Haulage Permits and Trailer Registration Bill [HL]

Baroness Randerson Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 13th March 2018 Grand Committee

[Lord Bassam of Brighton (Lab)]

My Lords, you will have to bear with me; it is a while since I have had to do this.

I welcome the noble Baroness, Lady Sugg, to Grand Committee and hope that she enjoys it as much as we will. Amendment 1, in my name and that of the noble Baroness, Lady Randerson, is very simple. Its aim is to ensure that the Government have as a negotiating objective continuing participation in the EU Community licence arrangements. Those arrangements have served the UK well. One might argue that they have created a frictionless regime for borders, are easy to understand and largely ensure safe passage of UK goods across the EU 27 and from the EU into the UK.

The Minister should welcome the amendment because it is surely what the Government want to secure in their negotiations. To put it into the Bill would give the freight industry the sort of confidence that it requires and demonstrate beyond doubt that the Government are very much on the industry’s side. If anyone needed reminding of the importance of freight to our economy, they need go no further than read last night’s Hansard. I have had the benefit of reading it, and my noble friend Lord Berkeley, among others, was passionate in his arguments on behalf of the freight industry generally, but for our economy in particular, when he moved amendments on freight-related issues. In particular, his Amendment 104 to Clause 7 of the withdrawal Bill caught my eye. It has similar objectives to this amendment in the sense that any new procedures that we put in place should avoid increasing delays to freight transport. The only surefire way to achieve that is to continue the current scheme.

The volume of traffic between the UK and the EU is enormous. In 2016, as my noble friend Lord Berkeley reminded us, 67 million tonnes of unitised freight were imported or exported, of which 14 million tonnes were temperature-controlled. There are 3,000 trucks a day carrying temperature-controlled loads. In one year alone, 55 million UK customs declarations had to be made, and my noble friend says that this is likely to multiply fivefold after Brexit.

We want at all costs to avoid the queues we have seen when Operation Stack has had to kick in. That would kill our export trade and decimate our ability to move materials into the UK for industry and farming purposes. Seeking to emulate what we already have must be an objective of the Bill, and that is what my amendment achieves.

I look forward to the happy prospect of the Minister not just welcoming my amendment but agreeing to busily import it and incorporate it into the Bill. I cannot believe that the Government would want to create any doubt in anyone’s mind about their intention to be successful in their negotiations and to secure the self-same benefits for the road freight sector that we currently enjoy. I am sure that the FTA and RHA would welcome that certainty. I am confident that our farming industry would want it and that manufacturers, the pharmaceutical sector and, importantly, the construction industry would want it too.

It might be for the convenience of the Committee if I say just a few words about some of the other amendments in my name in this group. The noble Lord, Lord Tunnicliffe, and I have put our names to sunset provisions simply because, if the Government are successful, not only do the main provisions of the Bill cease to have relevance but we both feel that the clauses should cease to have a place on the statute book. These amendments are supported by the Delegated Powers Committee and the Constitution Committee; I draw colleagues’ attention to the Constitution Committee’s report that has just been published. I also support the amendment tabled by the noble Lord, Lord Berkeley, in the group. I beg to move.

[Baroness Randerson (LD)]

My Lords, I signed Amendment 1 because it drew attention to the fact that, yet again, we have an example of the Government trying desperately to devise a way to maintain a position that we already have. They are fighting to keep the benefits that we currently enjoy as members of the EU. Although the Government have been quite innovative in their approach—in so far as there is any detail—the situation will clearly not be anything like as good as what hauliers currently enjoy.

The formulation in the amendment is similar to that used in the Nuclear Safeguards Bill, for example, in which we urge the Government to pursue Euratom membership. The Minister will be familiar with my Private Member’s Bill on the open skies agreement; it is the same formulation. We have a perfectly good arrangement in the EU at the moment, which we will leave for something less satisfactory. This group of amendments ensures that the powers granted under the haulage permits Bill are not applicable if we stay within the EU’s Community licence regime—in other words, if we successfully negotiate to remain in some kind of positive relationship within the EU.

I draw attention to the very harsh words of the Delegated Powers and Regulatory Reform Committee on the Bill. They reflect the sort of thing that we have heard quite regularly recently, but they are rather stronger than we are used to:

“The Bill is wholly skeletal, more of a mission statement than legislation”.


The committee also points out that:

“16 of the 24 clauses contain delegated powers, all of them subject only to the negative procedure”.


We have not even got draft regulations in order to see what the Government are aiming at.

It is clear that the Bill was written in a panic at the very last minute. It is the first instance I have come across of the Government legislating while saying that they do not want to and admitting that they do not know how the system will work. That is not how British democracy should work. It is yet another example of the destructive impact of Brexit. Having admitted that they did not want to have to legislate in this way, the Government should have included in the Bill some sunset clauses or the use of only the affirmative procedure. As it stands, the Bill is not worthy of a democracy.

[Lord Snape (Lab)]

My Lords, I support the noble Lord and the noble Baroness in their amendment. Noble Lords will have to forgive me if I sound even less coherent than usual today. I am suffering from what everybody else would call a cold, but, being a man, I believe it is something far more serious. Nevertheless, I am still here.

I would have thought, as my noble friend implied, that the Government would be in favour of the proposed new clause. As the noble Baroness said, this is rather last-minute legislation. In a way, it is understandable, because we still do not know how far negotiations have gone where these matters are concerned. I promised myself not to make a Second Reading speech and will not, but I found it surprising during the Brexit discussion to find so many road hauliers in favour of Brexit because they were not happy with the status quo as it then was. Now, of course, they are a lot less happy at the prospect of a status quo no longer existing. The main concern, at least of those whom I spoke to, was about cabotage; there is little mention—in fact, I do not think there is any—of cabotage in the Bill, and it would be interesting to hear from the Minister whether any discussions which have taken place with the rest of the EU have concentrated on this aspect of the road haulage industry.

My noble friend and the noble Baroness mentioned the number of lorry movements from the United Kingdom to the rest of the EU; there are a hell of a lot coming the other way—I understand about three times as many. We have expressed concern about the likelihood of Kent being a lorry park if no arrangements are made in light of this amendment, but if three times as many lorries are coming into the United Kingdom as leaving, it would be possible to imagine northern France also becoming a lorry park. That is not to say that I share the optimism of those who say that there will be an agreement because these matters cause even more dislocation to our European partners than they do the United Kingdom. Again, it is difficult to tease from the Government where exactly we are in the negotiations. We await the Minister’s response to this amendment. My view is that it might be something that the Government are happy to support. If she says that, at least we will have started the Committee off on a happy note, even if it is not repeated—although I hope it will be—during our deliberations. I support my noble friend and the noble Baroness and hope that the Minister can give a sympathetic response.

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[Lord Blencathra (Con)]

My Lords, I support Amendments 6 and 11 in this group in the name of the noble Lord, Lord Tunnicliffe. I do so in my capacity as chairman of the Delegated Powers and Regulatory Reform Committee.

The first thing I need to say to the noble Baroness, Lady Randerson, is that it is a bit unfair to characterise my committee’s report as having “very harsh words”. The noble Lords, Lord Tyler, Lord Thomas of Gresford, Lord Thurlow and Lord Lisvane, and my noble friend Lord Moynihan do not do harsh. Further, if one looks at my committee’s report, one will see that we have made five recommendations, two of which say that it would be nice to have a sifting committee and two of which say that we should have a sunset clause, as proposed in Amendments 6 and 11. The first recommendation suggests that it would have been helpful if the Government had given us some examples of the type of regulations necessary. If those are “harsh words”, I think the noble Baroness is living in cloud-cuckoo-land, if I may say so.

[Baroness Randerson]

Can I clarify that? Having used the term “harsh”, I then used the precise words that are in the report. Anyone reading these proceedings will be absolutely clear that my definition of “harsh” is based on the words used in the report. It might be in the eyes of the reader rather than the reality of the situation.

[Lord Blencathra]

I thank the noble Baroness. Our report does say:

“The Bill is wholly skeletal, more of a mission statement than legislation”.


It goes on to say in paragraph 4 that:

“We appreciate that the position remains unclear for a variety of reasons”,


which explains why we think the Bill is skeletal. I hope my noble friend the Minister can give us a few examples of the sort of regulations that may be necessary.

On Amendments 6 and 11, the Government’s helpful Explanatory Memorandum says that:

“The power has been left to delegated legislation rather than included in the Bill because the terms of international road transport agreements are as yet unknown. The provisions put in place, if any provisions are needed at all, will reflect the terms agreed between the UK and the EU or other countries for the carriage of goods”.


The wording in the Explanatory Memorandum is almost identical on Clauses 1 and 3, to which these amendments relate. That is why we simply say in our committee’s report:

“Given that regulations under clause 1”—


and Clause 3—

“might prove to be unnecessary, we recommend that the Bill should contain a sunset provision, extendable if necessary, to remove the regulation-making power in clause 1 if it does in fact prove to be unnecessary”.

I congratulate the noble Lord, Lord Tunnicliffe, on tabling that amendment on behalf of my committee. I had been a bit negligent in putting it down myself, so I am grateful to him and I would be grateful if the Minister, in due course, could respond to the points made.

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[Lord Berkeley]

My Lords, Amendments 2, 4 and 5 in my name come from a question I have about Clause 1: why do drivers transporting goods to Northern Ireland get singled out? We know that the Republic is going to remain in the single market and that Northern Ireland is not. I see no difference between the requirements for a permit, or anything else, for drivers going between Northern Ireland and the Republic, between Northern Ireland and the UK—I assume that there is no need for a special licence between Northern Ireland and the UK—and between Northern Ireland and continental Europe. There is an added complexity to the licensing system which is not justified. What is the difference between drivers in Northern Ireland and those in other parts of the UK going to other parts of the European Union? Finding that out is the purpose of these three amendments. I beg to move.

[Baroness Randerson]

My Lords, Amendment 3 in my name also deals with Northern Ireland. It is a probing amendment, seeking an explanation from the Minister. Following an “international agreement”, Clause 3 allows the creation of regulations prohibiting an operator of a goods vehicle using it in specified circumstances. This creates obvious problems for the Irish border. If an international agreement were able to prohibit the travel of goods between Northern Ireland and the Republic of Ireland, this could lead to a diminishing sense of the common identity that has developed in the years following the Good Friday agreement. It also presents a practical problem, as the avoidance of a hard border between Northern Ireland and the Republic would not be possible. We all know that the Prime Minister has repeatedly said that she wishes to avoid a hard border, but you are going to have a problem delivering that if checks are needed on the border. Whether the operator can cross the border or not, it is the checks that are the issue.

The Bill suggests that there is a sensitivity about travel between Northern Ireland and the Republic. Our amendment simply strengthens that reference. We obviously do not want to imply that there should be checks between Northern Ireland and the rest of the UK—quite the contrary. I therefore want to emphasise that the amendment is to investigate how this provision would work and in what circumstances the Government anticipate that they might have to use it. It would obviously be a lot easier for everyone if we kept to the current arrangements.

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[Lord Campbell-Savours]

My Lords, “first come, first served” implies immediately a limited number of permits, a shortage of permits and problems in the industry. I want to read the general conditions from one such permit issued nearly 35 years ago, which civil servants may find useful during the negotiations. It is quite short, but raises a number of issues. Under “General Conditions”, it states:

“This authorisation, together with the journey record mentioned below, must be carried on the vehicle and be produced at the request of any authorised inspecting officer. It authorises only the number of journeys indicated. It is not valid for national transport. It is not transferable. The carrier is required to comply, in the territory of each Member State, with the laws, regulations and administrative provisions of that State, and in particular with those concerning transport and traffic. This authorisation must be returned to the issuing agency within fifteen days of date of expiry. Before each transport operation, the holder of this authorisation is required to prepare any journey record provided for in bilateral agreements. Such journey record must be returned at the same time as this authorisation”.


So it is a fairly complicated process for the hauliers.

If it is not used within 15 days of the date of expiry, it is returned, but that permit has already been allocated to a specific journey—if that is what it says in the terms and conditions. Is that permit then written off? Does it affect the total number or permits that are allocated, or can we simply allocate a substitute permit, having declared that permit to be written off? I am asking this because, if a limited number of permits are allocated, there is going to be some argument about where they are going. I am trying to establish how we calculate the total numbers that are allocated.

I have been thinking about the earlier intervention by my noble friend Lord Snape. He talked about it being of benefit, in certain circumstances, to our haulage industry. There is a problem there, because we want to avoid that. If we are going into these negotiations on the basis that we want enough permits to supply all the demand, the last thing we want to do is starve the Irish of permits. If they need them, they should be given them, because that helps our case in the negotiations with the European Union.

[Baroness Randerson]

In her reply, will the Minister clarify exactly what these permits will be? The background briefing that her department issued referred to single-journey permits and multiple-journey permits. It referred to the European Conference of Ministers of Transport permit system. Having researched this, I believe that the number of permits available under that system would be absolutely tiny. Where are these permits going to come from? What is going to regulate them? Are we going to dream it up ourselves or base it on the international system? We need a bit of clarity on this.

[Baroness Sugg]

My Lords, I thank noble Lords again for their contributions to this debate. I assure noble Lords that this provision is not intended to allow these methods to be the only approach used, or for these to be used without the use of other criteria. We are in the process of negotiating with the EU on how UK hauliers will operate in the EU 27 after our withdrawal. As I said, we are confident we will secure an agreement which allows them to operate without restrictions on market access. If we do agree a permit system, “no restrictions” would mean unlimited permits. The exact nature of what will be in the permits will be down to the international agreement with the EU. We do not have details of that yet, but I imagine that it would follow the international information which is included on them. I will take back the point made by the noble Lord, Lord Campbell-Savours. I will look in detail in Hansard about what the exact restrictions on that permit are. I am not sure that we would repeat them in a future system.

In including this, we are attempting to be prudent in ensuring that the industry would be able to continue to operate under a range of different outcomes. It may be that, depending on our future partnership agreement, in some circumstances, the demand for permits may exceed the available number. As I said, that is not the aim of negotiations or what we are hoping for, but we have a duty to plan for that, as a contingency.

One of those outcomes could see the permit scheme we agree involving a set quota of permits. The Bill allows us to set criteria to allocate those permits, should we need to. The detail of the criteria will be setout in regulations and guidance. We have set out some examples in the scoping documents. In such a case, criteria such as the economic benefit the permit would bring would be reflected. Of course, a more sensible way of allocating permits would be the best outcome. However, if the use of those criteria—set out in the regulations—was not sufficient to balance demand versus supply, we may need to apply a further method such as random allocation to decide between applicants. For example, if we were able to clearly allocate 90% of applications because of the economic case, we could then use a first come, first served basis or random allocation to allocate the other 10%. As I said, and as noble Lords have made clear, we want to avoid a system with a limited number of permits, but we need the ability to allocate them should we find ourselves in the unfortunate situation of their being limited.

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[Baroness Randerson]

My Lords, I rise to speak specifically to Amendment 12, to which I added my name, but also to the group as a whole, because it covers the cost of all this to the haulage industry: the cost of UK-registered vehicles operating in the EU; the efficiency of haulage after Brexit; future arrangements for the international transport of goods; and the cost impact. I have a slight feeling of Groundhog Day. I will spare your Lordships much of the detail, but I have been through this once in the previous 24 hours, during the EU withdrawal Bill debate, when we covered some of the same territory. For the sake of variety, I will say a few different things because there are plenty of things to say.

A report came out today—hence it was not the topic of my speech last night—by Clifford Chance and Oliver Wyman. It estimates that the costs to business of Brexit in terms of customs arrangements, additional legal and bureaucratic requirements and haulage requirements in relation to customs arrangements for goods in transit will be £32.8 billion. I always measure things in relation to £350 million, for reasons that might be obvious to some noble Lords here; that figure comes out at roughly double £350 million a week. That is a very significant issue and I am delighted that the noble Lord, Lord Campbell-Savours, illustrated the situation so well with original documents. I recall that, a year ago, one of the haulage organisations—forgive me, I am delving into my memory and cannot remember which one—sent us a briefing about the costs to the haulage industry. It illustrated them by saying that, depending on the type of goods being carried, driving from the UK to Italy and back could require 64 different pieces of documentation. In this day and age, I am sure that would not be pieces of paper, but people have to fill in the forms online in just the same way. Anyone who spends as much time filling in forms online as I do will know that it is very easy to make one of the mistakes referred to by the noble Lord.

Last night, we talked about delays at the ports. Dover is a particularly stark example because of its geographical configuration and the built-up area around it. That all adds to the cost, and the issue of permits and other documentation is key to getting the lorries through Dover and all the other ports as quickly as possible.

The amendments address the impact of additional border controls and delays, the costs of which go well beyond the haulage industry. When we had Operation Stack—and Dover port is predicting worse queues than Operation Stack as a regular feature—it cost the police and council in Kent £1 million a day. All these other things add up, so it is so important that any permit system is simple, straightforward and as flexible as possible.

I also emphasised last night that we talk all the time about the cost to government, but businesses have to internalise and absorb those costs or pass them on to their customers. In the case of large companies, that might be quite reasonable over a period, but there are SMEs that have only ever exported to EU countries. They will never have dealt with custom systems before, and will not be familiar with the whole process. They will have to set up whole new departments and systems, which will be of significant cost to business and have significant impact on our industry. That applies across the board.

The Clifford Chance report picked out the impact on the car industry because car parts move across borders frequently during their production. The impact will be on car manufacturers not just in this country but in other countries bringing their cars and car parts to us.

I very much hope that the Minister will be able to assure us that the Government are doing some work on this and will soon be able to produce some hard figures. Reports have been published. They may be accurate or inaccurate, but the work has been done. Individual industries are doing that work. It would be very useful if we had some information on what the Government calculate will be the impact.

[Earl Attlee]

My Lords, I see merit in some of the amendments. Clearly, we need to know the outcome of the negotiation and what the impact will be. The noble Lord, Lord Campbell-Savours, mentioned demurrage, which is a good point. If you have a complex system, you can foul up. The problem for a small haulier is getting anyone to pay demurrage. It might be in the contract, but you try getting your customer to pay it for a small haulage business: you will struggle. It may be okay if you have a supertanker and your contract agreed on the Baltic Exchange, but for a little haulage deal? Forget it.

The Committee needs to consider the position of our EU partners. It is not in their interest to have a complex system either. We have the Hams Hall engine plant making BMW engines that have to go to Germany. We know perfectly well that automotive components go backwards and forwards several times, as the noble Baroness, Lady Randerson, said. It is in no one’s interest to have a complex system.

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Debate on whether Clause 5 should stand part of the Bill.

[Baroness Randerson]

My Lords, this clause refers to the payment of fees for the permits that we have been talking about. Currently, hauliers have to buy a licence to register as hauliers, but they are also able to have on request a Community licence, which will be equivalent to the permit and which is free. However, under the scheme that the Government envisage, Clause 5 gives them the power to levy fees for the permits. I want to know why the Government feel they should charge fees for something that up to now has been provided to the hauliers free of charge.

The hauliers seem to be suffering several times over. Rather than having this easy-to-access, free and on-demand Community licence, they now have to apply for a specific permit, pay for it, perhaps even queue for it if we are still talking about first come, first served—and all this when in the end they are going to have a much less convenient system.

My particular concern is for SMEs. Given that, when we discussed this informally, the Minister indicated that the amounts of money would be in the order of £50 or £55—if I recall correctly—clearly for a large haulage company operating vehicles on a daily basis, that will not be a massive amount of money and will be passed on to the customers, as is inevitable. However, this will be a significant additional cost for an SME. Can the Minister explain to us the cause of the Government’s decision to reclaim their costs, when clearly they have not done so up to now, whether they are open to persuasion that charging for this would not be a good idea and the basis on which charges will be levied?

[Lord Bassam of Brighton]

My Lords, the noble Baroness raised some interesting issues, some of which I touched on earlier. When I read the impact assessment, I could see that there was clearly some consideration by the Government about the potential impact on SMEs, as the noble Baroness, Lady Randerson, said. The assessment suggests that some SMEs would struggle. Clearly that worries us: we have a vibrant and viable haulage sector that works well and has served our economy well and we do not want to damage it.

I wonder what full-cost recovery really means and I wonder what extra the permit will be paying for. I saw reference in the impact assessment to a suggestion that inspections would be carried out—ones that perhaps do not currently have to be carried out—to make sure that permits are valid and do the job that they are supposed to do in terms of haulage operators being able to move across the EU 27. In particular, there was a suggestion on the trailer registration scheme that some benefits would accrue through an extra inspection regime. That may well be the case—we will have that argument another day and we have amendments that raise some of those issues—but what does full-cost recovery cover? How much is it likely to cost? What will the impact be on SMEs? What sort of inspection regime will take place? Will it mean an expansion in staff? The Minister suggested that the work will be undertaken by the DVLS, is it?

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The Government believe that it is better for fees to be made under Clause 5 instead of making new fees using Section 56 of the Finance Act 1973. There is some uncertainty about the extent of the power to charge fees under Section 56 and, in particular, whether that section would enable us to charge fees for applications to recover the costs of processing those applications. We would be looking to charge for both the application and the issuing of the permit.

[Baroness Randerson]

Can the Minister clarify something? In their examples of existing permits where there are bilateral agreements, the Government refer to both single-journey and multiple-journey permits. Multiple-journey permits are clearly a lot less bureaucratic, but single-journey permits are a lot less expensive. Do the Government have an image of which way they are going on this or whether they are going to have single and multiple-journey permits if required?

[Lord Campbell-Savours]

I am flying blind now—I should really know the answer to this question. When a British haulier travels in France now, I presume they pay a fee on the motorway. French motorways are very expensive. When a French haulier arrives in the United Kingdom, do they pay any charges for the use of our roads? I think not. If that is the case then we might like to raise this issue if we have any trouble with the French—particularly with the hauliers—in the course of the negotiations. It might not only be France; it might be that some other countries in Europe like to charge for the use of their motorways, such as the Italians, and I am sure that there are others as well. The Swiss get their share too—whenever I go through Switzerland they take me for a ride for 40 francs for my car alone.

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[Baroness Sugg]

The reason we do not think the permit will be allocated to a specific truck is to allow for flexibility, should there be a limit on the number of permits. It will enable hauliers to move them between trucks, so they are not restricted to only one truck going back and forth to Europe. On fraud, we are designing a system to try to ensure that it will be allocated to a specific company. It may give us the number of trucks that could use the permit. We could check the licence plates and other things. We are working through the issues on that. I hope that that explanation will satisfy the noble Baroness.

[Baroness Randerson]

I thank the Minister for the amount of detail she has given on this. Certainly, it is sufficient that I will have to look at the record and quite possibly come back with some more questions. I am very grateful for the amount of further information she has given us.

Clause 5 agreed.