The new Conservative Government might only have been in office a matter of days, but the logistics sector is already very clear about the issues that require its attention.
The Logistics sector has been a success story in recent years: growth of the sector is outstripping other sections of the economy. In 2018, the Logistics sector contributed £124 billion Gross Value Add (aGVA) to the UK economy (10 percent of the UK non-financial business economy).
However, the Logistics sector is facing a number of pressing challenges, including the uncertainty of Brexit and a growing skills shortage. These are areas on which the sector relies on Government action. As a result, sector leaders and industry bodies have already begun setting out their priorities for the new Government.
The Northern Powerhouse
Even before the election, Transport for the North was calling on whichever party won to focus on the North. It argued, “Whilst Brexit has dominated discourse, one issue has risen up the national agenda over the past year like no other – the future prosperity of the North… the nation is waking up to the pent-up economic potential in the North, waiting to be unleashed with the right impetus and investment… At the heart of this, is the ability to get people and goods from A to B better than they do today.”
The scale of the Conservative win in the North and the “debt” of trust the Government now owes those constituencies makes it likely that there will be greater focus on the Transport for the North’s agenda.
Following the landslide victory, Transport for the North released a statement reading, “The North has – rightly – been a key battle ground in this election, with pledges made on improving our transport and creating opportunities. Now is the time to advance that Northern agenda in the national interest. The Prime Minister must now deliver… We stand ready, on behalf of the North, to work with Boris Johnson and the new Government to ensure the much-needed investment is delivered to help rebalance the UK economy.”
The Road Haulage Association
The Road Haulage Association (RHA) has congratulated Boris Johnson on his general election win for the Conservatives and called on him to work with the freight and logistics sector on a number of key issues.
- managing the risks and impacts of whatever Brexit approach is taken, it is vital to allow enough time to implement the transition to any new arrangements for customs and lorry access regulations, labour is also essential to maintain the UK’s supply chains
- help is needed to facilitate the transition to cleaner vehicles throughout the industry
- the growing skills shortage must be addressed, via work like the RHA’s Road to Logistics initiative and practical policies
- the Apprenticeship Levy requires reform and funding
- improvements need to be made in terms of infrastructure and the operating environment, including safe and secure parking facilities for vehicles and drivers, improved fuel prices in line with EU competitors and better road maintenance across the UK
Richard Burnett, the RHA chief executive, commented: “The current Apprenticeship Levy system is not working for our industry and uptake amongst our members is minimal. As things stand, our industry has paid in over £300m while only being able to draw down approximately £20m.”
The Freight Transport Association
The Freight Transport Association responded to the election result with a much greater emphasis on the issue of Brexit.
It said it welcomed the new clarity and direction that the General Election result provides to business in terms of Brexit planning. However, it also warned that, without the passing of the Withdrawal Agreement through Parliament, there is still the risk of a No Deal departure from the EU on 31 January 2020 – which could bring chaos to the UK’s highly interconnected supply chain and the industries which rely upon it.
Pauline Bastidon, FTA’s Head of Global and European Policy, emphasised: “What logistics and supply chain managers need above all is clarity over the Brexit’s end game. While the short-term priority is to ensure that the UK leaves with a ratified withdrawal agreement, we need answers to the big questions about our future trading arrangements with Europe. Most of the crucial topics related to trade and transport have yet to be negotiated with the EU, in what will be a very short amount of time. Entering these negotiations with a clear picture of what logistics needs will be critical to its success. Minimising frictions, red tape and costs should be at the heart of the negotiations if UK PLC is to continue trading effectively.”
Key areas of concern for the FTA include:
- arrangements for imports and exports between the UK and Europe
- agreement on the situation on the Northern Ireland border, including the potential for checks and where and how these are to be made
- the ongoing situation regarding the employment of EU nationals within a sector that relies on them for vital labour
The FTA reiterated that with more than 53,000 lorry driver vacancies already in the UK, the loss of the 343,000 EU nationals working in British logistics firms could see the supply chain as a whole come to a standstill.
Response of the industry
It is clear that the Government has a lot on its plate in terms of the logistics sector alone.
While the organisations representing our sector are hopeful that the size of the Government’s majority will end the period of uncertainty, given the opaque promises on which it was elected (“get Brexit done”) there remains a vast lack of clarity over how this uncertainty will be resolved.
Logistics companies will be hoping this clarity will emerge soon.