The Road Transport Brexit Debate began with an objective presentation from Barclays Corporate’s head of logistics and transport, Rob Riddleston. He quipped that no opinions would be shared during his presentation on the request of his PR team. And he nearly managed it.
Riddleston reported that GDP forecasts for the UK are down, inflation forecasts up, consumer confidence diminished yet stock market investment at an all-time high. Some say the stock markets are 18 months ahead of the rest of the economy – I guess we’ll have to wait to find out.
The Bank of England had done a great job in marshaling our economy through the initial turbulence he said, yet he would prefer it if interest rates were not cut any further, particularly thinking of savers.
Riddleston pointed out that of the UK’s top 10 trading partners, seven are in the EU and one of the others is Switzerland. In the long term, developing new trading relationships with the EU and other countries will be vital, particularly if we are to not miss out on the 50 free trade agreements the EU currently has in place, which we currently take advantage of. The senior Barclays man questioned whether we still have the expertise in-country to negotiate these new deals effectively, given the fact that the UK has not been responsible for this task for decades.
Finishing up, he gave a sneak peek of the headline findings of the soon-to-be published Barclays Logistics Confidence Index, released every six months. The next one is out soon and they’ve interviewed more than 100 senior logistics sector executives to come up with their result. Confidence has apparently marginally improved since the index was last released half a year ago, and is still above 50, indicating that the industry is still in a confident mood. Though he wouldn’t disclose the exact figure.
Operational Panel Debate
With the picture well and truly painted, Riddleston handed over to Chris Walton, Group Managing Editor of Road Transport Media, who would be shepherding us the audience, and the panelists, through the next hour of debate.
SMMT representative Nigel Base was first to speak saying that Brexit is a very big deal with some 50% of our exports going to the EU. Representing the UK’s second largest exporting community Base said the SMMT does not want anything to change when it comes to our trading relationship with Europe and will be lobbying hard to that end. He recognised that some things will need to change during the negotiation but said that the UK automotive industry is in very good shape – a position which would have seemed almost unimaginable in the lows of the 1970s – and Brexit could lead to a decline.
From the audience Elaine Harris, Managing Director of Action Express (and panelist in the later employment-focused session) intervened to say that it’s important we take note of the positives and opportunities leading from Brexit.
Rob Flello, MP for Stoke South was next asked to take a message back to parliament with him from one attendee, bemused by all of the messages in the media focused on the requirement for certainty. He said he hadn’t experienced a day of certainty in his entire business life. Flello responded by saying that the reality of negotiations with the EU is that they will need to give us a deal which is sweet enough, but not so sweet as to be a temptation for other countries like Spain, Portugal and Greece to leave.A difficult line to walk. A consensus among all panelists during the initial session was that, whichever changes do need to be made, they must happen very quickly.
Fuel prices and regulatory conditions were next up. James Backhouse, director of Backhouse Jones transport law solicitors said that the legal framework will stay the same, for the time being at least. Though he said that the likelihood is that as EU law evolves we will diverge making it more complicated for transport service providers to operate in Europe. It is for this reason essential that we tell government what we definitely want to keep during negotiations, he said. Later adding that we must make the economic argument in order to be heard.
The panelists felt that O-Licencing will be here to stay post Brexit – given that it was invented here in the UK. Backhouse did say though that he could envisage changes to how financial standing is calculated. Requirements for financial standing for British operators has risen 17% since Brexit thanks to the falling pound and the fact the fact that it must be met in Euros.
One vocal member of the audience – Nigel Wilkinson, Director of Chambers and Cook (Eastern) – said that he often felt disadvantaged when competing with European operators, who often have lower fuel prices and less regulations, meaning they could undercut him on price. John Fawcett, CEO of Close Brothers agreed that while we should aim for the highest possible standards in the UK, it doesn’t make sense when the playing field becomes uneven.
The debate nearly came off the road towards the end of the final hour with cyclists in London making a minor cameo, before the moderator skilfully brought it back, pointing out that fragmentation of regulations and rules in different regions would be more likely in an increasingly devolved landscape after Brexit.
One thing all of the panelists could agree on, is that the motor transport industry is split in a similar way to the rest of the country. The important thing is for us to find the areas of common ground, where we know the majority want the same thing, and to speak with one voice to ensure our priorities are clearly communicated to government during the negotiation process.
Employment Panel Debate
A short break and quick hit of caffeine before returning to the debate arena – at the Warwcik University lecture theatre. The next session would now be moderated by Road Transport Media’s Laura Hailstone. Her first question: Should Driver CPC be changed after Brexit?
The RHA’s Director of Policy Jack Semple was straight out of the blocks, saying it should stay in one form or another. Supplying the legal opinion, DWP LLP Partner Philip Harman added tahat we will need something with the same underlying principles if we want to continue operating in the EU. In his opinion, we may have a somewhat clearer legal position on what exactly is required as things change, with the UK courts often more robust and faster to act than those in the EU to clear up exactly what laws mean Chris Yarsley, EU Affairs Manager at the FTA said he is concerned about the ambiguity – what happens when EU rules evolve and ours diverge? He added that the reporting requirements for the Working Time Directive and Drivers’ Hours are onerous, saying that the FTA would like to merge the two into a single piece of legislation. Brexit gives an opportunity to look at this possibility.
Next up – free movement of labour. Elaine Harries, MD, Action Express said she is unconcerned about the skin colour, ethnic origin, religion or sex of her staff, iterating that she just needs to be able to recruit and retain good people.Harries said that she believed we should be doing more to train new recruits right here in the UK to address this and has even gone to the lengths of setting up her own training business – though she said it was out of necessity rather than ambition as she often loses staff to the bigger operators who are able to offer higher salaries.
Semple highlighted an initiative, launched with Microlise, called Road to Logistics which is aiming to find and train more drivers and staff for other areas of logistics. He also added that there had been talk of visas with salary thresholds at around £24k if economic migrants want to work in the UK pos tBrexit, which could be a disastrous limitation for the industry, particularly those recruiting for warehouse staff where the pay is very often less than this.
The FTA’s Yarsley said that he had a better understanding than most of how Europeans living in the UK feel right now. He permanently lives in Brussels and is unsure what his situation will be after Brexit and despite the government’s reassurance, says that this ambiguity must be cleared up quickly. He added that 25% of warehouse workers in the UK are from Europe. Another panelist added that estimates suggest there are 1.6m EU citizens working in the UK and 88% would be unlikely to get a working visa under these suggested rules.
DWF’s Harman gave an example from his home county of Kent. Every year they need a very large temporary workforce to come in and pick apples. This need will not change and we will still need a fundamental way of getting workers from Europe in to do this job. According to Harman we may have more control of who comes to the UK as we could in the future block migrants coming from Europe who have a criminal record. This is an action not currently possible inside the EU.
Further questions were posed by the audience. With our export industry set to boom, given the fall in the pound, how will we deliver enough drivers to cope? Do you think we could roll back health and safety laws so that kids can go out with their fathers in the cab? Can we remove unnecessary red tape?
In summary, the answers were not sure, never, and hopefully. It was a brilliantly entertaining and meandering two hour discussion, heated at times, on all of the most important issues, fundamental to our road transport industry.
My three key take home points from the discussion were: 1) Brexit is a risk, but also a huge opportunity if we act quickly, 2) as an industry, we must find our common ground and speak as one and 3) don’t expect substantial immediate changes, gradual divergence is more likely.
If I had to take a fourth take home, it would have been that the biscuits at Warwick University are excellent. I would quite literally have taken them home.