Brexit: asleep at the wheel

02/07/2020

It was actually two years ago, in June 2018, when I suggested a way of avoiding lorry queues at Dover (and other ports). The idea was that government would organise some form of permit system, whereby international shippers were not allowed to put their vehicles on the road unless they had permits or other forms of authorisation.

These would have to indicate that their loads would most likely be cleared when presented at ports in EU Member State territories. The trouble is, as I then pointed out was that the damage would not necessarily be measurable in terms of visible congestion but in lost trade and reduced economic activity.

Despite that, we learned a few days ago that this is precisely what the government has in mind, with newspapers carrying the story that lorries "will need permission from new HMRC computer system before heading for Dover".

The name of the system is the "Goods Vehicle Movement Service" and it will be run by HMRC. Through this, British businesses exporting to the EU will have to wait for permission from HMRC before moving their goods. Basically, if vehicles don't have clearance before they start their journeys, they won't be allowed to enter the ports.

This will be a huge difference from what already exists, where transport companies send stuff to other EU Member States on a "turn up and go" basis with minimal formalities. Now, everything will have to be planned well in advance which, at the very least, is going to slow the job down.

The main merit of the system will be to deprive media photographers and film crews the opportunities to capture pictures of lorry queues outside Dover, thereby depriving the pundits of any immediate, visible evidence of how Brexit isn't working.

But the question of the moment is whether the computer system needed to make the service work will be ready in time. Apparently, it is still under development, with only six months to go before the end of the Brexit transition period.

Despite a long history of UK government IT projects going wrong, HMRC officials say they are confident the scheme can be delivered. They point to experience building platforms like the coronavirus furlough scheme as evidence that they are up to the job.

However, even if the system works, it can only deal with stuff this side of the Channel. If there are delays at Calais and other ports, traffic could back-up and ferries (and trains) could be delayed from unloading, leading to congestion through the system.

For the moment, though, nobody can really estimate how (or how badly) the system will be affected, and the story has been done to death. Thus it's difficult to get excited about the issues as people are quite simply bored rigid with them. But if, on the day there is nothing to see, the government may get over the first stages of TransEnd without too much adverse publicity.

One could suggest, of course, that the very reason for the "Goods Vehicle Movement Service" is to prevent embarrassing headlines, in which case its very existence suggests that the government is expecting problems, and well it might. However, it is a bit rich for it to say that this IT system will "facilitate" movement at the border. It can only slow it down.

Needless to say, this is just one of many areas where problems are expected and, as we run into the last half of the year, more than 100 company chiefs and entrepreneurs have written to the Prime Minister, warning that it would be "hugely damaging" to the economy if Britain leaves the EU without a deal at the end of this year.

Sadly, even though such warnings are not "project fear", we have had so many of them, and so many different varieties of them, that it is difficult to get worked up about them. Tedium has set in, and it is going to be very hard to get people worked up about an impending crisis that keeps getting delayed.

That said, the situation is different this time round, not least because of the pandemic. Thus we have the "fearful hundred" telling Johnson that businesses "simply do not have time or capacity to prepare for big changes in trading rules by the end of the year - especially given that we are already grappling with the upheaval caused by coronavirus".

The letter, we are told, has been signed by bosses and founders of companies such as Ebookers, Zoopla, Argus Media, New Covent Garden Soup, Graphene Composites and ICW.

Jürgen Maier, former chief executive of Siemens UK, who helped write the letter, assures us: "This is not a call to reopen old divisions about remaining or leaving". The government, he says, "must now deliver for us all, and on their promise to get a good deal, not a bad deal, and definitely not a no deal".

Sadly though, from what these business "leaders" are saying, it is far too late for them to intervene. It is not so much that the ship has sailed, as a whole fleet of them.

For instance, Peter Newport, chief executive of the Chemical Business Association – who also signed the letter - says that a "good EU trade deal with close alignment on chemical regulation and standards is the only way to avoid chemical supply chain disruption and have a negative impact on our economy".

Does he not already know that the government has already rejected the idea of aligning with the EU's REACH system for regulating chemicals. And even if there was any intention to harmonise systems, there is hardly enough time to negotiate the arrangements.

In fact, there appears to be a degree of wishful thinking in this letter which makes you wonder which planet these people have been on for the past four years.

It is apparently calling for "the best possible trading arrangements with the EU upholding common high standards currently applicable on both sides in the areas of state aid, social and employment standards, environment, climate change and tax". If they are hankering after a level playing field, that ship has most certainly sailed. It's probably sailing round the South Pacific by now, it left so long ago.

Further items on the "wish list", in this context, are almost jaw-dropping. The letter-writers also want alignment with EU regulatory bodies that allow free flow of products in areas such as pharmaceutical, medical and chemical supplies.

The letter adds that the UK’s financial services businesses also "urgently need assurance of an equivalence agreement with the EU that is broader than the traditional arrangements and gives them much greater certainty".

On that, did none of them listen to Barnier a couple of days ago? Can they really be so detached from reality that they still think the UK is going to get anything other than a bog-standard deal, and then – as Barnier says - only in those areas where it is clearly in the interest of the EU.

Even (or especially) the Financial Times seems to be having trouble catching up. It tells us it "revealed" last Monday that London and Brussels were blaming each other for slow progress on the question of whether the City of London will be granted access to European financial services markets after the Brexit transition period.

The underlying issue, though, is that business groups have been reluctant to rock the boat, concerned that this might reopen disputes with the government over Brexit, putting at risk the flow of money pouring from government coffers to deal with Covid-19.

Despite this, they are becoming concerned again over the lack of progress in EU trade talks, with just six months to go before the transition period ends. But they've been asleep at the wheel and it's rather late in the day to wake up. The deed is done, and it looks as if they haven't even realised.

Also published on Turbulent Times.