UK Transport and Brexit News & Views No. 53

Mark’s Brexit Week for Transport

Last week I raised our concerns about the legal issues which could threaten the transition arrangement. This week I have raised our concerns about the political issues which now threaten to derail the entire Brexit process. Indeed, last week I referred to the gap that appeared to be opening between the UK and the EU27. This week that gap started to turn into a chasm, as both sides dug in for some very difficult weeks of highly politicised negotiations ahead of the European Council meeting next month.  That is generating major risks and uncertainty for UK transport.  The transitional deal is now, if it has ever been, not a given.  On this side of the Channel there is little understanding of why the UK wants a two-year membership extension, if it wants to leave so badly.  Nor why it wants to maintain regulatory alignment, if it wants to take back control.  Or why the UK’s thinks the EU27 will deliver a transition or a framework agreement on a future relationship without the withdrawal issues, such as the Irish border, being fully addressed.

I was therefore surprised to hear David Davis express shock that the Commission’s latest thinking on transition was political. Of course, it is political. We’ve been making the point that Brexit is a political process for over 18 months now. You will have heard me repeatedly say with Brexit, politics trumps law and economics. And the transitional agreement is as political as anything. So if you want to see it happen you have to make it happen. Make the case. Launch a campaign. Join UKTiE.  Build alliances. Speak to politicians and not just officials. Seek to speak in Brussels, Berlin and Paris not just in London.  Whether we can bridge the chasm now depends less on David Davis and Michael Barnier, but more on the political pressure that businesses can exert, on both sides of the channel. 

We will be meeting the Director-General of DG Move Henrik Hololei  in the European Parliament on 27 February, to discuss current and future EU transport regulations.   It’s my firm view that whether we are in or out of the EU, or somewhere in between, existing and new EU transport regulations will continue to apply in the UK. It’s therefore absolutely essential we find a new way of influencing them when we have no representation in the Commission, Council or Parliament, in just over a year from now.  If you would like to attend our meeting with Hololei then please join us.
 
1.No-deal Brexit would trigger wave of red tape for UK drivers and hauliers
As reported in The Guardian, British drivers may need new licences and registration certificates to travel in Europe after Brexit under contingency plans being drawn up by the government that experts warn would create “extremely labour-intensive” extra red tape. The article reports that the contingency plan involves the UK signing up to a United Nations convention on road traffic, which theoretically also affects zebra crossings and parking. The article further highlights that the 1968 Vienna convention, which Britain previously avoided joining because it was too burdensome, has become an urgent necessity because the EU will no longer recognise UK-issued licences after Brexit and could ban all drivers and vehicles without an alternative agreement. The UK government will seek some exceptions to some of the Convention’s requirements but one of the most problematic requirements, that directly concerns drivers and hauliers, is the tiny number of travel permits potentially available for British truck drivers if there is no other solution found through an EU trade deal. Under existing international treaties there are between 103 and 1,224 permits a year available to deal with more than 300,000 journeys by 75,000 British trucks. Would you like to help us make the transport sector a priority in the Brexit negotiations and to make the case for a transition? Join us to find out how.

2. Type approval at risk for UK vehicles says European Commission
In a paper published this week, the European Commission has warned that the UK’s vehicle type approval authority will fall out of the scope of EU legislation post-Brexit. This is an important matter for the UK as over 50 percent of vehicles built in the country are then exported to the EU27. Unless a deal including mutual recognition of standards is met, the process of type approval which includes everything from emissions standards to technical construction criteria will need be duplicated by the UK.

3. EasyJet’s two-pronged Brexit contingency plan
In July, EasyJet announced that it was setting up Austrian headquarters to be used as a post-Brexit guarantee and this week shareholders approved final steps for the airline’s strategy of retaining the ability to operate in both the UK and the EU. Regarding the EU, EasyJet has launched an “active investor relations programme” to help the airline reach the threshold of having over 50% ownership coming from EEA countries that do not include the UK to ensure it remains a majority EU-owned airline and therefore able to retain EU flying rights. Regarding its UK approach, EasyJet will apply for a British air operator’s certificate which will oversee its UK operations. What is your business doing to prepare itself for Brexit? Contact us if you would like to know more about the exposure you may face from a ‘No-Deal Brexit’.

4. RyanAir to roll out ‘Brexit clause’ in forthcoming tickets
RyanAir has confirmed that tickets for its 2019 summer flights will include a clause explaining flights are “subject to the regulatory environment allowing this flight to take place”. The aviation industry wants clarity over Britain’s position in the open skies agreement, which allows for transatlantic flights between the US and EU countries, after Brexit. Ryanair’s chief marketing officer, Kenny Jacobs, said “nothing has changed” from the airline’s perspective, with Britain still leaving the EU in 2019 and “still no alternative to open skies” at present. RyanAir’s announcement comes in the wake of Thomas Cook who, just last year, included a clause confirming it will not be liable to pay compensation or reimburse expenses for delays caused by “airspace closures”, though it will still refund tickets. These moves suggest businesses preparing, however reluctantly, for a hard Brexit scenario which neither negotiating side may want but one that both sides may inadvertently fall into.

5. UKTiE Supported by IDA Group
UKTiE’s work is supported by IDA Group. IDA Group is a highly specialized consultancy for governmental affairs, reputation management, trade and funding. They share the belief in effective dialogue built upon trust and mutual understanding. Their diverse team of experts includes seasoned diplomats, politicians, journalists, lawyers and designers, supported by a global network of trusted partners, can help create measurable impact for your business. You will find more information on IDA Group and what services they can provide you with here.

6. EU draft withdrawal agreement to say Northern Ireland will stay in single market after Brexit
UK negotiators have been warned that the EU draft withdrawal agreement will stipulate that Northern Ireland will, in effect, remain in the customs union and single market after Brexit to avoid a hard border. Apparently, British officials negotiating in Brussels were told by their counterparts that there could be a “sunset clause” included in the legally binding text, which is due to be published in around two weeks. Such a legal device would make the text null and void at a future date should an unexpectedly generous free trade deal, or a hitherto unimagined technological solution emerge that could be as effective as the status quo in avoiding the need for border infrastructure. This decision by the EU, to offer clear legal language concerning the Irish border, comes in the wake of the UK government’s failure to clarify how it will leave the Customs Union and the Single Market while also avoiding a disruption to frictionless trade and the imposition of border checks.

7. Transition deal not a given says Michel Barnier
Addressing the media today in Brussels at the conclusion of yet another round of Brexit negotiations, Michel Barnier said that the EU and UK have “substantial” disagreements on transition and that if these disagreements persist that a transition deal is not a given. Upon listing the main points of disagreement, Barnier said that these revolved around 1. The cut-off date on citizens’ rights, 2. The UK’s wish for a “right of objection” to new EU rules during a transition period and 3. The UK’s desire to opt-into new EU policies on police and judicial co-operation. Are you concerned about the possibility of there being no transition deal? Contact us to find out what you should be doing to help prevent that from happening.

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