UK Transport and Brexit News & Views No. 24

Mark’s Week
Hope our UK readers enjoyed their Bank Holiday weekend!  I’m pleased to announce that UKTiE and our members will be meeting Michel Barnier’s team (known as Task Force 50) on 11 July, soon after the anticipated commencement of formal Brexit negotiations. After months of waiting and preparing it will be really good to sit down at last with the EU negotiating team directly and discuss our priorities for the UK transport sector as a whole, and more importantly deliver UKTiE’s post-Brexit solutions for the sector. Speaking with one voice on behalf of our members from all the modes of transport we can present a united front and work constructively with the EU institutions to ensure transport becomes a priority in the Brexit negotiations.  And we have quite a challenge. For example (as we set out below)  the Council approved the start of the negotiations last week but as previously reported transport and trade issues are not on the agenda. Citizen’s rights, finance and the Ireland border issue must be resolved first. I hope that the new UK government realizes it needs to get down to the nitty-gritty as soon as possible after the general election, as everyone requires certainty in the face of this huge challenge.  Meanwhile UKTiE will continue to meet EU negotiators, preparing the groundwork for a Brexit deal which is good for our members.  This week UKTiE is meeting with the office of Karima Delli MEP, the Chair of the Transport Committee of the European Parliament, as part of our on-going efforts to keep UK transport issues on everyone’s mind in Brussels. 

1.  Council approves the start of Brexit negotiations
The Council of the European Union unanimously adopted a decision authorising the opening of Brexit negotiations and formally nominating the Commission as Brexit negotiator on Monsay. They also adopted the negotiating directives. Both texts were based on the recommendation presented by the Commission on 3 May and so reiterate the E.U’s wish for a phased approach to the negotiations, and their priorities, i.e citizen’s rights, financial settlement, Ireland’s border situation and addressing what to do with goods and procedures already in place on the market. The first formal meeting between the EU and UK negotiators is expected to take place in June.

2. New reports published on possible Brexit scenarios
The Centre of Economic Business Research, on behalf of the Open Britain organisation, has produced a report that outlines the potential impact of securing a trade deal with the bloc that covers goods but not services. “Losing access to the single market in services after Brexit could cost the British economy up to £36bn a year and have a particularly negative impact on financial services, telecoms and transport”. Responding to the report, former deputy Prime Minister Nick Clegg said “Instead of pretending that we can have all the same benefits outside of the single market as in it, ministers must start dealing in reality rather than rhetoric.” The Federal Trust for Education & Research have also published a report where they consider 3 different scenarios for a “Hard Brexit”

3. Truck manufacturers call for swift Brexit
During a debate called “Truck to the Future” at the Microlise Transport Conference, manufacturers called on the Government to seal a swift Brexit deal to prevent drag on the UK truck market. Mark Grant, UK aftersales director at Scania, told delegates: “I would like to see a swift deal with Brexit. The sooner we know what we have to play with, we can adapt our strategies accordingly to work with the logistics industry. Let’s just get on with it. If we can remove red tape on unnecessary legislation and make quicker decisions let’s do it.”

4. Irish airlines may prove to be UK ally during Brexit negotiations
Eamonn Brennan, CEO of the Irish Aviation Authority (IAA) has opened up to POLITICO about his fears for what a “hard Brexit” would mean for Ireland’s thriving aviation industry. Brennan said “For the sake of business, leisure and tourism inter-dependencies, we should not tolerate a restrictive air transport agreement. Whatever the temptation may be, there is no space for the U.K. to be made an example of when it comes to this issue”. This should be good news for Brexit negotiators, as this means they will have at least one ally on the other side of the table, especially as Germany, backed by Lufthansa, will be arguing that “out is out”.

5. Ryanair planning for worst-case scenario
Ryanair is preparing for a worst-case scenario, warning that there may not be any flights between the UK and the EU if no alternative to the Open Skies air treaty is found. Ryanair believes a “hard Brexit” to be inevitable and has made plans to move planes from the UK to the continent should this happen. Ryanair’s CEO Michael O’Leary said they would probably have to stop selling UK-EU flights in December 2018. He said the UK government does not seem to have a plan B and is deluding itself. “They say that they cannot see how European airports are going to survive without British passengers – well, they can survive because they are going to have to.”

6. Transport associations keeping on top of Brexit developments
The Road Haulage Association and the Freight Transport Association are ensuring their issues are at the forefront of Brexit discussions in the UK. As well as having published official positions on their websites, not only are they bringing their message to the media, by reinforcing the importance of their sector to the overall functioning of British society, they are also making sure their employees are up to date, see this webinar from FTA. These association’s efforts at a broad Brexit strategy are exactly what all transport companies should be trying to achieve.

7. Operation Stack lorry park plans put on hold by general elections
Matthew Balfour, Cabinet member for transport for Kent County Council has said that Brexit uncertainty means that plans for the Operation Stack lorry park should continue. The plans for a holding area “the size of Disneyland” were first announced in 2015 but were campaigned against by local residents of Stanford, who launched a judicial review. The hearing was originally scheduled for 27 June but has been put on hold due to the general election. Although Stack hasn’t been in operation since the plans were first announced, the prospect of a different relationship with France under its new president, as well as the huge changes Brexit will cause, has many concerned that Kent County needs to be ready for serious delays at its ports.

8. Ireland continues to worry over Brexit border
An article provocatively titled “Brexit: Traders could face €100 bill for every cross-Border transport” from the Irish Times received a lot of attention on social media last week. Irish audit firm BDO’s partner Carol Lynch suggested €100, on top of tariff costs, as a reasonable estimate if there is a requirement to lodge customs declarations for every movement. Irish Revenue chairman Niall Cody had previously said that the committee was not planning for the re-establishment of customs posts along the Border, but that it is being taken into consideration as worst-case scenario. He recommends that businesses unfamiliar with customs procedures, should inform themselves now rather than later.

9. Southampton considering its post-Brexit future
The people in charge at Southampton port expect exports to suffer if border controls are tightened. Any delays could have major impacts warns Alastair Welch, director of ABP, as manufacturers could choose to make their goods in another country. However several politicians have said the impact should not be that hard-hitting as much of the ports’ exports head outside the EU. However another important source of income for the port is the cruise industry and David Dingle, chairman of Carnival UK, warned that border controls would cause delays for customers, and that might lead to cruise ships avoiding Southampton, choosing to dock on the continent instead. “We wouldn’t want that to happen. That is bad news economically and that would be bad news for British jobs.” He also emphasized this won’t just be a problem at ports. “If there are going to be challenges in cruise ports, the challenges are going to be far, far greater in our airports”.

10. UKTiE has also put together the latest timetable for Brexit. We will keep this up to date as the process develops: