International Road Transport Permits (EU Exit) Regulations 2018

Baroness Randerson Excerpts

Tuesday 6th November 2018 Lords Chamber

[Baroness Randerson (LD)]

My Lords, buried in these bureaucratic-sounding regulations before us today is what really amounts to a time bomb for the haulage industry.

I shall start by talking about the international road transport permits. These regulations were subject to a report by the Secondary Legislation Scrutiny Committee. As the Minister explained, the regulations are required as part of preparations for a no-deal scenario. I think I am safe in saying that, when we discussed the Bill in Committee—or Act as it now is—we did not envisage that we would still be expecting no deal to be a real possibility come November this year.

The stark statistics are that there are likely to be 80,000 applicants for 1,224 ECMT permits. Even with the ingenious DfT solution of dividing them up into monthly permits, they would cater for only 5% of the needs of UK hauliers. Needless to say, monthly permits would be massively bureaucratic—hugely expensive to the Government, but hugely expensive in particular to the haulage industry. I should explain that ECMT permits are intended for our hauliers who go beyond the EU. That is why the numbers are so small.

The Secondary Legislation Scrutiny Committee has drawn the attention of the House to these draft regulations because,

“they may imperfectly achieve their policy objectives”.

That is a masterful understatement.

If any noble Lord is not yet persuaded of the devastating impact that Brexit uncertainty is having on the haulage industry, or not yet persuaded of the disaster that would unfold if there is no deal or we do not get a deal that mirrors what happens now, I would draw their attention to the evidence given last Thursday to the EU Internal Market Sub-Committee, of which I am a member. We took evidence from the haulage industry, and I beg noble Lords to read that evidence. I will give you just a brief flavour of it.

James Hookham, from the Freight Transport Association, said that plans being prepared by the Government,

“would probably not make a significant difference to the virtual collapse of trade across the channel in the event of a no-deal”,

scenario. The Road Haulage Association was represented by Duncan Buchanan. He said that no one within the industry, either in Britain or in the EU, is prepared for what is to come, and that without a transition period, “there will be chaos”. I recommend that the Minister, in particular, reads that evidence. It was very powerful. It was emotional to hear it. Most passionate of all was the owner of an SME who trades regularly across the channel. He said that he could not see how his company could survive in the following months.

The regulations create a framework for the granting of future permits, for a system currently covered by a single Community licence. As the Minister has made clear, there is a great hurry on this because permits will have to be issued this month for them to take effect on 1 January. If I may point out the blindingly obvious, this is far too late. As the noble Lord, Lord Berkeley, made clear, the timescale is ridiculously tight.

We discussed all this in Committee on the Bill in July. It is far too late for the DfT to be bringing forward such regulations at this stage while at the same time issuing plans with a huge gap in them. We have been waiting for detail about how the permits will be allocated, and that is the yawning hole at the heart of this. It is obvious that if we have to fall back on the ECMT permits, the vast majority of hauliers will not get one. Exactly what will the Government do to help the 95% of the industry that do not get a permit?

The regulations set out the broadest, vaguest of criteria. They refer to emissions. Exactly what will the rules be on emissions? If you have an older truck, is there any point in applying for a permit? We are also told that it will depend on the goods to be carried. Does that mean that only vehicles carrying staple, vital products will get permits? We are also told that frequency of use will be one of the criteria. Does that mean that only the big companies will get a permit, or does it refer to some other aspect that I have not yet thought of? Then there is the dreaded “random selection”—the government lottery for haulage—and, famously, “any other matters to be considered appropriate”. What else might the Government be thinking of taking into account? The big question is: when will the Government make up their mind on the details of the criteria? How will we be told about them? Above all, how will the haulage industry come to know them? Where and when will they be published?

Hauliers are being asked this month to drop an application into a black hole. When will the Government provide publicity to fill that black hole? Apparently, the DVSA is devising an IT system. Can the Minister update us on that? Is it ready? As this is the month when people will apply, is the IT system up and running?

The Government state that they expect to reach a bilateral agreement with the Republic of Ireland. How are discussions on that going? Are the Government still confident of that?

Then we come to costs, which are £10 per application for an ECMT licence and an issue fee of £123 per year. That does not square with the costs cited in the Explanatory Memorandum. Paragraph 12.1 states that the annual cost to business and voluntary bodies is £163,000 with a £13,000 familiarisation cost. How were those figures reached? The industry includes 80,000 hauliers.

The Government expect to make bilateral agreements with the EU 27, but that will leave—as they clearly fear, hence the monthly ECMT permits—a time gap. Can the Minister confirm that the Government are developing plans for that time gap while the discussions are going on?

Finally, ECMT permits are intended for use in 43 countries, many of which are well beyond the EU. There are hauliers who make their living by transporting goods to those countries. They currently use ECMT permits; they never have a problem getting them because not many hauliers are making that sort of journey. However, they are going to be in stiff competition if EU-designated hauliers are going to be using the permits as well. What are the Government doing to guarantee an income and a livelihood for those hauliers who rely on ECMT permits?

I turn to the Trailer Registration Regulations, which are also part of the Brexit preparations. The Government estimate that, by next March, 80,000 trailer users will be required to register their trailers for international use for the first time. Most, but not all, of these are commercial operators. In contrast with the previous SI, there are very precise details here on the required size, placing and visibility of the registration plate. It is complex: you are going to need two registration plates—one for the trailer, one for the vehicle—you need to register your trailer, show relevant documents when you go to get your plate, and so on. The big question is the level of awareness across the very diverse haulage industry, and beyond, that will be affected by these regulations. There may not be many non-commercial trailers in this size category but, as the Government state, there are some. What have the Government already done to make trailer owners aware of what is coming? What are they planning to do, how and when?

In Committee, I raised the issue of the existing registration scheme run by the National Caravan Council. There is a real danger of confusion here, if the Government do not make their explanations crystal clear. Trailer owners who are already registered with the NCC could think that they do not have to register a second time. What discussions have the Government had with the NCC on the integration of these schemes and on making it absolutely clear that trailer users and owners will be required to register again?

On the road safety SI, I request an explanation on the territorial application, which is an issue I have raised before. It clearly says that it applies to Great Britain—hence it does not apply to Northern Ireland; that is clear—but why is Scotland picked out and Wales not mentioned? I draw attention to the fact that the Haulage Act applies to Northern Ireland, so there is going to be some confusion about the territorial application. I am sure that there is a technical tradition as to why Wales is not mentioned, but I wish the Government would abandon that as it is very confusing. This is becoming a serious issue because we have an avalanche of new legislation falling on the haulage industry and people wishing to travel, for whatever reason, from one country to another. Small businesses are trying to keep abreast of the industry. They may not belong to one of the big representative organisations that do a very good job of alerting their members. It makes it very confusing for them if it is not absolutely clear what applies in which bit of the UK.

--- Later in debate ---

[Baroness Randerson]

Can the Minister explain how small businesses are going to be taken into account according to those criteria? You could be a small business doing 100% of your business with the EU but have only one lorry. You are therefore going to be at a huge disadvantage in the numbers game, compared to big companies. A small business could well go to the wall as a result.

[Lord Berkeley]

May I ask a question supplementary to that? If the criterion is going to be the greatest economic benefit, how can the Government identify something vital for a small business, as the noble Baroness suggested—25 tonnes of oranges, or the parts for a major car manufacturer who says, “If I do not get the parts today, I am going to close the whole thing down”—when we are only going to get a quarter or so of the permits we need at the moment? It seems there is going to be chaos either way. Does the Minister have a solution?