Tory leader contender Sunak to encourage UK importers to use Dutch ports to avoid French disruption

Wed 27 Jul 2022
Posted by: Noelle McElhatton, Phillip Adnett
Trade News

Former Chancellor Sunak

Tory leadership contender Rishi Sunak (pictured above) has promised to strengthen links with Dutch and Danish ports and help reduce reliance on goods imported into Great Britain from French ports if he becomes prime minister.

The former chancellor of the exchequer said he would work with Britain’s biggest importers and encourage them to use alternatives to ports in France, which have suffered from disruption in recent months, reports the Standard.

Difficulties in importing components has affected growth in UK factory orders, according to the CBI/Accenture quarterly Industrial Trends Survey released this week. Output is at an 18-month low due to cost pressures, supply bottlenecks and reduced demand.

Border problems

As covered in the IOE&IT’s Daily Update, the port of Dover experienced delays for both consumer and freight traffic as the holiday season began last weekend.

A mixture of factors has been blamed. French authorities have pointed the finger at Brexit requirements for more rigorous border controls, and a lack of investment at Dover, while Dover Port has blamed the French for failing to provide sufficient border staff.

New biometric checks from next May could produce further delays, according to the BBC.

Importers struggling

Research by LSE has shown that the first year of the UK’s post-Brexit trade deal with the EU saw imports fall by 25% relative to imports from the rest of the world, whilst finding no evidence of a sustained decline in relative UK exports to the EU in the same time period.

Analysis of changes in trade patterns for 1,200 products found a sharp drop in the number of trade relationships between UK exporters and EU importers, with lower value relationships hit hardest.

Gas imports

The FT reports that the House of Lords’ economic affairs committee has warned the UK government to “urgently” strike an agreement with the EU to co-operate on emergency energy supplies in case Russia cuts off gas exports to the continent.

Britain, which has limited gas storage capacity, traditionally relies on imports from the EU during the winter, when demand is greater.

According to The Telegraph, the UK currently faces surging energy bills as a result of Russia’s latest reduction in supply.

Wine complexity

The Guardian highlighted the story of British wine wholesaler Daniel Lambert, who has decided to leave the UK after meeting post-Brexit regulations led to a £150,000 hole in revenue, as well as the struggles the drinks industry is having to move goods across borders.

Following Brexit, hauliers have left the wine sector because of the complexity of the additional compliance.

Wine imports require specialist expertise with each type of wine having an individual commodity code depending on its particular characteristics: such as variety of grape or container size.

Fashion hit

Other sectors struggling to move goods to Europe include the fashion industry, according to trade website Drapers.

Many fashion and retail business are reporting that trading has become more challenging because of increased costs and bureaucracy in the past 18 months.

New research from accountancy firm UHY Hacker Young shows that UK businesses and consumers have paid 62% more in customs duties on goods imported to the UK in the year to 31 March, reaching a record of £4.7 billion, up from £2.9 billion for the same period last year.

Embracing freeports

On Monday (25 July) night’s BBC TV The Next Prime Minister debate, foreign secretary Liz Truss went head-to-head with Sunak on subjects including trade, in front of an audience of Conservative voters.

Regarding UK freeports – eight of which former chancellor Sunak unveiled in his March 2021 budget – highlighted Teeside as a successful example of the concept.

“I've seen the amazing change [in Teeside Freeport] that I've helped to deliver … a freeport that's attracted jobs and investment post-Brexit … with new industries such as carbon capture and storage and vaccine manufacturing,” he said.