We reveal the rather recent changes to the secret “reasonable worst case scenario” assumptions for No Deal Brexit trade flow that are the foundation for the Government’s No Deal planning.
...last year Government’s reasonable worst case scenario (revealed to industry under NDA but not public) for trade flows across Channel was incredible fall of 75% to 87% - so only 2 in 10 lorries flowing.
That was improved to 50-70% in April
& 40-60% in past few days BBC told
/1
...reason is really rather interesting - original catastrophic assumption done without French cooperation - on basis of 100% manual customs & regulatory checks (& required officials studying satellite photos of French ports)...upgrade has come as a result of new French facilities
... what this means in practice though is instead of 8000 lorries a day stuck either side of the Channel in a reasonable worst case scenario, and queuing capacity in UK filling up in days, it is more like 5000, which would fill up space in a fortnight... /3
...so in less catastrophic worst case scenario territory rather than actually good ones. But if you re a glass half full person, you might welcome progress...my understanding is that medicines suppliers think the disruption will be significant even with a 20% reduction in flow /4
Logistics providers think assumed flow rates shd be further improved - but totally contingent on trader prep. Companies can be prepared as they like, but if the lorry in front hasn’t got an EORI number its still a queue... depends on whether small companies have the cash /5
Freight Transport Association point out that the support for traders from UK Government is just £750 per company - equivalent to two hours training on how to fill customs forms they never have before had to. Massive shortage of customs agents though etc /6
Other industries - eg food - far from convinced on Government extra optimism - and so for example, asking for competition policy changes for possible food supply coordination - my other report today /7
The really big point here though - that the original 2 in 10 assumption already assumed the waiving of all checks into UK at Dover/ Folkestone - the improvement comes from what was done on the French side - rather vivid example of how this really depends on Paris /8
Former Sainsburys Chief Justin King on @BBCNewsnight responds to our story on the governments internal assumptions on cross Channel trade flow, revealed to BBC news:
FTA’s EU freight expert @S_LD_ told me in Calais about UK firms servicing European supply chains at 6 hrs notice with zero paperwork, now being told to
- get a customs agent (none available)
- needing 24 hours notice
- have to provide detailed inventory, eg weigh their supplies
For Just-in-time (& oft forgotten but equally important just-in-sequence) delivery of parts - this delay v tricky. £ slide helps a bit maybe.
Point tho not just basic EORI number required - each export will need new paperwork
EORI just base level prep & majority haven’t done it
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Might remember I cornered Rwandan President Paul Kagame in January and asked if UK would get money back if no migrants were transferred to Rwanda… answer revealed today: Govt paid £715m so far until June of this year
“not recoverable under the terms of the Treaty”
terms of Rwanda deal are quite something…
In addition to £715m already paid, Treaty another £100m is due (will it be paid?)
also envisaged £120m bonus after 300 refugees “transferred”. And £20k per person payment.
And then further £150k per migrant payment over 5 years
IF a relocated migrant then relocated from Rwanda, UK government would then pay Rwanda £10k for that onward relocation (instead of the last payments above)
Treasury effectively confirms debt rule loosening, by announcing its new “guardrails” to channel capital spending goes to a 10 year pipeline of major projects that generate economic returns that will help “depoliticise infrastructure”
Their view is independent accountable bodies, either new or given new powers will set & implement a 10 year infrastructure strategy integrated with 2 year spending reviews, and audit this, and assess value for money ensuring capital investment generates clear long term returns…
Ministers now openly call the impact of the Sunak debt rule “a mistake”, that it constrained some much needed public infrastructure investment, while not stopping bad investment in failing projects… capital needs to be properly quality controlled not arbitrarily constrained
“One monopolist serves as a gatekeeper for the delivery of nearly all live music in America today”
- US Govt’s attempt to break up Live Nation-Ticketmaster announced in May in a court filing is quite a document… “platinum” pricing is mentioned 5 times … #Ticketonomics
Live Nation itself said this year that platinum pricing was in its 5th innings in the US but “in its first” in Europe and their intention to apply it “all along the way” until the concert “gates open up” is a “multi year opportunity to grow our top line/ bottom line”…
CEO Michael Rapino said earlier this year ”it’s just pricing smarter” & “it’s a skill” where LN/ Ticketmasters in-house team “works with artists, agents, managers” to “price the fronts better so the back sells out”… “rolling this around world” is “the great growth opportunity”
NAO confirms that HS2 without phase 2 will result in trains with less space between Manchester and Birmingham than current west Coast services, and might require demand management to dissuade passengers… bbc.co.uk/news/articles/…
Non-consensus view, but having sunk the costs of phase 1, and then committed to the hybrid bill for HS2 north… the cost benefit ratio of completing the bit between Manchester airport and Birmingham will be very high… would require political consensus to be re-established though
Who can forget the Perm Sec’s amazing document from last year.. the strategic case on rebalancing Britain “no longer applies”
Shadow Chancellor Jeremy Hunt acknowledges to @bbclaurak when asked if Conservatives had won whether there would have been tax cuts in Autumn that “we wouldn’t have been able to do it immediately, no”
…
most notable thing re: Chancellor interview with Laura is this unusual Treasury analysis due in next fortnight which will “look at the state of the public services, the state of the public finances…public spending pressures we are under”
Q: why isnt the OBR doing this?
While fiscally eventful, it is not going to be a “fiscal event”… when first announced by Chancellor on her first Monday in office it sounded more like an audit of stalled spending and impact on public services, than an audit of the public finances…
Reassuringly, @demishassabis tells Blair at the @InstituteGC conference that Artificial Intelligence is only at the IQ level of a cat right now.. [although that is changing rapidly - surely will exceed humans in many tasks in this Parliament] 🐈⬛
Interesting to think Blair as PM famously never used his computer, or rarely did so…
Also has the scars, as it were, from that failed NHS IT contract… if only that had succeeded…
Interesting to know if this Govt is conscious of the ghosts of that and of botched PFI deals.
Chancellor’s Mais lecture did have sense of learning from some setbacks during the Blair era … havent seen a good analysis tho of where eg record on PFI and the NHS IT contract [perhaps Horizon too] forms part of this govt’s memory.