Maritime Transport Access to Trade and Cabotage (Revocation) (EU Exit) Regulations 2019

Baroness Sugg Excerpts

Monday 25th February 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 19 December 2018 be approved.

Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, the draft regulations that we are considering will be made under the European Union (Withdrawal) Act and will be needed in the event of no deal, in which case UK ships will continue to have access to member state ports and the ability to travel between member states. This access is based on OECD common shipping principles.

The regulations we are considering today revoke EU legislation on market access and cabotage that would otherwise be retained in UK law by the EU withdrawal Act. For the most part, this legislation would be redundant. It would have no effect after we leave the EU. For example, Council Regulation 4058/86 is about anti-competitive measures by non-EU countries. It allows member states to ask the European Commission to co-ordinate retaliatory action against such countries. This remedy will not be available to the UK when we are no longer a member state, so it is clearly inappropriate to retain it.

There are some instances where the regulations will revoke legislation that would otherwise retain on the UK statute book statutory rights for EU member states in UK waters that would not necessarily be reciprocated. EU Regulation 3577/92 gives rights to member states to provide maritime cabotage within another member state. Cabotage in this context is the operation of ships between two ports, or trips to and from an offshore site within a single member state. If we do not revoke the regulation, it will be retained by UK law. This would mean that member states would continue to have statutory cabotage rights in UK waters. However, UK vessels would no longer have such rights across EU waters; their rights would be at the discretion of each member state.

The UK has no intention of restricting cabotage by EU vessels in UK waters. By removing the statutory rights provided in the regulation, we are simply putting EU vessels on the same footing as vessels from other countries: that is, they will continue to be able to operate cabotage, but without an express statutory right.

--- Later in debate ---

I apologise for my ignorance in this regard, but does international regulation provide that cabotage services must be allowed?

[Baroness Sugg]

I thank noble Lords for their consideration of these regulations. The noble Baroness, Lady Randerson, and the noble Lord, Lord Rosser, both mentioned the SLSC comments. I agree that the Explanatory Memorandum could have been clearer. I thank the SLSC for its work on this, and other SIs. We took its considerations on board and re-laid the Explanatory Memorandum.

The noble Baroness taught me a bit more history on the Rhine regulation than I knew already. The rules for operating on the Rhine are set through the Rhine convention. We are not planning to rejoin as a country; UK companies could still trade on the Rhine but they would need to ensure that they met the conditions in that convention as well as the relevant EU legislation.

We have consulted with the Welsh and Scottish Governments on Council Regulation 3577/92, which is on public service contracts in respect of island cabotage services. Financial assistance is devolved to the Welsh and Scottish Governments, to differing degrees, so they had a potential interest in this, and Ministers in both devolved Governments have given their consent. It is particularly important for Scotland, where they provide key services between the Highlands and Islands. The Scottish Government are satisfied that they will be able to continue procuring island services through the contracts, so they are content with it.

I attempted to set out in my opening speech why we have taken this approach. Leaving the European Union will mean, obviously, that we are no longer a member state and UK ships will lose their automatic right to cabotage. This SI removes the reciprocal statutory right for EU ships to practise cabotage. Instead, EU member states will be treated as all other countries are. We, the UK, operate a liberal cabotage regime for maritime, which we think is the best way to promote better and efficient services and perhaps—going back to what the Rhine convention originally wanted to do—to promote prosperity across Europe. In practice, all countries’ ships in the UK are permitted to carry out cabotage, so EU ships will be able to do the same. As I said, we have no intention to restrict cabotage.

Of course, this SI deals only with the UK side of legislation and does not cover EU action, and the way to ensure that UK ships can practise cabotage in the EU is to agree a deal. The future agreement, should we reach a deal, notes that the parties,

“should also make appropriate arrangements on market access for international maritime transport services”,

and EU trade deals always include provisions on maritime transport. It is a Commission competence, so we are not able to have bilateral conversations with separate member states, but EU trade deals usually have a separate chapter or part of a services chapter, and we expect that the same would apply in a future UK-EU agreement.

The noble Lord, Lord Rosser, asked about the effect on UK industry—which, as I say, is not part of the SSI, but it is certainly a valid question. Future UK shipping on EU cabotage will depend on a future agreement. If we leave without a deal, the impact on the UK of losing automatic access is estimated to be less than £10 million a year—although that is still £10 million a year—through losing our statutory rights.

The noble Lord asked about the different member states, and he was quite right to point out that it depends on the member state. International law does not require cabotage to be allowed within a state, so that is a matter for negotiation, if member states have not already set out their views. Some EU countries—Belgium, Denmark, Ireland and the Netherlands—do not have cabotage laws, or at least significant cabotage laws, and we would expect activity to continue. However, some EU countries have restrictive cabotage laws: Bulgaria, Croatia, Finland, France, Germany, Greece, Italy, Poland, Portugal, Spain and Sweden. It is worth noting that many of those states already restrict cabotage, despite the EU regulations, so this would not just be a matter of just switching it off—some restrictions are already in place. The EU technical notice on Brexit and maritime transport specifies which countries would allow that, and obviously we meet regularly with ship owners on this. I repeat that we do not want to see the loss of cabotage rights. It is one of the implications of not being a member state any more, which is another reason why we are working to achieve a deal.

The noble Lord, Lord Rosser, asked about anti-competitive action. We will rely on our own competitive competition legislation; the Competition and Markets Authority will take a greater role in enforcing such legislation, and we will be able to take action on trade remedies, if necessary under WTO rules. However, as I said, the maritime sector is global and liberalised, and that is reflected in the principles of the OECD, which most countries sign up to.

We have rarely seen action taken; on anti-dumping legislation, for example, there has been only one incidence in 1987. The Commission has been more interested in overpricing than underpricing, so it has looked at prohibiting liner conference cartels in the container trade and regulating the alliances which have succeeded them. Generally speaking, therefore, this has not been a significant issue. Of course, if the EU takes action in this case, it will cover European shipping, and if a ship is not going to the EU, it is unlikely to come to the UK. However, as I said, we have our own competition legislation in place.

The noble Lord, Lord Rosser, also asked about the effect of Regulation 789/2004 on the transfer of cargo and passengers. We believe that the application will have no effect; we are aware of no instance where the regulation has been used.

The noble Lord also asked about inland waterways. The UK will continue to have a similarly liberal regime in relation to the limited market for cabotage on inland waterways. For geographical reasons, obviously there is no international trade on inland waterways within Great Britain, and it is extremely limited in scope for Northern Ireland and the Republic. There is also very little interest from UK shipping in EU inland waterways.

No formal consultation was done on this instrument, simply because, for the most part, the regulations revoke redundant legislation and do not make any changes that affect the operation of businesses or impose any additional costs. The department has discussed the instrument with shipping industry representatives through the Chamber of Shipping, especially in relation to the proposals to revoke the cabotage regulation. The industry is concerned to avoid those restrictions, which is what we are doing. I am pleased again to set on the record that the Government have no plans to introduce such restrictions.

Officials have also discussed the regulations with the National Union of Rail, Maritime and Transport Workers, and especially the implications of the revocation of the cabotage regulation on Scottish inland services; we do not believe that that revocation has any consequence for such services. Ministers and officials meet regularly and frequently with many maritime stakeholders: for example, the Secretary of State met the Chamber of Shipping earlier this month to discuss Brexit. The RMT is one of the organisations we have regular engagement with; the Maritime Minister Nusrat Ghani met the RMT at the end of last year and will meet the union again in the next few weeks, and the chief executive of the MCA also met the RMT last week.

Therefore, while this SI does not have a direct effect, because it changes very little, obviously the alternative side of it is the effect it will have on UK shipping, and whether it has cabotage rights within the EU. While that is not related to this SI, of course we are discussing it on a regular basis, which is why we are keen to ensure that we achieve a deal that allows us continued access to cabotage within the EU, in the same way as EU member states will continue to have access to cabotage in the UK, even if not on a statutory rights basis; they will have the same access as all third country shipping companies do, and we have no plans to restrict that further.

I hope that I have managed to address the points raised, but, if not, I will provide answers in writing. The aim of this SI is to ensure that legislation continues to work effectively from day one in the event of no deal, and that redundant, inappropriate or unreciprocated provisions are duly removed.

Motion agreed.

Air Traffic Management (Amendment etc.) (EU Exit) Regulations 2019

Baroness Sugg Excerpts

Monday 25th February 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 28 January be approved.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, this draft instrument will be made using powers in the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union in March without a deal. It amends single European sky legislation, the four basic regulations which provide the framework for EU air traffic management regulation, and the implementing regulations which set out the more detailed requirements.

The implementing regulations cover air traffic management interoperability: the manner in which the UK works with other states to deliver air navigation services; the organisation of airspace; the safety and oversight of air navigation services; new technology and how it is to be used; and a system of performance and economic regulation for air navigation services. The single European sky legislation supports the EU initiative to improve the efficiency of air navigation services while maintaining safety within the European air traffic management system. The delivery of air navigation services is vital to ensure that congested airspace can be used safely and efficiently. The services regulated by the single European sky legislation support air traffic growth by ensuring the safe separation of aircraft. If these services are not provided in an efficient way, it can cause considerable delays, with resultant costs and disruption to airlines and passengers.

This draft instrument will ensure that the effective regulation of air traffic management arrangements in the UK continues in the event of no deal. It addresses areas where retained EU law will no longer function effectively after leaving the EU. It does this by removing governance and oversight roles of EU bodies that cannot be performed by the UK after exit and assigning them instead to the Secretary of State or the Civil Aviation Authority, and by removing regulatory tools where there is already satisfactory UK legislation. Where possible, roles currently undertaken by the European Commission and EU bodies are being transferred to the Secretary of State or the Civil Aviation Authority, but where they relate to pan-European functions, including air navigation services delivered by more than one state, they are being removed.

The instrument includes arrangements to recognise EU-based certifications and authorisations existing immediately before exit day. For example, EU air navigation service providers operating in the UK that have certificates issued prior to exit day will continue to have their certificates recognised by the CAA, which will allow them to continue to provide services in some parts of UK airspace. These certifications and authorisations will be preserved for a maximum two-year period, subject to any earlier expiry or termination, which will provide continuity until another agreement is reached with the EU on these issues.

The single European sky legislation includes a regulatory framework for the development and deployment of new technology and ways of using it: the Single European Sky Air Traffic Management Research programme, or SESAR. In the event of no deal, the UK will not be able to participate in or legislate for SESAR governance arrangements. We are, however, retaining requirements for the deployment of new technology arising from SESAR for the UK’s air navigation service provider, NATS, and some UK airports, to ensure that UK arrangements are modernised in line with those of the EU and that interoperability is retained.

The instrument also ensures that the UK can continue to comply with its international obligations, such as those set out under the Chicago convention, which governs international civil aviation. This is done by retaining regulations that currently dictate how we comply with the standards and recommended practices—SARPs—adopted by the International Civil Aviation Organization under that convention.

Again, the best outcome is for the UK to leave with a negotiated deal, and delivering that deal remains the Government’s top priority but, as a responsible Government, we must make all reasonable plans to prepare for a no-deal scenario. The instrument maintains the existing regulatory framework and technical requirements for air traffic management to ensure the continued provision of efficient, safe air navigation services and the effective regulation of the UK air traffic management system, as well as to maintain interoperability between the UK and the EU after the UK exits the EU. This instrument also ensures that in the event of a no-deal exit from the EU, the UK has effective regulatory arrangements for the UK’s air traffic management system and that the aviation industry—in particular, the CAA and NATS—has clarity about the regulatory framework which would be in place in that scenario. I beg to move.

[Baroness Randerson (LD)]

My Lords, no SI better epitomises the efforts of the Government to force us into splendid isolation. Anyone who has studied history at any time will remember that 19th-century concept of British diplomacy—which got us precisely nowhere in the end.

Modern air traffic management is based on a complex network of international treaties, organisations, protocols and rules that has built up over many years in the interests of safety, efficiency and limiting the environmental impact of aviation. I welcome the fact that just for once, under the section in the Explanatory Memorandum on consultation, there is reference to a specific view of stakeholders. It might have been a limited consultation, but we have a report that they want continuity of the regulatory framework—well, of course. Despite this, this SI is full of efforts to shoehorn the necessary changes into the existing approach. However much there are attempts to continue as normal, there will be significant changes.

There are several issues I want to raise. First, paragraph 7.3 of the Explanatory Memorandum states that some powers now held by the EU will come to the Secretary of State and some to the CAA, but air navigation services delivered by more than one state are simply being removed by this SI. Surely this will lead to a dangerous lack of co-ordination. Will the Minister explain what will happen in that yawning gap once the EU powers are removed?

Paragraph 7.9 states:

“The UK will remain a contracting State of Eurocontrol”.


Eurocontrol is an intergovernmental organisation regulated by the EU. I realise that membership of this organisation is essential for the interoperability of air navigation systems, but I was quite surprised to see that we are going to remain a member, given that the EU has powers over it. Has the Minister explained this to her colleagues who are in favour of leaving the EU? The compromise appears to be that we will accept the rules of Eurocontrol, but will be unable to participate in its governance. That seems a pretty poor deal, but I appreciate that we have no choice but to remain a member.

I have a question on functional airspace blocks, or FABs. They do not follow state boundaries, and we share an FAB with Ireland. My recollection is that a large proportion of Atlantic air traffic passes through that FAB. After Brexit, we will have no legal basis to participate in the FAB and in future, any involvement —so the Explanatory Memorandum states—will be discretionary. However, there is no word in the EM about what the Government would like to do. Is it their intention to try to remain a member of the joint functional airspace block with Ireland, and will leaving it be something they do only unwillingly, if forced? There is nothing in the Explanatory Memorandum about Ireland if we cease to participate. We are looking here at the splintering of the co-ordination on airspace functioning, and I believe that it would have a very serious impact on Ireland if we ceased to participate.

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[Lord Rosser (Lab)]

Again, I thank the Minister for explaining the purpose of this SI. As before, some of the points that I wanted to raise were touched on by the noble Baroness, Lady Randerson.

The first relates to paragraph 7.3 of the Explanatory Memorandum, to which the noble Baroness referred—particularly the reference to,

“pan-European functions including ANS delivered by more than one State … being removed”.

I, too, would like to know the actual impact of that. Does it compromise safety in any way, and what does it mean in practical terms from our point of view as a nation?

Paragraph 7.9 refers to Eurocontrol, which it says is,

“an intergovernmental organisation that provides some ANS for its member States”.

It says:

“It is not an EU body but it has been designated as the”,


single European sky,

“Network Manager and is regulated by the EU where it provides services to EU Member States. The UK will remain a contracting State of Eurocontrol after it leaves the EU and will still be able to receive its services as a contracting party to the Eurocontrol Convention”.

Can the Minister explain the exact impact of that on us, bearing in mind that it is designated as the single European sky network manager and we will no longer be part of the EU? What does it mean for us as far as regulation is concerned? Presumably it does not leave everything exactly the same as it is now, but at the moment I am struggling to identify precisely what the change might be. Any assistance that the Minister can give on that will be appreciated.

Paragraph 7.12 talks about the network manager role. It says:

“These functions pre-date the EU exercising its competence for ANS and the UK would still be able to access Eurocontrol’s wider network management role as a contracting State of the Eurocontrol Convention”.


However, it then says:

“This instrument will amend the preserved SES Legislation relating to airspace in an operable form, but the UK will be unable to participate in EU governance arrangements of the SES Network Manager”.


What will our Government’s arrangements for the network manager be? If Eurocontrol is the SES network manager and that no longer applies to us, am I right in saying that we have to set up some sort of similar arrangement, or have I misunderstood exactly what this means and what its implications are?

As the noble Baroness, Lady Randerson, has already said, paragraph 7.13, which talks about functional airspace blocks, refers to the fact that the UK formed an FAB with the Republic of Ireland in 2009. Paragraph 7.14 then goes on to say:

“The legislation establishing FABs will not be retained in the SES EU Exit Regulations. As a non-Member State after exiting the EU, the UK will have no legal basis to participate in a FAB”.


My question is not dissimilar to that posed by the noble Baroness, Lady Randerson. I simply ask: if we are no longer able to participate in an FAB but have one with the Republic of Ireland, what will the impact of this be on 29 March under a no-deal Brexit? What exactly does it mean and what are its implications? Do we have an FAB only with the Republic of Ireland or do we have a number of others and, if so, what is the impact on, or implication for, those further FABs?

The document also refers in paragraph 7.16 to changes being made in the SI,

“so that the Member State functions in the regulation are retained and instead carried out by the CAA who will now oversee the implementation of the regulation”—

that is, these regulations. Bearing in mind that it specifically refers to a change being made in the SI, is this the only such change of significance in it or are there others that perhaps might not have been highlighted in the same way?

Paragraph 7.19, on the subject of ATM safety, refers to the fact that the,

“SES Legislation relating to safety forms our current mechanism … so that legislation will need to be preserved in UK law in an operable form to maintain continuity in safety. In doing this we are giving some oversight functions to the CAA which were previously for EASA”.

Am I right in saying that this means an additional interface on safety issues? If I am right, does the Minister agree that that is hardly a desirable development, since the more interfaces you have over safety, presumably potentially—I stress “potentially”—the more difficult safety issues can become? It would be helpful to have the Minister’s comments on that issue.

The Minister referred in her introduction to the SESAR programme, which is the single European sky air travel management research programme. Paragraph 7.25 of the Explanatory Memorandum says that,

“the SESAR Joint Undertaking (SJU) was set up under a Council Regulation to manage”,

the research and development programme. The paragraph goes on to say:

“As the UK will no longer be able to participate in the SJU after leaving the EU the Council Regulation setting up the SJU will be revoked”.


What exactly are the potential consequences of this as far as research and development are concerned? I believe the Minister said that we have played an active role within it. Will we inevitably be able to play only a less active role? From our point of view, is there likely to be less involvement in research and development programmes?

Perhaps the Minister can confirm—I am sure there will be no difficulty, since the Minister in the Commons has already said so—that on SESAR funding, if there is a no-deal exit the Government will underwrite what would have been paid to the UK under the current arrangements, to provide certainty and continuity for those involved. Paragraph 7.26 indicates that the pilot common project will continue, saying that there will be,

“legislation to require UK project participants who have been implementing it since 2014 to complete the delivery of projects which will maintain interoperability with the UK’s neighbouring States”.

Presumably, the fact that it refers to one project suggests that withdrawing in this way means that there will be other projects with which we will not continue, or will not get involved when they commence. Perhaps the Minister could confirm whether I am right; that hardly seems a desirable situation.

I turn to paragraph 10 on “Consultation outcome” and ask once again: were the trade unions involved in the consultation? References are made to various stakeholders. I do not know whether that includes the trade unions but, again, I would like to know the answer to that question. The noble Baroness, Lady Randerson, mentioned that the consultation paragraph refers to a view among stakeholders supporting,

“continuity in terms of the regulatory framework for ATM after the UK leaves”,

the European Union. The paragraph ends:

“The preparation of the instrument also takes account of representations from operational stakeholders on the impacts of the UK leaving the EU or ATM and ANS including from NATS, the UK’s en route air traffic services provider”.


Can the Minister tell us what those representations were? Were they simply representations in relation to continuity or were other matters taken into account in preparing this instrument? If so, in what way does the instrument reflect those further representations?

[Baroness Sugg]

I thank noble Lords for their consideration of these draft regulations and turn to some of the questions raised. On participation in the UK-Ireland functional airspace block—the FAB—it is currently the only FAB we are part of but, in the event of no deal, there would be no legal basis for the UK to continue to participate in it; nor could we compel Ireland to be part of it, so we have not been able to retain this part of the single European sky legislation in the SI. There is a possibility that EU states could involve neighbouring third countries in their functional airspace blocks and future UK involvement as a third country would be discretionary.

Co-ordination and co-operation with Ireland will of course continue, as both states are members of the international inter-government organisation Eurocontrol and, indeed, ICAO; both the UK and Ireland are delegated by ICAO to provide air traffic services in parts of the north Atlantic. The noble Baroness is quite right to point out that 80% of traffic entering or leaving the EU from the north Atlantic flies through that airspace, so it is imperative that we work together on this.

--- Later in debate ---

[Baroness Sugg]

I am afraid that I do not have a specific figure. Future funding is under consideration as part of our wider airspace modernisation project. That will be looked at through the CAA, which has a contingency fund for airspace modernisation costs, including the deployment of new technology.

It is important to reiterate that the safety of airspace will not be jeopardised after we leave the EU. This SI, along with the aviation safety SI which has been laid and will be debated in the coming weeks, will ensure that we have the same high safety standards. Air traffic controllers will continue to be licensed by the CAA and relevant EASA regulations will be saved in national law to ensure that those safety standards remain.

On the pilot common project, UK industry has been involved in the governance to shape the scale and costs of SESAR deployment projects. The future deployment of new technology would need UK legislation under the Civil Aviation Act 1982.

The noble Baroness, Lady Randerson, asked about military and commercial use. The military is excluded from the single European sky legislation. The flexible use of airspace is about using airspace reserved for the military when the military does not need to use it. It is not strictly about regulating the military, as such, but rules will be transferred into UK law through the statutory instrument which will continue to oversee them.

NATS is currently the UK’s en route air navigation services provider and will continue in that role; there will be no difference. On the question of what will replace the SESAR programme when the UK leaves the EU, the level of participation in SESAR remains a matter for negotiation. We firmly believe that it is in the best interests of the UK and indeed of the EU to maintain close co-operation, but it is likely that UK industry will no longer be able to receive EU funding for SESAR deployment. As I said, the Government have committed to cover the costs of that.

I hope that I have answered all the questions. If I have missed any, I will follow up in writing. This SI, and others to be debated in the coming weeks, are a key part of ensuring that we have a functioning statute book for aviation should we leave the European Union without a deal. It will make sure that, in the event of no deal, the UK has effective regulatory arrangements for our air traffic management system, and that the aviation industry, the CAA and NATS, have clarity about the regulatory framework.

[Lord Whitty (Lab)]

My Lords, I do not think that the Minister answered my noble friend Lord Rosser’s question on this instrument, or the previous one, about consultation with the trade unions. As she is aware, I am the vice-president of BALPA.

[Baroness Sugg]

My apologies for not answering that question. We meet BALPA regularly to discuss a variety of issues, including Brexit. I cannot recall discussing this specific SI with BALPA but it is incredibly important that, as we develop these SIs, we take into account industry’s needs, our regulators’ needs and of course trade union needs.

Motion agreed.

Road Vehicles and Non-Road Mobile Machinery (Type-Approval) (Amendment) (EU Exit) Regulations 2019

Baroness Sugg Excerpts

Wednesday 20th February 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 21 January be approved.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, if it is convenient, in moving this Motion I shall speak also to the draft Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019. These draft regulations will be made, for the most part, under the powers conferred by the European Union (Withdrawal) Act 2018, and—in the case of the type-approval SI to align the definitions of type-approval certification used in Northern Ireland with the rest of the UK—under the powers conferred by the European Communities Act. These regulations will be required if the UK leaves the European Union without a deal.

I shall speak first to the type-approval regulations. Currently, motor vehicles can be registered and placed on the UK market only if they have a valid EU type approval. The legislation governing this is a mix of domestic and directly applicable EU regulations. Of the two SIs, the draft type-approval regulations were put forward originally as a negative SI and considered by the sifting committees of both Houses. Both committees recommended that they be upgraded to affirmative, given the potential impact on manufacturers. I thank the committees for their considerations of this and other statutory instruments.

The draft type-approval regulations under consideration ensure that we will continue to have control over the registration of vehicles in the UK while also ensuring that we minimise the burden on manufacturers. The SI achieves this by amending the Road Traffic Act 1988 in GB and the Road Traffic Order 1981 in Northern Ireland to create a UK approval scheme, enabling the Vehicle Certification Agency, the VCA, to issue provisional UK approvals to manufacturers holding a valid EU type approval, without requiring additional, costly retesting.

In addition, the SI amends the Vehicle Excise and Registration Act 1994 to provide that vehicles entering the UK after exit day can be registered only if they have a UK approval. Maintaining control over registration ensures that in the event of another VW emissions scandal, we would be able to prevent those vehicles from being put on the road. Minor amendments are proposed to the Road Vehicles (Approval) Regulations 2009, and to the three retained frameworks for motorcycles, agricultural vehicles and engines for non-road mobile machinery, to ensure that this retained EU legislation will remain operable after we leave the EU.

I assure noble Lords that we have consulted widely since last autumn on our proposals. This has been primarily with the major trade associations, such as the Society of Motor Manufacturers and Traders, as well as smaller, more specialised trade associations, such as the Wheelchair Accessible Vehicle Convertors Association.

--- Later in debate ---

Will the possibility of simplifying the arrangements for approving eco-innovations, which is also referred to in the document, lead to a weakening of the present arrangements in that regard? As I understand it, although I do not think this could be described as a derogation, if someone wants to be dealt with under that heading because they are introducing new technology and so ought not to be assessed in the same way as everybody else, at present the European Commission has to approve that. In future, presumably, that will be done on a UK basis. If I am correct—I may well not be—and that power of approval will be transferred from Europe to this country, who will exercise it here?

[Baroness Sugg]

My Lords, I thank noble Lords for their consideration of the draft regulations. The regulations will ensure that we can continue to control the registration of vehicles in the UK and also to combat climate change in the transport sector after we leave the European Union. I shall now respond to some of the points raised.

The issue of type approval and the standards that apply was raised by many noble Lords. Future changes to the standards that apply to vehicles approved and registered in the UK will be laid before Parliament for approval in the form of statutory instruments. At the point when we leave the EU, all existing standards, including those for safety and environmental performance, will continue to be applied to new vehicles registered in the UK. There will not be a drop in standards or a resultant effect on road safety or environmental performance when we leave the EU.

As for future decisions on remaining aligned with EU standards, it will be for the Government to propose legislation for Parliament’s consideration, and the process by which the legislation will be considered will be an SI, subject to the affirmative procedure, establishing a new full UK approval scheme. As discussed, that will be laid later this year. I reassure noble Lords that, as has been highlighted, the SI will create an interim arrangement, which will be valid for a maximum of two years. The department is undertaking a comprehensive review and reworking the UK’s type-approval arrangements in the case of a no-deal outcome, in order to ensure continuity for manufacturers. This absolutely is about maintaining the status quo. That is why we are having the interim measure for two years.

The review is not intended to make policy changes. We would remain aligned with existing standards, but we would amend the retained EU legislation on type approval, which runs to 3,700 pages, to eliminate remaining deficiencies and, if possible, to streamline the legislation to make it more accessible. There will, of course, be a formal consultation on that process, to ensure that we get it right. This is an interim measure for two years, maintaining the status quo pending a large piece of work with a formal consultation to ensure that, should we leave with no deal, we would have the best possible functioning type-approval system.

[Lord Adonis]

But what is the point? Why not simply continue to maintain EU 27 approvals? If we do not intend to diverge, what is the point of this big piece of work?

[Baroness Sugg]

By leaving the European Union through the European Union (Withdrawal) Act, we will take EU legislation on to our statute book. So we are carefully looking at that legislation to make sure that it functions in the best way for us. As I said, this is not intended to make policy changes and is intended to remain aligned with existing standards. But there are more than 3,700 pages of type approvals, and we want to make sure that they function correctly on our statute book. That is a significant piece of work, which we will be doing alongside a formal consultation to make sure that this continues to function.

The consultation on type approval was conducted by discussions and working groups, largely through the main UK trade bodies covering the various categories of vehicle that require type approval. We have had a range of meetings that included members of the SMMT, the Motorcycle Industry Association and the Agricultural Engineers Association. Through these meetings, we refined our proposals and addressed sector-specific issues as well as informing people what is expected in a no-deal scenario. Obviously, we have also spoken to the European trade associations.

[Lord Rosser]

I ask this in a genuine spirit: I hope that the Minister will accept that. If there were meetings and discussions with the bodies that she just mentioned, which are referred to in the EM, did they agree that what is in front of us today maintains the status quo—because they would have been told that that was the objective? Can I just check, because the Minister did not mention it, that the trade unions were not consulted?

[Baroness Sugg]

I am afraid that I do not have an answer on trade unions; I shall have to get back to the noble Lord on that.

The organisations we consulted do not wish for no deal—I should be very clear on that—but we are attempting a pragmatic approach to make sure that we continue trade with the EU should we have a no-deal exit. They are supportive of the proposals. The SMMT told the Lords Select Committee on the EU Internal Market that the department had put in place a system of temporary type approval, initially, which is probably as sensible as we can have during the interim period. The Motorcycle Industry Association confirmed that it had no immediate concern with the proposed text, which it expects to alleviate some of the short-term pressures on manufacturers and importers arising from the UK leaving the European Union without a deal. So I think that it is fair to say that industry does not want no deal but, in the event of no deal, it accepts that this interim measure is the right way forward. We published our technical notice of the changes to type approval last September.

On the question of the cost of type approval asked by the noble Baroness, Lady Randerson, the total cost to manufacturers of provisional approval is estimated to be around £800,000. That includes their internal administration costs and familiarisation costs. Normally, to obtain type approval for a single model costs at least £250,000, including the hire of test facilities, internal costs and fees to the VCA. It takes the VCA a couple of hours to prepare a UK approval following an application. As noble Lords would expect, the VCA has engaged extensively with industry and is well placed to issue provisional UK approvals. It has recruited additional temporary staff to manage the additional workload. So far, it has taken on 23 additional staff and is on target to have 40 in place by mid-March. The assessment found an estimated annual cost of the VCA of £800,000 per year, which would be recovered from manufacturers—so, combined with the administrative costs of using the scheme, the estimated total cost to business is £1.6 million per year.

[Baroness Randerson]

I thank the noble Baroness for those details, but I am still not clear about why the Government are suddenly so suspicious of EU type approvals. What grounds do they have to need to do this all over again rather than simply accepting, certainly for the first two years, that vehicles can come in with EU type approval, which we have trusted in the past and could trust for the next couple of years?

[Baroness Sugg]

Under no deal, EU-based manufacturers will also need to obtain UK approval from the VCA. That will be granted on the basis of a valid EU approval. The VCA retains the right to retest in the unlikely event that there are doubts about the authenticity of the EU approval. There are certainly no grounds for suspicion on that, but, if we leave the EU, it is only right that we have our own approval. We will no longer be a member of the EU, so we will no longer recognise its type approval.

On the VCA’s progress, as I said, engagement is continuing. It is actively working with customers and manufacturers on approvals from EU countries selling into the UK to ensure that they can deal with this. The VCA has already obtained approval data from manufacturers. Used cars and vans make up 99% of new registrations, and that engagement continues, so it is well placed.

The noble Baroness, Lady Randerson, also asked about the powers. The VCA currently has powers but, in the event of a no-deal exit, it will lose its powers as we will no longer be an EU member. That is what the SI brings in.

Several noble Lords asked about the national small series type-approval limits. They are being doubled for this year, and only for this year, because by next year we will have this new statutory instrument in place which will have our new type-approval process.

[Baroness Randerson]

Can the Minister explain why they are being doubled? On what grounds is their historic level now inappropriate?

[Baroness Sugg]

Before, it was for the whole of the EU. Now it will be for the UK only, so this is a temporary measure until the new type-approval statutory instrument comes in.

[Lord Adonis]

The Minister referred to a statutory instrument, but the regulation refers to legislation. What is the relationship between the legislation, which is scheduled for mid-2019, so will be introduced very shortly, and the statutory instrument to which she referred?

[Baroness Sugg]

The new type-approval regime will be a piece of legislation through a statutory instrument, which will be affirmative and will follow full consultation before it is published. A statutory instrument is the methodology by which it will come in.

I turn to emissions, on which, happily, we did consult. They were the subject of public consultation in November last year, and the Government’s response was published on 18 December. In parallel to that, we offered meetings with any stakeholders who wanted to discuss the proposals further. Again, I shall have to get back to the noble Lord on the specific point about trade unions. In addition to that formal consultation, DfT officials have been in regular contact with stakeholders for many months to help develop proposals to make sure that we have consistency with the existing EU regime. In the government response to comments from stakeholders, we provided clarification on the pooling and eco-innovation arrangements and set out a worked example of how a vehicle manufacturer’s target under the proposed UK regime might be established.

Through the statutory instruments, there are no specific impacts on UK manufacturers. If we were to leave the EU without a deal, the new UK regime would continue to operate as the EU regulation does for any vehicle manufacturer that registers new cars or vans in the UK. Manufacturers’ CO₂ emission reduction targets would be calculated in the same manner, and they would still be expected to meet the existing headline reduction targets and report new registrations, as they do now. UK manufacturers’ vehicles registered in the EU would count towards the EU’s regime, as they do now.

[Lord Dykes]

I am very grateful to the Minister for giving way, and I apologise for interrupting at this stage. Would she forgive me if I again raise the point that has just made by the Opposition Front-Bench spokesman about trade unions being included in the consultations? I note that she has now said twice that she does not know the answer to that, but I should have thought that her team would have provided her with a list of people who were consulted, so she could refer to it. Is it not a matter of alarm if the trade unions were not included, bearing in mind that in the high-technology motor industry, it is well known, as we see from the tragedy of the Honda closure in Swindon, that car workers are not just workers in a general sense: they are highly skilled operatives and proud of their long years of training. Therefore, they often know more than those owning or running the company and managing them about the intricacies of motor vehicle production and manufacture. The trade unions therefore really need to be consulted.

[Baroness Sugg]

I take the noble Lord’s point and of course agree that the staff who work in the manufacture of vehicles play a really important role, and we should ensure that their views are taken on board.

We expect the cost of moving to a UK regime for CO₂ emission reduction standards to be minimal. The registration of vehicles and the collection of required data is already handled by the DVLA on behalf of the DfT, and that will not change after EU exit.

With regard to emissions standards, the Government remain committed to our international and national environmental obligations. When we leave the EU, we will maintain them. If there is no deal, the SI we are considering will ensure that existing CO₂ emission reduction standards are maintained. The formula to set those CO₂ reduction targets and the headline targets themselves will be retained by the statutory instrument.

The noble Lord, Lord Rosser, asked about vehicle mass changes. As the UK average vehicle mass is above the EU average—we make heavier vehicles than the EU, on average—one consequence of adopting the current regime is that the sum of individual manufacturing targets in the UK will be slightly higher than the sum of targets in the EU. That might appear to be a slight loosening of standards, but that impression is incorrect. The goal that manufacturers must achieve remains the same. The SI specifically retains the headline targets that manufacturers must achieve by 2020. It maintains the level of effort that manufacturers must make under the current regime and ensures that regulations are as ambitious as under the existing arrangements.

On improving CO₂ standards, as per the terms of the withdrawal Act, amending SIs must only correct a deficiency. However, the Government are still committed to ensuring that the standards will be as high as or higher than those required to allow importation into the EU.

I hope that I have addressed the points that were raised in the debate. If I have missed any, I will follow up in writing. Maintaining vehicle approval and emissions standards is vital to the broader government commitments to tackle climate change and improve road safety. These SIs are essential to ensure that we maintain control of vehicles on UK roads and that the system of vehicle type approvals and emissions standards continues to function from day one after exit. I beg to move.

Motion agreed.

Motor Vehicles (Compulsory Insurance) (Amendment etc.) (EU Exit) Regulations 2019

Baroness Sugg Excerpts

Wednesday 20th February 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 24 January be approved.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, these draft regulations will be made under the powers in the European Union (Withdrawal) Act 2018, and will be needed if the UK leaves the European Union in March without a deal. The Government are seeking reciprocal arrangements on motor insurance following our exit from the EU, but in the event of no deal, without that agreement we must ensure we have a functioning statute book.

These regulations amend various domestic legislation to correct deficiencies in the legal framework for compulsory motor insurance which arise as a result of the UK leaving the EU without a deal. The draft instrument seeks to maintain the status quo with regards to compulsory motor insurance, making technical changes to ensure insurance requirements for vehicles in the UK are preserved, as well as amending redundant references to the UK being a member state. They also remove specific obligations on the UK’s Motor Insurers’ Bureau—the MIB—under the Protection of Visitors scheme, commonly referred to as the “visiting victims” scheme. If these changes are not made, the obligations would remain unilaterally upon the MIB in the event of no deal. These changes come into effect on exit day.

This SI was initially laid as a proposed negative instrument, but we have happily accepted the committee’s recommendations to re-lay it using the affirmative procedure instead, acknowledging its concerns about the impact of these changes on UK citizens.

It may be helpful to give noble Lords some background to the legislation being changed. In 1930, the UK Government introduced a law that required every person who used a vehicle to have at least third- party insurance. Today, compulsory motor insurance requirements are governed at EU level by the consolidated motor insurance directive, which is implemented in the UK through the Road Traffic Act 1988 and subordinate legislation. The amendments in this SI are necessary to uphold motor insurance requirements as they currently stand in the UK, if we leave the EU without a deal.

The instrument also deals with requirements under the codified EU motor insurance directive for member states to make arrangements to allow victims injured in a road accident in an EEA country, other than in their home state, to claim compensation when they return home. This is facilitated through insurance undertakings, with member states appointing in all other member states a claims representative to handle and settle claims by victims injured in accidents abroad.

Each member state must also appoint a compensation body which is responsible for providing compensation in certain circumstances where insurance undertakings, through the claims representative, fail to do so. These circumstances include, for example, where there is no claims representative or where the claims representative fails to provide a reasoned response to a claim within three months. In the UK, the Motor Insurers’ Bureau currently fulfils the compensation body role, and is reimbursed by its foreign counterparts under the motor insurance directive.

The amendments made by this SI are twofold. First, it makes amendments to reflect that, once the UK is no longer a member state, the motor insurance directive will no longer apply in respect of the UK. If we did not make these changes, which relieve the MIB of obligations under the visiting victims’ scheme, the Motor Insurers’ Bureau would be required to continue to reimburse its foreign counterparts in respect of EU 27 visitors injured in the UK. It would also have cost exposure for claims continuing to be made by UK residents injured in the EU, but without being able to seek reimbursement from its foreign counterparts. There will no longer be an obligation under the Motor Insurance Directive on insurance companies based in the EEA to appoint a claims representative in the UK, as is currently required. The Motor Insurers’ Bureau could therefore face the additional cost of handling claims that would previously have been dealt with by claims representatives from EEA countries. The additional cost burden would most likely be passed on to the bureau’s members through their membership levy; in turn, they could be expected to pass it on to UK motorists through higher insurance premiums.

The proposed change under this statutory instrument therefore relieves the Motor Insurers’ Bureau of obligations under the visiting victims’ scheme and removes the potential cost burden that would fall on the Motor Insurers’ Bureau if the legislation remained as it was. In future, without the visiting victims’ provisions, UK residents injured in a road traffic accident in the EEA will still be able to make a claim, but may need to do so outside of the UK.

The rest of the amendments make technical changes to domestic legislation that are limited to what is needed for the legislation to continue to function effectively once the UK has left the EU. They maintain the status quo in respect of compulsory motor insurance requirements. They also ensure that it remains the case that no insurance checks are carried out for vehicles entering the UK from the EU, and travelling between Great Britain and Northern Ireland.

On Northern Ireland more specifically, the UK Government remain committed to restoring devolution in Northern Ireland, but in the continued absence of a Northern Ireland Executive and in the interest of legal certainty, the Government will take through the necessary secondary legislation at Westminster for Northern Ireland. This SI therefore amends the Northern Irish legislation, which makes provision for Northern Ireland equivalent to the legislation for Great Britain. This has been done in close consultation with the Northern Ireland Civil Service.

In summary, while we are aiming for a comprehensive agreement on motor insurance following the UK’s exit from the EU—we very much hope to get that—these regulations are essential for ensuring that in the event of no deal, the UK’s legal framework for motor insurance is clear and fully enforceable. The rules on compulsory motor insurance are at the heart of the road safety regime and we must avoid any disruption to their proper functioning. I beg to move.

Amendment to the Motion

Moved by

--- Later in debate ---

[Baroness Sugg]

I thank noble Lords for their consideration of these draft regulations. I start by saying that this is not a situation the Government want to be in. We do not want no deal; we are working very hard to achieve a deal. We do not want to be in a situation where visiting victims provisions are no longer available to UK residents injured in the EEA. That is why we are trying to achieve a deal with the European Union, which is something that I hope will happen very soon. The removal of the visiting victims obligation in respect of the Motor Insurers’ Bureau would be a sensible approach in the event of no deal. It will ensure that the insurance industry and, ultimately, people who pay for insurance documents are not hit with an extra cost—the burden would ultimately fall upon UK motorists.

In response to the specific questions raised, as I acknowledged in my opening speech, this SI was upgraded from negative to affirmative. It did not contain provisions falling within paragraph 1(2) of Schedule 7 to the withdrawal Act, requiring it to be made under the affirmative procedure, but we understand why the committee was concerned and we are happy to relay it in the affirmative procedure.

On consultation, I can confirm that, yes, we speak to the RAC, the AA, personal injury lawyers, the insurance industry, the Motor Insurers’ Bureau, the Financial Conduct Authority and consumer organisations. It may be helpful to reiterate that, in the event of no deal, the motor insurance directive, which facilitates the visiting victims scheme, will no longer apply. A decision therefore had to be made because that would mean that the MIB would continue to compensate UK residents injured in the EEA without the ability to claim reimbursement from its foreign counterparts.

Also, the MIB would have to pay for claims made by EU 27 visitors injured in the UK, without UK visitors to the EU benefiting from those same benefits. Ultimately, this could mean that UK motorists in insurance schemes are paying, without any reciprocity, for EU 27 visitors injured in the UK. As I said, we would like to continue being part of the reciprocal scheme but, by leaving the EU, we will no longer be part of the motor insurance directive and will not be able to do so. I reiterate that this does not mean that UK residents will not receive compensation. They will still be entitled to compensation, although, as the noble Baroness pointed out, this will have to be claimed in the country where the accident happened, which will lead to additional complexities and costs.

[Baroness Randerson]

Could the Minister please take on board the need for people to know about this? I hope that she will come to the issues of why there was no consultation and the sensitivity of consultation. In view of the fact that there has not been consultation, I note that I have not seen any media coverage at all of this issue. There will be people going on their holidays—over Easter, for example—blissfully unaware of the potential impact of these changes if there is no deal. The Government need to take responsibility for advertising this situation—putting something on the government website would be useful because insurance companies, when granting insurance, could give people a pointer to information on the government website.

[Baroness Sugg]

I agree with the noble Baroness that the Government have a responsibility to ensure that people are aware of this. A communications campaign was launched in February, which has notified citizens about how the changes to claims can be pursued. It advises that in the event of a no-deal exit, UK residents involved in a road accident while abroad would need to bring their claim in the country concerned. That campaign is live, with radio, digital and social media. The noble Lord, Lord Adonis, heard an advert on Spotify, as he mentioned in a previous debate. We are also directing stakeholders to an external site where they can download and share information with their clients; we will continue to do that.

This is an area where we continue to pursue agreements with other EU countries: we are pursuing bilateral agreements and the MIB is having those conversations with its EU equivalents. The nature of the conversations is sensitive, involving the reciprocal payments of insurance claims; that is why the specific detail has not been published. As I say, we acknowledge that this is not an ideal outcome for citizens. It is a sensible alternative, after weighing up the options, but achieving a deal remains our greatest priority.

The impact assessment lays out the five options that we considered, including a “do nothing” policy, but in each there would be a direct cost to victims of traffic accidents. People are still able to make claims, but they will have to do that in another country. I am not able to give a specific cost. The noble Baroness is correct to point out that this equates to 5,000 motorists a year. The additional costs incurred by a victim would depend on a number of factors and the complexity of the case.

On green cards, the noble Lord, Lord Adonis, quite rightly quoted the comments from the SLSC report, which were put in the new Explanatory Memorandum. The noble and learned Lord, Lord Hope, was quite right to point out that this SI does not equate to green cards, but I am happy to address it briefly. The Government want to remain part of the green card free-circulation area. We meet all the requirements needed to remain part of it when we leave the EU. That has not yet been agreed by the Commission; we very much hope that it agrees that soon. They can be obtained from insurers, free of charge. The noble Lord is quite right to point out that that could mean 2 million to 4 million green cards. We are working very closely with insurance companies to ensure that people are informed of this. My noble friend Lady Barran, our new Whip, received such a contact from the insurance industry very recently. However, this is something that we want to avoid and that is why we are very hopeful that the Commission will agree that the UK can remain part of the green card free-circulation area. Again, as the noble and learned Lord, Lord Hope, pointed out, this is not in our gift. We match the requirements that are needed, but need the EU to recognise that.

I think I have answered all the questions raised.

[Lord Adonis]

Northern Ireland.

[Baroness Sugg]

On Northern Ireland and specifically the Good Friday agreement, which I think the noble Lord pointed to, the Commission and the UK have said that they will respect the Good Friday agreement, and currently—the noble Lord is right to point out—there would be a requirement to carry a green card. However, the implementing decision from the Commission to recognise the UK as part of a green card circulation area would remove the need for that green card. As I said previously, we meet all the requirements of that, and are working with the Commission to make that agreement.

I think I have answered all the questions; if I have not I will follow up in writing. I will end as I started: I recognise that this is not an ideal situation; it is not one that we want to be in. We think this is the right decision, given the implications of leaving the motor insurance directive—something that will happen if we leave the European Union without a deal—and that is why the Government are working to ensure that we achieve a deal with the European Union. I beg to move.

[Baroness Randerson]

In light of the Minister’s response, I am not minded to take this to a vote this evening. However, I do not want that to diminish the fact that this is a very regrettable direction in which the Government appear to be set. The only slight chink of light that I see is that the Minister tells us that the Government are engaged in bilateral discussions. That is what has persuaded me not to push this to a vote on this occasion.

Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019

Baroness Sugg Excerpts

Wednesday 20th February 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 18 December 2018 be approved.

Motion agreed.

Drivers’ Hours and Tachographs (Amendment etc.) (EU Exit) Regulations 2019

Baroness Sugg Excerpts

Wednesday 20th February 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 14 January be approved.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, these draft regulations will be made under the powers conferred by the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union without a deal. They also make amendments under the European Communities Act 1972. They amend EU Regulation 561/2006, which sets out driving time rules for commercial drivers, and EU Regulation 165/2014, which sets out rules on the use of the tachograph device used for the enforcement of driving time rules.

Drivers’ hours rules are central to keeping our roads safe. They set maximum driving times and minimum break and rest times for most commercial drivers of both lorries and coaches. Of course, the consequences of driving any vehicle when fatigued can be catastrophic. These rules are enforced by the Driver and Vehicle Standards Agency and the police at targeted roadside checks, as well as by visiting operators’ premises. The principal tool used by enforcement officers is the record generated by the tachograph.

The regulations would make three broad categories of amendments. First, the draft instrument would make the necessary changes so that the EU regulations retained in UK law by the withdrawal Act continue to function correctly after exit day. For example, EU processes, such as the need for the UK to seek authorisation from the European Commission for exemptions, have been removed. Secondly, the regulations would amend domestic legal provisions, also using the powers of the EU withdrawal Act. Under the current EU regulations, member states put in place effective and proportionate enforcement provisions themselves. In Great Britain, this has been done by means of criminal offences set out in primary legislation and a fixed penalty regime in secondary legislation. Particularly important amendments need to be made to these domestic enforcement provisions to make them work in a non-EU context. Thirdly, the regulations would make changes to domestic law under the European Communities Act 1972. These changes are required to update the legal provisions that implement EU law ahead of exit day so that the regime is fully effective and enforceable.

In addition to containing the directly applicable rules I have already mentioned, EU law includes the obligation on member states to apply the wider United Nations AETR agreement on drivers’ hours rules. With the UK outside the EU, this wider international agreement will in future cover transport operations between the UK and the EU. The majority of the changes here are to ensure that there are explicit domestic provisions, including offences and penalties, to fully implement the AETR agreement. The AETR driving time and tachograph rules mirror the equivalent EU regulations, so this legal change would not affect the regulatory obligations of the drivers and operators in scope of the rules.

While the need for these amendments is particularly important in the context of EU exit, they are in any event legally required under the UK’s current international obligations.

To conclude, the regulations are essential to ensure that the EU regulations on drivers’ hours, and the tachographs used to enforce them, continue to work effectively in the UK from exit day in the event of no deal. These rules are at the heart of the road safety regime for commercial vehicles.

[Lord Adonis (Lab)]

The Minister referred to the regime in respect of tachographs. Paragraph 2.7(a) of the Explanatory Memorandum states that,

“this includes amendments to criminal offences in relation to the use of tachographs”.

I take “amendments” to mean changes to the existing regime for criminal offences. Can the Minister say what will change, or are the amendments technical with no changes to criminal offences?

[Baroness Sugg]

The penalties precisely mirror those already in place for the existing equivalent offences. For tachographs, the penalty for breaches of the type-approval rules follows the legislation already in place for the type approval of motor vehicles. The fixed-penalty amounts for infringements of the AETR are the same as for infringements of the equivalent EU rules. I am happy to go through this in detail if the noble Lord would like; I expect he would.

[Lord Adonis]

So there were no changes in the actual impact of criminal offences on the individual, either in terms of the offences or the penalties?

[Baroness Sugg]

I will go through it in detail. A number of the provisions and offences in Part VI of the Transport Act are being amended to ensure that the AETR is fully applied in the UK, as I mentioned earlier. The existing measures, which make provision in relation to the EU regulation, are amended so as also to refer to the AETR provision: Section 96, which contains the offences of non-compliance with the EU and AETR drivers’ rules; Section 97C, which requires drivers to provide tachograph records to employers; Section 97G, which requires operators to ensure the data is downloaded from tachographs; Section 97H, which requires the production to an officer of downloaded tachograph data; and Section 99ZE, which prohibits the creation of false tachograph records and data. Those are the criminal offences being amended to make sure they are in line with the AETR rules.

[Lord Rosser (Lab)]

This relates to what my noble friend said. I intended to say it when I made my contribution, but perhaps I could just say it now. Paragraph 6.5 of the Explanatory Memorandum says that Part 2,

“creates three new offences and amends two existing offences to ensure that there are adequate enforcement provisions”.

I accept that if I had read the document more thoroughly, I might know the answer to this question, but what specifically are the three new offences referred to?

[Baroness Sugg]

I was just coming on to those new offences. The new criminal offences are all under the Transport Act. The first is the failure to install or use a tachograph in accordance with the AETR requirements for in-scope vehicles. The second, in Section 97ZB, is the supply of tachograph equipment that has not been or is no longer type-approved by the relevant authorities. The final new offence, in Section 97ZC, is the failure by a tachograph manufacturer to inform the Secretary of State of known security vulnerabilities in its product. As I said, in particular the provisions around the AETR agreement will be increasingly important as this international agreement takes the place of the existing EU regulations. In the course of the legal analysis work to prepare this EU exit SI, these were the new criminal offences identified as needed. It is particularly important to make sure that the AETR regulatory regime is fully functioning for exit day.

The necessary legal amendments do not modify the substantive regulatory obligations placed on drivers and operators subject to the rules. In the event of a deal, as set out in the draft political declaration, for road transport the UK and the EU intend to develop market access arrangements underpinned by appropriate common standards, including driving time limits. Obviously, that is where we hope to get to, but in the event of us leaving without a deal these regulations are needed. I beg to move.

[Baroness Randerson (LD)]

My Lords, these are really important regulations. They are vital for road safety and for driver welfare, because over the years there has been great concern about the way drivers have been expected to live when they are not driving along the motorways.

Up to now, drivers have been bound by the EU drivers’ hours regulation and the EU tachograph regulation. In future they will be bound by the AETR, which covers a much wider group of countries. From what the Minister has said, it appears that these two sets of regulations are very similar and essentially the same.

I had intended to ask about the three new offences and amendment of two existing ones, but the noble Lord, Lord Rosser, has already asked about that. It is important to find clarity on this.

The Secretary of State will be responsible in future for the approval of recording equipment. Currently, the Secretary of State is responsible only for checking and inspecting, but in future they will have responsibility for approval of the equipment. That is an important additional responsibility. Can the Minister explain who will have that responsibility in Northern Ireland? I realise that this SI does not apply to Northern Ireland, but clearly tachograph issues are very important in Northern Ireland, because drivers cross the border all the time and cross-border trade is so important. Can the Minister explain how it will work in Northern Ireland? Obviously, drivers from the Republic of Ireland will follow EU rules.

--- Later in debate ---

[Lord Rosser]

I will make one or two comments on this SI and ask the Minister to repeat a couple of things she has already said.

The Secondary Legislation Scrutiny Committee referred to the three new offences and the amendment to the two existing offences, saying:

“The House may wish to be aware of the creation of new offences using secondary legislation”.


Is the Minister able to give some information—I do not mean an enormous amount—on how frequently DfT uses secondary legislation to create new offences, or to amend existing offences? I am not entirely sure in my own mind the extent to which this is a break from normal practice or simply a continuation of an existing practice which may not be used frequently.

I would be grateful if the Minister could confirm that the effect of this SI is that there will be no changes to the requirements of the drivers’ hours and tachograph rules, so that what we are being invited to agree to is actually a continuation of the present arrangements.

I do not think the Minister will be too surprised if I ask whether there was any consultation with trade unions. Paragraph 10.1 says:

“Department for Transport Ministers and officials have regular engagement with the road transport industry”.


It would be of some relief if the Minister was able to say to me that, on this issue, that covered the trade unions as well as the other key players within the industry, because it talks, at paragraph 6.5, about creating,

“the equivalent offence of failing to install and use recording equipment”.

Presumably, a driver could be accused of not using the recording equipment, and might, for example, turn it off. To suggest that the drivers of vehicles have no interest at all in what is in this SI is stretching it.

I will leave my comments at that, on the basis that there is no change to the existing arrangements, and that is what this SI is intended to achieve. I would be grateful if the Minister could comment on what is in the Secondary Legislation Scrutiny Committee report about creating new offences using secondary legislation.

[Baroness Sugg]

I thank noble Lords for their consideration of these draft regulations, and I shall turn to the points raised.

The need for these regulations is incredibly important. On the market access regulations, which the noble Baroness referred to, the international access to the EU for the UK—if there is a no-deal Brexit—would be jeopardised without them. The regulation on the haulage market access currently being discussed envisages the continuation of equivalent rules for drivers’ hours and tachographs and includes draft provisions to reduce or terminate market access without those equivalent provisions, so they are important. Even under the limited access provided by ECMT permits, we also need to adhere to the international standards.

On enforcement, parts of the tachograph rules and the current regime of drivers’ hours offences in the UK would not continue to be enforceable in respect of much of the commercial road transport in the UK. Some of these breaches of the rules are incredibly serious, including the fraudulent manipulation of tachographs, so the rules are important to public safety.

On new powers, in many cases the reference to the Secretary of State is a technical change, but the Secretary of State will have some regulation-making powers, and they are exercisable by negative procedure to replace the Commission’s secondary legislation-making powers. At present, such legislation made by the Commission flows through to the UK automatically as directly applicable EU law. The regulation-making powers are transferred to the Secretary of State in relation to authorising exemptions from driver rules for transport operations carried out in exceptional circumstances, which the noble Baroness referred to. Procedures for field tests of tachograph equipment, setting out standardised reporting forms and specifying the content of the training of control officers, and setting out the technical specifications for tachograph equipment are subject to the negative procedure, due to the nature of the amendments which they would make. They are very specific and technical or apply to exceptional circumstances where we need a swift response. It would only be possible to modify the core regulatory obligations, such as maximum driving times and the requirement to install a tachograph, through primary legislation.

The costs on business will not change as a result of these regulations. The effect of the rules will be the same: behaviours which are legal will continue to be allowed, and behaviours which are illegal will continue to be prohibited. The regulations will enable the enforcement of the rules by the DVSA and the police to continue as at present.

On information exchange, which the noble Baroness, Lady Randerson, raised, the provisions are revoked because they relate to co-operation which, in the event of no deal, we sadly cannot guarantee. We would hope, none the less, to be in a position to continue to co-operate with the EU in relation to this sector. That is not an agreement we have reached yet, and we would not be party, for example, to the European Register of Road Transport Undertakings, which is the data exchange on violators, as we would no longer be a member of the EU, but that information flow is important and we would like to see it even in the event of no deal.

This would not affect the enforcement sanctions available. Regardless of Brexit, we are targeting enforcement resources towards offences such as tachograph manipulation, and enforcement against non-UK established hauliers and drivers, which includes the immobilisation of vehicles and fixed penalty notices, is not affected by the regulation or Brexit. We will continue to participate in Euro Contrôle Route, which is not an EU body and is not restricted to EU countries’ enforcement agencies. That organisation is focused on practical law enforcement collaboration and enables the exchanges of good practice.

--- Later in debate ---

[Lord Rosser]

Does the Minister think that the RHA and the FTA are the best representatives of drivers, as opposed to the union they are members of?

[Baroness Sugg]

No, I did not mean to say that. As I said, there will be no change for drivers from these regulations; the rules will stay the same. The EU rules are the same as the AETR rules.

The noble Lord, Lord Adonis, asked questions on divergence. We are not committing to following the EU rules. In the future, the Government will consider on a case-by-case basis how the UK might choose to respond to any changes in EU regulations. These regulations do not oblige the Government to remain aligned to the EU rules, but they do oblige the UK to remain aligned to the AETR rules. We are a contracting party to the AETR, and those wider international rules will underpin all transport operations between the UK and the EU after exit. At present, the AETR is aligned to the EU rules: the rules on driving time, rest time and requirements for the use and installation of tachographs are the same.

[Lord Adonis]

I had not understood that important distinction. Why, as a matter of policy, are we committing in advance to mimic the AETR rules when we are not committing to mimic any EU rules? Is it an ideological issue about an international body being superior to the European Union, or what?

[Baroness Sugg]

No, it is not. For many standards, whether it is UNECE standards or the AETR, we are a contracting party. If we leave the European Union without a deal, we will not be a member of the EU and so will not be following its regulations. But we will be following a broader group—those of the AETR.

[Lord Adonis]

This is important. Does an international treaty requirement or obligation apply to the United Kingdom? If not—to ask the question again—why have the Government decided to follow the AETR rules? If it is a discretionary matter, why are they not going to follow changes to EU rules, given that most of our lorry traffic is to the continent of Europe—in other words, to the European Union? It does not make obvious sense.

--- Later in debate ---

[Baroness Sugg]

All EU countries are party to the AETR and practically all international road freight beginning or ending in the UK begins or ends in an AETR country. As I said, if we leave the European Union without a deal, we will no longer be a member and so it would not be appropriate to follow the EU regulations. We have chosen instead to follow the same regulations under the international AETR body, which is a UN body.

[Lord Adonis]

I am sorry to interrupt again, but this is a point that will be picked up outside. Are the AETR rules and the EU rules the same?

[Baroness Sugg]

As I said, they are currently aligned. Rules on driving time, rest time and requirements for the use and installation of tachographs are the same in the AETR and the EU rules. Obviously, I cannot predict what might happen in the future, but we are a contracting party to the AETR, and those wider international rules will underpin transport operations between the UK and the EU after exit.

I think I have answered all the questions. As I have said previously and will no doubt say again, the Government are working to agree a deal with the European Union. But while we do that, and until we have final agreement, it is important that we prepare for the possibility that we will leave with no deal. These regulations are essential to ensure that the drivers’ hours rules will continue to underpin our road safety regime for commercial vehicles. I commend the regulations to the House.

Motion agreed.

Merchant Shipping (Marine Equipment) (Amendment etc.) (EU Exit) Regulations 2019

Baroness Sugg Excerpts

Wednesday 20th February 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 16 January be approved.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, these regulations will be made under powers in the European Union (Withdrawal) Act, and are needed if we leave the EU without a deal. Marine equipment, as we are discussing today, is the collective term used to describe a ship’s safety and pollution prevention equipment. Examples include lifejackets, fire extinguishers and navigation lights.

Marine equipment is regulated globally by the International Maritime Organization, the IMO, under three international conventions: the International Convention for the Safety of Life at Sea, the International Convention for the Prevention of Pollution from Ships and the International Regulations for Preventing Collisions at Sea. Collectively, these international conventions require flag state administrations, such as the UK, to ensure that marine equipment complies with certain safety requirements regarding design, construction and performance standards; and to issue the relevant certification before equipment is installed on board a ship flying its flag. The flag state in the UK for these purposes is the Maritime and Coastguard Agency, the MCA.

Historically, each EU maritime administration had its own systems and requirements for the approval or conformity assessment of marine equipment. To help the free movement of goods, the EU adopted legislation to harmonise the way in which EU member states implement the IMO conventions. This legislation allows member states to designate conformity assessment bodies on behalf of the EU to issue an EU-wide approval for marine equipment.

Marine equipment approved in accordance with the EU legislation may be installed on any EU-registered ship, and the international obligation of each EU member can be discharged accordingly. The MCA, on behalf of the Secretary of State, has designated 10 conformity bodies for the EU which approve marine equipment in the UK. In the event of no deal, the MCA intends to convert these 10 bodies from EU-notified bodies to UK-approved bodies, to allow for continuity in the method of approval for marine equipment in the UK, and to ensure that the UK continues to meet its international obligation.

The MCA regularly meets with these 10 bodies and has kept them informed of the proposals. The 10 bodies have been supportive to ensure that the UK continues to have a functioning statute book. Similarly, the MCA regularly meets with manufacturers of marine equipment, and has received only positive feedback on the proposed instrument.

The EU directive 2014/90, known as the marine equipment directive, and related legislation established the harmonised EU system, criteria for designating conformity assessment bodies, mechanisms for ensuring the compliance of equipment, and remedial measures for removing risks to the safety of life. The regulations in this case, which this SI is changing, includes the Merchant Shipping (Marine Equipment) Regulations 2016, which implement the 2014 marine equipment directive in UK law. The Act also makes provision in Section 8 for regulations to correct deficiencies in retained EU law arising from the UK’s withdrawal from the EU.

These regulations make the changes needed to the marine equipment regulatory framework to adapt the EU approval system to one that can function effectively as a UK approval system, if we leave without a deal. The regulations retain the status quo as far as possible to avoid market confusion and allow continuity of operations for manufacturers. Specifically, the regulations do not change the design, construction and performance standards applicable to marine equipment; the methods for conformity assessment of marine equipment; the requirements to become a designated conformity assessment body; and the mechanisms for protecting the UK market against fraudulent or unsafe equipment. The regulations will allow UK ships to continue to use marine equipment that has been approved under the EU system. However, the regulations also establish a new approval system. The regulations make changes needed to ensure the UK approval system works, for example by changing references to “member state” and “the Commission” to “the United Kingdom” and “Secretary of State”.

Noble Lords may be aware that, once again, the SLSC recommended that these regulations be upgraded to the affirmative procedure. Again, I am grateful to the committee for its careful consideration of the regulations. The committee noted that in a no-deal situation it is the Government’s long-term aim that UK ships will use the UK approval system only. The committee was concerned about the additional costs for manufacturers that might need to seek an EU approval as well as a UK approval. As we set out in the new Explanatory Memorandum, the regulations before the committee do not place any limit on how long the UK ships can use EU-approved equipment. Therefore, there will be no additional costs for manufacturers as a result of this SI. If anything were to change in the future, the Government would introduce regulations to remove the time limit only after widespread consultation and careful consideration of the costs and benefits.

[Lord Adonis (Lab)]

The Minister said that there would be no additional costs to manufacturers. But will there be additional costs to ship owners—that is, to the consumers?

[Baroness Sugg]

No. There is no time limit in these regulations on how long UK ships can use EU-approved equipment. The regulations allow UK ships to use EU-approved equipment or UK-approved equipment, but there is no time limit on that, so there should be no additional costs. There will be small familiarisation costs, but no significant costs.

The regulations also establish a UK conformity mark for the new UK system. UK ships will carry equipment that bears either the EU wheelmark or the new UK mark. The only significant difference between the UK and EU approval systems is that the EU system requires a manufacturer outside the EU to appoint an authorised representative in the EU; the UK system does not require this. We decided to make this authorised representative requirement voluntary to avoid creating a barrier to the new UK system.

The regulations include transitional provisions to smooth the transition from the EU to the UK approval systems. First, UK conformity assessment bodies that, immediately before exit day, are designated EU-notified bodies will automatically be converted to UK-approved bodies, which will be authorised to carry out conformity assessment activities for the UK. That gives certainty to the 10 UK-based conformity assessment bodies of their status after exit day.

Secondly, any application for conformity assessment lodged with a UK body before exit day for EU approval will be treated as an application for UK approval after exit day. In that way, a manufacturer will not need to make another application for conformity approval if it has not been determined.

Finally, the regulations will revoke Commission Implementing Regulation (EU) 2018/733 because these implementing regulations communicate the IMO technical standards applicable to marine equipment, which are updated annually. The MCA currently replicates these in Merchant Shipping Notice 1874 and will continue to communicate the standards in this way. Accordingly, the implementing regulations will become outdated in a year.

Merchant Shipping Notice 1874, Amendment 3, also provides information pertaining to the UK bodies that carry out conformity assessment activities on the UK’s behalf, and information on the UK’s market surveillance procedures and other technical information that bears no substantive changes. In addition to the merchant shipping notice, the regulations are supported by two marine guidance notes, which replace MGNs 554 and 557; one is addressed to applicant conformity assessment bodies and the other relates to the UK’s approach to market surveillance. The marine guidance notes do not change the substance of the notes that they replace.

Finally, the MCA will be publishing a plain English marine information note, which I am sure will be very welcome. It will explain the UK system for marine equipment approvals and substantive changes from the EU system and it will address each major stakeholder—namely, UK ships, UK conformity assessment bodies and manufacturers.

The changes made in these regulations are needed in the event of no deal. They will ensure that the law on conformity assessment of marine equipment continues to function effectively after the UK’s withdrawal from the European Union in the event of no deal. They will enable the UK to continue to comply with its international obligations to ensure that equipment installed on board its ships is approved to the relevant, applicable international standards. I beg to move.

Amendment to the Motion

Moved by

--- Later in debate ---

[Lord Rosser]

I knew I would get approval for at least something I said. I take this opportunity, after a fairly long evening, to express my thanks to the Minister for dealing with these SIs in her usual good-natured and patient manner.

[Baroness Sugg]

I thank noble Lords for their consideration of the final regulations of this evening. International conventions require each flag state administration to approve marine equipment, and once we have left the EU it would not be appropriate for the UK to fulfil its international obligations through an EU system that we can no longer influence. That is why we are setting up the UK system. It will allow the 10 UK-based conformity assessment bodies to continue offering services to the UK market. If we allowed only EU-approved equipment, those bodies would be in the strange position of having to relocate to the EU to provide to the UK market.

We understand that we need to ensure that the UK bodies can continue to offer EU-approved equipment. The new regulations apply both to existing ships and new ships, which will all be able to use either EU-approved equipment or UK-approved equipment. That does not have a time limit currently. The Government will consider whether we should move towards the UK system, but that would be done only after very careful consideration and consultation with the industry.

There will be no reduction in standards under the regulations. As I said in my opening statement, they retain the existing international standards set at IMO level, and that is what we will stick to. They apply the same familiar process and procedures to marine equipment approvals, to minimise disruption to industry. As the noble Baroness, Lady Randerson, noted, some of the 10 UK-based EU-notified bodies have a global client base—and long may that continue. They are global operations and have offices internationally. We anticipate that some of the UK-based notified bodies with offices in the EU will make contingency plans to enable them to maintain their EU-notified body status, but we have no information about any of the UK-based notified bodies moving there. These are global companies that provide to a global market, and we expect them to be able to continue to do so.

Both the EU system and the new UK system are established on IMO standards, so manufacturers do not need to produce to two standards. A UK manufacturer may maintain its existing EU approval and keep EU market access, while also maintaining UK market access.

No formal consultation has been done on this instrument, but the MCA and the department regularly meet the assessment bodies and the manufacturers. Both groups recognise that the regulations are needed to maintain the status quo, and I am pleased to be able to say to the noble Lord, Lord Rosser, on our final SI this evening, that both the UK Chamber of Shipping and Nautilus, the seafarers union, are participants in the MCA industry committees, and have been consulted. These meetings occur very frequently, every three to six months.

This statutory instrument is necessary: if the House does not approve it, there will be no legal basis for UK notified bodies to continue operating in the country. The companies and those who work for them would therefore face uncertainty. If this SI were not approved, we would not be able to accept equipment from the EU or investigate non-compliance. So it is essential. We have not carried out a full impact assessment of the regulations because their purpose, intent and real-world effect is to do everything possible to minimise cost and disruption. Noble Lords should be aware that the impacts and costs to business of not making these regulations would be significantly higher—as I said, it would lead to uncertainty.

I hope that I have managed to address the points that have been raised. I thank all noble Lords who contributed to the transport SI debates. I am genuinely grateful for their scrutiny; these are important pieces of secondary legislation, and the House is certainly doing its job in scrutinising them. Marine equipment approvals are, of course, vital to ensuring the safety of those on board ships and the protection of the marine environment. I hope that noble Lords will agree that this SI is essential to ensure that the legislation on marine equipment approvals will continue to work effectively in the UK in the event of no deal.

[Lord Adonis]

My Lords, I join in the appreciation of the Minister for the meticulous way in which she has handled our debates this evening. However, I want to clarify one point: that when the Explanatory Memorandum uses the word “choice”, it means that there will indeed be a choice on an ongoing basis, and that ships and their owners will be able to choose whether they have EU-approved and certified or UK-certified equipment—they will not have to shift from one to the other by virtue of the fact that they are purchasing the equipment after exit day.

[Baroness Sugg]

That is indeed the case. They have a choice: UK or EU. That is for new and existing ships and there is no time limit on that choice through the regulations.

[Lord Adonis]

My Lords, I thank the Minister for clarifying that point. My one final remark is that a felicitous moment in the debate was the revelation that the noble and learned Lord, Lord Mackay, is an Elder Brother of Trinity House. He shares that great distinction with Sir Winston Churchill, who used to appear frequently in the uniform of an Elder Brother of Trinity House. I hope that the noble and learned Lord might do so in future in the House, so that his great and esteemed rank is fully on display. On that note, I beg leave to withdraw the amendment.

Flybmi

Baroness Sugg Excerpts

Monday 18th February 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, with the leave of the House, I will repeat in the form of a Statement the Answer given by my honourable friend the Parliamentary Under-Secretary of State for Transport to an Urgent Question in the other place. The Statement is as follows:

“On 16 February 2019, British Midland Regional Limited, the East Midlands-based airline which operates as Flybmi, announced that it had ceased operations from that date and filed for administration. The group has surrendered its licence to operate in the UK, which means it is no longer able to operate flights. There has already been significant speculation about the reasons behind Flybmi’s failure. Ultimately, this was a commercial matter for the airline.

Flybmi operated in a very competitive industry and was exposed to wider pressures faced by the global aviation industry, such as increasing fuel prices. It is very disappointing that Flybmi has gone into administration, and we know that this will be a very difficult time for those who have lost their jobs as a result. Many of those affected are highly skilled; we are confident they will find suitable employment opportunities, and we welcome the moves by the sector to offer opportunities to those affected.

The Insolvency Service’s redundancy payments scheme is working with the administrators of Flybmi to ensure that former employees’ claims from the National Insurance Fund, which may include redundancy pay, holiday pay, arrears of pay and compensatory notice pay, are assessed as quickly as possible. With the sector ready to recruit, I hope new jobs will be found quickly.

I also recognise that this is a disruptive time for passengers, also very distressing, and the Government’s immediate priority is fully focused on supporting those affected. We are in active contact with airports, airlines and other transport providers to ensure everything possible is being done to help them. We and the Civil Aviation Authority are working closely with the travel industry to ensure this situation is managed with minimal impact to passengers. There are enough spaces on other flights for passengers to return home on other airlines, and we welcome the sector’s move to offer rescue fares for affected passengers. For example, Flybmi has codeshares across the Lufthansa Group. Passengers on these flights will be subject to EU passenger protection rules and will be provided with assistance and rerouted to their final destination.

Travel insurance and credit card bookings are worth noting here. Most passengers were business, and this will also be covered through their work. In addition, the CAA is providing detailed information for affected passengers on its website, including how people can claim back money they have spent on tickets.

The Government recognise the importance of maintaining regional connectivity, and that is why we fund a public service obligation route from Derry/Londonderry to London, which was recently extended from 1 April 2019 for a further two years, the norm for PSOs. The chief executive of Derry Council has the power to transfer the PSO contract to another airline for up to seven months to allow for a new procurement process to be conducted. Subject to due diligence, we expect the council to sign contracts and appoint an airline later this week, and we are expecting services to resume swiftly. Derry and Strabane Council will take forward that part—it is its responsibility.

All affected regional airports have been contacted and while they are disappointed, we are confident this will not cause them significant issues. A number of airlines have already indicated they will step in to replace routes previously served by Flybmi. For example, Loganair has publicly announced that it will cover routes from Aberdeen, Bristol and Newcastle.

Our priority is to protect employees, passengers and local economies. We are fully focused on supporting those affected and remain in close contact with industry and the CAA to ensure everything possible is done to assist”.

[Lord Tunnicliffe (Lab)]

My Lords, I thank the Minster for repeating the Answer to the Urgent Question. Eighteen months ago this House questioned Ministers on the collapse of Monarch Airlines, and we were promised things would change—yet here we are.

The Transport Secretary has dithered and delayed for nearly a year in bringing forward new rules on airline insolvencies, so we must ask Ministers what they have been doing. Flybmi has been in difficulty for some time, so what plans did the DfT have for an airline collapse? What plans does it have, or is it putting in place, should another airline be forced into this position?

Why was the airline allowed to sell tickets only hours before entering administration? The Minister detailed some of the actions being taken to support passengers left stranded by cancellations. Do the Government have an estimate of how many UK residents have been affected?

The Minister alluded to the fact that last week the Government agreed to extend the subsidy of Flybmi’s London to Derry route. We have gone from a ferry company with no ferries to a flight path with no flights. Was the DfT aware that the airline was about to collapse when it agreed this commitment of public money? What checks did Ministers do on the airline prior to extending the commitment?

[Baroness Sugg]

I thank the noble Lord for his questions. On how we are dealing with airline insolvency in the future, we have commissioned an independent review led by Peter Bucks to review consumer protection in the event of an airline or travel company failure. It is looking at options including an orderly wind-down of an airline so that it is able to conduct and finance repatriation options without impact on the taxpayer. The review is also looking at the lessons learned from the collapse of Monarch, and will identify potential market reforms necessary to ensure that passengers are protected when an airline fails. This is a complex issue and it is an extensive report. We are expecting the report in the spring.

Initial estimates are that fewer than 1,000 affected UK-originating passengers are overseas. Many will have already made their way back; many will have been planning to stay abroad. We understand that about two-thirds of those booked to return were on code shares, and those bookings will be honoured.

On the PSO, the department and the CAA were not informed of the administration until very shortly before the directors agreed to it. To be clear, the contract for the PSO is directly with the city of Derry and Strabane council. They are the people who run that contract and it is they who will re-let it shortly.

[Baroness Randerson (LD)]

My Lords, I thank the Minister for her Statement. The company cited Brexit as one of the reasons for its problems. First, the fall in the value of the pound in the past two and a half years has obviously meant that people are finding it more difficult to afford holidays abroad. It mentioned the spike in fuel and carbon costs caused by our exclusion from full participation in the EU Emissions Trading Scheme—we have been suspended from that until the withdrawal agreement is in place. The company said that it was unable to secure valuable flying contracts in the EU because of Brexit uncertainty.

On Saturday, we had Flybmi; today, we have the very sad news about Honda in Swindon. The trickle of job losses has become a steady flow. Today as well, we have the UK Trade Policy Observatory estimating some 750,000 job losses—that is a conservative estimated—as a result of Brexit uncertainty. What plans do the Government have to retrain people who lose their job because of Brexit uncertainty? What plans do they have to find new jobs for them? Have they estimated the total cost to our economy of retraining people and providing them with benefits while they are unemployed?

[Baroness Sugg]

Both the UK and the EU have made it very clear that we want flights to continue after Brexit. We and the EU are taking the necessary actions to ensure that this will be the case in the event of no deal. This sad event is a commercial matter for the airline in a competitive industry. BMI has been exposed to wider pressures faced by the global aviation industry such as increasing fuel prices and intense competition. Other EU airlines have collapsed in recent years; for example, Germania, Primera Air, Air Berlin and flyvlm. This is not just a UK issue. I agree with the noble Baroness that businesses want certainty. I am afraid that that I do not have any figures on jobs and retraining, but I regularly hear requests for certainty from the aviation industry. That is why we are working to deliver a deal and the implementation period that comes with it. I hope that that will be agreed soon so that we can give businesses the certainty they need.

[Lord Carlile of Berriew (CB)]

Does the Minister agree that this diminution in services to and from provincial airports in the United Kingdom raises real questions about the viability of some of those airports? Does she also agree that having a good network of provincial airports is extremely important to the UK economy and the passenger group who wish to travel? Will she assure us that the Government will look at this problem as a matter of urgency?

--- Later in debate ---

[Baroness Sugg]

I agree with the noble Lord on all those points. We are seeing supply outstrip demand on many of these routes. BMI cited 19 passengers per flight on a 50-seater plane; obviously, that would be very difficult to sustain. We are seeing other regional airlines take on those routes, but there is an excess of capacity. I agree with the noble Lord also on the importance of regional airports. Maintaining that regional connectivity is key. We provide a PSO on lifeline routes. Our aviation strategy, on which we published a consultation in December last year, looked at how we might support regional airports. They are important in providing connectivity not only for people but for freight and trade, and can act as a multiplier for local and regional economies. It is very important that we support them.

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend further address overcapacity, which she just mentioned? When airlines such as Ryanair and EasyJet are not making money, seeing their share price fall and issuing profit warnings, it obviously has implications for the whole industry.

[Baroness Sugg]

I agree with my noble friend. It is a challenging time to be in the aviation industry at the moment for many reasons. We are seeing airlines having to address those challenges. Ultimately, they are commercial enterprises, and the share price will be dictated by demand and their profitability. Through the aviation strategy consultation, we are looking to support the industry. The UK aviation sector is incredibly important to the UK economy, providing £22 billion per year and hundreds of thousands of jobs. We want to make sure that our aviation strategy helps it continue in its success.

[Lord Blunkett (Lab)]

My Lords, I have a tangential interest. I know that the Minister, for whom I have enormous respect, has an interest in what are called in technical jargon passengers with reduced mobility; that is, those who require assistance. Is she satisfied that the industry and government are doing enough to help those who will be stranded? Quite a number of them are extremely worried.

[Baroness Sugg]

I thank the noble Lord for his question. Yes, we are satisfied that we are doing everything we can to help those passengers who are stranded. The CAA and the department are working closely with airlines. Detailed information on that is on the website. As always, we need to make sure that we pay special attention to PRMs, as they are called, to ensure that they receive the support they need to get home.

[Lord Kilclooney (CB)]

I welcome the Statement by the Minister. I thank the Government for the speed with which they have attended to the problem in Londonderry and the north-west of Northern Ireland. Airlines depend on passengers. The special support that the Government are giving the route from the City of Derry Airport to London is very much appreciated, not only in Northern Ireland but also in the Republic of Ireland, because Donegal uses the airport. Does the Minister recall that more than two years ago, when there was no such thing as Brexit, Ryanair withdrew from the Derry to London route, not because of Brexit—because it did not exist—but of lack of passengers?

[Baroness Sugg]

The noble Lord is quite right that these routes will be dictated by passengers. However, as I mentioned previously, we have public service obligations, where the Government will provide funding to maintain these important routes. Perhaps I may provide further reassurance on the PSO route from Derry. Derry City and Strabane District Council have been in contact with a number of airlines. An emergency process is being invoked which allows the council to appoint another airline to take over the PSO for seven months without the full tender exercise. The department is working closely with the council to find a suitable alternative carrier on that route. We hope that an announcement will be made shortly.

Commercial Air Routes: United Kingdom and East Africa

Baroness Sugg Excerpts

Wednesday 13th February 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, UK airport slot allocation is based on worldwide guidelines from the International Air Transport Association—IATA. These guidelines provide for slots to be allocated independently of government in a non-discriminatory way. The Government recognise the difficulty of obtaining slots at highly constrained UK airports, and the much-needed additional capacity from Heathrow expansion will ease that constraint, enabling us to maintain and develop long-haul connectivity, including to developing economies such as Rwanda and Uganda.

[Lord Popat (Con)]

I thank the Minister for that helpful response. Almost two years ago, I helped RwandAir launch direct flights between London and Kigali, but I found that securing convenient landing and departures slots was practically impossible at Gatwick or Heathrow. The problem is that the biggest airlines, including budget airlines, have a monopoly over peak-time slots through grandfathering rights, meaning that newer airlines are squeezed out. Does the Minister agree that, given our country’s need to build commercial bridges with Africa post Brexit, we need a better and fairer system to ensure adequate access to those markets? Will she assure us that the Government will look urgently into reforming the allocation system?

[Baroness Sugg]

My Lords, I thank my noble friend for his continued efforts as a trade envoy to Rwanda and Uganda and particularly for his support for UK businesses involved in building Kigali airport. The Government believe that there is a case for changes in slot allocation where there is significant new capacity. Our aviation strategy, Aviation 2050, consults on a wide range of policy proposals designed to increase competition and connectivity both domestically and abroad. That includes looking at existing slot regulations to see how we can promote competition and ensure new long-haul routes, such as those to east Africa, can be delivered.

[Viscount Waverley (CB)]

My Lords, while I agree with the sentiment behind the Question asked by the noble Lord, Lord Popat, would the Minister nevertheless concur that encouraging intraregional trade is essential for multiple reasons and that encouraging an east-west network of air routes should be made a practical reality?

[Baroness Sugg]

I think I agree with what the noble Viscount says. The purpose of our slot reform would be to increase competition and benefit the consumer.

[Baroness Randerson (LD)]

My Lords, BA has in the region of 380 slots at Heathrow and Virgin has 27. Under the current system of slot allocation, every time new slots become available, they are allocated on the basis of the current ratio. This means that it is impossible to challenge BA’s position. This is not real competition and it is not good for consumers, who are offered no real choice. Will the Minister commit to look specifically at this aspect of slot allocation?

--- Later in debate ---

[Baroness Sugg]

Yes, we will. The current slot regime allows for new entrants. The regulations require 50% of available slots to be given to new entrants. The main issue is that there are not very many slots available. This is why we need expansion. There will be more slots available with expansion and with other airports making better use of their existing capacity. Our aim in looking at the slot allocation regime is to ensure competition, which will ultimately benefit the consumer.

[Lord Rosser (Lab)]

My Lords, government Ministers talk in enthusiastic terms about the new trade agreements that we will be able to conclude with other countries following Brexit. Will the availability at our major airport of sufficient and appropriate airline slots for direct services to those other countries be an important consideration in successfully concluding such trade deals? If so, do the Government intend to make sure—as opposed to simply talking about it—that such slots are available at Heathrow, or Gatwick at least, in the immediate aftermath of Brexit when, as I understand it, these new trade agreements with other countries will be concluded with considerable rapidity?

[Baroness Sugg]

My Lords, we aim to increase our connectivity across the globe. We have a very experienced team of air services negotiators in our department who work across the world to deliver new air services agreements. Our current approach is to favour as much liberalisation as possible, providing it is in the UK’s national interest. Regardless of the negotiations, Brexit will not deliver new slots, but an increased capacity at Heathrow will do. That will help us increase our links, and increase our trade links, across the world.

[Baroness Nicholson of Winterbourne (Con)]

My Lords, given the Middle East’s enormous appetite for access to the British market, would the Minister reconsider the prohibition on direct flights from Iraq to the United Kingdom and lift the prohibition on Iraqi pilots? Sadly, at the moment, they must be substituted by Jordanian pilots, who are doubtless wonderful but are none the less not the national product.

[Baroness Sugg]

My Lords, all of our decisions are based on our priorities of safety and security. We regularly look at our current system and will update it regularly.

[Lord Tomlinson (Lab)]

My Lords, can the Minister suggest to her right honourable friend the Secretary of State for Transport that he might suggest creating mythical new slots for mythical airlines without planes?

[Baroness Sugg]

My Lords, I was considering how noble Lords might be able to ask a question like that when we were talking about east African slots, but I had not considered that angle. We are interested in delivering real slots for real flights to new countries.

[Lord Polak (Con)]

My Lords, it is not just about the slots but what sort of slots are made available to these new airlines. They are often at the worst times of day. British Airways does not fly directly to Rwanda, and RwandAir plugged the gap by flying to the UK three times a day, I think—or a week. The problem is planning, because when the slots are given, they are given for only six months at a time. What sort of business can plan for six months only? Can the Minister go back and give these slots for longer?

[Baroness Sugg]

My Lords, my noble friend is quite right to point out that there are no direct BA flights to these countries. It does operate direct flights to Kenya and across the continent. In 2017, there were over 23,000 direct flights to Africa, carrying over 4.5 million passengers. My noble friend is quite right: the timing of the allocation of these slots is absolutely key. As with all businesses, airlines need to plan ahead. We are looking at that through our slot reform policy consultation.

[Lord Haselhurst (Con)]

My Lords, if there is increasing demand for passengers and freight to be taken to east African countries, notably Rwanda, the airlines themselves might realise that there is some advantage in changing their flight schedules. The Government’s interest might be not only in that but in the fact that Rwanda is to host the next Commonwealth Heads of Government Meeting, and it will be somewhat embarrassing if we do not have direct service by then. Does my noble friend agree?

[Baroness Sugg]

As my noble friend will be aware, decisions around where airlines fly are down to commercial reasons. However, I agree with him that it is important that we promote ties with Rwanda, not least as it is following us in hosting the next CHOGM summit. Trade in goods and services between the UK and Rwanda increased by 50% last year, outstripping growth in east Africa and indeed the continent as a whole. We want to see that growth in trade continue.

Motor Vehicles (International Circulation) (Amendment) (EU Exit) Order 2019

Baroness Sugg Excerpts

Tuesday 12th February 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Order laid before the House on 19 December 2018 be approved.

Relevant documents: 14th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, this draft order will be made under the powers conferred by the Motor Vehicles (International Circulation) Act 1952 and is needed in all EU exit scenarios—thus differing from many of the SIs we have discussed—as the UK has ratified the 1968 Vienna Convention on Road Traffic. The order amends the Motor Vehicles (International Circulation) Order 1975, which sets out the powers of the Government to issue international driving permits—IDPs—to ensure that UK motorists can exercise their international legal right to drive overseas.

As I have said before, the best outcome for the UK is to leave the EU with a deal, and delivering a deal is the Government’s top priority. In the event of no deal, the Department for Transport is working to achieve an agreement on mutual recognition of driving licences with EU member states. If we do not have a deal that will be by far the preferred scenario but, as a responsible Government, we must make all reasonable plans to prepare for a no-deal scenario and prepare in case we do not achieve mutual recognition.

While UK nationals will not be required to purchase an IDP if we achieve those agreements, this amendment is still necessary as the Vienna conventions come into force on 28 March 2019, irrespective of whether a deal is reached. Therefore, the 1968-format IDP is still required to guarantee licences when driving in over 75 countries outside the EU.

The EU is a popular destination for UK licence holders. Millions of UK motorists drive to Europe every year using ferries or Eurotunnel, whether for business or leisure, and many UK holidaymakers want the option to hire cars while abroad. Although we are still in the process of negotiating with the EU, we are committed to minimising disruption to UK motorists following exit and the department has taken the appropriate measures to achieve this goal.

The 1968 Vienna convention facilitates international road traffic and increases road safety through consistent traffic rules. In preparation for exit day, the UK ratified the 1968 Vienna convention on 28 March 2018. This international agreement will come into force on 28 March 2019 regardless. Following exit day, this convention will guarantee the recognition of UK vehicles and driving licences in 23 EU member states, plus Norway and Switzerland, and over 70 other countries globally. The earlier 1926 and 1949 conventions also remain in place, guaranteeing UK licences in four EU member states—different member states have helpfully ratified different conventions—plus Iceland and over 40 countries globally, including Japan and the USA, if the motorist presents the supporting IDP with their driving licence.

The draft instrument we are considering is necessary so that the Motor Vehicles (International Circulation) Order 1975 continues to function correctly after exit day. This is needed to provide certainty for UK motorists driving in the EU following exit day in case of a no-deal scenario if mutual recognition of licences is not agreed.

This SI will amend provisions of the Motor Vehicles (International Circulation) Order 1975 to implement provisions of the 1968 convention. These amendments will extend the 1975 order to the 1968-format IDP, and the power to charge a fee for the issuing of IDPs will extend to IDPs issued under the 1968 convention, in addition to those issued under the earlier 1926 and 1949 conventions. The 1968-format IDP will cost £5.50 and will be valid for three years. This amendment therefore ensures that UK motorists can exercise their international legal rights to drive in the countries party to the 1968 convention. If passed, this statutory instrument will become the main legislation on IDP issuing.

The existing SI on IDP issuing is the International Driving Permit (Fees) (EU Exit) Regulations 2019. This temporary measure has been in place since 1 February 2019—it came as a negative SI—and was required to allow charging for the issuing of IDPs under the 1968 convention from 1 February. We brought that in so that people were able to apply before exit day for these IDPs, should they be needed. Once the international circulation amendment comes into force, a separate negative SI will be required to revoke the 2019 IDP fees regulations.

These amendments also provide for the recognition of a 1968 IDP issued to non-UK residents who are temporarily visiting the UK by another country which is party to the convention. While the UK has announced that we will continue to recognise both EU and non-EU driving licences for non-residents driving for up to 12 months in the UK, IDPs may help provide legitimacy if the licence is not printed in the Roman alphabet or is in a different language.

It is also important to stress that even though Ireland is a party to the 1949 convention, UK driving licence holders should not need an IDP to drive in Ireland from 28 March 2019. Ireland, like us, does not currently require IDPs from holders of driving licences from non-EU countries. This means that IDPs will not be required when driving between Ireland and Northern Ireland.

While we are still seeking agreements with member states on licence recognition and exchange, this SI will ensure that we can issue IDPs to provide certainty for UK motorists if they want to travel in the EU following exit day. IDPs have been issued for many years under previous international conventions, so while the concept may not be new, this SI will expand the number of countries that an IDP can be used in and will enable us to issue and charge for this document. The 1968-format IDP actually has a longer validity period and therefore reduces the frequency of reissuing. I beg to move.

[The Earl of Dundee (Con)]

My Lords, can my noble friend comment on a few points? First, the European Union general safety regulations are expected shortly, before the end of March. Can she reassure noble Lords that post Brexit these standards will be observed and matched by the United Kingdom? Secondly, regarding reciprocal arrangements affecting uninsured drivers after EU withdrawal—and not least if there should be no deal—what protection would there be for a driver insured in the United Kingdom who has a collision in France with an uninsured vehicle, for example? Thirdly, post Brexit the desired aim is to make it as simple as possible to get hold of and use an international driving licence. In response to questions in another place the Government have already undertaken to reduce unnecessary complications, in particular by seeing whether there can be an international driving permit app for mobile phones, thereby avoiding the inconvenience of paper copies. What progress has been made on this?

--- Later in debate ---

[Lord Tunnicliffe]

Good. I share the concern expressed by the noble Baroness, Lady Randerson, about the resources that have been devoted to this. I shall be very happy to be told that I have misinterpreted this, but it seems to me that the day after this treaty becomes active—that is, 29 March 2019—we will have a cliff-edge situation. If we crash out without a deal, motorists will arrive in overseas countries illegally. The estimate of 7 million might be too high but, as I read the situation, technically an awful lot of people will need an IDP on the very first day. Can the Minister try to convince us that the processes necessary to meet such a sudden demand, and the plans for publicity so that the motoring public know, can be put in place so that we do not see many British motorists arriving overseas and finding themselves prosecuted?

[Baroness Sugg]

My Lords, I thank noble Lords again for their consideration of the draft regulations—the last of ours today. In the event of no deal, we remain confident that we will achieve mutual recognition and exchange agreements for driving licences with the EU and member states. As I said, we recognise EU and non-EU driving licences and very much hope that EU member states will also do so, which will remove the complexity of the system. But, obviously, until we have that agreement we must be prepared for all scenarios, so it is important to ensure that we can issue IDPs under the 1968 Vienna convention to provide that certainty for UK motorists driving in the EU.

I will respond to some of the questions raised. My noble friend asked about uninsured drivers. We intend that the UK should remain part of the green card-free circulation zone, and we are working towards that. We are seeking reciprocal arrangements to ensure that UK drivers who are hit by an uninsured driver, for example in France, can obtain compensation from the French national insurers’ bureau. On safety regulations, we have one of the best road safety records in the world; I am not familiar with the specific document which my noble friend referred to, but I assure him that we will work to continue and maintain that good safety record.

On the IDP format and the idea of an app—a new one on me, but I like the sound of it; you could perhaps called the IDP look “traditional”—the format is specified in the UN conventions, and at the moment an app or electronic document is not applicable. However, I agree with my noble friend that we should consider that in order to modernise and to enable permits to be applied for more easily.

On consultation, obviously this affects a huge number of people. We did a lot of consultation around the 1968 Vienna convention, which brought this in, we have held many discussions with motoring organisations such as the AA, the RAC and the RAC Foundation, and we have also had separate engagements with consumer associations, which are helping us to provide guidance to people.

On the communications point, I agree that the Government’s duty is to ensure that UK licence holders are provided with the correct and sufficient information to make sure that they are ready for the changes. As I say, we hope that they will not be needed. We have published guidance on GOV.UK, which covers everything, such as the type of IDP you will need in each member state—the noble Baroness was right to point out that you will need different IDPs if you are driving from France to Spain, which, just to add to the confusion, are valid for different amounts of time. The Post Office website also provides information on your nearest IDP-issuing branch, and which countries you will need which IDP for, and it will continue to update this guidance as we progress, I hope, with achieving bilateral agreements.

We have a public information campaign that ensures that UK nationals have all the information and advice they need to continue to plan and book their travel to Europe. It includes radio adverts, Spotify adverts and social media. As I say, we are in no way complacent that we will achieve this deal and IDPs will not be needed—that is why we are bringing forward these SIs. However, if we do not get a deal—I agree with the noble Lord that this is a very good example of why we need a deal—there is still the option of the mutual recognition of driving licences, which we are moving towards, especially as we are 45 days out. If we are closer to exit without this agreement and it looks less likely that we get it, I absolutely agree with the noble Baroness that we need to do all we can to ensure that we communicate that.

[Baroness Randerson]

Can the noble Baroness specifically address the issue of people living abroad—there are millions of Britons live abroad—and how they would obtain an IDP, and whether specific publicity will be aimed at them?

[Baroness Sugg]

The noble Baroness was right to point out that, sadly, we are not able to issue these abroad, in the same way that we are not able to issue driving licences abroad, which obviously gives expats in particular specific problems. We are working actively with the Foreign Office to communicate with UK nationals who live overseas, using the normal consular routes to provide information on that. We are encouraging UK licence holders already resident in EU or EEA countries to exchange their licences ahead of exit day, which will avoid the potential for them to have to retake tests. IDPs are designed for visitors, not people who are resident in another state, so we are providing clear advice to people who are resident in another state that they should exchange their licences ahead of exit day.

[Baroness Randerson]

I am grateful to the noble Baroness for giving way again. The concept of “resident in another state” is in itself quite old-fashioned. People go to work for six months, three months, even a year. They will not want to change their driving licence to make life even easier for them in that period of time; they will want an IDP for a short time. Of course, they have not had to bother about all this up to now.

[Baroness Sugg]

I agree with the noble Baroness. This is why we recognise EU and non-EU driving licences for a period of up to 12 months, for people to drive if they are not resident, because of the changing nature of how people live and work. That is why we very much want to achieve mutual recognition. However, if that is not possible, we will be in a situation where people will have to apply for IDPs before 1 March.

On resourcing, which both the noble Baroness and the noble Lord brought up, as did the SLSC, we have expanded the turn-up-and-go service for issuing IDPs from 89 originally to 2,500 post offices, which means that 90% of the UK population live within 10 miles of an issuing branch. We have also optimised that branch network to ensure that there is a good level of availability at locations that are points of departure for UK motorists, such as ferry ports and airports. The noble Baroness is quite right to point out that there were not enough post offices in Northern Ireland that could issue IDPs; that has significantly increased from two to around 100. We have had confirmation that all the staff have been trained on how to issue all three different formats, and, while this will be demand led, should demand increase, we have the facility to expand the services to an additional 2,000 post offices, which will mean that 90% of the population will live within three miles of an issuing branch.

It is difficult to quantify how many of these we will need, given that we do not have clear data on individual journeys and what licences people who undertake those journeys have. So far, we have issued an average of 2,500 IDPs a day since 1 February—about one per relevant post office per day. The DVLA has printed 2 million IDPs across all three formats to prepare for the increase in demand. However, as I say, if we see an increase in demand, we have the possibility to expand it. On staffing levels, we do not believe that we will need further staff for the Post Office. It takes around five minutes to apply for an IDP and get it issued. I very much hoped to be able to be a mystery shopper and get down to a post office myself, but, sadly, I ran out of time before this debate. We remain confident that the Post Office will be able to deal adequately with this request. Back in the day when tax discs were issued over the counter, it delivered 30 million transactions across 4,000 branches for the DVLA, so we think it has the capacity.

The noble Baroness asked about the change to the issuing of IDPs, as they are now issued by the Post Office and not online. At the end of 2017, we looked at four different options: to continue and extend the existing arrangements, which you could do by post—that was with the AA and the RAC; to give responsibility to the DVLA to issue IDPs, via the Post Office or another supplier; the possibility of an online system but with the physical document provided by someone else; and we looked at a DVLA online direct supplying system. We decided to reject the option to continue and extend the existing arrangements, as it would not have been possible to continue that under the current government procurement rules. There was also considerable uncertainty about the volume which was needed, which continues, and we thought that would be difficult for potential suppliers to be able to quote accurately. We did consider the possibility of an online system, but ultimately that was rejected. We thought that there would be a significant risk of a wasted investment on that. Moreover, such a system would not have been available to the 5 million licence holders who are without a photo card licence—although, obviously, the vast majority have one.

I return to the point that we are hopeful of achieving mutual recognition on this if we do not get a deal, but I agree with the noble Lord and the noble Baroness that this is a complex system—a messy one, as the noble Lord called it. We do not want to be in a situation where IDPs are necessary, and that is why we are trying to achieve a deal with the European Union; I very much hope that we will reach agreement on a deal soon, but the issuing of IDPs is a sensible contingency approach in the event of a no-deal scenario. It is the only way to absolutely ensure and guarantee that our licences will still be recognised after exit in the event of no deal. It relies on the international arrangements that are outside the control of the EU, but we hope to agree a deal or mutual recognition, which is obviously in the control of the EU and we will continue to press ahead with that.

This SI is essential to ensuring that UK motorists will be able to drive in the EU following exit day. The option of purchasing an IDP provides drivers with that certainty for driving in the EU under all potential scenarios.

Motion agreed.