Gove warns of mas­sive queues of trucks in Kent

Mar­kets, in­dus­try and po­ten­tial part­ners all hate un­cer­tainty – no amount of rhetoric will change that

The Daily Telegraph - Business - - Front Page - By Lizzy Bur­den

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

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