‘Now essential’ sector sees Article 50 extension, oil logistics boss claims

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An oil and gas sector logistics expert has said the government should ask the EU to extend the Article 50 period in the interests of the industry’s traders with the bloc.

Adam Johnson, director of Leeds-based Tudor International Freight, said there were now fewer than 70 days to go before the UK was scheduled to leave the EU. It was therefore becoming impossible to see how departure arrangements acceptable to the bloc and most British MPs could be put in place by this deadline.

Mr Johnson said extending the Article 50 period was better for oil and gas businesses trading with the EU than the current legal position, under which the UK will automatically leave on 29 March. This was because the latter arrangement now contained a very real risk of a no-deal departure, which would greatly harm these companies.

He explained: “For a withdrawal agreement to be put fully in place, not only do changes to the current draft have to be negotiated with the EU and the revised text approved by Parliament but about 800 pieces of other legislation will be necessary to ensure it’s legally executed too. And those are just the key domestic requirements – there are other demands, such as ratification by the EU, as well – so it’s now very difficult to see all this happening by the current deadline.”

Mr Johnson said Labour MP Yvette Cooper hoped to table a crucial amendment to a motion in the Commons next week. This would, if passed, force the government to ask the EU to extend the Article 50 period until the end of 2019 if no withdrawal deal had been agreed by 26 February.

He said: “Many oil and gas sector EU traders will now be wishing Ms Cooper well with her amendment.”

Mr Johnson said the need for a deadline extension reflected the fact that no real progress had been made on the Brexit issue since the draft withdrawal agreement and accompanying political declaration were published in mid-November.

He said: “Following MPs rejecting her withdrawal deal by a massive 230-vote margin, the Prime Minister consulted members of other parties on the way forward. But Mrs May then made a statement earlier this week indicating she’s still focused on gaining enough votes from Conservative MPs and their Democratic Unionist colleagues, who provide their majority in the Commons, for a document closely resembling her original deal to pass.

“This only seems possible if she can persuade the EU to provide a legally-binding commitment that the so-called backstop, guaranteeing an open border in Ireland, will apply merely for a limited period after we leave. However, the EU has already said repeatedly that it won’t agree to this, as, by definition, it would make the arrangement no longer a backstop.”

Mr Johnson said exactly what a no-deal Brexit would mean in practice for oil and gas sector businesses had been further illustrated recently when the EU published its plans for such an outcome.

He said: “These reveal that planes and lorries from the UK will be able to continue flying and driving to and from the EU after Brexit, but not between points within it, and only then for a year and nine months respectively.

“On top of that, these arrangements depend partly on UK operators following EU rules. The European Commission can unilaterally revoke the haulage system at any time if it feels UK operators have broken its regulations on drivers’ hours, for example.”

Mr Johnson added that, after a no-deal Brexit and this transition period, the number of permits UK haulage operators could obtain to enter the EU was likely to cover only about five per cent of the journeys they currently made.

He said: “These, and other consequences of a no-deal Brexit, make it imperative that this fate is avoided. Given how things stand and the very limited time to 29 March, we feel it’s now essential that the Article 50 period is extended.”

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