Brexit: What next for the road transport industry?

On 24 June 2016 it was decided that UK would seek to exit the European Union (“EU”). Immediately following that decision, we saw David Cameron resign as Prime Minister, the FTSE 100 and pound plunge and commentary coming from Europe’s leaders talking of their shock and disappointment.

Now we must think about what this means for hauliers and where things go from here.

Business as Usual
The first thing to remember is that we are still a part of the EU. The exit is a staged process set down by Article 50 of the 2009 Lisbon Treaty, and this is triggered by a Member State stating that they wish to leave the EU. What will then follow are negotiations on a withdrawal agreement.

The request to leave the EU hasn’t yet been made, and David Cameron ha stated that notice will not be given to The Functioning European Union (TFEU) until after his departure in October 2016. This position is endorsed by the “out” campaigners, who do not want to start the stopwatch towards exit until decisions have been taken on the UK’s leadership, and who will take part in negotiating our exit.

Once the Article 50 request to exit is made to the TFEU, the UK and the EU will then negotiate how the UK’s future relations with the EU will look, and the Lisbon Treaty allows for up to two years to reach an agreement. During that period we will remain a member of the EU and will fully participate in EU business, albeit our views may be marginalised on many issues moving forwards.

If there is no agreement within the two year deadline, the only way that the deadline can be extended is if all Member States agree to this.

Other European countries such as Switzerland and Norway have their own relationships with the EU (eg. EFTA, EEA) which have been negotiated over years and these offer example frameworks of what might in theory be achieved for the UK. These frameworks provide certain pillars of EU membership such as the free movement of goods to extend, but they require many conditions to be respected such as respect for competition rules and other regulatory controls.

Legally Speaking
The foundations of road transport regulatory law come from Europe and so many wonder whether hauliers will now start to see a huge shift in focus and laws being changed.

The first point to make here is that we remain a member of the EU and therefore it has to be business as usual. However, once the UK has exited the EU, relevant transport legislation will still stand unless the UK Government repeals this or takes steps to amend the various statutes.

Whilst rules on drivers’ hours began in Europe through EC Regulation 561/2006, the UK adopted these regulations within the Transport Act 1968 and consequently this law will remain, regardless of our status in Europe. Therefore, our eventual departure from the EU will have very little impact on the underlying UK laws which have implemented directives such as 561/2006.

I cannot imagine that UK government will seek to change the law in this regard given that it all goes to the common goal of road safety, compliance and fair competition. Equally, any haulier operating outside of the UK would still have to be operating in accordance with EU regulations to avoid criminal implications whilst driving in those countries and so there is no benefit for the UK to make changes to these rules at this stage. After notice is given to TFEU, negotiations with them will begin and the UK will undoubtedly be looking to maintain free movement of goods. Therefore, there would seem to be little sense in the UK looking to unravel transport legislation that emanated from Europe as that would undermine our hauliers’ ability to participate in European trade and the movement of goods on the Continent.

Operating Matters
As we exit the EU, we could well see stricter border controls and the expectation is that this will mean that the ability to cross the border into and out of the UK will be a slower process, thereby affecting the efficiency of transport operations. However, it Is difficult to predict this with any certainty given that negotiations with TFEU could see the UK join the the European Free Trade Area and remain in the European Economic Area, which may see a continuation of the rules governing free movement of goods / people.

Another concern, which was already a growing issue in the sector, is regarding driver shortages. The haulage sector draws heavily from the EU for its workers and therefore industry must not only continue to deal with an aging driver population and an ongoing driver shortage, but must now deal with the potential of not having access to workers moving into the UK to fill these roles. However, it may be that to deal with this issue, the Government pull away from the EU driven concept of Driver CPC, which some people see as a hindrance to new labour entering the haulage industry.

Concluding Thoughts
Given that we are the first Member State to seek to invoke Article 50, what we can be sure of is that we have a tricky time ahead. With some commentary coming out of Europe that the UK should be pushed out and marginalised for this decision, and other Member States now calling for huge reforms of the EU or referendums themselves, this could spell turbulent times for the UK, the EU, or indeed everybody in Europe. Only time will tell what happens, but in the meantime, hauliers should continue with the day job, and we will keep you updated as this situation unfolds.

The key priority has to be to stay focused on the day job – the more that we can focus on business as usual; the stronger our position will be within the UK as we step into uncharted territory.

For further information, please contact our National Head of Road Transport & Logistics, Vikki Woodfine, at vikki.woodfine@dwf.law

Find out more at www.thelorrylawyer.com or follow us on Twitter @lorrylawyer.

Comments are closed.