THE LOTUS WEEKLY BREXIT ROUND-UP (2/3/20)

Heathrow third runway ruled illegal over climate change

The Court of Appeal on Thursday ruled that the UK government’s decision to build a third runway at Heathrow was unlawful.

Environmentalists brought the case to court claiming the decision failed to take into account climate change commitments.

The government says it will not appeal the decision but Heathrow airport has said it will.

The Business Travel Association said it was supportive of expanding Heathrow’s runway capacity as long as it was done within a framework of effective climate commitments.

EU Trade Talks Begin Today

David Frost, the UK's chief negotiator, and Michel Barnier, the EU’s chief negotiator arrive in Brussels today with teams of advisers and civil servants to start negotiating the trade deal between the UK and EU. The teams will be spread across 10 working groups, focusing on all sectors and areas of concern from fishing to financial services to truck drivers' cross-border access.

They enter the talks having squared up beforehand, and it is clear there will be disagreements.

Last week, the UK and EU both published their final mandates on their positions.

The UK Government stated that it will suspend talks in four months if significant progress has not been made. But commentators agree that nothing is going to get decided until the autumn.The Times believes that there does seem to be much in the UK mandate that the EU will be happy with. If formalised, the government's commits to come to an agreement that preserves current UK standards in environmental and labour laws. It also opens the door to an agreement on fishing in return for access to financial services. Both sides will be sovereign, but with the sovereign right to make concessions.

Negotiations are to take place once every two or three weeks from now until the summer at least, alternating between Brussels and London - with the prime minister insisting a deal must be struck by the year's end.

There are still concerns about checks and controls in the Irish sea however.

Negotiations for a US deal are also beginning today.

Immigration

The Home Office unveiled its new immigration plans last week to bring overall numbers down and cure the economy’s reliance on “cheap labour.” The new points-based system, which will come into effect in 2021, will treat EU and non-EU citizens the same. Those with the highest skills, such as scientists and engineers, will be prioritised. Applicants will have to speak English and most will be required to have a job offer paying at least £25,600. Critics warned that the new regime could lead to disastrous labour shortages in the care, farming, construction and hospitality sectors.

Coronavirus: Covid-19

Travel News

On Friday, ITB Berlin, which was expecting over 130,000 delegates, and due to take place this week, was the most recent major world event to cancel and joins the Mobile World Congress, the Geneva Motor Show, global fashion weeks, Milan Furniture Fair, Facebook’s Global Marketing Summit, the Chinese Grand Prix and two Six Nations Rugby matches to have cancelled.

Big European companies have also started to ban or restrict business travel with Nestle, L’Oreal and Unilever all reported to be restricting travel programmes and joining other global companies such as Ericsson, LG, Google and Apple who had previously said they were restricting travel to China.

Trade associations such as ETOA and ABTA have confirmed that tour operators will be running tours and going ahead with holiday itineraries unless Foreign Office or other Government bodies advise otherwise.

ABTA said that it had been liaising with the FCO and regularly updating advice for members and customers as the situation has developed. They said that their other main priority is on providing accurate advice to the travelling public and providing some perspective to reports – covering the scale of the issue, the currently very limited nature of travel restrictions in place by the FCO and practical steps people can take to protect themselves.

On Friday ETOA released an update with concerns over three origin markets: China, Japan and North America for Europe.

Demand from China had been good, and started the year 11% up on 2019, but there has been no tourist departures since 27 January. Bookings from Japan to Europe started 2020 with bookings running 15% up compared to 2019. Travel held firm until February, where a combination in a disruption to airlift and nervousness started to erode the market.

Since the declaration of the outbreak in Italy, bookings from the US have stalled and cancellations are starting. The US, the most important market for Europe began the year 10% up. The Coronavirus outbreak has occurred during a low season for travel, but what is normally the main booking period for people coming to Europe from North America.

The Foreign Office in the UK is advising against all travel to the Hubei region in China and all but essential travel to 11 towns in the Lombardy region of Italy, Iran and parts of Korea. It also has specific advice for those travelling in or returning from eleven other countries. Many other countries have also implemented similar travel restrictions.

Tourists staying at a Tenerife hotel that has been on lockdown after five cases of the coronavirus were detected there are free to leave if they test negative for the virus, regional health authorities said on Sunday.

Virus Update

Currently there are over 87,000 cases of the virus Covid-19 now reported worldwide, and over 3,000 deaths. Whilst most cases are still in China a secondary peak outside China has been growing with hotspots in Iran and Italy and cases in the UK continue to rise.

1. The virus has spread most in China, but has spread to 50 countries and is in all continents apart from Antarctica with 83,391 confirmed cases reported worldwide

1. It has been widely acknowledged by bodies such as the WHO that whilst the outbreak is serious and of concern, much of the economic impact is related to panic, fear and the anticipation of its impact, which is causing a dive in consumer confidence. The balance between containing the virus to prevent a pandemic and causing unnecessary economic damage as a result of containment, has been fraught

1. Overall, official tourism bodies are calling for cooperation across the industry, including a measured, evidence-based response to information provided by the FCO, the World Health Organization, and other health officials. Bodies such as the World Travel and Tourism Council and the London School of Economics Global Health Initiative are now calling for borders to remain open and for Governments not to impose disproportionate and inefficient measureS

1. Last week the markets went into freefall. Stock markets endured their worst week since the 2008 financial crisis, with the FTSE 100 plunging more than 11% and America’s Dow Jones diving 12%. On Thursday 27 February, the Dow Jones saw the sharpest points-drop in history which had followed six days of market decline, wiping more than $150 billion off the markets and triggering concerns for a global recession. In total about $6 trillion has been wiped off the value of global stocks. Although officially, consensus, according to The Times is that Covid-19 has so far caused a $1 trillion deficit.

In mid-February 2020, WTTC chairman and Hilton president and chief executive Chris Nassetta told investors he expected the impact of the epidemic to last six to 12 months. He suggested: “Three to six months of escalation and impact from the outbreak, and another three to six on recovery.”

The Global Travel and Tourism Resilience Council have said “Given the latest developments, we should expect the impact to extend at least towards the higher end of this estimate.” They went to say that: “the sector will recover. But first the outbreak must be contained and pass its peak. In the meantime, the industry should seek to disseminate accurate information, display flexibility and act co-operatively. The concerns of travellers are real, as are the difficulties facing businesses and communities dealing with the fallout.”

The International Air Transport Association (IATA) has published an initial assessment of the impact of COVID-19 which estimates total global lost airline revenue could be as high as $29.3 billion, with a potential 13% full-year loss of passenger demand and $27.8 billion revenue loss in 2020 for carriers in the Asia-Pacific region. Airlines registered in China would be most affected with $12.8 billion lost in the China domestic market.

The WTTC report Crisis Preparedness, Management and Recovery noted: “Effective management of a crisis requires rapid activation of emergency plans as well as quick, accurate and transparent communication. We must hope inaccurate communication is kept to a minimum and even closer cooperation between public and private sectors is encouraged.”