.

But this simply underlines the obvious. We are not going to get anything sensible from the Tory right on agriculture, and this think-tank has totally lost the plot. All you get from it is dross from on high. What they are offering is wrong, and dangerously so. They would destroy British farming as we know it, for no gain at all.

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