Business, Freight News, Logistics, Road

Updated: Javid announces £2.1bn to help freight industry cope with no deal Brexit

[ August 1, 2019   //   ]

The government says it will double the funding available to prepare the country for a no deal Brexit, setting aside an extra £2.1 billion to pay for measures such as more border force officers and upgrades to port transport infrastructure, along with measures to stockpile medicines and other essential goods.

However, the plans unveiled by chancellor Sajid Javid were sharply criticised by opposition MPs as a waste of taxpayer’s money, especially in the light of new PM Boris Johnson’s earlier pronouncement that there was a million to one chance of a no deal brexit taking place.

Freight Transport Association deputy chief executive James Hookham said however that in any case, the package would fall “well short of what will be required to ensure that all those organisations which currently trade with the EU will be able to continue operating smoothly and efficiently in the event that the UK leaves the EU without a deal.”

The money equated to only £745 per business – far less than will be needed for each to understand and implement the procedures, staff and systems required for routine No Deal trading.

He added: “The allowances announced may enable the government to say they have helped business, but the reality once again leaves logistics operators carrying the burden of adapting to and adopting new operating procedures at the last minute – many of the industry’s issues are still to be answered by government – and potentially carrying the can for a lack of government planning.”

Chief executive of the British Ports Association, Richard Ballantyne, welcomed the extra funds but reiterate the association’s position that a no-deal Brexit would cause needless disruption at key trading gateways, adding: “A ‘no deal’ would also send shudders, at least in the short term, through the UK economy.”

But while the UK Government and EU leaders to continue to prioritise frictionless trade in their negotiations, it was “sensible to take further steps to prepare for a ‘no deal’, albeit with less than 100 days to go.” The new funding should complement the previously announced temporary mitigations which should  mean that in the short term freight is not held up entering the UK

The British Ports Association’s ‘Roll-on Roll-off’ port members, who could face the most challenging post Brexit borders arrangements are in regular dialogue with Government officials who at least understand and appreciate the issues.
Ballantyne said: “Ideally we are keen to see a deal with the EU which maintains frictionless trade but if that is not possible we would stress that some of this funding should be used to cover any new border facilities and systems that might be required at ports. We have written to the Chancellor requesting that this is the case although it “must be stressed that the clock is ticking.
As well as ports there could also be huge additional burdens on freight operators, hauliers and traders who could need to adapt systems and collect and process the information required for customs and frontier purposes. This part of the logistics industry certainly needs support in preparing for a ‘no deal’

“Indeed we have heard conservative estimates of additional costs for the freight industry of around £12bn each year just in agency fees if customs declarations are required for UK-EU freight. These costs also exclude investments in new systems and any burdens imposed from tariffs.”

Chief Executive of the Port of Dover, Doug Bannister, added:  “Any investment to help keep vital cross-Channel traffic…is welcome.  In the current circumstances, it is natural and appropriate that the UK Government should consider how to protect the supply of certain critical goods such as medicines.  However, we also need a measured and holistic approach, one that rationally deals with all of our trading needs.  The identified Category 1 goods, whilst critical, form a small subset of the total volume of goods essential to maintaining our quality of life.  We believe a prudent Government should place a commensurate level of attention to ensure borders remain open so that all time sensitive essential items, such as perishable foods, continue to flow.”

Brittany Ferries meanwhile said it was “carefully considering this latest development in no-deal Brexit planning. We do have flexibility across our fleet operations through western channel ports of Portsmouth, Poole and Plymouth. And of course we were one of the companies awarded a contract last December. But we need to consider carefully what schedule changes will mean for planned freight and passenger operations this autumn and, as a consequence, what additional freight capacity we may be able to guarantee.”