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Politicians leave freight high and dry after Brexit votes

Moving freight is tough at the best of times, but with a Government that has no authority and a Parliament that’s divided it leaves industry and trade heading for trouble. Credit: Shutterstock.

Amendments to Prime Minister Theresa May’s European Union (EU) withdrawal deal were meant to clarify the basis on which the United Kingdom (UK) would withdraw from the EU; however, the outcome has muddied the waters further.

It has left cross-border traders with the task of learning how to present complex paperwork that will be necessary at the border to get the freight through controls. And while Alex Veitch, the Head of Multi-Modal Policy at the Freight Transport Association (FTA), told FreightWaves that most logistics firms will be prepared, many small- and medium-sized enterprises will make errors and that could “snarl up the system.”

Veitch said, “The logistics industry is getting to grips with what it needs to do, but the advice from the border authorities is slow in coming out and so for many it is unclear how the roll-on/roll-off ferries will function in the event of a no deal Brexit.”

Veitch went on to say, “We’re less than 60 days from Brexit and the detailed guidance on what you need to do is only now dripping out from government. If they had worked with the logistics industry six months ago we would be in a better place now.”

Even so Veitch pointed out that the system will only work if the data from shippers is complete, but there is no guarantee of this. The system would be similar to that used by deep sea cargo arrivals, though the time frames are significantly different, with the ferry service needing cargo details a few hours after the cargo is loaded onto the lorry, whereas with international containers it can take weeks for the boxes to arrive.

In addition, the government passed a new regulation to register trailers so that cargo is listed and checked against the trailer registration, something that has not been necessary in the past. Registration of trailers is happening now, but it is unclear whether that will be completed by Brexit day, 29 March 2019.

In the meantime, the Foreign Minister Jeremy Hunt has admitted that the Government may not be able to complete the transfer of legislation into UK statute. Some 600 laws need to be transferred into UK law, with only around 100 of these completed so far.

Yet the Government is now committed to attempting to alter the agreement it took two years to negotiate within a few weeks. An extension to the deadline is, according to some people, inevitable, but it is unclear how long the Government will need. And Tuesday’s vote in Parliament did not make things any clearer.

Seven amendments were tabled in total in Tuesday’s debates that ended with votes on each amendment. It was no surprise that the revisions proposed by the Labour Party and the Scottish Nationalist Party calling for the Government to embrace a customs union and to remove no-deal from the negotiations were voted down.

However, there was an expectation that the former Attorney General Dominic Grieve’s amendment would be agreed to by the House. It would have allowed Parliament to debate and suggest a course of action that would be acceptable to the EU and then approved by Parliament.

Another revision that was thought to have a good chance of approval by Members of Parliament (MPs) was that proposed by the Labour MP Yvette Cooper who wanted to see an extension to Article 50 by nine months, giving Government more time to find an acceptable withdrawal agreement. This too failed with some 14 Labour Party MPs, from leave-voting constituencies, rebelling against their party and voting with the Conservatives.

Two amendments were passed on Tuesday and they appear to be contradictory in nature. Conservative MP Sir Graham Brady proposed a revision that would see the Irish Backstop, that keeps regulations with Ireland and the UK in line with Europe should the transition period end with no free trade deal, removed in favour of “alternative arrangements.”

The second amendment agreed to was from another Conservative MP, Dame Caroline Spelman, who wants Parliament to rule out a no-deal Brexit. But, although this revision was agreed to, it is non-binding on Government; it is an advisory amendment.

With the Brady revision looking to scrap the Irish Backstop in favour of unspecified “alternative arrangements,” it was expected that the EU would reject this proposal. And within minutes of the vote EU representatives made it clear that there would be no renegotiation of the backstop and the withdrawal deal.

James Hookham, Deputy CEO at the Freight Transport Association said, “The votes in the House of Commons leave logistics and supply chain managers with no greater clarity or confidence about the timing or nature of Brexit. The risk of a No Deal Brexit on 29 March is just as great today as it was before the vote.”

The Confederation for British Industry (CBI) was more forthright. “This is another deeply frustrating day for British business. The never-ending parliamentary process limps on while the economic impact of no deal planning accelerates. The Brady amendment feels like a throw-of-the-dice. It won’t be worth the paper it is written on if it cannot be negotiated with the EU. Any renegotiation must happen quickly – succeed or fail fast,” said CBI Director General Carolyn Fairbairn.

Business leaders feel that the Government is gambling with the country’s trade and while it holds the threat of no-deal over the heads of the EU, that same threat is also hanging over industry.

After Tuesday’s votes that threat will remain until 13 February when the Prime Minister will return to the House of Commons with a revised deal to again be voted on by MPs. The revision assumes that the EU will negotiate. And once again the politicians will have the opportunity to give the country a definitive answer as to what the terms of the withdrawal will be. Industry leaders say that the traders are desperate for clarity.

Fairbairn confirmed their views, “Firms will welcome confirmation that a majority of MPs oppose a no deal outcome. But rejecting a no deal doesn’t get a deal. Until MPs can agree to a solution, delay will do nothing to lift the threat of an economic cliff edge that is draining money from the UK.”

Watch this space for the next instalment in the Brexit soap opera.