Brexit preparations in the spotlight
The Port of Tilbury has hosted the Chancellor of the Exchequer, the Rt. Hon. Sajid Javid MP, and the Home Secretary, the Rt. Hon. Priti Patel MP, for an overview of its expanding operations – including a new port terminal, Tilbury2 – and its contingency planning for the UK’s departure from the European Union.
Construction at Tilbury2 by Graham Construction is under way on a site which was part of the former Tilbury Power Station. Once operational, in spring 2020, Tilbury2 will be home to the UK’s largest unaccompanied ferry port, operated by P&O Ferries, and the country’s biggest construction processing hub, with “Authorised Economic Operator” trusted trader status.
Tilbury has doubled the size of its business in the past 10 years and is projected to double the volume across the quay (from 16 million to 32 million tonnes) and triple the direct employment (from 3,500 to 12,000 jobs) over the next 10-15 years.
This growth is underpinned by the Port of Tilbury’s £1 billion investment programme, 2012-20, of which Tilbury2 is a central part. Tilbury2 will include a new rail and road connection, deep water jetty and pontoon, at a projected cost in excess of £200 million.
Expansion is needed to cope with rising demand for construction materials and aggregates from the UK's building sector, imported and exported cars, as well as an increase in ferry traffic, which carries food, drink, finished products and other goods between Europe and the UK.
Sajid Javid MP, Chancellor, said:
“Great to visit the Port of Tilbury with the Home Secretary and see how they're preparing for Brexit. The £2.1bn no-deal funding I’ve announced today will accelerate preparations at the border, support business readiness and ensure the supply of critical medicines.”
“Tilbury2 will add much-needed European-facing ferry capacity at a crucial time for the UK economy,” commented Carole Cran, Chief Financial Officer of Forth Ports Group (owner of the Port of Tilbury), after hosting the Chancellor and the Home Secretary.
“In addition, our existing port infrastructure and experienced staff stand ready to flex in order to provide greater resilience to vital pan-European supply chains in preparation for the UK’s departure from the European Union, utilising the latest technology and streamlined border processes in support of continued market demand created by business growth.
“Tilbury2 is a significant part of the Port’s £1 billion investment strategy as we look to provide the next generation of logistics facilities to equip Britain to take advantage of new business opportunities and cement existing trading relationships.”
Separately, Sajid Javid has announced an additional £2.1 billion to fund no-deal Brexit preparations.
The financial package includes a “new immediate cash boost of £1.1 billion to prepare critical areas for EU exit on 31 October” and “a further £1 billion available to enhance operational preparedness this year if needed,” according to a HM Treasury statement.
The funding will support “critical operations,” with £344 million earmarked to help get new border and customs operations ready, the statement noted.
“This includes an extra 500 border force officers, meaning we will have added up to 1,000 more officers this year; boosting capacity to process UK passport applications this year, helping avoid delays; doubling the support made available for customs agents to train new staff or invest in better IT so businesses can get the support they need to complete customs declarations ; improving transport infrastructure around ports and additional funding for ‘Operation Brock’ to manage traffic disruption in Kent; and enhancing support available on government helplines.”
£434 million is being made available to help ensure continuity of vital medicines and medical products, including through freight capacity, warehousing and stockpiling.
A further £108 million will target promotion and support businesses to ensure they are ready for Brexit, including a national programme of business readiness and helping exporters to prepare for, and capitalise on, new opportunities.
“With 92 days until the UK leaves the European Union it’s vital that we intensify our planning to ensure we are ready,” commented Sajid Javid.
“We want to get a good deal that abolishes the anti-democratic backstop. But if we can’t get a good deal, we’ll have to leave without one. This additional £2.1 billion will ensure we are ready to leave on 31 October - deal or no deal.”
However, James Hookham, deputy CEO of the Freight Transport Association (FTA) said the Government’s 'No Deal' funding for business, announced today (1 August 2019), “falls well short of what will be required to ensure that all those organisations which currently trade with the EU will be able to continue operating smoothly and efficiently in the event that the UK leaves the EU without a deal.”
“5% of the fund allocated by the Treasury today equates to only £745 per business - far less than will be needed for each business to understand and implement the procedures, staff and systems required for routine No Deal trading.
“The allowances announced may enable the government to say they have helped business, but the reality once again leaves logistics operators carrying the burden of adapting to and adopting new operating procedures at the last minute (many of the industry’s issues are still to be answered by government), and potentially carrying the can for a lack of government planning. Industry deserves and needs the appropriate boost, rather than the damp squib promised today,” Hookham added.
The British Ports Association reacted more positively to the new funding, with its chief executive, Richard Ballantyne, commenting:
“Given that this Government is committed to Brexit we welcome the Chancellor’s announcement and the additional resources for preparations at the border. We would reiterate our position that a ‘no-deal’ Brexit would cause needless disruption at some of our key trading gateways. A ‘no deal’ would also send shudders, at least in the short term, through the UK economy. We therefore urge those both the new UK Government and EU leaders to continue to prioritise frictionless trade in their negotiations.
“However, in the current climate it is sensible to take further steps to prepare for a ‘no deal’, albeit it with less than 100 days to go. The new funding should complement the previously announced temporary mitigations which hopefully will mean that in the short term freight is not held up entering the UK and not delayed at ports. There are similar arrangements planned at some EU ports.”
He emphasised that the British Ports Association’s ‘roll-on roll-off port members, which include the likes of Dover, Holyhead, Immingham and Portsmouth, potentially face the most challenging post Brexit borders arrangements with potential new requirements on lorry traffic using these routes.
“Such ports are in regular dialogue with UK Government officials who at least understand and appreciate the issues. Ideally, we are keen to see a deal with the EU which maintains frictionless trade but if that is not possible we would stress that some of this funding should be used to cover any new border facilities and systems that might be required at ports.”
“We have written to the Chancellor this week requesting that this is the case although it must be stressed that the clock is ticking. As well as ports there could also be huge additional burdens on freight operators, hauliers and traders who could need to adapt systems and collect and process the information required for customs and frontier purposes. This part of the logistics industry certainly needs support in preparing for a ‘no deal.’ It should be noted that any extra logistics costs could be passed on to traders, manufacturers and ultimately consumers which is not good for UK trade or business.
“Indeed we have heard conservative estimates of additional costs for the freight industry of around £12 billion each year just in agency fees if customs declarations are required for UK-EU freight. These costs also exclude investments in new systems and any burdens imposed from tariffs.
“We therefore welcome the Chancellor’s announcement.”
Sources: Forth Ports and Lloyd’s Loading List