RIA Response to 2025 Border Strategy

J August 2020

2025 BORDER STRATEGY CONSULTATION RESPONSE FROM THE RAILWAY INDUSTRY ASSOCIATION (RIA) 1.

INTRODUCTION

1.1

This submission constitutes the response from the Railway Industry Association (RIA) to the above consultation launched on 22 July 2020.

2.

BACKGROUND TO RIA

2.1

RIA is the trade association for UK-based suppliers to the UK and world-wide railways. It has some 300 companies in membership covering all aspects of rolling stock and infrastructure supply and covering a diverse range of products and services. As well as the vast majority of the larger, multinational companies, 60% of RIA’s membership base is comprised of SMEs.

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The Oxford Economics 2018 report shows the UK rail sector contributes annually over £36 billion Gross Value Added (GVA) to the UK economy, employs 600,000 people and generates £11 billion in tax revenues. For every £1 spent on rail, £2.20 of income is generated in the wider economy, meaning rail is not just an important sector in its own right, but it is also crucial for UK plc, its economy and connectivity. Despite the Coronavirus pandemic, the long-term future of rail is positive – rail has been a growing industry since the 1990s and the number of rail journeys are expected to double in the next 25 years, along with significant growth in rail freight traffic. The full report Oxford Economics report can be accessed here.

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RIA provides its members with extensive services, including: • Representation of the supply industry’s interests to Government, Network Rail (NR), Transport for London (TfL), High Speed 2 (HS2), the Office of Rail & Road (ORR) and other key stakeholders • Providing opportunities for dialogue and networking between members, including a number of Special Interest Groups • Supply chain improvement initiatives • Provision of technical, commercial and political information every week • Export promotional activity, through briefings, visits overseas, hosting inwards visits • Organising UK presence at exhibitions overseas.

3.

RIA SUBMISSION Do you consent for the Border and Protocol Delivery Group to gather and use your personal data and response to this consultation on behalf of the Government, as outlined in the privacy notice?

Yes ☒

No ☐

Please provide your first name: Damian Please provide your surname: Testa Please provide your email address: Damian.Testa@riagb.org.uk 1/8

If you are responding on behalf of a business or other organisation, please let us know its name: Railway Industry Association We would like to understand how the organisation you are responding on behalf of relates to the border (Please note we are not seeking views from individual travellers as part of this consultation). Are you primarily: A port rail terminal, or airport operator A air, land or sea carrier (e.g a ferry operator or airline company) A logistics firm who supports others to move goods through cross-border supply chain (e.g a freight forwarder) An intermediary which supports other organisations to complete documentation and processes required to cross the border (e.g a customs agent) A business which develops software, IT or technology solutions to help others interact with border systems A UK business which imports and/or exports goods or services internationally A non-UK business which exports or imports goods and/or services to or from the UK A business which arranges or manages travel for business or leisure travel (e.g a travel agent or tour operator) A non-commercial organisation that depends upon the movement of goods or people across the UK border A Business Representative Organisation and/or Trade Association A group or association representing commercial and/or leisure travellers An expert on border processes, procedures, and technology Other If other, please specify: Click here to enter text.

☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☒ ☐ ☐ ☐

What region(s) of the UK does your business or organisation operate in (please select all applicable options)? ☒ ☒ ☒ ☒ ☒ ☒ ☒ ☒ ☒ ☒ ☒ ☐

Scotland Northern Ireland Wales North East England North West England Yorkshire and the Humber West Midlands East Midlands South East South West London Outside the UK

If you are responding on behalf of a business we would be interested to know about the size of your business. Is it: ☐ ☒

A micro business (0-9 employees) A small business (9-49 employees) 2/8

A medium sized business (50-249 employees) A large business (over 250 employees)

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Q1a) To what extent do you agree with the vision and draft strategic objectives for the UK border? ☐ ☒ ☐ ☐ ☐

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

Q1b) Please provide any specific feedback you have on the draft vision and four strategic objectives.

The strategic objectives and outcomes look about right. It would be helpful if HMRC could set out how these would differ in practice from the arrangements the UK has applied as an EU Member State in order to demonstrate to businesses what will change in order to guide their preparations for the 2025 Border Strategy and assess whether the UK has the world’s most effective border.

The objectives should not result in additional processes for business to comply with, rather to simplify and streamline the process. The objective should be to create a system that is at least as frictionless as current trade with the EU. Q2a) To what extent do you agree the draft strategic outcomes listed above are those that will deliver the most benefit to the UK? ☐ ☒ ☐ ☐ ☐ ☐

Strongly agree Agree Neither agree nor disagree Somewhat disagree Disagree Strongly disagree Q2b) Please provide any specific feedback you have on the draft strategic outcomes.

The draft strategic objectives of most important to the rail supply sector are:

• Increase the resilience of international supply chains and minimise the risk of disruption at UK ports.

• Create a border that contributes to increasing the UK’s competitiveness as a top destination for international trade and investment.

• Improve the end-to-end user experience for moving legitimate goods into and out of the UK for businesses of all sizes to promote prosperity in all regions of the UK. • Improve the end-to-end user experience for legitimate travellers to promote the UK as a top destination for tourism and business travellers.

Q3) As a trader, what part of the user journey do you think the UK border delivers particularly well?

N/A 3/8

Q4) As a trader, what part of the user journey, illustrated above, do you find most difficult or frustrating?

N/A Q5) Where could government work with industry to improve processes for traders (potentially learning from other countries)?

Taking best practice from other countries where they have superior processes and verifying these with businesses before formal adoption.

Q6) As a trader what are the key drivers of cost for you in moving goods across the border?

While RIA is not a trader itself, our rail supply member businesses tell us that a key driver is the cost of delays and the unpredictability of the length of delays. This makes managing/ mitigating delays more challenging.

Q7) As a trader, what are the key non-financial barriers to moving goods across the border?

While RIA is not a trader itself, our rail supply member businesses tell us that non-financial barriers include the customs administration requirements including the IT system, product/ customs coding and the need for training. If the UK moves away from a risk based approach to checks at the border, resulting delays would represent a barrier. Similarly, if trading partners, including the EU, adopt a more stringent system of customs check, the same concern arises.

Q8) As a trader, do you move goods across the border at various places in the UK or do you focus on a particular route? If so, what drives your choice of port?

While RIA is not a trader itself, our rail supply member businesses tell us the majority of imports enter the UK either via the Channel Tunnel or the Port of Dover.

Q9) As a trader, have you used, or tried to use, an intermediary for your interaction with the border? Why and what was your experience?

N/A Q10) To what extent are supply chains able to adapt in the face of major disruption at the border (i.e. flexing between different routes or modes of transport)?

See the response to Q6. It is the uncertainty of delays/ the length of delays at the border that will influence the use of different routes and/ or modes of transport. Cost of the other approaches will also be a factor in the decision making.

Q11) In what ways might government facilitate the adaptation of supply chains and so enhance their resilience?

Resilience can often mean a diversity of suppliers/ sources in the supply chain. For some goods , however, provided by the rail supply sector, these are only available via importation with a single overseas supplier/ source serving a number of UK rail supply businesses. While COVID-19 has increased the spotlight on the shortening of supply chains, in the circumstances above, this is not always possible or desirable.

In terms of UK based supply chains, the Government could review public procurement policy to ensure it remains relevant in a post-EU world, with a view to considering how it can incentivise 4/8

local sourcing for rail procurement, including rolling stock procurement whether for heavy rail or metro systems. This approach would support investment in skills, UK capability and rail supply chain growth. A diverse UK based supply chain would support resilience.

Q12) As an organisation or business representing leisure or commercial travellers, what part of the traveller user journey do you believe the UK delivers particularly well?

No comment.

Q13) As an organisation or business representing leisure or commercial travellers, what part of the user journey, illustrated above, do travellers find most difficult or frustrating?

Delays at immigration checks/ passport control by Border Force and the visa regime depending on the requirements of individual destinations.

Q14) Where could government work with industry to improve processes for travellers (potentially learning from other countries)?

No comment.

Q15) As an organisation or business representing leisure or commercial travellers, do you believe that all the necessary information and material is accessible to support the user journey for travellers crossing the border?

In our view, greater public awareness of the new arrangements would manage expectations of commercial travellers.

Q16) To what extent do you agree that these six transformations are the required major changes in border delivery, to realise the vision and objectives for the UK border by 2025? ☐ ☒ ☐ ☐ ☐ ☐ ☐

Strongly agree Agree Somewhat agree Neither agree nor disagree Somewhat disagree Disagree Strongly disagree

Q17) To what extent do you believe the proposed transformations would decrease the costs and overall burden on legitimate businesses and passengers crossing the border?

Greatly decrease cost and burdens Moderately decrease costs and burdens Slightly decrease cost and burdens They would not affect costs and burdens significantly They would increase costs and burdens

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☐ ☐ ☐ ☒ ☐

Q17b) Please provide any further feedback on the six transformations set out above.

While our response to Q17a is that the transformations would not affect costs and burdens significantly, this is on the proviso that these transformations are implemented in such a way as to achieve this outcome. The devil is in the detail. Some of the proposed transformations may not be realised for several years, e.g. Transformation 6 Shape the future development of border worldwide.

Q18) Which policy and legislative changes would be required for the delivery of these major transformations in the way the border operates?

In our view, the Government is best placed to assess which policy and legislative changes would be required.

Q19) What adjustments may be needed to specific international instruments, conventions or standards to enable the UK to deliver fully on its 2025 Strategy?

In our view, the Government is best placed to assess what adjustments may be needed.

Q20) How can government best support and incentivise industry to work with the public sector to deliver the 2025 border?

There needs to be regular and effective engagement with industry in the development of how the strategy will be implemented. The Government could invite businesses to take part in a pilot arrangement to help validate implementation ahead of rolling this out more widely.

Q21) How can government help the border industry and users of the border to innovate to develop better border processes, systems and technology (for example by setting standards, creating APIs, or putting in place test-beds and other enablers of innovation)?

In our view, the examples detailed in the question above appear to be sensible. Essentially users of the border want a fast, safe, secure and seamless process so that any support that helps to achieve this is welcome.

Q22) Are you able to access the skills and information that you need to trade effectively across the UK border? If not, what are the biggest barriers?

In terms of access to skills, if these are not present currently within a business, they can be acquired but at cost. This can impact on competitiveness and would likely affect SMEs more than larger businesses.

Q23) Please suggest any ways you believe government and the border industry could build the capability of frontline staff (both public and private sector) who support users of the border.

Border staff should be capable of delivering an efficient and consistent service, thus investment in such capability should be prioritised.

Q24) How might the role of intermediaries (e.g. customs agents, freight forwarders, customs bureaus) need to evolve in response to future changes in trade, business and the UK’s border strategy?

RIA does not have expertise in this area.

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Q25) What technological solutions would improve the experience of trading across the UK border, enabling swift and secure clearance for legitimate goods?

While this is not an area of RIA’s expertise, technology systems, such as blockchain, are already being used to facilitate international trade. RIA suggests the Government review the technological data-driven approaches currently being used and assess what is appropriate for the UK. Traceability and verification will be key factors in any system.

Q26) What technological and IT solutions would make the experience of travelling across the UK border as a passenger smoother and more secure?

Biometric passports have already shown they can accelerate the pace at which travellers cross the UK border. Could the use of such passports be extended to other countries for non-UK citizens entering and exiting the UK? Q27) Are there opportunities to change the way data is shared across supply chains and with government to improve the operation of the border? Are there any legal or commercial barriers to this?

Likely commercial barriers include the market sensitivity of data that is confidential to an individual business. To an extent, if the data is relevant within a business supply chain, it is likely already being shared with the supply chain partners. In terms of Government involvement, this should seek to avoid adding either complexity or increased bureaucracy placed on a business. The Government could use commercial data that is readily available rather than creating ‘customs data’.

Q28) How do you see the technologies for sharing and validating data within supply chains changing between now and 2025? How might this affect the operation of the border?

RIA does not have expertise in this area. That said, once can expect technological changes/ advancement by 2025 give the rate of advance in recent years. The border system will therefore need to account for future proofing.

Q29) How easy is it for you to access the information you need to move goods or travel across the border? What obstacles are there to obtaining the data you need and sharing it with others (e.g. government, people in your supply chain, carriers)?

RIA does not have expertise in this area. However, Government might want to think about whether it would be beneficial to mandate the use of commodity codes on manifests in order to reduce the number of consignments placed on hold due to insufficient description of the goods.

Q30) To what extent is the visibility of security checks at the UK border important for travellers’ and traders’ sense of safety?

In our view, there should be a visible deterrent to, and action taking against, illegal trading and activity. Security checks at the UK border should be carried out on a risk basis taking into account, inter alia, trading history, nature of the goods.

Q31) What do you see as the advantages and/or disadvantages of moving border checking facilities away from the physical border crossing point? How could this be improved across the country to support the Government’s levelling up agenda?

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RIA supports the moving of border checking facilities away from the physical border if it helps to mitigate the risk of delays at the border. Such a system though should not result in a greater amount of customs checks. For example, the customs system could take steps to reduce the number of declarations required, combine data, and reduce the need for two or three declarations for the same import. There could also be a system for pre-approved traders. Such facilities, which may not exist currently, could be in provided at all the major points on entry into the UK for goods.

Q32) How could border checking facilities be designed to reduce delays for legitimate goods and people, whilst still facilitating secure and safe interventions?

While the principle sounds laudable, how would ‘legitimate goods’ be defined and how would the system design out fraudulent practice, i.e. ensure only legitimate goods entered into free circulation. Spot checks to ensure only legitimate goods clear customs. Essentially, the border operating system should be risk based. It would be helpful to understand the practical benefit to UK importers of the suggested facilities, i.e. how much difference would it make and whether there would be a cost to businesses for using the facilities.

Q33) Please provide any other feedback on the development of the 2025 UK Border Strategy not specifically addressed by any of the questions above.

RIA has four key asks to help shape current and future UK trade negotiations, which are equally relevant to the 2025 Border Strategy: 1. Rail to continue to be included in the negotiation of free trade deals – UK rail exports are a real growth opportunity.

2. Access to an appropriately skilled workforce and mobility for skilled UK workers – the industry needs workers at all skills levels to support its ability to compete globally. Mobility supports UK exports of world class rail goods and services.

3. Consistent application of standards - RIA would want to see mutual recognition/ equivalence and non-discrimination as core principles in all our trade agreements. This would support the competitiveness of the UK rail supply sector and ensure economies of scale.

4. Smooth cross border trade rules – which minimise cost and delay and which avoid trade distortionary tariffs as much as possible.

If you would like further information, please email RIA’s Policy Director, Kate Jennings (kate.jennings@riagb.org.uk) or Senior Policy Manager, Damian Testa (damian.testa@riagb.org.uk).

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