The Humber region voted to leave the European Union and businesses now await the outcome of Brexit negotiations
Upstairs in Hull Maritime Museum, exhibits recall cargo ships docking from Rio de Janeiro, Cape Town and Bombay, and Scandinavian steamer routes. Hull’s global connections reflect both the challenges and opportunities the region faces as it negotiates the choppy waters of Brexit.
Associated British Ports’ (ABP) four Humber docks – Hull, Goole, Grimsby and Immingham – handle more than 65 million tonnes of cargo annually. The region is a net beneficiary of European Union funding and has a strong agricultural sector, supported by the EU’s Common Agricultural Policy. It also voted resoundingly to leave the EU. For the region, like the country as a whole, much depends on the decisions reached by EU and UK leaders.
The government’s apparent intention to leave the Customs Union is prominent in the debate, in part because of concerns about the pressure this could put on the Channel ports. “There’s anxiety about what happens in Dover,” says David Leighton, ABP group head of corporate affairs. “If the French authorities in Calais chose to implement disproportionate new checks on cargo, this could cause serious disruption.
“There’s an opportunity there for the Humber to help businesses that are anxious about the risk of disruption at Dover, to help recalibrate and secure their supply chains.”
Free ports could be the way forward after Brexit
ABP has invested £50 million to double container handling capacity on the Humber since the referendum, so the ports could play a crucial role in trade resilience if this scenario does arise. Shifting freight to the Humber could have an environmental benefit, Mr Leighton adds, reducing the number of lorry miles on UK roads and taking pressure off the congested road network in the southeast.
Moreover, cargo moving through ports, such as Southampton, which currently handle mainly non-EU trade, flows smoothly and efficiently. According to ABP, only around 1.3 per cent of the total volume of goods arriving in the UK from outside the EU at Southampton is stopped for checks.
Some have a different vision for the Humber ports that goes beyond this. Conservative MP Rishi Sunak, author of the Centre for Policy Studies report The Free Ports Opportunity: How Brexit could boost trade, manufacturing and the North, outlines plans for a free port, an area inside a country geographically, but considered outside for customs purposes.
Free ports “are flourishing all around the world, except in the EU”, Mr Sunak wrote. “Post-Brexit they could play an important role in signalling Britain’s openness to the world, as well as reconnecting the nation with its proud maritime history.”
Humber as the export highway for the North
Melanie Onn, Labour MP for Great Grimsby, is less enthusiastic. “Free port status could assist with providing tax and duty-free imports or exports and boost trade, if granted,” she says. “But it is not as straightforward as imports being tariff free.”
For example, Grimsby is one of the world’s leading locations for seafood processing. According to Grimsby Seafood Village, 80 per cent of the UK’s seafood products are manufactured there. As Ms Onn points out, the majority of fish imports coming from Norway and Iceland arrive by road from other ports for processing. “Therefore, one of the biggest issues will be about making sure there are limited delays at EU member state checkpoints and a streamlined process for authorisation documentation,” she says.
The initial challenge is that the Humber estuary is the great export highway for the north of England, pointing to our main export market which is continental Europe
ABP sees the potential, particularly for Humber International Enterprise Park, just outside Hull. “It’s one of the largest port development sites in the UK, a huge area of development land next to deep water,” says Mr Leighton. “If we can draw a line around areas of land like this at UK ports and give them free port status, it just adds to the UK’s armoury in terms of attracting new investment, particularly in manufacturing.”
Richard Corbett, Labour MEP for Yorkshire and Humber, says: “The initial challenge is that the Humber estuary is the great export highway for the north of England, pointing to our main export market which is continental Europe.
“If we’re outside the Customs Union, this will be undermined through barriers that will involve extra paperwork and queues for controls at the ports. That’s what is involved, under World Trade Organization rules, with trading with the customs unions from the outside.”
How Brexit could impact local business
Local companies are waiting to see what a final Brexit deal could look like. “For us it’s been a good thing so far because of the movement in currency – we used that as an opportunity,” says James Sweeting, director of Lincoln & York. The coffee-roasting company based in Brigg supplies thousands of coffee shops nationwide. The drop in sterling means “you’re more competitive abroad and exports are 30 per cent of sales in our coffee business”, he says.
Hornsea-based Heald, manufacturers and installers of hostile vehicle mitigation systems, the roadblocks, barriers and bollards frequently seen at border crossings and similar sites, has a similar positive attitude.
“I think whatever happens we may feel a bit of pain initially, but in the end it will work out fine. We are a resourceful nation and savvy businesspeople,” says managing director Debbie Heald. “A lot of our exports are outside of the EU, so hopefully will not be affected.”
Local business expects government to live up to its promises
Yorkshire and the Humber is a net beneficiary of EU funds. For example, the Humber Local Enterprise Partnership, which helps attract investment to the region, received £79.6 million from the European Regional Development Fund and European Social Fund for the period 2014 to 2020. The region’s universities also benefit from research funding.
“The big question is how much of a hit our public finances are going to take with Brexit; there’ll be a lot of pressure on public expenditure in every single field,” says MEP Mr Corbett. “The idea that the government will simply replace all the EU support with national funds is not something that can be relied upon.”
In the meantime, stakeholders throughout the region are awaiting the outcome of negotiations. “People in Grimsby are expecting the government to live up to the promises made through the referendum, that Brexit brings opportunities and the UK will be better off,” says MP Ms Onn. “Now is the government’s opportunity to prove it by committing to ensure that individuals and businesses in Grimsby will be no worse off as a result of leaving the EU.”