(7 years, 9 months ago)
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Baroness Randerson
To ask Her Majesty’s Government what assessment they have made of the impact of Brexit on the transport sector in the United Kingdom.
Baroness Randerson (LD)
My Lords, across the world trade normally takes place most intensively with our neighbours. There are exceptions to that, of course—not much passes between North and South Korea, for example—but, setting aside countries with major ideological and diplomatic differences, it is obviously sensible to concentrate on trade with your neighbours. Distance costs time and money.
Even the vote of 23 June did not totally undermine those basic truths. It was possible for us to leave the EU while remaining in the single market, leaving intact the basic principles of successful international trade. However, the Government have decided to go for a very hard Brexit dressed in the clothes of bold internationalism. We are turning our back on Europe and seeking friends across the other side of the world.
Whatever the agreements made for trade in goods or services with the remaining EU and the rest of the world, trade will grind to a halt if we can no longer transport our goods or personnel. Our international trade stands on the shoulders of our airlines, HGVs, shipping and ports and our railways, so transport agreements must be prioritised. We are part of EU transport agreements which will have to be unpicked and hopefully replaced. There is a host of agreements with countries beyond the EU to which we belong as EU members, and these too will have to be replaced. That is the first step to stay where we are at the moment. The transport industry’s economic impact underpins all the rest. Get this wrong and nothing functions properly, from the City of London to the car industry in Sunderland.
I start with aviation, worth £52 billion a year to our economy. We have the third-largest aviation network in the world, and 54% of scheduled commercial flights from the UK go to the EU. The single aviation market has revolutionised the way people travel, with the advent of cheap flights. Airlines can have a base in one member state and operate on a cabotage basis between other member states. Therefore, easyJet can fly not just between the UK and Italy but between Germany and France or between airports within Italy, for instance.
Obviously, airlines want to carry on doing this. Post Brexit, they want the UK to become part of the European common aviation area, but this would require acceptance of EU aviation law. They also want us to remain a member of the European Aviation Safety Agency. Unless our airlines continue to get unfettered access to EU markets, they warn of inevitably rising air fares. They need to continue to employ staff from across Europe, with current employment rights protected. There is a host of other issues, such as security, repair and maintenance arrangements, pilot licensing, the availability of slots, air traffic management and so on.
Then there is the open skies agreement between the EU and the US. We are a member by virtue of being an EU member. We are part of a single airspace block with Ireland, which will of course remain in the EU. Therefore, continuing as a part of the open skies agreement will require obvious compromise, as it will involve sharing competence with EU institutions.
The road haulage industry has a similarly complex reliance on an open EU market. Even our domestic road hauliers will be impacted by withdrawal from the EU because 60,000 EU nationals now work in UK domestic transport. Any EU operator with an international operator’s licence can transport goods between any EU countries. EU rules underpin much of the regulatory regime for the road haulage sector, covering qualifications and licensing, drivers’ hours and tachograph standards, vehicle standards, roadworthiness and so on. There is significant co-operation between enforcement agencies across Europe, and safety on our roads is dependent on EU agencies and EU standards.
The main concern of the industry is that new certificate of origin rules, permits or quota systems would lead to delays at ports and add to the cost of goods. It points out that our ports have physically developed without the space or systems to allow significant amounts of paperwork to be processed. To transport a lorry load of goods from London to Milan in 1988 required 88 separate documents; it now requires one. I think that that says it all. UK ports handle 95% of imports and exports by weight. About half our maritime trade is with the EU. The British Ports Association estimates that, based on current trade levels, HMRC will have to process about 300 million additional customs declarations each year. There is a major fear of bottlenecks and disruption at ports.
I come now to railways, where there is concern about the bedrock of staff employment rights, passenger rights and safety. Mostly, of course, trains run entirely within our borders, but the obvious exceptions are Eurostar and the freight trains running through the Channel Tunnel. The tunnel carries a quarter of the UK’s trade in goods with the EU. Of course, the dream of the Channel Tunnel is far older than the EU, but it has been built and run as part of the EU. The possibility of tariffs and quotas will have the same impact on its operators as it will on the ports. Eurostar is a UK company and its whole purpose is to link us with Europe. It has thrived on the free movement of people. The EU directive establishing a single European railway area, with common rules and principles, has opened up markets in Europe. The costs are reduced by mutual recognition of qualifications and a consistent approach to safety. Eurostar wants to continue to recruit strongly from within the EU and to work closely with rail operators in Europe.
The themes I have spoken of are echoed by the bus and coach industry. It too wants to be able to trade freely with the EU—to take passengers without needing a visa and to bid for contracts in other states. It too values the simplicity that the EU has brought and the rights of access to those markets.
I want to make a final point on infrastructure development and the Trans-European Transport Network. It developed a transnational approach to infrastructure development and is a vital source of funding. It was expected to provide between 4% and 6% of the overall cost of HS2, for instance—a significant black hole for the Government now to fill.
There are some recurring themes: free access to markets with no tariffs or barriers; free movement of labour; a common and consistent approach to maintaining security, safety, regulation, employment rights and consumer rights; the right to invest on equal terms throughout EU member states; and common environmental standards. I have not had time this evening to explore the need to work together across the European Union on vehicle standards in order to improve air quality.
Those are not my demands; they are all taken from statements made by the major transport trade bodies and companies. The transport industry wants the future to look as much like the present as possible. It believes that the EU has in general enabled its businesses to expand and thrive. I have no doubt that the Minister will talk this evening of alternative markets—a big, bold, beautiful Brexit, with Britain trading with the US, China and Australia. However, I am not comforted by last week’s White Paper.
I have no doubt that major shipping companies and the big airlines will adapt and prosper over time, but there are huge parts of the transport industry which cannot do that: the markets of HGV operators have to be among their close neighbours; for ferry companies, long-distance options are not possible; markets in China are no use for bus operators which currently take tourists down the Rhine valley; and for Eurostar and the Channel Tunnel, trade with Europe is their whole purpose. For all of them, the Government’s decision to leave the single market cuts at the roots of their business.
Lord Patten (Con)
My Lords, rising as though from the Bench of Bishops, I take as my text this evening what the Latvian Prime Minister, Mr Maris Kucinskis, said during the weekend summit in Malta:
“What is most important is to think about a beneficial partnership … Every member state is looking to build the best possible trading relationship with the UK and I think that the whole Union will also benefit from a strong trading relationship”.
Those remarks certainly apply, as the Prime Minister of Latvia said, to transport as to everything else economically. He represents the new generation of younger, realistic EU leaders—still, small voices of calm who should be listened to very carefully.
In the end, my assessment of the impact of Brexit on the transport sector is that it will not be very great. That is because I think that the European weather is changing. Increasingly, grown-up voices, also since Christmas, have been urging the need for a change in the European weather, urging amicable separation, and no one more economically grown up—and, to me anyway, personally more admirable—than the brave German Finance Minister, Dr Wolfgang Schäuble. He was saying just that at Davos, as well as in a very carefully worded interview over the weekend in Tagesspiegel. He said that the euro was overvalued in relation to the German economy, continuing:
“We want to keep Britain close to us. London’s financial centre serves the whole European economy. London offers a quality of financial services that are not to be found on the continent”.
I respectfully agree with the man who has been German Finance Minister so successfully since 2009. What he says is critical for UK transport and much else in other economic sectors post Brexit. Flows of capital into and out of the City, where I work, are critical to the domestic economy. Had Dr Schäuble said the opposite, panic would probably have set in in the media overnight, and I think it is strange that the good news of his very positive views going forward have not yet been any more than scantily reported.
For the generality of people in the country at the moment, although the noble Baroness, Lady Randerson, made her points so well, the transport matters following from Brexit are not of much concern yet—perhaps they will be later. People are more concerned about the chaos on British railways and on the Underground. That really need rapid attention. TfL and the mayor need to get going and sort out what is going on in London Underground. Above all, we need to bring about existential changes in industrial relations in the transport sector.
That said, the biggest benefits for the transport sector, by comparison, are not to be found in detailed Brexit negotiations but by our remaining stalwartly open to foreign direct investment, in a way largely unknown to most of our current EU partners. They do not necessarily welcome FDI in the same way as we do. Take the 1 February announcement of UK manufacturing figures for January 2017. It was a cracking start to the year in transport and other sectors—as my noble friend the Minister will know—and where German and French companies have long been players. We rightly regard our transport infrastructure and services as vital, but we do not protest against foreign direct investment and instead welcome it into this country. We do not adopt a protectionist attitude, unlike the French a few years back when they declared their yoghurt manufacturer, Danone, a strategic asset when it was receiving possible takeover attention from foreigners. We take a much more enlightened approach. The US has well-developed institutions governing the transport sector, and the professional consensus is that market liberalisation is well developed compared with many other member states.
Following Brexit, foreign direct investment into transport should be welcomed, whether in manufacturing or indeed service provision. Take rail services and the bidding for franchises: public procurement arrangements and international trade rules operate on the reciprocity principle. In these changing times, both sides will wish to see UK operators in the UK mirroring the treatment of EU operators wanting to win franchises in this country. It is totally mutually self-destructive not to do that. In the EU, all rail franchises must be competitively tendered in the 2019 to 2022 period, so all that is needed is for operators to continue to comply with regulations concerning safety and technical standards—ditto for UK operators wishing to compete outside the European Union, for the UK will remain an active member, and I welcome that, of the Intergovernmental Organisation for International Carriage by Rail.
I move to a second and last example, from rail to road transport. The noble Baroness, Lady Randerson, in the closing words of her very important and interesting speech, raised the issue of vehicle standards and emissions. In my closing words, I agree with her. Here, I think Brexit will allow us to show leadership to the rest of Europe on the approval processes and procedures for vehicles and their emissions. Not only is the UK happily one of the world leaders in car manufacture, but our companies have played it straight throughout on emission measurements in this country. They have certainly played it very straight compared to the emissions scandals affecting some German and French manufacturers, which are an utter European disgrace. I think the world’s consumers will look very favourably on any additional UK approvals as backing up the global reputation of our motor manufacturers. We can take a leadership role in honesty, which will be a great selling point for the UK, its cars and transport sector and so many other areas of transport policy.
Lord Whitty (Lab)
My Lords, the noble Lord, Lord Patten, has a very overoptimistic view of the position. I agree that transport is likely to be one of the sectors least affected by Brexit, but the hope for a positive mood among the politicians of Europe, which was certainly still there after the initial shock two or three months ago, has been sadly disappointed by the way in which the Prime Minister’s definition of the UK’s bargaining position has excluded us from any form of membership of the single market and any form of real participation in the customs union. Both of those seriously affect the transport sector.
I thank the noble Baroness, Lady Randerson, for introducing this interesting debate. She and I are both members of the same sub-committee of the EU Select Committee, which has been looking at trade. When we looked at the options for trade, at that point we still considered partial membership of the single market at least as a potential option, as with at least temporary continued membership of the customs union. We have received evidence from and talked to, formally and informally, representatives of manufacturing and of goods and services, and we are now looking at services in more detail, including transport services. The initial reaction of those industries, after the shock of the referendum vote, was panic, and then they came back with the view, sector by sector, that, “Okay, we are where we are, but we could do a sectoral deal on this front and still retain all the key issues of membership of the single market”. I am afraid the Lancaster House speech, followed by the White Paper and the Statement with the White Paper last week, have cut off that possibility.
As the noble Baroness pointed out, transport has been hugely integrated across Europe for the past 40 years—not totally but to a significant degree. A regulatory structure applies to the whole of European transport, including on issues of safety, ownership, routes and vehicle standards, as has been said. These are all easy to deal with within the single market; they become much less easy outside the single market.
In aviation, there is probably greater scope for doing a bespoke deal than there is for the other sectors. European airspace already extends to some extent beyond the European Union—to Norway, Iceland and some of the Balkan countries—but it is very important that we establish early on in the negotiations that aviation is dealt with as a one-off. Not only does it define the use of European airspace and our access to European airspace, which at the moment also includes issues of establishment and whether UK-owned airlines or UK-domiciled airlines can operate effectively in other countries and within other countries, but it also defines our relationship with the rest of the world, including the open skies agreement with the United States. We need to retain that. That can probably be dealt with in a separate deal. Whether it could be dealt with in a separate deal entirely within a free trade agreement—which appears to be now where we are in terms of narrowing down our options, which we have, unfortunately, done over the past couple of months—is not entirely clear.
If we were to take the jump off the cliff, concluding that no deal is better than a bad deal, and go to WTO standards, we would still probably be able to do a separate deal on aviation, but that would require a lot of negotiation, hard bargaining and recognition of what the key British interests are in terms of retention of routes, slots, airline establishment and so forth. Aviation is somewhat different from the other modes of transport. Its regulatory system is very much an EU responsibility and competence.
I could argue that, if we reverted to control of the rail system with renationalisation of the railways, which I think is still the Labour Party’s policy, that would be more easily achieved outside the EU. It is not completely banned by the fourth railway package that we are currently negotiating, but it would be more difficult were we to remain members of the EU. However, the through routes to which the noble Baroness referred, such as the Eurostar and the large amount of freight that is carried by railways and so forth, all affect the railway sector. That is an essential part of the single market mechanism, and we will be outside the single market mechanism.
In road transport, there are a whole range of regulatory structures involving driver hours, vehicle standards, vignettes and cabotage arrangements and so forth. Drivers are an international workforce, so getting control of migration may limit the degree to which British operators and foreign operators trying to trade import and export from the UK have access to a skilled workforce. Once again, road transport arrangements are a key part of the single market, and we will be outside the single market.
On shipping, a lot of shipping is between ourselves and Europe and there will be arrangements on safety, standards and routes that are part of the single market. But the far more important aspect of the maritime situation is ports. It may be beneficial for the owners of UK private ports, which are by and large privately owned within the UK, to be free of the regulatory structure that exists within Europe, which is largely geared to publicly owned ports. The problem for ports is not ownership or regulation but that, outside of the customs union, we will face all sorts of additional responsibilities on port administration, port space and the cost at the port level. If we are to be outside of the customs union, the movement of people and goods through our ports will be a much more complex issue. It will require space to check, and it will require administration and bureaucracy. Some of it can be subject to electronic arrangements these days, but much of it cannot. In the end, because of the configuration of most UK ports, it will be difficult to extend the time, parking space and so forth which, even under the current arrangements, have been under some considerable strain, as we have seen particularly in Dover, over recent years. The need for additional space, checks and bureaucracy and the delays in shifting goods by road, rail through our ports and through our shipping will significantly increase.
All that is because we have taken a decision in principle that we will move away from the customs union. The ambiguous words in the Lancaster House speech have now been whittled down to mean that any continued co-operation is on administrative arrangements. Desirable as those may be, they will not stop all the pressure on our ports, our roads, our shipping and our rail systems. The narrowing down of the options by the Lancaster House speech has put a greater burden on transport than looked like being the case a few weeks ago.
Lord Bradshaw (LD)
My Lords, I will add some burdens to the Minister in his reply by mentioning other factors that must be taken into account. I will talk about the British bus building industry. It is one of our great successes, with Wrights of Ballymena, Alexander Dennis in Scotland and Optare in Leeds. They are world leaders in the manufacture of buses. When we talk about buses, we always talk about all the components that go into building buses. I want to know that these people will be able to trade with countries in Europe on the same basis as they do now. If they are not, it will immediately deal a blow to employment prospects here. There are plenty of other people waiting to fill the gaps that we create for bus purchases.
Secondly, I am concerned about road safety. Figures published in the last couple of days show that serious road casualties of children are going up again, quite steeply. In statistics published by the Department for Transport, little coloured markers show each road user—pedestrians, cyclists, motorcyclists and cars. But lorries are missing. The need to keep the strictest control on lorries is vital if road safety is to be enhanced. Most serious casualties involve one or more heavy goods vehicles. Any race to the bottom that may be envisaged to allow the road haulage market to be liberalised must be balanced very carefully with the damaging effects of that on road safety and on the environment.
The existing railway franchise competitions, which when the railways were privatised were envisaged as something quite separate from the state, are now populated heavily by not only European Governments but foreign Governments. To that extent, I suppose they are nationalised. However, if they withdrew from competitions, which is a possibility, there would be very little competition left in the British market. Very often, they are one of two bidders, or two out of three, for franchises. They mostly run the trains very well and bring a lot of experience, but if we cut ourselves off, that element of competition will not be available to us.
Lastly, I turn to the position of Airbus. It is a joint venture between France, Germany, Britain and, I think, Italy. A huge number of skilled workers in Cheshire depend on Airbus for their living. If the Airbus consortium were broken up in any way, Cheshire could lose out very heavily because there are manufacturers on the continent of Europe that will willingly step into the void left by our withdrawal, and there will be tremendous casualties. That applies in a lot of other areas besides transport. A lot of employment depends on our remaining in the European Union. The examples that I have cited involve transport—I have tried to stick to this particular debate—but I am sure there are many others in many other areas.
Lord Berkeley (Lab)
My Lords, I am grateful to the noble Baroness for securing this debate because there are interesting and important issues that we have to discuss. The noble Lord, Lord Patten, mentioned the leadership of the UK on emissions. He may or may not be right, but when it comes to the production of emissions, which is the dirty air that we breathe in our major cities, the European Union has launched infraction proceedings against the British Government because we have not cleaned up the air that we should have under European regulations. There are two sides to this. On so many environmental things, I do not believe that our Governments—of whichever party—would have done as much as they have or should without pressure from European legislation.
I declare an interest as chairman of the Rail Freight Group. I am also on the board of United Kingdom Trade and Investment in Europe, which is a small group of companies and people in Brussels whose aim is to facilitate the knowledge of what UK organisations need to work in the European Union generally. Now, of course, they are also trying to get a feel for what the position of the European institutions might be when it comes to negotiations. The first comment from there—which I quote often as I am sure it is right—is that the White Paper, which many noble Lords have discussed this evening, will be seen in Brussels and many other national capitals as the UK Government picking and choosing from a menu and wanting to retain access to the single market while gaining more control over migration. I am sure Angela Merkel will remain unwavering, as she has said on many occasions that Europe’s four freedoms are inseparable.
When it comes to transport, the White Paper helpfully shows on page 53 that 40% of our exports are to the European Union. It is as well to remember that this is not just a one-way export, because over the last 40 years with the single market, freight has gone backwards and forwards many times in the course of its manufacture or distribution. As other noble Lords have said, it generally moves without too much obstruction and it has become extremely efficient in the way that it has been done.
I find it surprising that the White Paper does not mention rail, maritime or ports. It mentions air and road, and the problems might be much the same, but perhaps the solutions are not. If we think that one of the important issues is for our freight operators to be able to operate across Europe, we need to recall that it was only 25 years ago that cabotage was abolished, which was particularly enforced in France and prevented our own hauliers bringing back loads from France to the UK. That was abolished as part of the negotiations on the Channel Tunnel, on which I worked, and is not something we want to go back to.
Turning briefly to railway legislation, as noble Lords have said, it is very important, if we are to use railway traffic across Europe from here, which I hope we will continue to do, that the standards of the legislation are Europe-wide. I recall about five years ago, a manufacturer of some excellent railway wagons in this country wanted the wagons to be able to operate in France. Because they had to be approved by the French standards agency, many things were found wrong with them and they never went there. If they had been manufactured in France, I am convinced there would have been no problem at all. One of the successes of the European work in the last few years has been the creation of the European Railway Agency, which now has the ability to approve rolling stock on a Europe-wide basis. That is incredibly useful for our manufacturers and I hope it will continue.
As other noble Lords have said, the biggest problem will come on the frontiers themselves. I understood from a colleague today that, if there were a 24-hour traffic jam at Dover, it would stretch up the M20, the M2 and the A2, and round the M25 as far as Stansted airport. This is the importance that we must attach to getting the traffic through Dover on time and as freely as possible. The noble Baroness mentioned 390 million filings a year, and she is absolutely right, but how is this to be done? I am told that the French customs authorities already employ three times the number of staff that we do. We get delays. The incredible thing is that the number of units of freight going through Dover has increased by 32% in four years. Depending on what happens to our trade generally with the rest of the European Union, that might not matter very much; it may not go on. The free flow of the documentation—it all seems to go through Dover at the moment, apart from what goes through the Channel Tunnel—is vital for our future trading and prosperity.
The biggest problem—which is not identified in the White Paper, although other noble Lords may have referred to it—is the uncertainty. Companies, operators, exporters, importers and forwarders want to know what is happening, when it will happen and how much it will affect their business. Do they have to change their manufacture or distribution from the UK to France or somewhere else? All the big sheds that have been built around this country for distribution might have to go back; perhaps there will be more in France. I hope the Government will tell us very quickly what is going to go on, what is happening and when, for the sake of our industry.
Lord Roberts of Llandudno (LD)
My Lords, I appreciate the opportunity to speak in the gap on this particular issue. Many will know that, over the years, I have asked many questions about road traffic accidents and so on along the A55 in north Wales. The proposal, if we leave the European Union, that we will have different road regulations leads us to think that the situation is even more worrying and causing more concern than it has in the past.
When we consider the borders of the European Union, we speak of the border between the south and the north of Ireland, a border that does not seem to be causing a great deal of anxiety—and yet, who knows? But there is another border; that of the Irish Sea. It is the border between Holyhead and Haverford West and the Irish ports. The Irish Sea will be a border. How will we tackle that border? We have large vehicles coming from, say, Dover. They will be under different regulations, European regulations, up to Dover; and then from Dover to Holyhead they will be under UK regulations. I suggest that the regulations from Europe have saved many serious accidents along the A55 and other roads affected.
When we consider the overloading of lorries, the length of drivers’ hours, poor roadworthiness and other abuses of regulations, these are all regulated from Europe. VOSA staff have the power to stop a lorry if the driver has exceeded his allotted hours, or the lorry is overloaded or in poor mechanical condition. Many serious accidents have been avoided because of these European regulations. Will the Minister tell the House how these arrangements with the European regulations are working at present and what traffic arrangements will apply if we leave the European Union?
Lord Rosser (Lab)
I thank the noble Baroness, Lady Randerson, for securing this debate on an issue that is not necessarily at the top of the list when we consider the implications for this country of leaving the European Union, despite the fact that transport plays a critical role in supporting our economy. For that reason, there needs to be some clarity over what we are seeking to achieve in the forthcoming negotiations on our exit from the European Union in respect of each of the major sectors of our transport industry. The priority should be, at the very least, to avoid any adverse impact on jobs, the economy and living standards. Are those the Government’s priorities or do they consider other objectives more important? If so, what are those different priorities?
Our aviation sector is the largest in Europe and the third largest in the world, supporting some 1 million jobs. Airlines that operate from within the UK are able to rely on the EU single aviation market, which allows any airline owned and controlled by nationals of EU member states to operate freely anywhere within the EU without restrictions on capacity, frequency or pricing. Additionally, EU carriers are able to take advantage of the traffic rights contained in the many air services agreements that the EU has negotiated on behalf of all member states with non-EU countries.
At present, we are a de facto signatory to these agreements as an EU member state. When we leave the EU, and if we do not retain any form of European common aviation area membership, our airlines will need to negotiate new rights, from outside the EU, to operate freely within the EU and to operate transatlantic routes. What are the Government’s objectives in relation to protecting, or not protecting, the existing rights of our airlines over where they can fly under existing European aviation agreements? The Government’s White Paper is not as clear as it might be on this point, referring in paragraph 8.32 to,
“a clear interest for all sides to seek arrangements”.
Between 2011 and 2015, a quarter of all European Investment Bank lending to the United Kingdom was for transport projects. Transport for London, for example, borrowed £1 billion from the EIB to part-finance Crossrail. In addition, the European Commission provides direct funding for transport infrastructure projects. Half the cost of the ground investigation works for phase 1 of the HS2 route between London and the West Midlands was funded from Europe, and potential EU funding formed part of the Government’s case for giving HS2 the go-ahead. Will the Government confirm that they will make up any shortfall in investment in the rail network arising from the loss of direct EU funding or loans from the European Investment Bank? Will the Government also say what they estimate that shortfall in investment is expected to be?
The main European Union legislation as it relates to railways is contained in the three railway packages that have been passed, and in the latest fourth railway package. The individual pieces of legislation which make up these packages are wide-ranging and include prescribing how railways can be structured, financed and run. To what extent do the Government see these packages, and the measures they contain, as relevant and applicable to our rail industry beyond the immediate term, once we have left the European Union? On road haulage, will the Government seek to ensure, as part of the Brexit negotiations, the continuation of the practice that enables British hauliers to carry goods between EU member states? Or do the Government not see this as a priority once we have left the European Union?
Will the Government also seek to ensure that British driving licences will continue to be exchangeable with those of EU member states after we have left the EU, so that UK nationals, for example, who migrate to a country in the EU will not have to take another test in the new country? Or will this issue not be a priority for the Government? More than one-fifth of UK international trade involves transport by ship to and from EU countries, and more than 90% of UK trade in weight is handled by ports. If it is the Government’s expectation that we will no longer be part of the single market and the customs union, what guarantees can the Government give that this will not involve establishing new customs checks on imports and exports, which could cause considerable congestion at UK and mainland European ports and will potentially have an adverse impact on maritime trade and our maritime transport sector, as well as on road, rail and airline freight traffic?
However, it is not just the movement of goods that could be an issue following Brexit. The main transport sectors have been affected by the movement of people across mainland Europe seeking to come to this country. One unauthorised method of trying to reach this country has been through seeking to travel undetected on a heavy goods vehicle. Certainly until recently, some leading figures in the road haulage industry considered that the number coming to this country in this way ran into the tens of thousands per year despite, for example, the checks undertaken, and co-operation given, at ports on the other side of the English Channel.
Can the Minister indicate what the Government’s estimate is of the number of people gaining unauthorised entry to this country per year, and how they intend to address this situation during the negotiations on our withdrawal from the European Union, bearing in mind the current impact on our transport industry despite the checks and co-operation, and the potential impact after we have left the European Union? Will our withdrawal from the European Union lead to the need for more extensive and time-consuming checks at our own ports to control and stop unauthorised entry into this country, or is it envisaged that the existing co-operation and support we receive from adjacent mainland European countries over checking for unauthorised entry to this country will continue after we have left the European Union?
If that existing co-operation and support is less likely to be offered when we break away from, and cease to be part of, the European Union, what do the Government consider could be the consequences for border checks at our points of entry and for those sections of the road haulage, rail and maritime transport industries in this country that are involved in the international carriage of goods and passengers?
There are other potential impacts of Brexit on the transport industry in this country that I have not touched on, including impacts in the fields of the environment and health and safety. I hope, however, that the Minister will be able to provide some answers to the questions I and other noble Lords have raised in this debate about the potential impact of Brexit, and the Government’s objectives and priorities for the different sectors of our transport industry in the forthcoming negotiations on our withdrawal from the European Union.
The Parliamentary Under-Secretary of State, Department for Transport (Lord Ahmad of Wimbledon) (Con)
My Lords, I join other noble Lords in thanking the noble Baroness, Lady Randerson, for this opportunity to discuss the important issue of the UK’s exit from the European Union and related transport matters. I am also grateful for the chance to respond to the points raised during this debate, and if there are questions that I am unable to answer within the time limits I shall write to noble Lords about them.
First I will address the general points raised. It is the Government’s very strong view that, as my right honourable friend the Prime Minister herself articulated in her speech of 17 January, we should be “a truly global Britain”. What does this mean? As she explained, it means a “stronger, fairer, more united” country, one that is outward-looking, open for business and a magnet for international talent. It will be,
“an ambitious country that goes out into the world to build relationships with old friends and new allies alike”.
The noble Lord, Lord Whitty, made the role of the single market quite clear. He is right: as the Prime Minister has made clear, Britain will not be a member of the single market. As EU leaders have themselves made clear—it was also a point made by two noble Lords during the debate—staying in the single market would mean accepting the four freedoms and a role for the European Court of Justice. In the Prime Minister’s words:
“It would to all intents and purposes mean not leaving the EU at all”.
The noble Lord, Lord Rosser, in the various questions he raised, asked about the priorities, and I agree with him that transport is vital in realising this vision of a global Britain. These principles will inform our approach for transport in the negotiations ahead.
There have been a number of points about how different modes of transport will be affected by Brexit. As we all acknowledge, transport providers move huge numbers of passengers by air, road, rail and sea, and our logistics providers ensure that vital goods are moved efficiently. Let me be clear: we want them to continue doing that with minimum hindrance. Of course, I acknowledge that when we leave the European Union our relationship will be different. As the Prime Minister has explained, when we leave the EU we will leave the internal market. Our focus as we discuss our future relationship with our EU partners will therefore be on finding sensible ways to allow transport operations to continue. I am sure that noble Lords will accept that it is too soon to say precisely what those arrangements will look like, but I believe that all citizens and businesses in Europe have a shared interest in finding arrangements that work for us here in the United Kingdom and for the remaining members of the European Union.
I will address the point raised by the noble Lord, Lord Berkeley, in his contribution on the White Paper and its specifics on different modes of transport. He acknowledged that air and road haulage are mentioned, but he should not infer from that that other modes have been forgotten, namely sea and rail transport. We are making thorough preparations for negotiations covering all modes. As I have said to noble Lords during Questions, we continue to meet practitioners and industry representatives across all modes of transport to ensure that their priorities are reflected in the negotiations with our European partners.
If I may address this issue sector by sector, I will start with my own portfolio as Minister for Aviation. The UK aviation industry is of course world leading. As noble Lords have acknowledged, our airports service the third-largest aviation market in the world and the largest in Europe. Demand for flights continues to grow and UK airlines have seized opportunities globally, including those offered through European aviation markets. The Prime Minister made it clear, as did last week’s White Paper, that we will seek new strategic partnerships with the European Union, including wide-reaching, bold and ambitious free trade agreements. Aviation should be a part of that, so that citizens in the UK and the EU can continue to access air travel as they do now.
I assure your Lordships that the Government are working closely with the aviation industry to ensure we understand its priorities and needs as we start discussions with the EU. I have attended very constructive, pragmatic and positive meetings with representatives from across the aviation industry, along with my right honourable friend the Secretary of State for Exiting the European Union, David Davis. We stressed the point then that our air connections with Europe are important, but we also have an opportunity to widen our horizons. Leaving the European Union gives us more freedom to make our own aviation agreements with countries beyond Europe. Last year, after my appointment as Aviation Minister, I signed a deal with China that will more than double the number of flights operated between our two countries, boosting trade and tourism.
The noble Baroness, Lady Randerson, talked within the aviation context about the importance of the European Aviation Safety Agency, or EASA. As she will be aware, the UK has played a pivotal and active role in developing air safety standards. Our expertise is valued and recognised. We therefore hope and expect that all sides will value our continued participation—a sentiment which my noble friend Lord Patten reflected in his contribution.
Britain is open for business and open to the rest of the world. The connectivity provided by aviation is essential to making this happen. Whether it is new agreements such as that with China, our support for a third runway at Heathrow or the new aviation strategy, we will do what is necessary to support our future prosperity and growth. I assure the noble Lord, Lord Bradshaw, that this includes ensuring the prioritising and protection of jobs. He mentioned the example of Airbus, a corporation which we continue to work with not just in the UK but across Europe to ensure its presence on the global market.
If I may turn to road haulage, I mentioned the importance of the logistics industry in my opening comments. We are of course very much dependent on road hauliers. The noble Lord, Lord Berkeley, makes sure that we are fully aware of the importance of road haulage across many areas when we discuss it in this House. It should not be understated as, without those hauliers, our shops would be empty and our industry would grind to a halt. The logistics industry plays an important role by doing a first-class job in transporting goods to where they need to go.
The vast majority of lorries on our roads undertake domestic deliveries and never leave the country, yet a number make international journeys. Over 80% of these lorries are owned by European firms, not UK ones. Both the UK and the EU will want sensible arrangements in the future that allow goods to flow freely from and to the UK. I also want to ensure that UK hauliers have fair opportunities to win international business. I assure your Lordships that we are working hard on this objective as we prepare for negotiations.
The noble Lord, Lord Bradshaw, raised the important issue of lorries and strict controls on road safety, as did the noble Lord, Lord Roberts, on the particular issue that he raised about the A55. I assure both noble Lords and the House that, as the Government have stated before, the great repeal Bill will act as the basis for ensuring that all EU legislation is transposed into UK legislation. The transition will ensure that those kinds of safety regulations are sustained and maintained.
The maritime sector has been operating successfully for many centuries, as many noble Lords noted, trading freely between ports across the world long before the European Union came into being. There is no reason why that will not continue after we leave. The UK has always been a leading maritime nation, and we will continue to build on this, taking a higher profile in the International Maritime Organization. Of course, as noble Lords will know, that is based in London. We will be facilitating international maritime trade, helping attract more maritime business to the UK and promoting the UK flag. The Government and industry have been working together to identify a shared goal of continued growth over the coming year and beyond. Given our exit from the EU, we will drive forward this work through the maritime growth study.
I turn briefly to railways. The creation of the EU internal market for rail services has been slower than for other modes, but the past 20 years have seen the opening up of international services. The British railway network is essentially a domestic network, so the effects of leaving the EU will be limited. However, we of course have one international connection with continental Europe—the Channel Tunnel. Let us not forget the Belfast-to-Dublin link too. We will focus on ensuring that these services can continue as now. I say to the noble Baroness, Lady Randerson, that we will ensure that, in everyone’s interest.
Across the transport sector we are determined to agree the best arrangements for Britain. The Government will continue to listen to our transport industries as their views develop. The noble Lord, Lord Bradshaw, raised the issue of rail franchising. We will not want to limit EU bidders in bidding for franchises. That will be part of the message to ensure that we are truly open for business.
We have world-class expertise in this country across many sectors, as my noble friend Lord Patten noted—in the automotive sector, in aerospace, in logistics, in transport engineering and much more. We must be confident in offering this to the world. We have every reason to be confident. Anyone who has seen the work on Crossrail—and I am proud to be the Minister for Crossrail—in this city will know that this country is capable of world-class engineering. It is recognised internationally. Country delegations visiting the UK want to see what Crossrail is all about.
Our departure from the EU is an unprecedented opportunity to shape our future. We must take advantage of all the opportunities it offers. We will get out into the world and do business right across the globe. Yes, I say to the noble Baroness, it is a bold and ambitious vision. The message we take to the world is this: the UK remains open for business. We are the same positive, pragmatic, outward-looking, globally minded nation we always were. We will continue to strengthen our role and our international partnerships on the global stage.