Concerns over future of Port of Sunderland as Brexit approaches
Uncertainty around Brexit could see a dip in trade at the Port of Sunderland, councillors have heard.
In recent months, the port has seen huge investment to help it expand its offering to the region’s automotive sector alongside securing contracts with offshore renewable energy firms.
Investment has also included a huge new Liebherr LHM 420 crane to boost operations on the site.
On January 17, Sunderland City Council’s Scrutiny Co-ordinating Committee heard business competition and the unknown outcome of Brexit was having a “negative impact”.
A budget report, presented to councillors, said Brexit was “impacting upon the willingness of companies to invest and trade significant volumes of cargoes” at the port.
While the council-owned port will still trade profitably, it added, there could be a predicted £375,000 drop in trading surplus in 2019/20.
Coun Niall Hodson, speaking at Sunderland Civic Centre, said the threat of Brexit was having a knock-on effect on money available to spend for residents.
“This is terrifying to me to see this, this is not a government funding cut or anything like that,” he said.
“We have a duty to make clear to people in the city even the threat of a ‘no deal’ Brexit is having an actual financial cost and removing money for services directly to residents to cover lots of trade.
“I find this really troubling.”
Head of corporate services on the council, Jon Ritchie, responding, said the port was still profitable despite the pressures.
“From memory, the medium term plan expected (the port) to make a profit next year of around £800,000,” he said.
“This is reducing the profit target, so it’s still going to return a surplus of around half a million pounds for the council so it’s contributing for its cost plus towards the budget.”
He added in the medium to long term, several plans were in place to increase income and surplus at the port including extra funding schemes and investment.
Coun Bob Francis also stressed the potential job benefits from offshore engineering contracts.
“If those projects come to fruition and Sunderland gets its fair slice of the cake, we will have the opportunity of developing proper five-year engineering apprenticeships and similar things in this city,” he said.
“This means young men and women can look forward to a proper training programme with a proper job at the end of it.”
A trade surplus measures the ‘balance of trade’ where the value of exports exceeds that of imports.
Under current capital investment plans around £2million is set to be invested into the port over the next four years.
In recent weeks however, the North East Chamber of Commerce warned of the potential impact of a ‘no-deal’ Brexit on Sunderland’s automotive, advanced manufacturing and digital sectors.
This included short-term disruption around exports and the potential of North East firms relocating or making cuts.
Coun Darryl Dixon agreed that the Brexit process has led to some companies “holding off on investment to see what happens.”
“It’s right to keep (the port) going until we know what’s going to happen in the future,” he said.
“If these plans come to fruition we’re up and running in a good way, so it’s certainly the right thing to do to keep investment going.”
And Coun Colin English added it was important to safeguard services going forward.
“Whatever we do have at the moment, we don’t know what’s going to happen with Brexit,” he said.
“I do think it’s massively important that we try to protect what we have got for as long as we have got it,
“Quite frankly, regarding what happens after Brexit, this document might mean nothing, there could be a complete crash for all we know, the economy could collapse.
“If things come to fruition, fantastic, if they don’t, at least we have gone down trying.”
The council’s final budget for 2019/20 is set to be agreed in March this year.
Chris Binding , Local Democracy Reporting Service