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Playing chicken with the Channel Tunnel

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Playing chicken with the Channel Tunnel

Faisal Islam, Political Editor

It takes 24 minutes to turn around a Eurotunnel freight train full of imports from Europe at the terminal near Folkestone, before it leaves full of lorries heading for the Continent – six trains an hour 24 hours a day, 7 days a week – a quarter of all our trade with Europe, or £100bn’s worth.

It is less a train station, and more a rolling motorway, with customs having been cleared on entry on the Calais side, the lorries and their cargo zoom off the freight trains and straight on to a spur road of the M20.

And then within minutes a fresh load of lorries load up with car parts from Oxford, fruit and veg from Gloucestershire, and my personal favourite – fish from Scotland exported to France via the Channel Tunnel.

Image: The Eurotunnel is a ‘rolling motorway’ of goods and people between the UK and Europe

This is the frictionless trade border with Europe in action – 99% of traffic is completely unchecked, as it is tariff free and up until now produced to the same standards within the European Union and its single market and customs union.

But leaving all three will have consequences to this, one of the infrastructural wonders of the world. The Channel Tunnel was born within months of the EU single market, with both projects championed by Margaret Thatcher.

Can things possibly stay the same, even if tariff-free goods trade can continue, if the UK is a “third country” by EU standards?

John Keefe is a director of Get Link, the recently rebranded name for the owners of Eurotunnel.

“Fresh vegetables, fish from Scotland, car parts, processed food, powdered pharmaceuticals – nothing here is checked. It is absolutely frictionless now. It’s like moving something from Manchester to London, there’s no check on the motorway, that’s how it works today,” he explains to me walking down the platform next to one of freight trains.

Depending on the customs trade deal, somewhere and somehow there might have to be checks for plants, tariffs, for rules of origin on manufacturing parts. So what does he understand by the Government’s mantra of “as frictionless as possible”?

“The ‘as possible’ has to go. The only way to run this is frictionlessly”.

It boils down to a rather cosmic game of chicken, Channel Tunnel chicken

Faisal Islam, Political Editor

Sky News has revealed that the Government had obliged key border operators to sign non-disclosure agreements over the shape of the post-Brexit border.

Number 10 and HMRC acknowledged this fact after our story. The Opposition suggested that it was “disturbing evidence” from a “Government obsessed with secrecy” that was “trying to hide the fact that they have no plausible plan for protecting British trade and manufacturing”.

HMRC said such non-disclosure agreements were “standard practice”. The Chair of the Public Accounts Committee Meg Hillier said they were “extremely unusual” because they were being forced on private companies being consulted on policy options, rather than the more usual purpose of use with a commercial contractor.

The agreements concern information shared with the Border Planning Group (BPG), a cross Whitehall Committee of senior officials.

This is public but its proceedings are private. An informed source told Sky News: “Early last year this group sought and received ministerial permission to talk to various businesses on projected Brexit impacts under a variety of scenarios, including WTO [No Deal].

“It was a data-gathering exercise that informed government scenario planning. The businesses signed NDAs and the anonymised results of the exercise were presented to BPG”.

Video: Tusk says the EU does not want to build a wall around Britain

The scenarios described to Sky News have been broadly interpreted by the industry as “hard Brexit”, “soft Brexit” and “no deal”. It is the last scenario that has raised the most eyebrows in industry.

“This is what we call the ‘Throw Open the Borders option,'” said one operator. The scenario involves the UK on day one of Brexit unilaterally deciding not to enforce customs checks, and other border checks, and presuming that a reciprocal approach will be taken by the European Union, and thus at least temporarily maintaining a non-negotiated form of frictionless trade in goods.

Indeed, although a number of involved operators confirmed this approach as a scenario being discussed by the Government, the Treasury appears to have broadly confirmed it to MPs earlier this month.

The Treasury minute in response to the Public Accounts Committee’s excoriating recent report on Brexit border preparations says that “the Border Planning Group has reviewed all border locations (ports, airports and the Channel Tunnel) to understand the implications at these locations of controls and checks; and concluded that there are a number of locations, especially ‘roll on – roll off’ ports (for example, Dover), where significant extra controls and checks would be difficult to accommodate without affecting the flow of traffic and people”.

This is a highly significant admission from the Government of the logistical impossibility of border checks at crossings designed from inception to operate without any. Put simply, there is no space.

The Government’s stated alternative? Pragmatism.

Everybody involved in negotiating Brexit should be made to stand on the platform of the Eurotunnel terminal

Peter MacSwiney, Chairman of ASM UK Ltd

“Therefore, the Government is taking a pragmatic approach to border controls to ensure the flow of traffic at the border, and to implement controls and checks as they can be accommodated,” it wrote earlier this month.

Mrs Hillier is unimpressed: “We were pretty staggered when we were told that behaviours wouldn’t change much the day after Brexit and they might have to reduce checks to keep traffic moving.

“If you have a two-minute delay on every freight vehicle, that could be a 17-mile tailback on both sides of Channel.

“If solving this means throwing open the borders to all players… it is staggering after all the Government’s constant talk of controlling borders – we are faced with a situation which could be fairly open borders and chaos on day one”.

But the really important thing here is the response of the EU, and the presumption that France or Belgium or Ireland would not enforce EU law, tariffs, standards checks and its customs code on a, by then, “third country” United Kingdom on its side of the border.

“Disruption in Europe trying to get to Britain is just as much of a problem as disruption here. If we have massive queues at Calais of the goods we rely on coming in, then that’s going to be disastrous and the EU is going to enforce the rules it has. It has to, that’s the way it works,” says Christopher Snelling of the Freight Transport Association.

Meg Hillier adds: “The idea we are hoping to become a backdoor for illegal products going into Europe, is not going to be reality.

“There’s got to be some wake-up call here – we’ve looked at even the new computer system that’s supposed to be in place a year from now – it’s not even got to the testing point.”

Even if there is a deal, outside customs union and single market regulations, checks will be required, somewhere.

The current customs checking facility that serves both the Channel Tunnel and the Port of Dover is a few miles away up the M20 at Stop 24. It has just 82 lorry parking spaces, to serve checks on lorries with cargo heading beyond European Union destinations to or from Turkey and Morocco.

As time ticks down the private sector has to make its own decisions amid the uncertainty. Mr Snelling said that 12-month contracts are now stretching past Brexit Day.

“What some are starting to find is they’re having to set two different prices: one for now while we are still in the EU and then a higher price once you are out of the EU because of uncertainty.

“Until a transition deal is nailed down and is legal and members can rely on this, then people have to price for the possibility there will be no transition and put procedures in place.

“Without a deal any goods going through will have to have checks, anything that is food or livestock or medicine will have even more checks on standards and health and all of that will be massively disruptive to businesses and consumers in Britain.”

Image: An aerial view of the Eurotunnel in France

And the lack of concrete credible border plans is beginning to change minds, including of Peter MacSwiney, the chair of a key Brexit customs consultative committee, himself no great fan of the EU.

If these options don’t work, he says, “the ports will come to a grinding halt”.

Is this not just more scaremongering? “We’re always warned we shouldn’t use words like ‘disaster’ with politicians,” he says ominously. Mr MacSwiney was asked, subsequent to the Sky News interview, to sign a non-disclosure agreement by Government – he refused citing “too much Brexit secrecy”.

Incidentally, he voted Leave in the referendum. “I did, but I didn’t vote for what it appears we are going to get now, though”.

A Government spokesperson said: “We want to have a customs arrangement that ensures trade with the EU is as frictionless as possible, and we have set out our two preferred models in our Customs Future Partnership paper.

“In relation to Northern Ireland and Ireland, both the UK and the EU have also been clear there will not be any physical border infrastructure.

“It is in everyone’s interests to secure a good deal for both sides and we think that is by far and away the highest probability, but we have a duty to plan for the alternative. That is common sense.”

Everybody involved in negotiating Brexit should be made to stand on the platform of the Eurotunnel terminal.

Here is where the claims of “they need us more than we need them” about imports of car parts and of prosecco can be seen in context.

It boils down to a rather cosmic game of chicken, Channel Tunnel chicken. Essentially “they” need the Channel Tunnel to move as freely for EU exports into the UK as the UK needs it the other way round.

This perhaps underestimates the political impact of the combination of export difficulties and a slowing up of the imports of consumer goods too.

:: Boris Johnson floats idea of Channel ‘bridge’ at UK-France summit

Video: Theresa May delivers her ‘hard facts’ Brexit speech

Is part of the UK Government negotiating position to dare the EU to apply its own trade laws, while the UK unilaterally chooses not to apply its own and waves trade through, essentially unchecked?

Border operators and manufacturers are beginning to take this prospect seriously, even though neither side of the Brexit negotiation wants it.

For what it’s worth, all believe that Europe would not reciprocate, and would apply legally necessary customs checks with the UK immediately.

The crippling effect of this on cross-border trade would surely mean that negotiations would start within months or weeks, I suggest. “Hours,” says one key logistics operator.

It is frankly amazing to hear such things being contemplated, even privately. No wonder the Government is rather liberally handing out non-disclosure agreements.

Put simply though – something is amiss. The money is not being spent, the planning permissions are not being sought, nor the customs officers being trained, let alone shovels in the ground to build the new facilities inescapably required by the Government’s decision to leave the single market and customs union.

Instead, the Government is signing secrecy agreements about unilateral plans widely dismissed by the people who actually operate the frictionless border.

With 12 months to go, and transition not a legal certainty, something has got to give, and soon.