Mark’s EU Week for Transport
Whatever the type of Brexit, whenever it occurs, if it occurs at all, it is vital the UK starts to get back on the front foot when it comes to shaping transport policy and seeking to protect and promote UK transport interests, particularly here in Brussels. Brexit has been a huge distraction for almost three years, and we’ve heard time and time again the same over used phrase that that ‘we simply do not have the bandwidth to cope with Brexit and influence UK, EU and international transport policy’.
UKTiE was one of the first organisations to recognize that the UK will maintain regulatory alignment far into the future, and subsequently argue that we need to maintain our influence in Brussels whatever type of Brexit takes place. And that’s not just for transport policy but related fields such as also competition law, state aid policy, employment rights and environmental standards too.
Given developments over the past week, and the additional 6 month Brexit delay, there is a growing realisation that Brexit may not occur at all, or even if it does it will be the softest of Brexits, yet we will lack any form of institutional representation. For that reason, the UK’s participation in the European Parliament elections is far from being a waste of time, it actually maintains UK influence at the heart of the EU policy and decision making process. Surely what would be more bizarre is if we were to follow all the rules on transport forevermore, but never have MEPs to shape them.
That’s why we are doing two things. One is we have launched our own policy priorities ahead of the EU elections and the appointment of the new EU Commission, to seek to shape our operating environment in the years to come. Second, we will be watching the European Parliament elections closely and identifying MEPs to engage with, be they from the UK or the continent, to build alliances and coalitions with those that share our ambition. Let me know if you wish to join us as we prepare to shape the future, whatever the outcome whatever the type of Brexit, whenever it occurs, if it occurs at all!
This week’s song of the week, is Revolution by The Beatles.
1. New UKTiE Messaging
Today UKTiE launches our new ‘UKTiE Vision’ at a moment of political uncertainty where UK business in the EU is at a crossroads as to how it operates going forward. Our new vision focuses on policy areas such as: Multi-Modality, Sustainability, Competition, and Digitalisation. This new UKTiE Vision represents our policy priorities for the near future. Our intention is also to present a vision which, we believe, represents objectives that UK business operating in the EU can get behind, regardless of sector.
2. UKTiE Member snapshot: RIA – ‘‘Boom and bust’ in rail infrastructure investment’
Companies involved in the provision of UK rail infrastructure know all too well the issue of ‘boom and bust’ in their workloads. Rail investment is allocated in five yearly regulated cycles, known as Control Periods (CPs). In every CP since rail was privatised in the UK in 1995, rail suppliers have seen a ‘boom and bust’ profile in the way work comes to market, often requiring them to increase their capacity at the start of the funding period, only to reduce it when they see a sharp drop-off in workload near the end. It would be more far more efficient to smooth the pipeline of work across each CP.
At the Railway Industry Association (RIA), we have been campaigning over the past 18 months for such a smoothing out of workloads, to ensure suppliers do not see large peaks in work, followed by sharp falls. Our research has shown how detrimental ‘boom and bust’ funding is for the UK rail network, impacting the ability of businesses to recruit and retain staff, reducing investment in innovation and technology and threatening the survival of specialist SMEs who are an integral part of the supply chain. It also extremely inefficient – adding, we believe, somewhere between 10% and 30% to costs. This is self-evidently a sub optimal way to run the railway.
Encouragingly, the UK Parliamentary Transport Select Committee recommended, in summer 2018, that the Government work with RIA and others to identify ways to smooth out ‘boom and bust’. By September 2018, the Department for Transport (DfT) had accepted the recommendation in full. This is a significant success for RIA on behalf of the supply chain.
Since then, we have been working with the DfT, the rail regulator (the Office of Road and Rail – ORR) and with Network Rail (the infrastructure manager for the UK rail network) to identify a practical way forward. RIA’s suggested approach is for there to be a baseline level of work each year, with associated funding, that would act as a floor in the market and keep the network running in a steady state. This would facilitate a continual cycle of design, tender and procurement across control periods to avoid a hiatus in work towards the end of one control period and the start of the next. This baseline level of funding can then be increased when the Government and the rail regulator determine the final total investment for the individual control period. We are discussing this and other options.
We look forward to continuing our work with the Government, Network Rail and the ORR to end this ‘boom and bust’ cycle; this will enable the rail supply industry to invest with confidence, support the sustainability of the industry and to deliver more efficiently the investment from the Government.
3. No Deal Brexit still a possibility despite UK Government putting No Deal plans ‘on hold’
The Financial Times reports Contingency plans to cope with a no-deal Brexit have been put on hold by the government as the risk of the UK crashing out of the EU without an agreement has subsided. Whitehall officials confirmed on Friday that Operation Yellowhammer — a national strategy aimed at preventing a run on food, fuel and the banking system in the event of a no-deal Brexit — had been paused by the government. However, Reuters reports that , in an internal note to staff, Theresa May said he government will continue to plan for the possibility of a no-deal Brexit. This comes after the Government received criticism for relaxing its No Deal preparations. While the immediate threat of a No Deal Brexit has subsided, there remains the possibility of the UK crashing out without a deal as early as June 1st if European elections are not run, albeit an increasingly unlikely outcome.
4. UK businesses at most gloomy since referendum
The Guardian reports on a Deloitte quarterly survey that says “British businesses are the most gloomy they have been about Brexit since the 2016 referendum, with eight out of 10 finance leaders expecting the long-term business environment to be worse as a result of the UK leaving the EU”. Deloitte’s latest quarterly survey of chief financial officers (CFOs) found only 13% were more optimistic about the prospects for their company than they were three months ago. The first-quarter survey gauges sentiment among the UK’s largest businesses in the wake of parliament’s successive rejections of Theresa May’s Brexit deal. Deloitte interviewed 89 CFOs, including 48 representing FTSE 100 companies and smaller firms on the FTSE 250.
5. Why we should expect an EU Transport White Paper in 2020
In his new blog, Mark writes that looking at all the evidence, he says we should be expecting an EU Transport White Paper in 2020 to replace the last one written in 2011. Mark further adds that the last White Paper, from 2011, reads like something from a different era. The thinking of 2011’s White Paper was very much influenced by the economic crisis, and adopted a growth first approach, emphasising the completion of the Single European Transport Area. It also abandoned the modal shift commitment, which was the focus of the much greener 2001 White Paper, launched by the then Transport Commissioner Neil Kinnock.
6. UKTiE has also put together the latest timetable for Brexit. We will keep this up to date as the process develops:
- 29 March 2017 – A50 triggered.
- 5 April 2017 – European Parliament adopted Brexit guidelines.
- 22 May 2017 – Brexit negotiating directives approved by Council.
- 19 June 2017 – Negotiations formally began.
- 23 March 2018– European Council agreed guidelines on the future trading relationship.
- 30 September 2018 – Date by which EU’s chief Brexit negotiator, Michel Barnier, wanted to conclude the terms of Britain’s exit from the Union.
- 11 December 2018 – House of Commons vote on Withdrawal Agreement
- 23-26 May 2019 – European Parliament election.
- 31 October 2019 – The UK will formally leave the EU.
- 31 December 2020 – End of Transition Period (tbc).
UK transport in Europe (UKTiE)