Brexit: Logistics Industry

Lord Bradshaw Excerpts

Tuesday 8th May 2018 Lords Chamber

Asked by

[Lord Bradshaw]

To ask Her Majesty’s Government whether they have asked any organisations in the logistics industry to sign confidentiality agreements in respect of negotiations concerning the United Kingdom’s withdrawal from the European Union.

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, the Department for Exiting the European Union is responsible for overseeing the negotiations to leave. We continue to engage regularly with companies across the economy to inform our negotiating position and prepare for our departure from the EU. The department has not signed any non-disclosure agreements in respect of negotiations.

[Lord Bradshaw (LD)]

I thank the Minister for that reply. Since he is close to the logistics industry, does he agree that the line favoured by the Prime Minister has the potential to solve the looming crisis in the supply chain industry, or does he agree with the Foreign Secretary, who has described the Prime Minister’s proposals as “bonkers”?

[Lord Callanan]

If the noble Lord is referring to customs solutions, there are, of course, two models on the table. I am sure noble Lords are very familiar with the issue, but there is the streamlined model and the alternative model, a new customs partnership. Both have issues and drawbacks as well as opportunities and the Government are examining both models closely. When we have reached the most appropriate solution that is best for the UK, we will announce it.

European Union (Withdrawal) Bill

Lord Bradshaw Excerpts

Committee: 6th sitting (Hansard - continued): House of Lords
Monday 12th March 2018 Lords Chamber

There are a number of reasons for this amendment. Clearly, it is a probing amendment, but I hope that the Government can accept the need to produce a detailed and comprehensive report of how these frontier control procedures can be implemented and keep to the costs and the programme. There is very little information at the moment. It is the Government’s problem, and they have to sort it out, but I hope that they will integrate and work closely with the industry and maybe even arrange some more meetings before Report so that this can be discussed further. I beg to move.

[Lord Bradshaw (LD)]

My Lords, the logistics industry permeates all our lives. It dominates retailing and allows most sophisticated industries, such as the motor industry, to organise themselves on a multisite basis. When we buy something in most shops, we start a process which means that our purchase will trigger the order for a replacement, stretching back to the manufacturer or supplier. This arrangement has become very much more sophisticated since we joined the EU 44 years ago. Supplies of parts flow through a network as complicated as a spider’s web, throughout the community and beyond. This is what makes your orange appear at breakfast or your new car come off the production line.

We are told in ever shriller tones by the logistics industry and its customers that the survival of that system depends upon frictionless trade: no stops at borders, no need to provide documentation and no tariffs—they are the words of the Freight Transport Association. The industry was lured into a state of complacency by the assurances of Ministers that this “frictionless” trade would continue after March 2019, which is less than a year away. However, that complacency is swiftly turning to panic as it becomes evident that the assurances offered concerning frictionless trade are becoming less likely to be realised. Trade deals, even if these could be negotiated, seem a very distant prospect. Your orange at breakfast has to come from Spain, and the parts to make and deliver your Mini need to arrive at Cowley every 20 minutes or the production line stops. The prospect of empty shelves in the shops, as witnessed recently due to the weather, becomes almost a certainty.

If there is any interruption at ports or similar points of entry and exit, I suggest that people’s anger with those politicians who have sold them a false prospectus will be deep and severe. If people are unable to obtain the supplies of groceries to which they have become accustomed, or workers in factories that cannot get a time-critical supply of spare parts are laid off, there will be trouble. The chance of protests in the streets as these shortages become apparent should be taken far more seriously than the suggestion of a popular uprising if the concept of Brexit is eventually frustrated. The mantra “Europe needs us more than we need them” is perhaps best not put to the test, as there will be those doing business here who decide to seek the certainty of closer union with the EU by moving their operations within its borders. The future of the aircraft construction industry is an example.

The logistics problem is very serious in respect of Ireland, to which the noble Lord, Lord Berkeley, has referred. A very large amount of perishable material has to transit via Great Britain on its way to and from Europe. If any border checks are necessary to secure passage at either Holyhead and Dover—probably both, as things stand—there will be serious implications for that trade, and it will surely lead to the establishment of direct ferry links between the Republic and Europe to avoid using those at Dover or other crossing points. At this moment the Government of the Republic are giving serious consideration to that possibility.

Maybe those in the logistics industries—notably the ports industry, the Freight Transport Association and the Road Haulage Association—have kept quiet until now because they have always trusted and supported the party opposite and have trusted the assurances of David Davis and Liam Fox. That misplaced loyalty is about to be tested, possibly to the point where these businesses suffer permanent damage. The purpose of the amendments is to seek from the Government, at this late stage, the humility to accept that the promises about frictionless trade cannot be delivered and to bring back on Report a plan to keep Britain working and supplied in the present just-in-time way, or they face a defeat in this House on Report. As the Freight Transport Association said, the trailer registration Bill, to which the noble Lord, Lord Berkeley, referred, which is coming back to your Lordships’ House in Committee, is not a viable solution.

As the Prime Minister said only last week, we need certainty. I submit to your Lordships that we are as far from that as ever.

[Lord Bilimoria (CB)]

My Lords, I put my name to both the amendments and I would like to build on what the noble Lords, Lord Berkeley and Lord Bradshaw, said. Some 70% of the UK’s food imports by value are from the EU, and 60% to 65% of the UK’s agricultural exports are to other member states. Any risk of delays would put a strain on our supply chains and would probably raise food prices.

The Channel Tunnel illustrates how important timing is: 1.4 million trucks and 2,900 rail freight trains went through in 2014, transporting approaching £100 billion-worth of goods between the UK and the continent, including almost £200 million-worth of iron, steel and metal products from Yorkshire and the Humber. The time saved by using the Channel Tunnel was equivalent to 120,000 days in 2014, saving a lot of money on each crossing. So any delays and any more customs checks would up-end such financial projections and have downstream consequences.

One whole aspect of Brexit is the huge complexity caused. The amendments highlight the impact that it will have not just on our freight industry but on as us a public. The list of border operations includes revenue collection, safety and security, environment and health, consumer protection and trade policy. Modern customs systems have to balance providing security with facilitating the free flow of goods. Some 37 million tonnes of trade a year pass through Southampton alone, including more than 1 million containers. How could you possibly inspect every container? It would just create delays and blockages.

Of the freight transport that goes in and out of the UK, 69% of that going to the EU is lorry traffic, whereas 99% of non-EU is containers. Of the EU share, between 75% and 100% of lorry traffic goes through Dover, the Channel Tunnel, Harwich and Holyhead. We cannot possibly have any delays that will make life more difficult for our businesses. I just mentioned the requirement for food products. Ireland and the British land bridge have also been mentioned. We will be talking about air transport later, and rail in more detail.

The UK will not be deemed a third country until the end of any transition period, if one exists. Even if the UK were to remain in the customs union with the EU, it would still be a third country and goods would be subject to checks. Freight using the UK land bridge will effectively be subject to non-tariff barriers—people always miss the non-tariff barriers.

Brexit will cause one disaster after another in this area. Customs’ rule of thumb is that 2% of cargo coming from third countries is subject to physical exam, while 4% to 6% of such cargo is subject to documentary checks. However, the Department of Agriculture is obliged to check up to 50% of food and other products that contain an element of food, such as cosmetics, pharma or medical devices. There is a 100% check on animals, including pets. This is how complicated this whole area is. Revenue will prepare a list of approved customs courses for use by traders. Traders should apply for customs registration numbers. This will be absolutely disastrous; I do not think people have comprehended how difficult it will be.

As the noble Lord, Lord Bradshaw, mentioned, 50% of FTA members operate more than 200,000 lorries: almost half the UK fleet. FTA members represent 90% of freight moved by rail. FTA members consign 70% of UK visible exports by sea and 70% of UK visible exports by air. They speak for this industry. If we do not listen to them, we are not listening to the people who do this. How UK companies get goods to and from the continent in the future will be a matter for EU negotiations, but the changes to border controls and customs will impact our transport efficiency. There is no denying that. At the moment there is frictionless movement of goods to and from the UK. Unless a solution can be agreed as a free-trade agreement when the UK moves outside the single market and the customs union, that will change.

European Union (Notification of Withdrawal) Bill

Lord Bradshaw Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 1st March 2017 Lords Chamber

[Lord Redesdale (LD)]

My Lords, from these Benches, I was the Lib Dem spokesman on energy for 10 years and was often the lone Peer who was attacking atomic energy as something we should be relying on. Our problem at the moment is that 20.9% of our power—I checked with UK Energy five minutes ago—came from nuclear energy. It is coming from an aged nuclear fleet that is almost past its sell-by date and will be decommissioned. If we are to keep the lights on, we probably will need nuclear power stations. I know that the noble Lord, Lord O’Neill, thought that he would never hear me say that.

The Minister will come up with an extremely cogent and persuasive argument for why we should leave the Euratom treaty and how everything will work well. I will ask one question, though. Considering that our new power plants will be designed and built by the French, Chinese, Americans and Japanese, we will need some standards—and, of course, Euratom provides them. The Minister will say, however, that we need to move into the new age and will look at this. Can he say—because work must have been done on this—how much the new standards body will cost to run and set up? I very much hope that he can give me a figure, or perhaps write to me on this issue—or maybe not. If he cannot give me that figure off the top of his head, can he say which department will be responsible for setting up this new body? Will it be BEIS—because DECC has gone the way of many great organisations in the past? If it is BEIS, what new funding will be made available to it to meet its new obligations?

[Lord Bradshaw (LD)]

My Lords, I live in the shadow of Culham. Like the noble Lord, Lord Hayward, I am well aware of the problems that this debate is already causing. I met a number of people from Culham last Thursday. A number are already discussing the opportunities that exist outside this country to move away, because they are uncertain. Many are married to EU nationals who do not know what their position is.

Also, from my association with Oxford University, I can assure noble Lords that not only are we in danger of losing some of the best scientists in medical science, energy and technology, but applications for post-doctoral fellowships for PhDs are declining because people are afraid of what is going to happen. Reference was made to our shortage of nuclear technologists: if those who are there at present were to go away, we would be even shorter—almost bereft—of them.

[Lord Oxburgh (CB)]

My Lords, by now the Minister will probably have got the message that this House thinks Euratom is pretty important for the reasons given. I shall not repeat them, but they are very sound. Indeed, sitting yesterday as a member of the Science and Technology Committee, under the chairmanship of the noble Earl, Lord Selborne, we received evidence on nuclear matters. We raised Euratom. There certainly was dismay among our witnesses at the prospect of the UK leaving it.

Nuclear energy will play an important part in the energy plans of the present Government and, I suspect, any Government we are likely to have in the near future. That said, as my noble friend Lord Krebs pointed out, our expenditure on nuclear R&D is simply derisory by international standards. For that reason, we get enormous benefit from our membership of Euratom—proportionately more than almost any other member.

Probably the most important point to recognise is that Euratom governs not just non-proliferation, but the movement of nuclear materials and, above all, nuclear IP. If Brexit goes ahead on the timetable we have at the moment and nothing is put in place effectively to give us continuing membership of Euratom by some means or other, that occurrence would come right in the middle of the build at Hinkley. It is not impossible that Hinkley would come to a serious and grinding halt unless the Government somehow manage a better arrangement for the future.