British families pay £470 extra a year for food because of EU tax on imported goods

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British families pay an extra £470 a year for food because of EU taxes imposed on imported goods, government figures revealed yesterday.

In the first analysis of its kind, the Department of Trade and Industry (DTI) showed Britons paid two lots of tariffs on many household goods.

Taxes are first levied on goods manufactured outside the EU, and these go directly towards its Common Agricultural Policy (CAP). Secondly, the shop selling these imported items passes on an extra cost in the price it charges to the shopper. The CAP is estimated to add £8 to £9 a week to the food bill of a family of four.

Patricia Hewitt, the Secretary of State for Trade and Industry, said that the extra cost was not always transparent to British shoppers and that the poorest, including struggling mothers, suffered the most.

Talking at a meeting with the Consumers' Association, Ms Hewitt launched an attack on the system and said it was in need of real change. "Because CAP subsidies and EU tariffs affect essential items, families can't escape them, and poorest families are worst hit.

"The poorest 10 per cent of households spend 10 times as much on food as the richest 10 per cent [as a proportion of their income]. Struggling mothers pay more too," Ms Hewitt said.

She added that the system was "rigged against developing countries" as well as "rigged against the high street". Tariffs on baby food account for at least 20 per cent of the shop price, which adds £12 a month to the cost of feeding a baby. A 12 per cent EU tariff on baby clothes adds £60 to a £500 annual bill and a child's bike costs an extra £20 for a £200 bike after a 10 per cent tariff.

Ms Hewitt's is keen to reform the CAP and EU tax schemes, as she will make clear at world trade talks in Cancun, Mexico, in September.

The scheme was developed to support European produce but many believe that it is expensive for British consumers and damages trade in developing countries. Ms Hewitt said that the EU and US must stop preaching free trade abroad while practising protectionism at home.

The DTI found that if tariffs in the developed and developing worlds were halved, the latter would gain £150bn a year, which is three times the sum it receives in aid, reducing the number of people living in poverty by 300 million by 2015.

Ms Hewitt said: "We are giving with one hand and taking away with the other. Instead of trade, they get aid ... 1.2 billion people in our world live on less than $1 a day. Yet we pay our dairy cows in Europe twice that amount under the CAP. It's lose, lose." Last year, France and Germany agreed to delay radical reform of agricultural policy until 2013 to ensure that their farmers continued to receive subsidies until then.

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