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Post-EU transition, trade missions and being at the centre of negotiations
RIA’s Policy Director Kate Jennings and Exports Director Neil Walker give their thoughts on how to ensure the UK’s rail supply chain is prepared for new export opportunities
The railway has a key role to play in post- Brexit, post-coronavirus economic recovery, the UK’s economic growth and in generating the inward investment the UK needs to support the much-heralded ‘Build Back Better’ agenda.
Four and a half years on from an EU referendum which saw Britain vote to leave the EU, and, since 31 January 2020, a 12-month status quo transition period, companies are now preparing for changes to the way that business is conducted with European countries as well as new trade partners around the world.
Preparedness is, of course, key to business survival but this has been difficult due to the protracted, and then extended, trade talks between the EU and the UK. As 2020 drew to a close, a post-Brexit agreement on trade and other issues was finally agreed on Christmas Eve, avoiding the anticipated disruption of no-deal.
The Railway Industry Association (RIA) is the voice of the UK rail supply community and has some 300 companies in membership in a sector that contributes £36 billion in economic growth and £11 billion in tax revenue each year, as well as employing 600,000 people. It spent the transition period planning for different scenarios in an effort to support its members and the wider industry. Kate Jennings, RIA’s Policy Director, and Neil Walker, Exports Director, are leading the association’s efforts on post EU transition work, providing essential support for RIA members. Both are determined to work with members to fully understand what the rail sector needs in order to navigate the challenges and flourish in a post-transition environment, and also to seize upon the opportunities that exist in trading with non-EU countries.
Kate is no stranger to strategic thinking on relationships with the EU, having been the Department for Transport’s (DfT) Head of Rail Strategy Projects Division and, from December 2019 to February 2020, working on the development of transport policy for the EU exit. She joined RIA in March 2020.
Kate Jennings
Neil Walker
Key trade asks
In 2020, RIA called on the Government to consider rail as a key part of future trade policy, highlighting five key trade asks:
- For rail to be included in the negotiation of free trade deals
- Access to an appropriately skilled workforce and mobility for skilled UK workers
- The consistent application of standards with mutual recognition/equivalence and nondiscrimination as core principles in all trade agreements
- Smooth cross-border trade rules
- Reciprocal rules on market access and domestic content
These asks, said Kate, should remain at the core of Government thinking on rail’s ability to play its part in an economic recovery and the sector’s objective to double exports by 2025.
She said: “What we want is to be included in the conversation, so that if there are rail specific issues we can make the Government aware of them and if there are policy issues then we can influence those.
“We’re very concerned about the access to a skilled workforce and the mobility of workers because a lot of the rail expertise that is employed in the UK comes from Europe and elsewhere. Similarly, for a lot of our consultant members they need to visit other countries for business so they have to be easily mobile.”
Reciprocity needed
Kate said: “We want consistent standards and mutual recognition of standards, for this to be as simple as possible and for there to be no discrimination. Generally, in terms of market access, we want reciprocal rules. It has been relatively simple for UK companies to seize on European rail investment opportunities but in the future that will be different, so we need to make sure there is reciprocity to enable UK companies to keep exporting.
“There are other areas where it would be good to understand what Government policy is. One of which is inward investment and what that means to the UK’s capability and content. With the levels of investment in rail in the UK there is a big opportunity for UK companies to grow, hire and develop people and skills and to grow their companies. It was positive to see in the UK-EU Trade Deal that we will remain part of Horizon Futures, the EU’s Research and Development Programme. While things will be different, there will remain many opportunities to learn, innovate and network. Generally, throughout 2020, our role was to flag information so members knew what to prepare for.”
In addition to ongoing conversations with Government and members throughout 2020, RIA continued to participate in Rail Sector Group (RSG) efforts to strengthen the capability and competitiveness of the UK rail supply chain and fed into the Rail Sector Deal strategy, including contributing to the RSG Exports Pillar. For Neil Walker, there are big market opportunities on the horizon for rail supply businesses.
He said: “RIA undertook an Oxford Economics 2018 Rail Report and that highlighted that over £800m in exports flow from the UK to international markets per annum. There’s the objective to double exports by 2025. RIA has an active export arm, and we work closely with the Department for International Trade (DIT) and provided a host of essential online information and businesses awareness sessions, international webinars with potential new trade partners, and we are now planning virtual trade missions to some countries.”
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Global rail vibrant
“We’ve held nine different international webinars covering around 20 different markets talking about the many opportunities that exist. UNIFE’s recent World Rail Market Study predicted world rail market growth of up to 2.3 per cent by 2025 and an annual volume of around €240bn. So rail is vibrant around the world and can provide lots of opportunities with the right support for UK companies.”
The RSG’s recently released export survey highlighted that the top priority markets for UK rail companies were USA, Australia, India, Germany, France, Canada, UAE and Ireland. And, said Neil, the feeling across the exports sector is that, by working with Government, a lot more can be achieved in the markets that have been identified.
RIA, and Neil, have been busy planning a supportive programme for 2021. Working with DIT, the first joint virtual trade mission to Canada has been arranged, providing companies with access to in-market presentations and one-to one meetings. In March, a virtual trade mission to Australia is planned and will be followed, should rules and guidance on public gatherings allow, with physical exhibitions and conferences in 2021, including Rail Solutions Asia, TRAKO in Gdansk, Middle East Rail in October and AusRAIL Plus in Brisbane in December.
Neil added: “This is all about helping UK companies network, giving them an opportunity to demonstrate what their products are and build and open up market opportunities for them, with support from RIA and UK Government officials in these markets.
“Understanding customs tariffs, standards, entry barriers and taxes is really key to doing business and working together we can help more UK companies export more.
“There are mutual recognition agreements in place with Australia, New Zealand and the USA and that is very encouraging. Also, the DIT has signed many trade agreements. So we are keen to get the information from Government on what is happening in those markets so we can signpost the right information to our members.”
Peer-to-peer mentoring
In addition, the RSG has been working with RIA and the Government to enable exporters to obtain Network Rail references to be used when bidding for overseas work, and RSG are hoping to roll out the same facility with other organisations, including Transport for London. The RSG are also developing a peer-to-peer mentoring scheme for exporters and carrying out a mapping of the UK, due to be completed this year, to gain an overview of what aspects of rail business are represented across the country with support from RIA and other organisations in the RSG Exports Pillar.
RIA’s transition planning and support dovetails with the association’s new ‘10 reasons to continue to invest in rail’ report, which explains why coronavirus should have a negligible impact on the long-term prospects of UK rail. Passenger numbers historically always bounce back after economic shocks and recessions – the railway is demonstrably safe for those using the network during the pandemic, and will continue to be so subsequently – and the Government needs serious investment in the railway to continue in the months and years to come if it wants to deliver green growth which can ‘level up’. Taken together, all this provides many reasons to remain optimistic about what the future holds, whether we are talking about rail at home or abroad.
Investing in rail
Kate added: “Globally, everyone is talking about rail as an industry that can help rebuild post-recession and following the hit we’ve taken from coronavirus. If you take a 50-year view of the rail industry it is clearly central to Zero Carbon targets, accessible travel, levelling up and jobs, it’s clean and green, why wouldn’t you invest in rail? What we’d like is for UK investment to have a legacy on exports. How we can celebrate talent in the industry and support the companies that have the capability to export and maximise their potential? We’re optimistic and considering what we can do to support this work. Whether it’s trade missions or helping with negotiations, how can we help?”
Neil added: “We have a very good relationship with the Government in terms of export markets, great support from DIT and DfT, and work very closely with TfL and other organisations. We’re keen that this support continues. We’ve been very privileged to have ministers support us on overseas trade missions and attending overseas exhibitions, while embassies have been exceptional at facilitating visits, hosting receptions and networking so companies in market can take those discussions further.
“The Government financially supports SMEs with Trade Access Programming (TAP) grants and we’d like that to continue at the current budget level and even for that budget to be increased if possible. Looking at other areas where the Government can show its support to the UK’s rail supply community will be very, very important in the coming years.”
