Farmers and businesses are still uncertain about Brexit

Theresa May
Theresa May

With its Uffizi gallery Florence is a city for artists and dreamers, but it became the centre of European politics when the prime minister, Theresa May, chose it as the venue for her ‘big speech’ on Europe.

This was designed to bring her fractious party to some sort of unity over Europe, and to persuade the European Commission to enter into a more realistic debate over Brexit.

If those were the goals the speech was something of a disappointment. MPs are as divided as ever, while the Commission has pocketed the £18 billion offer and wants more.

Politics apart, farmers, and indeed all businesses, are as uncertain about the future as before the speech. That is a state of affairs likely to continue for the foreseeable future. The offer to pay money into the EU coffers after Brexit – and the figure is likely to rise – is based around a guarantee that countries remaining in the EU will not have to pay more during the two-year transition phase. That means there will not be the savings many thought possible for the UK Treasury from Brexit. The UK is now committed to contributing to the cost of the CAP in other member states, while the future of our support arrangements is still up in the air.

One positive in the speech for the farming and food industry was some reassurance that EU citizens will still be able to work here, at least during the two year transition period. This will almost certainly mean red tape for those employees and the employers, but this is a vital concession for an industry reliant on permanent and seasonal foreign national labour.

On support for agriculture we know that the CAP structures will continue until 2020. We also know that the funding going to farming is guaranteed by the Conservatives until the next election. This should be in 2022 if the government can continue with its slim majority until then. There has been no confirmation that direct payments will continue during the transition period, although there is no reason for this not to happen. The farming lobby needs to make sure the decision to have a transition period after Brexit is not used as an excuse to kick the issue of support for agriculture into touch.

Things have already dragged on too long without any decisions, and the DEFRA secretary Michael Gove has, after an initial flourish, failed to deliver the reassurances farmers need about their future. This does not mean a support deal will not happen, but in a long term industry like agriculture an early decision is essential to allow people to plan. It would be good if some Conservative party members from rural areas pressed for a commitment on this when the party holds its annual conference. However a party that was once identified as a friend of the shire county farming areas now has a greener, urban focus. Farmers would be unwise to hope that agriculture will be remembered when the party meets in Manchester next week for its annual conference.

The government has effectively promised the EU £18 billion to secure access to the Single Market for two years after Brexit. This is the transition period. It is however not clear, so far as agriculture is concerned, how this might work. Theresa May is clear that she does not want a Norway-style membership of the single market customs union, because that would mean accepting EU rules. The big question for agriculture is that if the UK is a temporary member of the Single Market, having paid to buy that, how exports will happen.

If, for example, lamb is going to France or beef to Spain what will be the basis of that trade. For now, within the CAP, quality and compliance with EU regulations is taken for granted, but it is far from clear now how that will be achieved after Brexit. We might have continuing access to the Single Market by agreement, but there is a big difference between a deal and legislation legally enforceable through the European Court. That will doubtless be tested after 2019, but it would be ironic if agriculture ended up out of the CAP, but still having to meet the rules to access the Single Market. That points to a battle ahead through the transition period, unless a new and more generous tone is brought to the negotiations by Brussels – and there is little sign of that happening.