UKTiE Submission to Future UK-EU transport arrangements inquiry

14 September 2018

Introduction

1. UK Transport in Europe (UKTiE) welcomes this opportunity to make a submission to The House of Lords EU Internal Market Sub-Committee inquiry into the future UK-EU relationship in road, rail and maritime transport, and their efforts to explore the opportunities and challenges of leaving the EU in areas such as market access, standards and cooperation.

2. UKTiE is Britain’s only multi-modal transport group speaking up for UK transport in Brussels.

3. Our submission focuses on your question, ‘How prepared are the Department for Transport and UK transport agencies and bodies for Brexit, including the potential implications of ‘no deal’?’

4. The Government set out a basic framework for the future UK-EU transport relationship in a paper published 7 June 2018, and further details on these objectives were given in the Future relationship between the United Kingdom and European Union White Paper, published 12 July 2018.

Further, faster and fairer

5. UKTIE has been calling for a UK position paper on transport and Brexit for some time and welcomes the Government’s Framework for the UK-EU partnership for transport, and the subsequent Chequers Agreement and the Brexit White Paper.

6. While a useful contribution to the Brexit process, the lack of sufficient clarity on fundamental issues highlights a lack of adequate preparedness, not least because the abovementioned papers fail to adequately address questions such as why do we want to be members of some of the EU’s transport agencies (air), but not rail & maritime agencies? What about port services? What about reciprocal market access for rail services & products? What about employment, environmental, state aid & competition policy? What about enforcement? What degree of regulatory convergence, or divergence, are we prepared to accept? How do we influence EU transport policy and regulation post Brexit if we are still largely bound by them? We note the “Framework for the UK-EU partnership – Transport” makes minimal reference to rail services and the White Paper has only one paragraph.

7. Our members have noticed a marked slow down in investment given the uncertainty surrounding the current negotiations. This lack of clarity on the final shape of the withdrawal agreement and the UK’s future relationship with the rest of the EU is delaying investment decisions and increasing costs as businesses factor in contingency arrangements. In addition, public sector bodies face reduced/no future borrowing from the European Investment Bank (EIB). While the Treasury has promised to come forward with a new scheme, details remain elusive. Rates from the existing Public Works Loan Board are higher than the EIB putting further pressure on the finances of public sector bodies. We are concerned that the UK could lose access to EIB facilities without an equivalent UK Government supported borrowing facility offering comparable rates in place.

8. In the absence of a clear, consistent and comprehensive approach for what relationship with the EU in the field of transport post Brexit the Government are seeking, it is almost impossible to properly prepare for the limitless number of post-Brexit scenarios. Hence our call for an approach which goes further, faster and is fairer. All the above questions raise issues that are inter-linked but are crucial if our approach is to work for UK transport, and above all, be deliverable.

9. Going further. The Government’s approach is not sufficiently clear, consistent or comprehensive as seen in Figure 1. Regulatory alignment for goods but not services makes little sense for Britain’s mature transport industry where these activities are now completely inter-connected. For example, transport goods are not sold or provided in isolation: the service element, from finance and design to operation and maintenance is integral to our ability to win contracts.

10. Faster. A new UK-EU relationship on transport will form part of a mixed trade agreement (FTA). Consequently, it will be dealt with, across the modes, and a holistic horizontal and consistent approach is required. It is hard to envisage a scenario where we can diverge from EU legislation in some transport areas, but not others.3 Indeed, that inconsistency in the treatment of the different modes within the two above mentioned Government papers, could compromise the ability of the UK government to secure the unanimous ratification of the agreement by the required 37 national and regional Parliaments on the continent. Therefore, our approach must recognise the need for speed, while facilitating a timely negotiation and ratification process, in order to avoid the UK remaining in transitional limbo for years. A clear, consistent and comprehensive approach across the modes is the only realistic approach (see 7 above). It is illogical, and to a large extent impractical, to adopt an inconsistent approach across different transport modes, not least as it may well lead to unintended consequences that damage the competitiveness of the UK transport sector.

11. Fairer. The Government’s papers set out how, in varying degrees, the UK transport sector will still be subject to not just the EU’s ‘common rule book’ for good, but also to environmental, employment, state aid and competition legislation. However, future rule-making through the proposed institutional arrangement relies very much on a Joint Committee of EU and UK Civil Servants as set out in Figure 2. This Joint Committee, which will manage the new relationship on a day to day basis, including new legislation, provides no clear or practical safeguards on transparency, or assurances on accountability to the UK transport sector. Consequently, we risk being subject to future EU regulations in perpetuity, without any direct opportunity for technical or policy input.

Conclusion

12. Finally, I would like to thank you for giving UKTiE this opportunity to make a submission and I hope our evidence assists your deliberations. Whilst the Government’s papers and the efforts of Department’s have greatly assisted the preparation process, the lack of a clear, consistent and comprehensive approach suggests much more work is needed to ensure we can deliver the best possible Brexit for transport. We would be happy to provide further information in writing or orally.

Mark Watts
Co-ordinator
UK Transport in Europe (UKTiE) Rue d’Arlon 40
Brussels 1000
Belgium

markwatts@lpbrussels.com

www.uktie.eu