Every single thing about this “How much we will save on tariffs after Brexit” thing in The Sun the other day was completely wrong. So much so that The Sun chose to delete it off of their website though it still went out in the real paper.
Now I don’t just mean it was a little bit wrong. Everything was wrong in about a dozen ways. I mean you won’t believe how bad it was.
Let’s start with using unrepresentative retail prices. Mozzarella-type (not even real mozzarella) cheese they have as £1.50 for 125g. Hmm.. you can get 125g Tesco Everyday Value Mozzarella for 47p. That’s the first thing.
Then they’re using the retail price as a starting point instead of the price at import where tariffs are actually paid by the importer. So the savings are well inflated already.
Then, as if that wasn’t stupid enough, they messed up doing basic arithmetic with percentages. If something costs £2 with a 50% tariff on it you don’t get back to what it was before the tariff addition by taking 50% off the final price. If your end price is £2, it would have been £1.33 before 50% was added to it not a pound (£1.33 +50% = £2). A 9-year old child would know that.
Then there’s the fact that they chose a whole bunch of products that we get tariff free already for various reason. Viking Bikes are British so no tariff. Mozzarella comes from Italy and most ciggies sold in the UK are made in Poland & Germany, so no tariff imported from the EU.
In fact here’s a video of them making Marlboro cigarettes in Berlin!
Then there’s the LG TV from South Korea. But we have a free trade deal with South Korea, so there’s no tariff there. But not just that. It turns out the biggest LCD TV factory in the world is in Slovakia, in the EU.
Let’s look at the cigarettes for a moment. Now this is really bad. First of all they’re almost certainly coming from Poland or Germany as said earlier, but if not then they would have to be coming somewhere outside of the EU where we don’t have a free trade agreement and also from a country that isn’t one of the 47 developing countries that a have an exemption to all tariffs. So let’s assume that for a moment and carry on.
Firstly they ignored the huge excise duty that the UK (not the EU) put on fags. Plus the distributor’s costs and retailers margin, all of which are, in reality added to the cost after the tariff has been added.
So If you take off the excise duty and margins and, I nearly forgot, the 20% VAT, you end up with an import cost of about £1.30 for a pack of 20 cigarettes. It’s on this price that you’d actually calculate and add the tariff. So 57.6% of this is about 75p.
So on a packet of fags costing £10.70 the potential saving (in fantasy land) would actually only be about 75p and not the £6.16 that The Sun said it would be. That’s quite a difference. But remember there’s no bloody tariff on them anyway!
Well at least they got one thing right. Nike. It’s a US brand and we’ve not got a free trade deal with the States, so there would be tariffs on those trainers right? Well actually no, there wouldn’t. Nike have got subsidiaries and factories all over the world including 16 factories in Italy no less, 5 of them making footwear (http://manufacturingmap.nikeinc.com). So no tariff on them either.
Basically nothing they picked would actually have a tariff on it.
But I’m not even finished! They had butter on the list remember? For God’s sake, the UK makes loads of butter. We we can’t get rid of enough of the stuff. It’s cheaper than the stuff we import like the Danish stuff that Rutger Hauer puts on his spuds. He’s bloody Dutch, anyway. Why the heck do they get him to advertise Danish butter? Anyway, never mind that. Imported butter. Lurpak. That’s from the EU of course. Plus we get loads from Ireland too. Kerrygold right? EU. And British butter is cheaper than that too! We don’t need any more imported butter we’ve got loads. So no tariffs on butter, ok?
Now wait a minute I know what you’re thinking .. Anchor Butter, it’s from New Zealand right? WRONG! The brand was bought by Arla back in 2012. It’s now made in Wiltshire. You don’t see those ads with the dancing cows that eat grass all year round anymore. But for some reason (nostalgia maybe?) despite Anchor no longer being New Zealand butter we do still import a bit from there. However according AHDB Dairy (a division of the Agriculture and Horticulture Development Board), we’re importing about 96% less from New Zealand than we did 12 months months ago. You know why? Because we’ve got loads of it here already on our doorstep and it’s cheaper than the stuff shipped half-way across the world. We don’t import it from anywhere else outside of the EU. So no tariffs on butter. But let’s give the Sun a break here let’s look at their savings. Let’s ignore the prior maths catastrophe for a second and look at the tariff figure they used.
So the tariff they had for butter was 50% .. bloody hell that sounds a bit much, I mean 57.6% for fags is understandable perhaps but 50% on butter? Have they got that right? No! Of course they haven’t. It’s the bloody Sun!
According to the tariff website at https://www.trade-tariff.service.gov.uk/trade-tariff/commodities/0405101120?country=NZ#import (I’ve become quite familiar with this site over the last few months) the tariff on New Zealand butter is 70 Euros per 100 kg. Hm, where the bloody hell did 50%? Come from? God knows. Anyway what does that tariff mean for our block of butter? Well a standard block is 250g. So that’s 4 blocks to a kilo and 400 blocks to 100kg.
So to get the amount of tariff on a single block we need to divide 70 Euros by 400, which comes to 17.5 euro cents. That’s about 15p. 15p, not a pound as The Sun says but 15p. But of course this is a fantasy anyway because we don’t need to import any bloody butter from New Zealand when there’s loads on our doorstep.
God, there’s more maths trouble but I’m kind of bored of it now. But you know what, The Sun getting stuff like this wrong is kind of what you’d expect isn’t it. But here’s the annoying thing. Who’s this on Twitter re-tweeting the Sun’s figures? Economists For Brexit. Who are they? That’s the group of “Economists” led by Patrick Minford. Minford and his team were the only economists in the world who predicted that Brexit would result in an economic benefit to the UK. I mean literally the only economists in the World. Everyone else thinks he’s off his rocker, but Jacob Rees Mogg, Michael Gove, Ian Duncan Smith, they think he’s brilliant. And here he is, or at at least someone tweeting on his behalf, endorsing this shocking awful maths catastrophe that bears no relation to reality.
I despair.
