Wednesday 27 January 2021

What's happening at Dover and Folkestone?

Things seem to have gone quiet at Dover and Folkestone and supermarkets seem well stocked. It almost looks as if everything is back to normal and all our predictions have turned out wrong.  I wouldn't be so sure just yet. Traffic volumes are still very low and the authorities are doing everything to avoid queues of HGVs. I see one report by a Polish truck driver who delivered a load from Poland to Manchester and then took six days (6 days!) to leave the UK "mostly spent on waiting for customs documentation."  The drivers' experience is given on a website 40ton.net which is mostly in Polish. 

A short video clip is said to show drivers honking horns last Friday night (22nd) at Manston airfield where they were all waiting although it's not clear what for.  Apparently all Dover bound HGVs are being directed to Manston airfield where final checks are made on customs declarations and if necessary drivers are able to get a covid-19 test. But even when they're ready that's not the end of it:

"The trucks were released in small batches, so the queue was moving forward every 5 or 10 minutes. This took 6 hours, finally, also Kamil was free to go to Dover. He reached the port after 6 days of struggle with the formality to find an almost empty port that was handing tickets for the next available ferry."

I assume this is to avoid news organisations picking up great long queues of HGVs on the M20 and local residents getting annoyed.

Another driver on Twitter linked to a report about the government 'fast-tracking' goods bound for Gibraltar because of shortages, mainly of chilled and fresh food. The use of the Prioritised Goods Scheme is said to be an “emergency measure” that should be in place for the shortest time possible. Gibraltar relies on the UK for about 50% of its food and the manager of one local supermarket which stocks products from Waitrose, is quoted saying that “bringing UK goods to Gibraltar by land is becoming a nightmare”.

I think this shows the problems at Dover/Folkestone have been hidden under covid, pre-Christmas stock piling, low traffic volumes and traffic planning to mitigate queuing.  But even so problems are starting to surface.  Presumably the need for 'fast-tracking' will increase until it's the norm and we will then see queues developing.

A former customs agent who now lives in Cyprus posted a picture last night of a traffic camera on the M20 at the tunnel entrance:

As stockpiles wind down, traffic volumes will increase and the problems will come to the surface. I think the short straits will never again run at the same volumes as they did at the end of 2020. Problems will be overcome and mistakes on the customs documentation will reduce as more agents are recruited and exporters learn how to fill in the complex forms but it will all be at a much reduced level.

Nobody wants to incur extra costs and risk delays on goods that face border formalities and customers on both sides of the Channel will find other suppliers and trade will fall.  Export figures for January to the EU will be interesting.  I note the Irish have already started several new direct ferry routes to France and are doing a roaring trade. The journey takes longer but there is no paperwork involved so you can see how exporters and hauliers view customs borders.

There are fears for Holyhead's future and Fishguard is also at risk of losing out. These are just some of the unforeseen casualties of Brexit

Eventually,  as we all get vaccinated things will return to a new but very different 'normal' where choice is more limited and prices are higher. Less trade means fewer jobs.  The covid furloughing scheme is hiding a lot of unemployment but when this comes to an end the figures will shoot up and will take that much longer to come down.

The government may be surprised at what is happening already in the labour market. A report by Jonathan Portes recently seems to show said an “unprecedented exodus” of foreign workers between the third quarter of 2019 and the same period in 2020. The official figures appear to indicate a 1.3 million fall in the population. In London, an estimated 700,000 foreign-born workers have left, contributing to an 8 per cent drop in the capital’s population over the last year.

These are stunning figures. And if, as seems to be the case, this is an exodus of low paid EU migrants back to their home countries from the hospitality or care industries for example, Brexit will be akin to a one-way valve.  It is now more difficult for EU nationals to emigrate back to the UK. EU nationals now need work visas to be employed in Britain and show a minimum level of income. Migrants with settled status can return to work but new migrants need to apply for the visa before employment.  The report adds:

“So the picture of sustained growth driven by international migration is relatively recent. If this has now reversed, the medium to long-term implications for London will be profound.”

We are about 32 million workers in total in the UK.  If the exodus included (say) half workers and half dependents, this would equate to a permanent fall of about 0.5% in GDP quite apart from anything else.

This year will begin to see a slow recovery from the pandemic - and we should all be grateful for that - but it will be a recovery with an economy deliberately crippled by Brexit that will take so much longer to recover and will be at a permanent disadvantage compared to the EU.  We have not even started to count the true cost of Brexit yet.