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  1. Spotlight on Policy
20 September 2019updated 09 Sep 2021 12:55pm

It’s time to turbo-charge trade

The UK needs to build a shared agenda for trade capable of creating a stronger foundation for long-term prosperity.    

By David Leighton

As the United Kingdom begins a new phase in its journey towards delivering Brexit, the government’s intention to “turbo-charge” the nation’s preparations for no deal has been made clear. Whilst leaving the European Union without a deal is not a desirable outcome for many, it is vital to make sure that British businesses are thoroughly prepared. It is also vital to look beyond Brexit and to turbo-charge the nation’s capacity to export and trade, and preparing for no deal can be part of that.

As the UK’s leading port operator, handling one quarter of the nation’s seaborne trade, ABP remains committed to making sure our ports are ready for a no deal Brexit, in particular offering our Humber ports as alternatives to Dover where the risk of disruption is greatest. Since 2016 ABP has invested £250m across its network of 21 ports around Britain, including the expansion of our container facilities on the Humber at Immingham and Hull. As well as working closely with government and customers, ABP has deepened co-operation with other European ports connected with the Humber.

Importantly, ABP’s approach offers longer-term benefits for businesses and the economy. Because the Humber is closer to many of the UK’s principal centres for manufacturing and distribution, making greater use of its ports for EU trade can facilitate easier and more resilient access to export markets. In addition, by enabling a significant reduction in distances travelled by HGVs on Britain’s roads, there is an opportunity to improve safety and cut CO2 emissions to help tackle climate change. Research by the University of Hull Logistics Institute has demonstrated that moving just 10 per cent of cargo from Dover to the Humber, destined for distribution hubs in the North and Midlands, can save 100,000 tonnes of CO2e every year. In the same way, ramping up the UK’s wider preparations for a no deal Brexit can also deliver longer-term benefits, significantly boosting the nation’s exports and trade.

One of the most troubling gaps in the UK’s no deal readiness is that too few businesses trading with the EU are registered to make customs declarations; recent reports indicate that only one third of the estimated 240,000 EU-trading UK firms have signed up for so-called “EORI status”. Further, customs processes are currently not all that easy to swiftly get to grips with. Consequently, there is an urgent need for a high-profile campaign to encourage more businesses to prepare for no deal and to direct those businesses to a source of information that offers simplified, straightforward guidance about what they need to do.

However, encouraging more businesses to prepare for no deal by acquiring the capability to deal with customs procedures can achieve much more than strengthening the UK’s no deal readiness. Such an initiative can also help increase the nation’s capacity to export to growth markets across the world – one part of achieving “Global Britain”.

Another important policy priority to help prepare for no deal, as well as enhance the competitiveness of the UK’s ports outside the Customs Union, is to drive the establishment of free ports. Free ports enable goods to move in and out of ports without requiring the payment of customs duty, as long as the goods remain inside specially designated zones.

Free ports can therefore attract more trade and create jobs, but not solely in port or logistics operations. Many ports and sites located adjacent to ports, such as Port Talbot and the Humber International Enterprise Park, offer large areas of development land close to deep water, ideal for facilitating the efficient import of
raw materials or components and the export of finished products.

Free ports can capitalise on these advantages and make these sites even more attractive for investment in new manufacturing. A 2016 report authored by chief secretary to the Treasury Rishi Sunak, indicated that free ports can deliver 86,000 new jobs and in areas where jobs are most needed. The report notes that of the UK’s 30 largest ports, 17 are in the bottom quartile of local authorities when ranked by the ONS’s Index of Multiple Deprivation. Free ports are a further example of a policy that can both underpin no deal readiness and support longer-term growth in exports and trade, as well as helping to transform many of Britain’s hard-pressed coastal communities.

Vigorous debate and disagreement about a more determined approach to no deal Brexit will continue. Yet it remains the case that lying within this endeavour there are actions that the government can take that will deliver longer-term benefits whatever the outcome of the Brexit negotiations.

There are, of course, many other steps which need be taken to increase Britain’s future exports and trade. For the ports sector, which handles 95 per cent of the UK’s trade in goods, they include prioritising investment in transport infrastructure connecting ports to make sure businesses have the best possible access to global markets. It is also important to enable ports to develop and grow to meet customer demand.

One example is the Port of Southampton. Every year the port handles £40bn of exports, including £36bn destined for countries outside the EU. Major British manufacturers such as JLR rely on the port’s infrastructure to export their products all over the world, which is why some 11,700 jobs in the automotive sector rely on the port in the West Midlands alone. Making sure the port is well-connected and can continue to grow is fundamental to the future success and competitiveness of exporters throughout the country.

Ultimately, delivering real success in boosting exports and trade also depends on a bolder, long-term and inspiring vision for the economy with exports and trade at its heart; it demands genuinely ambitious goals; and it requires a broader strategy. In 2017 ABP published a policy paper advocating a “Trade First” review of government policy, cutting across all relevant government departments. The purpose of the review would be to make sure policy across Whitehall is aligned with the goal of increasing exports and trade. Its scope would need to include departments such as education in order to excite new generations to export and trade across the world, and to equip them with the skills they need to achieve that.

We need to build a shared agenda capable of making sure the UK continues to strengthen its position as a world-leading exporter, eliminating the trade deficit and creating a stronger foundation for long-term prosperity. 

David Leighton is ABP group head of corporate affairs and marketing.

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