Industry braced as May triggers Brexit countdown

The prime minister Theresa May has officially begun the two-year countdown to the UK’s exit from the European Union, amidst calls from road transport trade associations to protect its interests during the forthcoming negotiations with the remainder of the EU.

The day before Mrs May triggered Article 50 with a letter to the president of the European Council, which formalised Britain’s decision to depart the EU, Road Haulage Association (RHA) chief executive Richard Burnett made a plea for the needs of the road transport industry to be made a priority during the Brexit negotiations.

“The trucking industry is the life blood of the UK economy,” he said.

“We literally deliver our economy, with 85 per cent of everything we eat, drink, wear or build with travelling by truck.

“For the good of the UK economy the government must achieve a Brexit outcome that guarantees frictionless movements through ports and across borders, a level playing field for UK truckers to compete with those based on the continent, and a continuing ability to recruit foreign drivers.”

The RHA is advocating a system that would allow UK operators to bring in lorry drivers from outside the country. This would include retaining current EU drivers, of which it estimates there are around 60,000.

Burnett argued that both ferry ports and the Irish border must have arrangements that would allow trucks to move freely away from border areas – not least because there are currently no holding areas in UK or EU border areas large enough to handle customs formalities for arriving or departing HGV traffic.

“Simply using current customs practices and applying them to UK/EU traffic risks delays of biblical proportions which would strangle growth and hurt the entire economy,” he said.

“We risk the chaos of Operation Stack becoming the norm and being replicated on the approach to every ferry port in Britain.  A bad outcome for the UK road haulage industry will be a bad outcome for UK plc.”

He also argued that leaving the EU would pose a significant risk to supply chains incorporating imports and exports by road, if new customs controls were to be imposed “inappropriately” at borders. The RHA is calling for unimpeded access for both UK and EU hauliers transporting goods to, from and through the UK and EU.

“It is paramount that the government ensures that international road haulage moves quickly and reliably after the UK exits the EU,” he said.

“The government and customs need to appreciate the scale of the problem at our ferry ports. They need to work on the issue with creativity, with industry partners and with authorities in the EU to ensure we maintain our border effectively while allowing trade to move freely.”

In its Brexit manifesto released in February, which was collated from responses from its 16,000 members, the Freight Transport Association (FTA) raised similar issues – key among its positions being that trade with the EU should be “as seamless as possible, with no tariffs and quotas in place, and no additional administrative formalities, checks and delays at the border”.

“Post-Brexit, UK-registered transport and logistics companies should continue to benefit from a seamless access to the EU market and other markets with whom the EU has agreements,” added FTA.

Such untrammelled access may well prove a sticking point in negotiations between the British government and those of other member states, particularly given Mrs May’s stated intention to leave the European single market, which guarantees the free movement between states of goods, people, services and capital.

But Andrew Baxter, managing director of logistics provider Europa Worldwide Group – who has been a vocal advocate of Brexit – rejected the idea that a failure to reach a trade deal with the remainder of the EU would spell disaster for Britain.

“I don’t think that’s the case,” he said.

“In an ideal world, yes we want a deal – but in reality it is important that the government gets comfortable with the idea of no deal and projects confidence to the EU in all negotiations.

“Britain needs to see itself as a global player, a hub for free trade, the most attractive central base for businesses from across the world…

“In my opinion, the simplest and most effective route to putting Britain at the heart of free trade is for the government to drop corporation tax as low as possible – and we would soon see Britain become the number one location for world head offices.

“We already have the reputation, the connections, the talent and the expertise in the UK to attract major businesses, we just need to focus on striking up the best deals with the rest of the world, something which has been hampered by our membership of the EU.”

Meanwhile, there have been reports that changes to customs arrangements between Ireland and the United Kingdom post-Brexit could have far-reaching impacts on Irish Sea ferry services – with most traffic being routed through a land ‘soft border’ between the Republic and Northern Ireland before crossing from Belfast or Larne to Liverpool or Cairnryan, rather than crossing directly from Ireland to Wales.

Welsh Labour Assembly Member Eluned Morgan said that if the UK left the European Customs Union then an “immense infrastructure” would have to be constructed at Welsh ferry ports to clear freight traffic arriving from the Irish Republic through customs.

“There is a real danger that if there is a hard border with Wales, but a soft border with Northern Ireland, then freight will be transported via the easier borderless route from Belfast to Liverpool or Cairnryan to Larne,” the Mid & West Wales AM said.

“Four hundred lorries an hour pour off the ferry at Holyhead, and in the summer we welcome hordes of tourists from the Irish Republic to Wales through Fishguard,” she added.

“If we were outside the customs union, it is hard to see how these goods and people could be let in without being inspected.”

“In order to do that, the port would have to create an immense infrastructure to park all 400 lorries.”

The UK always had a common travel area with the Irish Republic prior to both nations joining the European Union.

How Brexit could affect industry

Potential alterations to customs and free trade arrangements have been widely publicised by trade groups as possible consequences of leaving the EU. But they were just two areas highlighted by a House of Commons briefing paper published late last year in which the industry could see change as a result of Brexit.

“There are potentially a lot of uncertainties for UK haulage companies as a result of Brexit, particularly in terms of employment, drivers’ hours rules, access to markets and border controls,” said the paper.

In addition to possible changes to the rules for the UK surrounding cabotage – the practice whereby a haulier from one EU Member state can carry goods between two others – legislation on driver licensing and testing derives from EU law, and could potentially see changes post-Brexit.

The Driver CPC in particular was highlighted in the briefing paper as an area that had been “heavily criticised” by the HGV and PSV industries for its “inconsistent application and enforcement”.

The paper also pointed out that the Freight Transport Association (FTA) had complained of “over-prescriptive” medical rules for vocational drivers below the age of 45.

Vehicle standards is another area in which the UK largely derives its regulatory framework from Europe, and the briefing paper highlighted its “generally… positive impacts” on the industry, including reduced costs and allowing for the free flow of vehicles.

It quoted the FTA as highlighting the “level-playing field of technical requirements for the construction, maintenance and operation of road vehicles” that the EU provided, which it said was “infinitely better than 27 variants all designed to protect the home markets of indigenous producers”, despite its rules being “complex and sometimes cumbersome”.

The briefing paper added: “While there has been some criticism of the EU-wide type approval process for vehicles in the wake of the VW emissions scandal, a return to UK-only type approval, with some sort of mutual recognition scheme for all other countries, seems unlikely and has not been suggested.”

This may well be indicative of the direction of travel more generally: while there is potential for law around any of these areas to change once Westminster regains full jurisdiction, it should be noted that in many cases, the status quo is expected to prevail, not least because of the practical considerations of cross-border cooperation both for fleet operators and the authorities.

Any ‘tinkering’ with road transport law that does transpire as a direct result of the freedoms afforded to Westminster by Brexit is unlikely to take effect until 2019 at the very earliest.