Gove warns of massive queues of trucks in Kent
Markets, industry and potential partners all hate uncertainty – no amount of rhetoric will change that
UP TO 70pc of trucks travelling to the European Union might not be ready for new post-Brexit border controls by January, according to a leaked letter from Michael Gove to trade groups.
The Cabinet Secretary warned that in a “reasonable worst-case scenario”, queues of 7,000 port-bound trucks could face two-day delays in Kent.
Officials calculate that up to half of lorries crossing from Dover across the short straits – about 20,000 – might not be border-ready.
They “expect sustained disruption to worsen over the first two weeks [of January] as freight demand builds”, the letter said. The letter added that while a winter spike in Covid-19 might reduce demand for freight, it could also make problems at Dover worse by increasing the number of border staff on sick leave.
Mr Gove said: “The biggest potential cause of disruption are traders not being ready for controls implemented by EU member states on Jan 1 2021.” He added: “It is essential traders act now and get ready for new formalities.”
Tim Reardon, head of EU exit at the port of Dover, told MPs on the Treasury select committee yesterday that the Government was “cutting it quite tight” with 100 days until Britain leaves the single market and customs union.
Every political job I had benefited from my experience creating a business that now employs some 1,400 people across the world. I endeavoured to bring that entrepreneurial spirit to government. Creating the European Space Agency helped Britain to obtain satellite leadership. Establishing the London Dockland Development Corporation brought enterprise and opportunity to a part of our capital from which it had been mostly excluded since the war.
Culling the quangos faster even than Keith Joseph confirmed my faith in choice and competition. Indeed, these two characteristics were at the heart of the urban regeneration I pioneered in Liverpool in the early Eighties.
I know something of the rhetoric of politics but I know too what persuades business people to invest. As the nation’s wealth creators hear proclamations about “Our Glorious Future” they know that in six weeks’ time – October 31 – we either have a deal clarifying our trading arrangements with Europe or, two months later, we are left with WTO terms. Battle hardened by their experiences of both Brexit and Covid they will want certainty before committing their threatened cash.
They know the vultures are flying in ever decreasing circles.
A much better outcome would be an agreement that provides order to this momentous peacetime adjustment to our trading relationships. But not even this would be a cost-free adjustment.
The critical point is that none of us has any idea which options will emerge from the welter of spin and counter spin. Business people will sit on their hands until they do. Who can blame them? Within recent memory it all sounded very different. The words could not have been clearer, from now-Prime Minister Boris Johnson back in Jan 2017: “We will no longer be part of the common commercial policy or bound by the Common External Tariff, and we will no longer have our trade policy run by the Commission … We will be able to do new free trade deals with countries around the world. They are already queuing up.”
Some 43pc of our trade goes to the European Union, while the highest equivalent national figure the other way is our import of 5.9pc of German exports. Several European countries have a negative balance. This hardly squares with the assertion that “they need us more than we need them”.
The news is currently dominated by Covid and, recently, the threat to many people’s Christmas. In the same timescale we shall know whether we have a deal or not. Getting a deal with the EU favourable to the UK, they said, will be the “easiest to secure in human history”. Well, not quite!
Trade negotiations have to resolve the competing self-interest of national states. Every country has its demands and its red lines. There is no charity.
Behind every trade negotiation are the lobby groups, politicians and national press seeking to protect their own jobs and companies. It can take years to find the compromises necessary to persuade suspicious parliaments to ratify agreements.
The Government no longer talks of fast-growing markets in the developing world. Consider, for example, the fall from grace of the BRIC countries (Brazil, Russia, India and China). No group of nations better exemplified the markets where the UK could pursue its future outside a “low-growth EU”. The hope grows fainter; Brazil and India are crippled by Covid, debt and corruption; while Russia and China are now political and commercial pariahs.
Modern China has a space age economy rapidly trading up the quality ladder. They want access for sophisticated equipment. The row over Huawei is but a glimpse of the political reaction when they get it.
As for India, it will want its citizens to be able to come to the UK without the increasingly restrictive immigration regime.
Both are changing at unprecedented speed. The old idea that we can sell them sophisticated equipment while buying low cost, mass market products is long gone. We need to understand this, particularly in the context of another strand of rhetoric.
As Britain turns its back on European arrangements built over 50 years, we are promised the end of the irksome regulations that are said to shackle our enterprise. On a public platform it is easy to lampoon civil servants cocooned in red tape thrown headlong from a sinking ship. A quieter voice may ask what exactly are these new freedoms.
Markets know no morality. Regulation is the framework of civilisation. The markets of tomorrow will demand ever higher standards in environment, safety, health, education, noise and much else.
The prizes will go to the nations that trade up their standards. Governments will regulate to meet public demand and create new markets. The winners will be those ahead of the game. We will never win in the low cost, cheap product market.
Perhaps the most glaring contrast between rhetoric and reality is our position with the United States. President Trump claimed that “a fantastic and big US-UK deal is rapidly approaching”. Now he is fighting for his political life with an even tighter deadline than our European one. This is hardly the moment for him to do anything other than put “America first”. The Democratic candidate, points ahead in the polls to replace him, is at odds with our Foreign Secretary over the implications of the latest proposals to renege on our Withdrawal Agreement.
So far only one major new deal has been initialled. Interestingly, the details have not yet been published so we cannot tell what trade-offs have been made with Japan or whether it is largely a continuation of the existing European arrangements. The Department for International Trade calculates it will add 0.07pc to UK GDP over time. This should be set in context with forecasts of a 5pc loss of GDP as a consequence of leaving the European customs union and single market.
So why, the UK exporter will be wondering, is the Government of the world’s fifth biggest economy finding it so hard to land deals?
I think I know why.
First, as with Covid, having overpromised, the Government was bound to underachieve.
Second, senior ministers need to understand that without common goals, goodwill and trust, deals will be few and far between.
Third, absent a UK-EU deal, other would-be UK trading partners, unable to judge what a deal might be worth to them, could be forgiven for waiting until clarity exists.
All this boils down to one factor: uncertainty. That is what everyone hates – markets, industry, business and future potential partners. Until the uncertainty is resolved we shall remain in limbo and no amount of rhetoric will change that.
‘So why is the Government of the world’s fifth biggest economy finding it so hard to land deals?
I think I know why …’
Lord Heseltine was an MP from 1966 to 2001 and is a former deputy leader of the Conservative Party