UK Transport and Brexit News & Views No. 35

Mark’s Brexit Week for Transport

The announcement that British Prime Minister Theresa May will give a speech this Friday in Florence on the Brexit negotiations so far and provide ‘updates on how the negotiations were going and be engaged in an ongoing conversation with Europe’ is a chance to reboot the stalled negotiations.

As we all know, without a swift resolution on the key divorce issues such as the U.K.’s financial obligations, the Ireland Question and the EU and and the UK citizens’ rights, it is unlikely that the European Council meeting on October 19 will deem that “sufficient progress” has been made to move on to other topics, including trade and transport.

So she will need to pull the proverbial rabbit out of the hat to secure a sea change by the October Council. That is not her style,  and I think we are more likely instead to hear a significant change in tone, which will lay the foundations for sufficient progress on the divorce issues by the December Council meeting.

The other thing I suspect is that we will hear greater clarity on the transitional arrangement, or the implementation phase.  The terms of which were set out pretty clearly by the European Council in April, and include continuing payments into the EU and acceptance of the acquis. I suspect she’ll announce the UK will broadly accept those conditions, and remain a member of the EU in all but name until the next UK general election, scheduled for 2022.

Such a reboot will go a long way to restoring the good will to the talks which has been sadly lacking.  And the EU27 also seem to be in a mood to inject some good will. The influential Visegrád Group of foreign ministers met last week with the UK Chancellor Philip Hammond in Budapest and advocated that “The most wide-reaching and comprehensive free trade agreement possible must be achieved between Great Britain and the European Union to ensure that economic, trade and investor relations can continue as smoothly as possible”. And even Jean-Claude Juncker declared last week that “My working hypothesis is that there will be a deal. … I do not envisage a so-called hard Brexit.”

So if good will does indeed break out, the UK transport sector should stand ready to engage here in Brussels in early January, when the detailed talks will kick off. It is essential that the future UK-EU regulatory framework is based on evidence and facts and a proper understanding of the market.

The biggest mystery is why Florence. As Politico reported, it is close to Guy Verhofstadt’s vineyard, the home of Machiavelli, and has a big city hall that hosts an annual State of the Union conference, so why not? Officially Downing Street said, “The U.K. has had deep cultural and economic ties spanning centuries with Florence, a city known for its historical trading power.”  Maybe May has gone to seek inspiration, in the home of Machiavelli. I’m sure she very much concurs with Machiavelli’s warning on handling political change “It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things.”

1. Transport Secretary promises post-Brexit boost to maritime sector….
During the International Shipping Week in London, Transport Secretary Chris Grayling MP has appeared at several events promising that a new independent trade policy will provide opportunities, jobs and prosperity for the maritime sector. However not all are buying into his promises, according to this tweet, his comments were booed at the ISW dinner and he has been criticized for exuding platitudes.

2. … While HMRC says post-Brexit border and tax checks could cost up to £800m
Head of HM Revenue and Customs, Jon Thompson, told the Treasury select committee that the HMRC is currently investigating the possibility of using a Singapore-style border check system. Furthermore, he warned that any new customs procedures could require an extra 5,000 staff and cost up to £800m. He also warned that any new system would take between five and seven years to become fully operational and streamlined. In his presentation to the committee, he was most concerned about the Dover-Calais route. Our member, Port of Dover, has created a video that illustrates how delays at Dover will affect trade across the UK and the EU.

3. Third runway more important than ever as TFL sees drop in users
Emma Gilthorpe, Executive Director Expansion for Heathrow, speaking a conference that was discussing the proposed expansion of Heathrow, said that the construction of third runway is even more important now than before Brexit as the UK needs to show that they are open for business and “have the mechanics to deliver links to long-haul markets that we may not do business with today, but we will absolutely need to do business with tomorrow.” Also attending the conference was Alex Williams, Director of City Planning for Transport for London, who said that: “Total trips in London, a leading indicator of economic activity, are going down partly because of the uncertainty of Brexit.”

4. Brexit negotiations delayed for a week for PM’s speech
The UK has asked for the negotiations to be pushed back a week to allow for Prime Minister May to give a speech in Florence, Italy. They will now resume on 25 September. Brussels hopes her speech will break with the uncompromising stance set out in her Lancaster House speech in January and clarify the UK’s stance on Brexit. Everyone is hoping this speech will break the stalemate that the negotiations are currently finding themselves in.

5. Guy Verhofstadt MEP reports back to the Conference of Committee Chairs
The European Parliament’s Brexit representative, Guy Verhofstadt MEP, reported back to the Chairs of the EP’s committees. Most of what he informed the Chairs was about the remaining point of disagreement between the EU and the UK such as citizen’s rights, the financial settlement and the Irish border. Karima Delli MEP warned that for the transport sector time is running out especially for aviation and Mr Vehofstadt MEP replied that the EU side certainly wants to avoid a cliff-edge scenario, although Parliament negotiators also insist with the Commission to have solutions ready for all eventualities. If you would like to see the full summary, please contact uktie@idagroup.global

6. BBC programme discusses what the EU wants from Brexit
As we are constantly advocating, during these negotiations it will be important to not only talk to people in the UK but also in the EU27 Member States. A 30 minute programme from BBC Radio 4, The Briefing Room, discusses what Berlin, Warsaw and Paris think about Brexit. The bottom line: the priority is to protect the integrity of the union and the Single Market, even though the EU regrets Brexit, the UK will get no special favours.
 
7. UKTiE has also put together the latest timetable for Brexit. We will keep this up to date as the process develops: