Haulage Permits and Trailer Registration Bill [Lords]

Andy McDonald Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Monday 14th May 2018 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)]

The Bill presents a long overdue opportunity to consider the importance of the transport and logistics industries to the United Kingdom and the commercial road haulage sector in particular. The industry employs more than 2.5 million people and is the fifth biggest sector of the economy contributing £124 billion.

One of the privileges of my job is to meet people from across the transport, freight and logistics sectors. In the course of those discussions around transitional and post-Brexit arrangements, I hear an increasing frustration and anger at the cavalier “it will be all right on the night” approach from this Government, and rightly so, because there is no evidence that economic self-interest will prevail.

As we debate the prospect of a permit system for the haulage industry in the event of a no-deal Brexit, it should be recalled that the UK has 600,000 goods vehicle driving licence holders. There are nearly half a million commercial vehicles over 3.5 tonnes registered in the UK, which are responsible for moving 98% of goods. This is a serious and vital industry and we meddle with it at our peril.

[Sammy Wilson]

Does the hon. Gentleman accept that the haulage industry is important to the United Kingdom, especially to Northern Ireland where almost all of our food and goods travel by road? Does he not accept that the whole purpose of the Bill is to ensure that, if there is a deal, we are prepared for it, and if there is no deal, we are also prepared for it, and that that should reassure the haulage industry?

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[Andy McDonald]

I am grateful to the right hon. Gentleman for his intervention, but I just do not share his sense of confidence that the provisions of the Bill are anything like adequate in the event of a no deal. These measures will not respond to the needs of the country should that contingency arise.

The Bill must be regarded as the first piece of legislation that provides for a no-deal Brexit. It sets out new powers for the Government to allocate permits to hauliers if required by future agreement or lack thereof, so that UK lorries can continue to operate to and within the European Union. A newspaper headline this weekend—in The Sunday Times, no less—was correct to say that

“this government is failing business at every turn”.

Today’s debate is a further foretaste of the damage that this Government’s prevaricating is doing to the British economy.

[Mr Leslie]

My hon. Friend will have noticed that the Secretary of State—in all his finger-crossing hopes for something to crop up before Brexit day—did not actually update the House on the progress that he might be making towards a comprehensive land transport agreement, which is what the Freight Transport Association is asking for. The Secretary of State did not confirm whether he is personally in discussions with the Irish Government, other Governments or the European Commission. Is it not lamentable that he could not even give this vital industry some level of update on the progress of negotiations towards those agreements?

[Andy McDonald]

My hon. Friend has got it absolutely right. It is indeed lamentable that there has been a complete absence of those discussions. It is a question of hit and hope, finger in the air and everything will be alright on the night. This is not the right way to go about it. The Secretary of State has come to the Dispatch Box and said that he does not speak for the other 27 Governments. I sometimes wonder whether he speaks for the one of which he is a member. A damaged and disrupted logistics sector will result in a damaged and disrupted British economy.

[John Redwood]

Will the hon. Gentleman just tell the House what additional contingencies he would make if he were the Secretary of State?

[Andy McDonald]

If the right hon. Gentleman will allow me to continue, that is exactly what I am going to outline during the course of my speech.

I hope that this Bill represents the dawn of the realisation of the catastrophe that would flow from a chaotic Brexit. A few months ago the “beast from the east” left supermarket shelves across the country empty, while logistics problems forced fast food chain KFC to close hundreds of outlets because of supply shortages. These examples provide the merest glimpse of what shocks to the supply and distribution chain will look like for British consumers and businesses if the free flow of trade is not maintained following our departure from the European Union.

The Bill has serious implications for the UK’s music industry, particularly the concert haulage industry, which supports the music industry in the UK and the EU. Concert haulage operators require a community licence for road transport to the EU, which will be lost after Brexit. The Road Haulage Association says that a permit system will not work for concert hauliers, and estimates that the UK will run out of permits in 2.5 days. I have to ask: when will the Government listen to business and accept that there has to be a continuation of the current trading and transport environment, if a massive disruption of the flow of goods and produce is to be avoided?

As an island nation, ports are and will remain vital to our trading relationship with Europe and the rest of the world, so it is quite extraordinary that no Minister from the Department for Exiting the European Union has visited Britain’s most important gateway to Europe—the port of Dover. Half of the UK’s international road haulage traffic comes through Dover alone. I ask the Minister, is transport really a top priority in the Government’s Brexit negotiations?

[Mr John Hayes (South Holland and The Deepings) (Con)]

Forgive me; I did not mean to interrupt the hon. Gentleman in mid-flow, but I think that I am right in saying that the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Fareham (Suella Braverman), visited Dover last week. I know that the hon. Gentleman is a straightforward Member of this House and would not want to mislead the House, so he will probably want to correct what he said. I say this to be helpful.

[Andy McDonald]

I am grateful to the right hon. Gentleman for making that point. I am just delighted that the hon. Lady got there eventually.

Road haulage is essential to the complex and sensitive just-in-time supply chains that underpin the UK and EU economies. Roll-on roll-off ferries face the most serious impact from a no-deal Brexit. A staggering 10,000 trucks pass through Dover each day. Almost none of these currently requires a customs clearance process. The port estimates that a two-minute delay per vehicle will generate a permanent 20-mile-long traffic jam.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My hon. Friend is making an excellent speech. Given the current snail’s pace in the negotiations, with the Cabinet split in two to look for solutions rather than no solutions, should there not have been some contingency in this Bill for customs checks, which are looking increasingly likely due to the Government’s handling of Brexit?

[Andy McDonald]

My hon. Friend makes a good point. One does wonder why no such contingency has been put in the Bill, and we will have to address that in Committee.

The Society of Motor Manufacturers and Traders tells me that, on average, 1,100 trucks from the EU deliver components worth £35 million to UK car and engine plants every single day. The UK automotive industry relies on just six major ports for the export of 95% of completed vehicles. The SMMT says that some manufacturers face costs of up to £1 million an hour if production is stopped due to component supply issues. A 15-minute delay to parts delivered just in time can cost manufacturers £850,000 per year. Is it not blindingly obvious that the current trajectory of this Government, with Brextremists at their core, means that we are heading for economic and trading chaos?

[Chris Grayling]

May I ask the hon. Gentleman a simple question? If business shares the pessimism that he is laying before the House, can he explain the string of positive announcements of investment in the United Kingdom that we have seen in the past few months by Vauxhall, Toyota and others? If things are so bleak, why are they choosing to make substantial investments in their future in the United Kingdom?

[Andy McDonald]

If the Secretary of State had looked at the papers over the weekend, he would have seen exactly why. A lot of people are making their plans to get out of the UK if necessary. That is exactly what has happened. He is playing with fire on this, and he really should wake up and smell the coffee.

The Government have done little to help the road haulage industry. They have made a complete and utter dog’s breakfast of contingency planning for the M20 motorway. A lorry park off the motorway has been desperately needed to help alleviate problems during Operation Stack, and it is all the more needed ahead of Brexit next March. Yet the Department for Transport failed properly to undertake the critically important environmental risk assessment before the planning process for the £250 million project and had to scrap it last September. This incompetence will have disastrous consequences. If this Government cannot successfully plan how to build a lorry park in Kent, how do they expect anyone to believe that they are capable of introducing an alternative haulage permit scheme?

[Mr Goodwill]

The hon. Gentleman says, rather surprisingly, that this Government have done nothing for the road haulage industry. Is he not aware that the HGV levy brought in to level the playing field between foreign and UK hauliers brought in £96 million in the first two years after it was introduced in 2014, and that the previous coalition Government increased the speed limit on single-carriageway roads from 40 mph to 50 mph, which made a great contribution to improving logistical efficiency?

[Andy McDonald]

If the right hon. Gentleman had had the pleasure of listening to the Road Haulage Association last week, and the FTA as well, he would probably agree with me that they are not exactly overjoyed by the prospect of the uncertainty that is facing them. A lot of these companies are small companies working on very small margins. He raised the issue of costs that are now going to be put on to those companies. He should be worrying about how that is going to impact on them.

[Mr Goodwill]

Will the hon. Gentleman give way?

[Andy McDonald]

No. I am not trying to be rude, but I need to make progress. I have taken a lot of interventions.

The ongoing supply of labour is a huge concern for the road haulage industry. The average age of an HGV driver is now 55 and only 2% of the workforce is under 25. The industry is enormously reliant on the 60,000 non-UK EU nationals and any restriction on the supply of skilled workers will undoubtedly have a negative impact.

Ministers urgently need to reassure the road haulage industry that Brexit will not result in more delays at borders as well as that it will not have to bear additional red tape and costs. The Government need urgently to provide clarity about customs, borders and future regulations, about which there are real and deep concerns. Ministers continually argue that economic self-interest will mean that things naturally gravitate towards protecting British business. That is a naive and irresponsible view that is already damaging UK industry.

I pay tribute to the noble Lords, whose work has improved the Bill. The Delegated Powers and Regulatory Reform Committee in the Lords described the Bill as

“wholly skeletal, more of a mission statement than legislation”,

said that the Committee was

“in the dark because the devil will be in the regulatory detail”,

and urged the Government to provide

“illustrative examples…of at least some of the regulations to be made under the main delegated powers in the Bill”.

As the future relationship is a matter for the Brexit negotiations, this is an enabling Bill that contains little detail and grants the Secretary of State significant powers. The fact that so few details are on the face of the Bill also speaks to the lack of strategy and progress in the Government’s approach to exiting the European Union. The Secretary of State should of course have the powers needed to mitigate the damage to the UK haulage sector caused by a failure to retain current arrangements, but those powers should not be excessive. For example, an argument has been made in favour of a sunset clause so that the powers do not remain on the statute book ad infinitum.

Following pressure in the other place, concessions were made. I am glad that clauses 1, 2, 12 and 17 will be subject to the affirmative procedure, taking account of the recommendations of the Delegated Powers and Regulatory Reform Committee to the effect that regulations made under certain clauses should be subject to a vote of both Houses. I am pleased that the Government tabled an amendment introducing a new reporting requirement, requiring the Secretary of State to lay a report before Parliament annually that assesses the effect on the UK haulage industry of any restrictions that apply to a permit scheme agreed with one or more EU member states. The impact of a future permit scheme has the potential to be far reaching with many unintended consequences, so it is right that the Secretary of State should report to Parliament.

In the light of the Government’s abysmal failure on road safety, which has seen the number of specialised road traffic police plummet while the number killed and seriously injured on our roads rises year on year, I urge the Secretary of State not to attempt to remove Labour’s amendment on trailer safety. The amendment is eminently reasonable, and requires the Government to assess evidence on the incidence of trailer-related road accidents and, only if the evidence justifies action, for a new MOT-style mandatory safety standards testing scheme to be created.

I note that when it was introduced in the other place the Bill would have allowed for permits to be allocated on a first come, first served basis or through a lottery, creating a situation where companies would be left queuing overnight or waiting with their fingers crossed that their company’s name would be pulled out of a hat. I am glad that, after criticism from the noble Lord Tunnicliffe, this was changed.

In Committee, Labour will continue to identify any further unintended consequences of the Bill, and will look to strengthen the accountability to Parliament and restrict the powers granted to the Secretary of State where necessary. Labour believes that getting the right deal for transport and its networks must be the highest priority for the Brexit negotiations. Nothing less than the future of the country is at stake. Only Labour’s clear policy of a customs union with the EU can ensure that trade can flow and grow. The Government should put country before party and provide the same.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

I am slightly astonished at some of the points that the hon. Member for Middlesbrough (Andy McDonald) made on behalf of the Opposition. I know him well—we often travel down on the train from the north-east together—but he has spent most of the past quarter of an hour attacking the Government for implementing the decision made by 65.5% of the voters in Middlesbrough, and by over 60% of people in Cleveland as a whole, to leave the European Union.

[Andy McDonald]

Does the right hon. Gentleman not agree with me that the voters did not vote to be worse off?

[Mr Goodwill]

The hon. Gentleman has fallen into the other trap that many Labour colleagues fall into, which is arguing that the people were too stupid to understand what they were voting for. They knew precisely what they were voting for. They knew it would be tough, but they put the interests of the country before short-term economic advantage. I believe that the Government are negotiating to get the best deal for Britain and one that will be to the long-term benefit of our country.

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[Mr John Hayes (South Holland and The Deepings) (Con)]

The central role of good Government is to anticipate, prepare and act. In practice, of course, Governments spend a good deal of time responding to things to which they are obliged to react. Nevertheless, it is important that, as Ministers anticipate, they prepare legislation accordingly, and that is really what we are talking about today.

As I read the Bill, I could not help thinking that it is yet another piece of legislation that had its genesis during my time at the Department for Transport. We spend a great deal of time debating Bills that I had a hand in. When I was a Minister, I suppose that excessive humility meant that I did not fully accept the plaudits from the Secretary of State and the shadow Secretary of State, but now I realise just how inventive I was in the Department. It was that combination of perspicacity and imagination that led to so much legislation, including this Bill.

As has been said, the essence of the Bill is to create a framework. The first of the Bill’s two parts deals with establishing a permit system that will allow the continued movement of goods across Europe by hauliers, and the second deals with trailer registration. I do not want to go exhaustively into that—it was described very well by the Secretary of State, and others have made reference to it—but some points of amplification are worth making. I emphasise again the significance of haulage and why the measures that we are debating really matter. Both the Secretary of State and the shadow Secretary of State drew attention to the scale of the industry. It is worth something like £13.1 billion to the economy and directly employs almost 200,000 people but, of course, there are many more jobs in the logistics industry, as we like to describe it in the modern idiom. Around 2.35 million people have occupations that relate to the transit—the movement —of goods.

Through haulage, for the vast majority of goods are transported by truck, the things that we want and the things that we need—they are not necessarily the same, by the way—are brought to us, and the things that we make and sell are taken from us to other places. It is critical that the process is as seamless as possible. I note that there was mention of fresh produce. When we move things around, it is important that we do so quickly, and no more so than in the case of fresh produce. The just-in-time culture that we have created means that the lead times involved in acquiring, transporting and retailing goods are very short indeed, and were they to suffer as a result of any change, it would mean not only a considerable disruption to what we have come to expect, but significant additional costs to the haulage industry, which works on very narrow margins—typically something like 1% to 3%. I have spoken to the RHA about that, both since and while I was a Minister, and it is conscious of the need to maintain that free flow of goods not only for its own sake, but for the sake of all those it serves through the industry including, ultimately, consumers—those who buy and use the goods, and whose lives are made better by their acquisition.

It is therefore important, as the Secretary of State and the shadow Secretary of State have both emphasised, that we make the process as seamless as possible. The optimum outcome, of course, is that it be as much like it is now as possible. As the Secretary of State said, that is what he anticipates will be the product of the negotiations in which we are engaged, and his argument is compelling, because it is in our mutual interest that that is the case. It is absolutely in the mutual interest of countries across Europe that they are able to sell and buy goods as they need them.

[Andy McDonald]

Does not the right hon. Gentleman accept that while a principle of solidarity exists in an EU comprising 28 countries, once we are a third country, that principle of solidarity will obtain across 27 countries and their duty will be to each other, not the UK?

[Mr Hayes]

I understand the hon. Gentleman’s argument, but I suspect that the commercial interests of those countries and the pressure that commercial interests put on them will, in the end, be irresistible. For example, as was argued a few moments ago, farmers, growers and food manufacturers across Europe—whether in northern Europe or, as we heard, in Spain and Italy in the south—will want their goods brought here, much as they are now. I think the pressure to do a deal in our mutual interest will in the end rule the day.

Now, I do not know that, and the Secretary of State asked, very honestly, “How could I predict that?”—he would not want to, and he did not—but I think a deal in our mutual interest is the likely outcome. He called it his best guess; I would go further and call it my considered estimation.

[Mr Hayes]

That is why it is vital that the negotiations go well and why it is important to put in place this framework legislation. It is right that the Government prepare for all eventualities. In opposition, I spent half my time saying the Government were being too precise, too dogmatic, too determined to specify, and the other half saying they were being too open-minded and too flexible. The trouble with all Oppositions is that they meander between those two positions: on the one hand, they want the Government to be specific; on the other hand, they want the Government to be flexible. I slightly sense that that dilemma prevails in respect of the existing Opposition. This is a framework Bill—there is no need to apologise for that. The detail will come forward when we know the shape of the negotiations and how much of the Bill will be necessary. That is a straightforward and honourable position for any Government who want to anticipate, prepare and act.

The shadow Secretary of State made an additional important point about haulage that I also want to amplify. On skills and employment, he is entirely right that, irrespective of our relationship with the EU, there is a pressing need to recruit more people into the industry. As he was speaking, I was looking at notes on this very subject. He will know that the strategic transport apprenticeship taskforce, which has been looking at just these matters, published a report last year, off the back of its earlier consideration, and although there have been improvements across each sector of transport—road, rail, and so on, including haulage—there is still more to do, particularly to recruit people from under-represented groups in the sector.

When I was a Minister, work was being done, which I know is continuing under my successors, to encourage more people into the industry by, if you like, recasting or rebranding it—something I discussed with the RHA many times. That is vital not only on the purely numeric grounds the hon. Gentleman mentioned, but because we want people to have worthwhile careers in logistics. It is an important sector, and there are many good jobs to be had and many important skills to learn and use, so there is an efficacy in this as well as a necessity. To that end, I hope the work will continue through the apprenticeship taskforce. I gather from its report that there are 15,000 apprentices in road freight this year. I hope that that number will continue to grow. I established an education advisory group in the Department to advise on how we could cast out more widely in attracting people into the industry, and it seems to me that that work should also continue—but far be it from me to bind the hands of my successors.

[Andy McDonald]

Does the right hon. Gentleman also agree that this is not only about attracting people into the industry but about retaining them? The figures show that many young people coming into the industry do not hang around but go on to pastures new, and that requires urgent and focused attention.

[Mr Hayes]

It does require focused attention. The hon. Gentleman is absolutely right: it is about retention as well as recruitment. We must recruit from different sources, which might mean people coming back into the industry, and address the rate of attrition. We must draw on people from other sources—a good example is the armed services, where people, having learned to drive, could re-enter the private sector—and we must attract more people from minority communities, which are very sparsely represented in haulage and road freight, and more women drivers. To do that, however, we have to change some of the working conditions. That is critical to both recruitment and retention.

Madam Deputy Speaker, I hope you did not mind my digressing a little from the specifics of the Bill in order to amplify an important point that I know is keenly felt by shadow Ministers and Ministers.