A ferry good opportunity

Newhaven and Dieppe are two cross channel communities that have been linked for over 170 years for rest, play and work. But with Brexit, what does it really mean for this historic partnership? And what will it take to keep our link prospering for the next 170 years?

Let’s address the issue of Brexit first. The big question is has the recent two year negotiation undone all the value that the 170 year marriage between two ports has created. At its most basic level, it will mean some day to day logistics and paperwork changes for the movement of the 320,000 people and products that flow between Newhaven and Dieppe every year.

However, the bigger ports either side of Newhaven and Dieppe will struggle far more simply because the volume of people and products is far greater. And this fact presents the Newhaven to Dieppe route with a glorious opportunity. Given that the UK cannot sustain itself in terms of food and energy production, the Newhaven to Dieppe route could again become the path of least resistance between Paris and London. 

The reality is that the medium to long term imperative is not about Brexit. It's the economic, social and environmental action we put in place now to sustain the link between Sussex and Normandy for another 170 years.

The economics of it all

In this world of service based economies, there is nothing better than a stark reality check. By pausing for a moment in Newhaven’s Hope Pub or in the Tout Va Bien bar in Dieppe, you can observe real people on both sides of the channel prepare for their journey on the Newhaven Dieppe Ferry. These are the people and businesses who keep each local economy buoyant. This is the real economy in action. Not transactions on a financial services spreadsheet but real visible flows.

Around the time of the UK Brexit vote, the Seine Maritime region in Normandy signed on the dotted line and committed to a five year investment in the Newhaven Dieppe Ferry Route. This timescale was way past the Brexit process deadline. Whereas most UK companies ceased balance sheet investment or paused it during this period, the French took a different view. This was a medium term investment for them because of the economic and social value of a long term link. This was to be around a 125m euro investment decision. This is a significant investment for the benefit of Sussex.

To put this into context, this decision is the equivalent of ￡25 being added to the council tax bills of every UK South East resident. The investment effectively says “The Newhaven-Dieppe ferry is an essential service to the local economy alongside emergency and council services.”

So what’s the justification? Around 51% of the (GVA) or Gross Value Add for Dieppe is generated by the ferry. Without this important link the port town will struggle. This is no different when a northern UK city’s links come under pressure to be cut. It puts pressure on jobs, commerce, culture and people’s hopes and dreams. So you simply have to invest.

More UK focus needed

Yet in the UK there seems little visible interest in properly understanding the value of the ferry link to the local economy. The Coast to Capital LEP has prioritised Gatwick expansion as its infra-structure investment priority. From a Sussex and Normandy perspective this encourages people and products to simply fly over our two regions.

The South East LEP (SELEP) has a good understanding of how port infrastructure benefits economics, society and impacts the environment. Newhaven could still benefit directly from the lessons other ports have learnt such as Ipswich, Harwich, Dover and Ramsgate.

Put simply, there is still much work to do to promote the importance of the link between Newhaven and Dieppe but time is running out.

A slow car crash with time to act

The best analogy for the opportunity here is that it's like watching a slow car crash where you have time to react and do things differently to avoid it. There is a big level of certainty here. There will be a board meeting in three years’ time in Normandy where the current investors sit around a table, review a contract for the economic and social return on investment and say “oui” or “non” or maybe “peut-être”. 

That decision will also be stacked up against other Normandy local authority priorities for infrastructure investment. So the opportunity to grow this 170 year old connection is clear and very present. 

Deploy the economic air bags

So what sort of air bags can we deploy to soften the blow of the crash? Or better still, what kind of systems can we install into the car to prevent the crash from happening altogether?

Economically should one side of the channel solely fund a link with dual benefits to both economies and societies? No, of course not. It means that only one side of the channel is incentivised to really care about making the link thrive and prosper. So what needs to change now. Four things in our humble view.

1) Long term fair investment

The solution for financing the link between communities is simple and established elsewhere. It's an opportunity to match the cashflow between the 320,000 people who cross the channel with the long term investment power of the UK and French pension funds. 

Imagine the proceeds from customers using the ferry funding someone being paid a pension long term because their pension fund manager wants to invest in the real economy. This is long term infrastructure investment in action. 

On the current investment in the link there is an immediate opportunity to develop a stronger sense of Environmental, Social and Governance (ESG) oversight of the links performance. For example in the asset management industry, even a 5% shareholding means that you can influence the ESG performance of the business. A 100% investment should mean a whole lot more influence in terms of how the operator is visibly delivering customer satisfaction, loyalty, environmental efficiency etc. 

Active stakeholder groups such as customer user groups can play an important role in bringing accountability and sustainability into investments like this if they funded and positioned correctly in the governance of the investment. This is what needs to be done to ensure better accountability.

2) Quantify the Social Value

Imagine if we could quantity the social value of the infrastructure link between Sussex and Normandy in Pounds and Euros. We want the communities of Sussex and Normandy to have their say on an upcoming piece of work. This is not a new approach. It has been done already where ferry services and bridges in Scotland or Norway needed social arguments to add to the economics of infrastructure investment. Organisations like the Social Value Portal are already helping us in our work on both side of the channel. 

3) Help our communities to play, rest and work together

We are only just starting to realise the huge cultural benefits between our two communities but there is more to do. The human links between places make people inquisitive and ultimately make them want to travel. Cross channel food festivals, educational placements, business networks, music festivals and even a film project has already built more bridges between the Newhaven and Dieppe communities than ever before.

The best cultural relationships occur where play, rest and work develop in that order. Collaborative organisations such as Trans Manche User Group, Grand Dieppe and Newhaven Regeneration Group are already working together to link our communities across the channel. In fact, we have an INTERREG funding bid going in to accelerate our work to improve these links between our two regions. We simply have nothing to lose and everything to gain!

4) Clean, Green, Marine in Action

And finally there is an energy and environmental problem here that could be solved by this link. We already know that pollution in the air and in the oceans needs urgent attention. The Newhaven Dieppe Ferry service provides an investment opportunity to experiment with Clean Green Marine innovations such as hull bubble technology to reduce hull friction. We could be turning local waste into alternative fuels for the ferry service on both side of the channel too. The current fuel bill to keep the ferries running for one year is approximately 9 million euros. This is an opportunity to innovate and decarbonise.

In summary lets be custodians…

If we think for a minute that the current 170 year relationship between Newhaven and Dieppe is just a waypoint in a much longer journey, we can only ever be caretakers when making decisions. Our role as custodians is to make sure that we deploy the best and fairest economic model for the benefit of both communities. To do this we need, all stakeholders need to make a contribution not just financially but also by giving the very people who will benefit the chance to mould and shape the ferry service of the future. That will be the key to its success.

Graham Precey

• Big Thinker - Social Entrepreneur and Social Investor
• Co Founder - Newhaven Regeneration Group
• Trans Manche User Group (TUG) Board Member
• Former Head of Sustainability for Legal & General Group Plc.

Date: 1st Feb 2019