Brexit: Transport

Lord Patten Excerpts

Monday 6th February 2017 Lords Chamber

[Lord Patten (Con)]

My Lords, rising as though from the Bench of Bishops, I take as my text this evening what the Latvian Prime Minister, Mr Maris Kucinskis, said during the weekend summit in Malta:

“What is most important is to think about a beneficial partnership … Every member state is looking to build the best possible trading relationship with the UK and I think that the whole Union will also benefit from a strong trading relationship”.


Those remarks certainly apply, as the Prime Minister of Latvia said, to transport as to everything else economically. He represents the new generation of younger, realistic EU leaders—still, small voices of calm who should be listened to very carefully.

In the end, my assessment of the impact of Brexit on the transport sector is that it will not be very great. That is because I think that the European weather is changing. Increasingly, grown-up voices, also since Christmas, have been urging the need for a change in the European weather, urging amicable separation, and no one more economically grown up—and, to me anyway, personally more admirable—than the brave German Finance Minister, Dr Wolfgang Schäuble. He was saying just that at Davos, as well as in a very carefully worded interview over the weekend in Tagesspiegel. He said that the euro was overvalued in relation to the German economy, continuing:

“We want to keep Britain close to us. London’s financial centre serves the whole European economy. London offers a quality of financial services that are not to be found on the continent”.


I respectfully agree with the man who has been German Finance Minister so successfully since 2009. What he says is critical for UK transport and much else in other economic sectors post Brexit. Flows of capital into and out of the City, where I work, are critical to the domestic economy. Had Dr Schäuble said the opposite, panic would probably have set in in the media overnight, and I think it is strange that the good news of his very positive views going forward have not yet been any more than scantily reported.

For the generality of people in the country at the moment, although the noble Baroness, Lady Randerson, made her points so well, the transport matters following from Brexit are not of much concern yet—perhaps they will be later. People are more concerned about the chaos on British railways and on the Underground. That really need rapid attention. TfL and the mayor need to get going and sort out what is going on in London Underground. Above all, we need to bring about existential changes in industrial relations in the transport sector.

That said, the biggest benefits for the transport sector, by comparison, are not to be found in detailed Brexit negotiations but by our remaining stalwartly open to foreign direct investment, in a way largely unknown to most of our current EU partners. They do not necessarily welcome FDI in the same way as we do. Take the 1 February announcement of UK manufacturing figures for January 2017. It was a cracking start to the year in transport and other sectors—as my noble friend the Minister will know—and where German and French companies have long been players. We rightly regard our transport infrastructure and services as vital, but we do not protest against foreign direct investment and instead welcome it into this country. We do not adopt a protectionist attitude, unlike the French a few years back when they declared their yoghurt manufacturer, Danone, a strategic asset when it was receiving possible takeover attention from foreigners. We take a much more enlightened approach. The US has well-developed institutions governing the transport sector, and the professional consensus is that market liberalisation is well developed compared with many other member states.

Following Brexit, foreign direct investment into transport should be welcomed, whether in manufacturing or indeed service provision. Take rail services and the bidding for franchises: public procurement arrangements and international trade rules operate on the reciprocity principle. In these changing times, both sides will wish to see UK operators in the UK mirroring the treatment of EU operators wanting to win franchises in this country. It is totally mutually self-destructive not to do that. In the EU, all rail franchises must be competitively tendered in the 2019 to 2022 period, so all that is needed is for operators to continue to comply with regulations concerning safety and technical standards—ditto for UK operators wishing to compete outside the European Union, for the UK will remain an active member, and I welcome that, of the Intergovernmental Organisation for International Carriage by Rail.

I move to a second and last example, from rail to road transport. The noble Baroness, Lady Randerson, in the closing words of her very important and interesting speech, raised the issue of vehicle standards and emissions. In my closing words, I agree with her. Here, I think Brexit will allow us to show leadership to the rest of Europe on the approval processes and procedures for vehicles and their emissions. Not only is the UK happily one of the world leaders in car manufacture, but our companies have played it straight throughout on emission measurements in this country. They have certainly played it very straight compared to the emissions scandals affecting some German and French manufacturers, which are an utter European disgrace. I think the world’s consumers will look very favourably on any additional UK approvals as backing up the global reputation of our motor manufacturers. We can take a leadership role in honesty, which will be a great selling point for the UK, its cars and transport sector and so many other areas of transport policy.