UK Transport and Brexit News & Views No. 31

Mark’s Brexit Week for Transport

With the British Parliament and the EU institutions now in recess we have a chance to take stock following two rounds of Brexit negotiations.   Well, we now know for certain that transport is unfortunately not a priority in the Brexit negotiations, and the Government’s demand that trade negotiations be held in parallel have been rebuffed.  However, this is not a time for us to wait and see, but rather to plan and prepare to ensure transport interests are not overlooked when the discussions on trade do commence. And we need to remember that not everyone recognises the importance of the sector, including the politicians from the 27 EU countries that will have to sign off an eventual deal for transport. So if we are to shape the future UK-EU transport relationship we need to use the summer period to marshal our facts, assemble our evidence, develop our solutions and build coalitions.  We then need to stand poised ready to deliver our submissions to them when the institutions return. And remember unlike Westminster, Brussels returns at the end of August, with the third round of negotiations commencing on Monday 28th August. British MEPs remain in post until Brexit, so don’t forget to prepare submissions for them too. We will be back with UKTiE News and Views on Monday 28th August. In the meantime whether you manage to prise yourself away from your Brexit preparations or not, please may I wish you an enjoyable summer! 

1. Negotiations moving forward but there are still some fundamental differences
Speaking at a press conference after the latest round of negotiations, Michel Barnier, Chief EU Brexit negotiator said that although “We are now all moving forward in a common direction” there was a “fundamental divergence” with the UK negotiating team over the rights of EU citizens. He also expressed some frustration over the lack of clarity from the Brits, in particular pertaining to the financial settlement that the EU is demanding. He said: “A clarification of the UK position is indispensable,” David Davis said the talks had been conducted “constructively and at pace,” but that “we shouldn’t expect incremental progress in every round. […] clearly there’s a lot left to talk about.”

2. Liam Fox sets out what he wants in a transitional arrangement 
A transitional arrangement, long advocated by UKTiE, took an important step closer in the past week with Liam Fox, Secretary of State for International Trade throwing his weight behind the measure, but adding any transitional arrangement with the EU after Brexit must end by the time of the next election.  Liam Fox told the BBC he had no ideological objection to interim arrangements to minimise disruption after the UK’s exit in 2019. However, more controversially he said he would want the UK to be able to negotiate its own trade deals during that period so it could take “full advantage” of its new status, which would appear to conflict with the obligations that the EU are likely to impose during any transition.

3. Think Tank issues report on key issues for transport industry Brexit talks must address  
The think tank Independent Transport Commission has published a report on how leaving the EU will affect UK transport. The report sets outs the key issues that the think tank urges the Government and policy makers to consider carefully. These include the long timeframes involved in transport infrastructure, the dependence of the sector on EU labour, the potential customs difficulties and the importance of existing EU agreements such as the European Single Aviation Market. “Given transport’s essential role in supporting the UK economy, the ITC recommends that transport issues are given a very high priority by the Government in its negotiations with the EU.”

4. Ports and airports most at risk from a no-deal Brexit, warns Moody’s
Moody’s, a ratings agency that is one of three key financial companies that analyses and rates the world’s debt, has published a report on the credit implications of Brexit. Unlike many voices currently being heard in London, Moody’s believes that the “impact on financial services may be muted” and that it is infrastructure assets that are at most risk from a no-deal Brexit. “The impact could […] be substantial for ports, especially for those relying on EU-UK traffic. The imposition of tariffs could also trigger changes in transshipment patterns that would have mixed impacts on UK ports.” The report also speaks of the impacts to airports, airlines and in particular, Eurotunnel.

5. Air industry wants urgent action – are the key players listening?
Among others, the Airport Services Association (ASA) has called for urgent action to ensure that Brexit does not harm the aviation sector in the UK, EU and beyond. The ASA suggests that any agreement should also safeguard air traffic between the UK and non-EU countries with which the EU has open skies or comprehensive air transport agreements, such as the US. Some reports would suggest that the UK government is listening as City AM reports that ministers have identified aviation as a “top priority” in Brexit negotiations, saying that the government will seek new flight rights with 44 countries to replace the EU framework governing where airlines can fly. However UKTiE has also heard that aviation will not considered separately and that transport will be dealt with horizontally.

6. Coveney rules out technical post-Brexit border solution
Speaking in Brussels before the latest negotiation round, Irish Minister for Foreign Affairs Simon Coveney said he hoped to see a strong political acknowledgement of what can be achieved at Brexit negotiations but he has ruled out using electronic tagging on the border after Brexit. “We do not want to pretend we can solve the problems of the border on the island of Ireland through technical solutions like cameras and pre-registration and so on. That is not going to work.” In fact he seemed to say he would prefer there to be no border on the island of Ireland “all of the parties in Northern Ireland, whether they are unionist or nationalist, recognise we what to keep the free movement of people and goods and services and livelihoods.”

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