Haulage Permits and Trailer Registration Bill [HL]

Baroness Sugg Excerpts

2nd reading (Hansard): House of Lords
Tuesday 27th February 2018 Lords Chamber

Moved by

[Baroness Sugg]

That the Bill be now read a second time.

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

My Lords, the UK’s road haulage sector directly contributes £13.1 billion to our economy and plays a major role in carrying £35 billion in trade between the UK and the EU. It is estimated that almost 200,000 people are directly employed in the road freight sector in Great Britain. These figures alone highlight the importance of the sector to the UK economy. The commercial haulage industry is critical to ensuring the continued movement of goods between the UK and EU. Hauliers are planning for the years ahead and they want certainty that any future deal can be implemented smoothly.

I hope noble Lords will welcome that the UK’s overall aim in the negotiations with the EU is to maintain the existing liberalised access for commercial haulage. We anticipate success in the negotiations, building on the progress made last December. However, it is only right and responsible that the Government should prepare for a range of scenarios. As part of the Government’s EU exit legislation programme, the Bill provides a sensible framework for the UK to use, if required, as part of our agreement with the EU. The Bill also ensures that the UK can fulfil its international obligations and be ready to operate in the international arena when we leave the EU. I hope noble Lords from all sides can support the Bill’s intention.

There are two parts to the Haulage Permits and Trailer Registration Bill. The first will give the UK Government the ability to introduce arrangements to operate a road haulage permit scheme, if that is what is required as part of our deal with the EU. Currently, hauliers have to hold an international operator’s licence and an EU community licence to operate on the continent. The Bill puts in place a legal framework for the Government to establish an administrative system to issue permits, if required, as part of the final deal. This part of the Bill is designed to provide a flexible framework for any system that may be needed, without placing any undue regulatory or financial requirements on the industry. It will come into effect only if our international agreements require it, and it applies only to UK hauliers travelling abroad.

Permits are a key feature of almost all international road freight agreements outside free trade areas. Indeed, the UK already has several permit-based agreements with non-EU countries, including Belarus, Georgia, Kazakhstan, Morocco, the Russian Federation, Tunisia and Ukraine. The UK also has liberal non-permit agreements with Serbia, Albania and Turkey. While we currently administer some types of permits, the numbers that we issue are very small, so the Government are putting in place plans to deal with future international agreements that may require permits. The Bill will allow the UK Government to distribute permits that we negotiate with overseas authorities to UK operators. The type and form of permit will depend on the agreements that we negotiate. It also contains powers to determine how to allocate permits in the light of any agreement reached, based on criteria that will be set out in the regulations with further guidance on how they will be applied in practice.

This section of the Bill also allows the Government to recover the cost of the scheme through the charging of fees that will be in line with current arrangements for international permit schemes. We are committed to ensuring that any additional requirements or costs to the road haulage industry are minimised. There are a total of 13 provisions containing delegated powers within the Bill to establish the permitting system, should we need it, and a trailer registration scheme. Of course it is important that we get these regulations right, and we will be consulting with industry on the detail later this year.

Before moving on to Part 2 of the Bill, it may be helpful if I say a few words about the 1968 Vienna convention, which is subject to a separate parliamentary process but is related to the trailer registration section in the Bill before us today. The Government have recently laid a Command Paper with the intention to formally ratify the 1968 Vienna Convention on Road Traffic, which the UK signed in 1968. We intend that our ratification will be completed on or before 29 March 2019. The convention was introduced by the United Nations to enable international road travel and to increase safety by establishing common traffic rules. The convention builds on the earlier 1949 Geneva Convention on Road Traffic and the 1926 Paris convention, both of which the UK has already signed and ratified.

Moving on to the second part of the Bill, the Government are seeking powers to establish a trailer registration scheme to meet the registration standards in the 1968 Vienna Convention on Road Traffic which I just mentioned. Many EU countries already comply with this convention and have similar registration schemes. This part of the Bill will ensure that UK operators will comply with the obligations of those countries that require registration of trailers travelling on their roads.

The Bill provides powers to set the scope of coverage for a trailer registration scheme. While the detail of the scheme will be set out in regulations, our intention is to require only operators who take trailers abroad to register their trailers. The scheme will apply to commercial trailers over 750 kilograms, and all trailers over 3.5 tonnes. I would like to reassure noble Lords that private-use trailers such as caravans and horse trailers would not fall within the scope of the mandatory registration scheme. Furthermore, this scheme would not apply domestically.

This section of the Bill also allows the Government to recover the costs of running this scheme through the charging of fees. The fees will be significantly lower than those currently set out for the registration of motor vehicles. It is of course important that these new arrangements are complied with. Offences will be created in relation to trailer registration that mirror existing offences for motor vehicle registration.

On devolution, the Bill covers the whole of the United Kingdom. Haulage permitting and trailer registration are reserved matters in Scotland and Wales, and this matter is devolved to Northern Ireland. The department has been working closely with all devolved Administrations as the Bill has been developed.

On the Bill’s application to the island of Ireland, this legislation supports the commitments made in the December joint report. These commitments include avoiding a hard land border and preserving the constitutional and economic integrity of the United Kingdom. We want to see trade and everyday movements over the land border continue as they do now. The Bill will not create a permit regime or a hard border on the island of Ireland. Trailers travelling only between the UK and Ireland will not need to be registered.

Your Lordships will be well aware that there are many other considerations when considering the movement of goods across to the EU, including the future customs and border arrangements. Separately to the Bill, my department is working closely with the Department for Exiting the EU and HMRC as part of the cross-government borders working group to manage impacts to borders after we leave the EU. I can confirm that the Bill will not impact on border arrangements and that there will be no new transport-related checks at our borders.

I look forward to this Second Reading debate on the content of the Bill. As I have already outlined, this Government are committed to ensuring that this sector can continue to prosper as we leave the European Union. As part of the Government’s EU exit legislation programme, the Bill prepares us for a range of scenarios and will ensure that the UK can fulfil its international obligations and be ready to operate in this sector when we leave the EU. The Government have been supported by industry for bringing forward these measures. I hope that noble Lords will recognise this Bill as the Government taking a responsible approach in their contingency planning, and I welcome your Lordships’ expertise in ensuring that this legislation is as well designed as possible. I beg to move.

--- Later in debate ---

[Baroness Sugg]

My Lords, as always, the experience and knowledge in this Chamber has been extremely insightful, and I thank all noble Lords for their contributions. Many noble Lords have pointed out the importance of the Bill to ensuring that there is no disruption to the haulage industry when we leave the EU, and of course I entirely agree. This is responsible planning to ensure that we are ready to deliver the outcome of the negotiations, whatever that may be. I think we all agree on our aim to retain the existing liberalised access for commercial haulage. I welcome that agreement; it may be one of the few that we have during the progress of the Bill.

I apologise that the Bill was not announced in the Queen’s Speech, as highlighted by the noble Lord, Lord Bassam, and the noble Baroness, Lady Randerson. The gracious Speech outlined that alongside the EU (Withdrawal) Bill there would be complementary legislation and that is what this is, but I apologise that it was not explicitly pointed out then.

Many noble Lords, including the noble Lords, Lord Bassam and Lord Teverson, asked about costs and fees for both haulage permits and trailer registration. As I said in my opening words, the Bill provides powers for the Government to set and charge the administration fee. We are consulting on the details of the fees and charges for haulage permitting later this year. Again, as I said, we are doing this in order to minimise any additional burdens and costs for business. We are fully aware that this is going to be a cost for large and smaller haulage firms. The fees will be in line with the current international permit schemes. The noble Baroness, Lady Randerson, asked for some examples. An ECMT permit for one year currently costs around £133 and a bilateral permit for one journey costs around £8, so that is the kind of ballpark figure that we are looking at. However, the exact nature and costs of the permit scheme will depend on the outcome of the negotiations, so we will be setting that out.

On the question of trailer registration, the Bill again provides the powers to set the fees to cover the administration. Again, we are aiming to minimise those as far as possible in order to reduce any burden or cost to businesses. There will be no ongoing annual fees associated with trailer registration. I think the noble Lord, Lord Teverson, asked about numbers; we expect around 80,000 or so will be registered. Once the trailer is registered, the only further fees would be for any subsequent reissue. The system for that is still in development and the cost is still to be determined. We have been doing quite a lot of exploratory work on this and are confident that the registration fee will be significantly below that of the current vehicle registration fee, which is £55.

On caravans, a subject raised by the noble Baroness, Lady Randerson, the scheme will apply only to commercial trailers over 750 kilogrammes. We are speaking to the caravan society, as the noble Baroness mentioned, to further clarify that.

I raised the issue around horses and whether, if a horse was travelling to race abroad on a commercial basis, that would count. I was reassured that horses in that case would be in an all-in-one vehicle; I do not quite know what to call the vehicles, but they would not be in a trailer horsebox. My colleagues tell me that a horsebox is an all-in-one vehicle, rather than a horse trailer, so they would be covered. However, I am going to go back and clarify that further.

The noble Lord, Lord Bassam, asked about the permit application process and how it will work, and the noble Lord, Lord Berkeley, mentioned HMRC. We are working with an existing organisation, the Driver & Vehicle Standards Agency, on the system to allocate haulage permits. That will be building on existing IT systems to create an online permit application system. Obviously hauliers are already familiar with applying to the DVSA for paperwork related to domestic and international travel, so we hope that they will welcome this. Again, we are committed to trying to minimise any additional requirements, and we are working closely with industry to develop those plans. The aim is absolutely that we will be able to take applications and issue permits in advance of exit day, and we are on track to be able to issue permits in late 2018.

[Lord Bassam of Brighton]

My Lords, are the Government so well advanced in their thinking on the permit scheme that they have scoped out an IT system with one of the providers? Are they in negotiation with companies that do outsourcing on data and so on to try to work out exactly what sort of system they might want to put in place and think about what sort of contract they might want to set?

[Baroness Sugg]

We are working with the existing IT system at DVSA, so there would be no additional contract. I can certainly provide the noble Lord with further details on that.

The noble Lord, Lord Teverson, asked about the implementation period. Obviously, this is being discussed. The Government have been clear that the implementation period will be based on existing rules and regulations. I hope that we will reach agreement on that soon, which should provide some reassurance to industry.

The noble Lord, Lord Bassam, asked about the recognition of driver qualifications. The treatment of drivers’ certificate of professional competence will—again—depend on the outcome of negotiations with the EU, but our objective is absolutely to ensure that following our exit from the EU, CPCs will continue to be recognised.

The noble Lords, Lord Teverson and Lord Berkeley, asked about access for foreign hauliers, including cabotage. These, again, are important issues for negotiations that we are considering carefully for any future arrangement. In any scenario, there is existing domestic legislation to provide appropriate access for foreign hauliers coming to the UK, so the Bill does not address that specifically. However, as the noble Lord, Lord Berkeley, pointed out, it is an important part of the negotiations, and it will obviously be part of the discussions.

The noble Lord, Lord Tunnicliffe, and others mentioned ECMT permits. The permitting system operated by the European Conference of Ministers of Transport is an international agreement entirely separate from the EU and will not be part of our negotiations. The ECMT permits currently allocated to the UK are little used and we have absolutely no intention of allowing them after we leave the EU.

As much as I would love to give the noble Lord, Lord Bassam, a timeline for our transport negotiations, I am unable to do so. We are working closely with industry to understand its requirements and priorities, and have been doing so since the result of the referendum. We represent those views to the Department for Exiting the European Union. That department and the Department for Transport stand ready to move forward with the transport negotiations as soon as they begin.

The noble Lord, Lord Snape, spoke about optimism. I agree with him that we do not want to return to rationing. We are optimistic in these negotiations and am pleased that at least my noble friend Lord Attlee shares that optimism. It is absolutely to the mutual benefit of us and the European Union that we maintain liberal access; 84% of the freight transported between the UK and continental Europe is operated by EU hauliers, and it is in both our interests that we have a successful outcome.

[Lord Berkeley]

If this goes ahead and we have licences here for drivers and trucks to operate on the continent, we will presumably need some approval process. Perhaps it would not be a taxing system but it could work alongside the customs declaration for all the 80% of foreign trucks coming into the UK—either into Northern Ireland from the Republic or from the continent. Has that been taken into consideration?

[Baroness Sugg]

Certainly not in the context of the Bill. I apologise for going back to this, but exactly what that will look like is a matter for the discussions with the European Union as part of the negotiations.

The noble Lord, Lord Snape, asked about the reservations to the Vienna Convention on Road Transport. We will be making reservations in respect of six sections of the convention, relating to jaywalking, parking direction and so on. They apply only domestically and will not affect the other countries. It is usual practice for countries, on ratifying the convention, to put forward such reservations. We do not expect there to be any issue on that.

[Lord Snape]

If that is the case and it is all so simple, why have we not endorsed the Vienna convention over the past 50 years?

[Baroness Sugg]

We have been relying on the agreement that we have with the European Union, and because we are leaving the EU we have to bring forward something else.

The noble Lord, Lord Tunnicliffe, asked questions around the convention process. We are following the usual process for Command Papers and have done our best to highlight this issue. The convention is detailed and the Secretary of State has offered a meeting with all Peers and MPs to discuss the Bill and the convention. As the noble Lord pointed out, there is a process to discuss the matter further on the Floor of the House and I would be delighted to do so if anyone would wish to.

The noble Lord also raised the issue of safety for trailers. I do not believe there is a safety requirement in the Bill, but I will take that suggestion away and look at it further.

[Earl Attlee]

My understanding is that the tractor unit is subject to the plating and testing regulations, as is the trailer, and they are also subject to type approval regulations that are already in place.

[Baroness Sugg]

I believe that to be the case, and that therefore the Bill will not affect safety, but I will clarify that and write to my noble friend.

My noble friend Lord Attlee asked about penalty drafting within the Bill. We have drawn up the penalty levels from the original 1975 legislation so the offences are consistent with that. I am told that Clause 8 puts the offence in respect of a permit scheme in the Bill along with the penalties, which are summary only. Clause 17 enables regulations to be made which include the offences and penalties. Clause 17(6) restricts those regulations to include summary offences only, but perhaps I can write to my noble friend further on that.

On Ireland, the noble Lords, Lord Berkeley and Lord Whitty, and the noble Baroness, Lady Randerson, all rightly highlighted the importance of ensuring that we get the legislation right for the island of Ireland, and I should like to say a few more words about that. The Bill does not create a permit regime or a hard border on the island of Ireland. Again, the Government are committed to ensuring that there is no hard border. We want trade and everyday movements over the land border to continue as they do now. Half of the imports and exports by road are to and from Ireland and 89% of this trade is going between Northern Ireland and Ireland. There is no history of restrictions on road haulage, and that must remain the case.

To make clear the commitment not to create a hard border on the island of Ireland, we included Clause 1 explicitly to provide that permit regulations may not apply to journeys on the island of Ireland unless there is an agreement on the provision of permits between the UK Government and Irish Governments. To reiterate, trailers travelling between the UK and Ireland will not need to be registered. I very much agree that this is an important issue and something we need to keep in mind as the Bill progresses.

The noble Lord, Lord Tunnicliffe, and many other noble Lords mentioned borders. The provision of a permit scheme, whatever its detailed design, is intended precisely to ensure that there will be no delays for UK hauliers at our borders or any other borders in relation to their permission to travel. The haulage permits part of the Bill relates to UK hauliers, but, as noble Lords mentioned, EU hauliers also benefit from hauling to and from the UK. The DVSA already carries out checks on vehicle operating standards on our road network rather than at the borders and we would expect that to continue and include checks for permits if those are required as part of the deal with the EU.

The noble Lord, Lord Campbell-Savours, raised an interesting point on corruption. It is certainly something we must avoid. I will make sure that I am fully briefed on previous issues with the system ahead of Committee so that we can avoid them.

[Lord Campbell-Savours]

Perhaps I may make a suggestion: that the department bring in operators who were operating in the 1960s and 1970s. There will be some around and they will remember what happened.

[Baroness Sugg]

If we can track them down, we will certainly get them in. I thank the noble Lord for that suggestion.

[Lord Bassam of Brighton]

Perhaps I can take the noble Baroness back to an earlier point about trailer registration. I do not know whether she has looked at the department’s impact assessment, but it says that one of the indirect benefits will be improvements for road safety, and trailer registration is part of that. It strikes me that this is an opportunity, if the department wants to look at it that way, to secure some long-term benefits from trailer registration, and the Government might want to focus on it in their post-Brexit evaluation of road safety issues.

[Baroness Sugg]

I thank the noble Lord for that suggestion and will go back and study exactly where the safety requirements fall, and whether there is an opportunity within the Bill to further improve safety. I know that there is quite a lot of work on trailer safety going on in the department at the moment.

[Earl Attlee]

Perhaps I can assist the House. There is already a system of trailer identification to make sure that trailers are properly tested. The issue is whether there should be registration and therefore a number plate on the rear of the trailer.

[Baroness Sugg]

I thank my noble friend for that clarification.

The noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Randerson, mentioned the Commission’s paper setting out its general approach to the options for future partnership on rail, maritime and road transport. We think that is an opening position from the Commission, drafted with its own interpretation of EU red lines. We welcome its recognition of the importance of keeping transport flowing after we leave the EU. This is clearly part of the EU’s internal preparatory discussions and will not necessarily represent where negotiations will end up. The proposals are designed to be thought-provoking, and we are pleased that they will at least ensure that member states focus on transport issues.

[Baroness Randerson]

I understand the Government’s view that these EU papers are just an opening position, but actually they are a factual statement. How we move forward from that is another issue, but the papers are making a factual statement. Will the Minister address the fact that those papers cover rail and maritime as well as road? My question was: how will the Government deal with rail and maritime? Will there be legislation similar to this Bill?

[Baroness Sugg]

We do not currently believe that there needs to be legislation for the maritime and rail sectors. Obviously there is preparatory work going on, but we do not have any further updates for the noble Baroness on that. As and when we need to bring forward legislation to prepare ourselves, we absolutely will, in the same way as we have done with this.

The Government have introduced this Bill as part of the preparations for the UK’s withdrawal from the EU. I say again that we are committed to ensuring that liberal access continues for the commercial haulage sector. We all agree on how important it is that that continues. We are confident that a future partnership between the UK and EU in this area is in the interests of us all, and we are optimistic about the negotiations.

This legislation shows that this Government are acting responsibly—I hope noble Lords will welcome the preparations, as many have, in various tones—in case preparations are required as we move from our current membership of the EU to our future partnership. My noble friend Lord Attlee rightly called this a sensible precaution, and I will pass on the congratulations of the noble Lord, Lord Whitty, to the department for being so well prepared. Of course, there are many wider issues relating to leaving the EU that will be of much interest to noble Lords. Many of them are being debated at length in the EU (Withdrawal) Bill. I hope that the sensible measures in this technical Bill will help ensure that the UK is prepared for all eventualities and I welcome noble Lords’ broad agreement on this, and their contributions to delivering it as the Bill proceeds through the House.

I thank again all noble Lords for their contributions to the debate this afternoon—in particular the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Randerson, who, like me, are on their third piece of transport legislation today. We will carefully consider all the points raised, and I look forward to discussing them further in Committee. I ask the House to give the Bill a Second Reading.

Bill read a second time and committed to a Grand Committee.