UK Transport and Brexit News & Views No. 64

Mark’s Brexit Week for Transport

I detect the tectonic plates of Brexit are shifting, which will have a deep, profound and lasting impact on Brexit & transport.

The focus has mainly been on the on-going struggle within Cabinet to reach an agreement on customs, which both avoids a hard border with Ireland and ensures UK sovereignty over trade and regulation.   As reported below, the Head of Britain’s HMRC told MPs recently that the ‘Max fac’ customs option, favoured by Brexiteers in Theresa May’s cabinet, could cost businesses up to £20 billion a year and take years to implement.  So that’s probably dead in the water.

But meanwhile, other significant developments mean a Brexit deal is at risk, and transport is being side-lined.

Firstly, as reported below, Dominic Cummings says Brexit is now a ‘train wreck’.  Among his many damning criticisms is the one on the preparations for Brexit, or the lack thereof. He claims that ‘Downing Street, the Treasury, the Cabinet Office and the Cabinet have made no such preparations and there is no intention of starting.’  And why is that significant? Well he was the man behind the official Leave campaign.

Secondly, the key Irish border issue remains unresolved. But there was a subtle, but I believe significant, development in the words used by UK Opposition Leader Jeremy Corbyn when he spoke at Queens University Belfast last week.  He repeated Labour’s commitment to remain in a Customs union, even if it means the UK losing the freedom to negotiate trade deals. But he went further and advocated ‘a new relationship with the single market, based on protecting and improving existing standards and rights’. In other words membership of the Single Market in all but name. And he made it clear that Labour will not support any Brexit deal that includes the return of a hard border on the island of Ireland or a border in the Irish Sea, and predicted he would win a division in the Commons on the issue.

Thirdly, whilst the result of the referendum on abortion in the Republic of Ireland may not have a direct bearing on Brexit, as Jon Snow put it in a tweet, ‘Who would ever have guessed the Brexit coalition would be threatened by abortion’.

Fourthly, this week, key non-Brexit issues including transport, like the third runway at Heathrow are again inevitably being side-lined. Janan Ganesh’s excellent article, also reported below, in the FT and Irish Times made this very point.

He refers to the parable of Heathrow which he says ‘illuminates Britain’s predicament since 2016’.  But if anything the inability to even make a decision on additional runway capacity in the south east of England for a decade or more is actually illustrative of the much deeper malaise in the UK,  namely the fault lines in British society which the above developments have so graphically exposed in the past week., which are making Brexit almost mission impossible.

So whilst a few months ago I was optimistic that we could do a deal by next month’s Council, our inability to even agree with ourselves on the most fundamental of Brexit questions means no deal in June, and the risk of no deal in October either, other than a bare-bones exit, which will unfortunately leave transport badly exposed.

Let’s hope the Government can turn this round and make some of the tough decisions to ensure the best possible Brexit, including not just listening to industry, the Lords and opposition, but taking on board their advice and seeking to forge a new national consensus.

In the meantime hold onto your hat. We’re in for a bumpy ride.

In conclusion, by popular demand we’re be featuring a song each week which best illustrates developments (and will hopefully lift our spirits for the many challenges ahead!).

This week, Derek Ryan’s Hold On To Your Hat (featuring Sharon Shannon).

Enjoy and have a good week!

1. How Britain’s departure from the EU stretches to mid-2020s
The Financial Times reported that Brexit negotiators, on both sides, are beginning to come to the same realisation: “extracting the UK smoothly from the EU will be a process that stretches into the mid-2020s”. The article further adds that this would take the shape of some form of “EU afterlife” and that, according to one senior negotiator, this would inevitably be agreed on once both sides look in the mirror and finally admit how long this will all take. HMRC’s Jon Thompson, speaking to MPs last week, was asked when his customs transformation would finish, Mr Thompson said: “When am I going to start?” We can see building pressure on both sides of negotiations to simply admit that the timeframes being discussed are unrealistic in their objectives and will lead to an unfulfilled and ill-prepared Brexit. In their hastiness to ‘get on with it’ Brexiteers may well be doing the most damage to their Brexit aspirations as a country ill-prepared for Brexit will suffer the most damaging of consequences and this would lead to an inevitable regret towards leaving the EU. The Scientific Method of trial and error does not apply here, Britain simply cannot afford to discover what the errors would look like. Meanwhile, Remainers (whom Sir Ivan Rogers labelled as ‘Reversers’ last week) are not helping in the preparation efforts as the country remains locked in a debate over Brexit itself, and not over how Brexit can be best achieved. People are entrenched in their own positions, fortified by the echo chambers they have self-created by checking news and opinion that merely echoes what they believe in. We need to, as the Financial Times points out, have a long hard look in the mirror and decide whether this is the level of political debate that we want in our country or if perhaps an honest discussion on the actual timescale needed to accomplish this gargantuan task can finally be had.

2. Eurotunnel warns on Tory plans for post-Brexit customs
Eurotunnel, the Channel tunnel operator, has issued a stark warning that UK businesses and consumers will face serious economic costs if the government adopts either of the post-Brexit customs models being considered by Theresa May’s government. The Guardian reports that “The intervention by the Channel tunnel operator, coupled with a claim by the company that the necessary technology to prevent delays at the borders may not be ready until several years after Brexit, will add to growing pressure on Theresa May to face down hardline Brexiters by keeping the UK inside the EU customs union”. While we are just around the corner from some crucial votes in the House of Commons for Theresa May’s government, this warning from Eurotunnel adds to one made by Jon Thompson, Head of HMRC, who sent shockwaves through Whitehall last week when he revealed that British companies would face an additional bill of around £20bn a year in extra bureaucracy if the so-called “max fac” border option, backed by the leading Brexiters Boris Johnson and Michael Gove, was adopted. Eurotunnel adds that while ‘Max fac’ would be the most costly for business and consumers, the other option – the “customs partnership” favoured by May, under which the UK would collect tariffs for Brussels – would also mean extra checks and bureaucracy.

3. The Real Cost of Brexit? What isn’t being done.
The Irish Times’ Janan Ganesh wrote an excellent article this week outlining that the real cost of Brexit is what isn’t being done due to the fact that “Britain has not the time or energy for much besides Brexit”. Ganesh writes that “the parable of Heathrow illuminates Britain’s predicament since 2016. History might come to record the real cost of Brexit as all the other things not done. A generation of MPs, civil servants and public intellectuals are engaged with one open-ended mission. It is where they must spend their energies and political capital”. He goes on to further add that “the political, diplomatic, technical and intellectual work that goes into the management of this bilateral tie will allow for few other undertakings of real weight. And even this does not budget for the emotional rawness of an electorate that is divided on the matter. Would the nation tolerate another round of divisive change on, say, housing?”. It is often the case that we get too caught up in the Brexit process to realise that there is actual government work falling by the wayside as a consequence of the Herculian task that Parliament has to sift through the Brexit legislation. By all accounts, Brexit will not be the end of Brexit, we will be rhetorically ‘Brexiting’ even after our legal departure from the EU. The question then is: will we ever get back to a non-Brexit dominated government agenda or will we be stuck discussing and debating Brexit (in some form or another) as the Government has done with the Heathrow expansion, for many years to come?

4. Dominic Cummings says Brexit is now a ‘train wreck’
Writing in his blog last week, Dominic Cummings said that Brexit is now a ‘train wreck’.  Among his many damning criticisms is the one on the preparations for Brexit, or the lack thereof. He claims that ‘Downing Street, the Treasury, the Cabinet Office and the Cabinet have made no such preparations and there is no intention of starting.’  And why is that significant? Well he was the man behind the official Leave campaign. Cummings further believes that Article 50 was triggered too soon, as “the Government immediately accepted bogus legal advice and triggered Article 50 quickly without discussions with our EU friends and without a plan. This immediately closed many positive branching histories and created major problems. The joy in Brussels was palpable. Hammond and DD responded to this joy with empty sabre rattling which Brussels is now enjoying shoving down their throats”. Cummings then adds that “the Government effectively has no credible policy and the whole world knows it. By not taking the basic steps any sane Government should have taken from 24 June 2016, including providing itself with world class legal advice, it’s ‘strategy’ has imploded. It now thinks its survival requires surrender, it thinks that admitting this risks its survival”. Cummings’ blog post screams disillusion with the negotiations and a government struggling to come close to fulfilling the promises of Brexit that Cummings believes in.The key question for Theresa May here is: how many other Brexiteers agree with him?

5. A Tale of Two Speeches
Two speeches, from Jeremy Corbyn and Sir Ivan Rogers, made Brexit waves this week. For his part, Corbyn gave a speech at Queen’s University in Belfast where he outlined that Labour’s solution to avoiding a hard border on the island or Ireland or a border in the Irish Sea was to negotiate a “a new and comprehensive customs union with the EU, which includes a British say in future trade deals, we can ensure trade on this island stays frictionless and free flowing and prevent communities being divided.” Corbyn claims that this new Customs Union would allow the UK to maintain some say over trade deals, despite not officially being a member. This represents something that Sir Ivan Rogers might label as “delusional” as he said in his own speech that “once outside the EU, our ability to contribute from within to any development of the EU policy framework will disappear . . . We will be obliged to implement changes agreed by the 27, or at least to keep substantially in line, or the UK regime will not be declared ‘adequate’ — essentially equivalent — by the EU”. The bluntness of Rogers and what some have describes as the naive stance of Corbyn show once again the sheer divergence of opinion between two people who could be labelled as “Remainers”. The longer the Brexit process goes on, the more speeches like that given by Corbyn, those full of ideas but no indication of how to achieve them, struggle to be seen with any real credibility. While speeches like that given by Rogers, labelled as “speaking truth to power” by the Financial Times, lack the necessary resonance to make an impact in London or in Brussels.

6. Confused by Brexit? An Essex academic seems to have a solution
Are you feeling confused by everything that Brexit entails and how different sectors and regions will be affected? An Exeter academic may have the answer. Through a series of maps, University of Essex psychologist Dr Maxwell Roberts has created Brexit-themed tube maps to help people better understand the impact of the UK leaving the EU. Among the maps, which can all be found here, the fate of UK transport across the UK regions is mapped out and shows the sheer level of involvement than the sector has with the EU and really brings back a comment by Pascal Lamy about Brexit resembling trying to take an egg out of an omelette.

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