Haulage Permits and Trailer Registration Bill [HL]

Lord Bassam of Brighton Excerpts

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

Moved by

[Lord Bassam of Brighton]

1: Before Clause 1, insert the following new Clause—
“EU Community Licence arrangements
(1) It is an objective of the Government, in negotiating a withdrawal agreement from the EU, to seek continued UK participation in the EU’s Community Licence arrangements.(2) If the continued participation referred to in subsection (1) is achieved after the passing of this Act, no Minister of the Crown may make regulations under sections 1 to 5 or 23(2) of this Act.”

[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.

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

My Lords, I thank all noble Lords for their contributions. The proposed amendments would enshrine in the Bill an objective in negotiating the EU withdrawal agreement and, should a certain agreement be reached, Clauses 1 to 3 would cease to have an effect.

I will speak first to the amendment in the name of the noble Lord, Lord Bassam, and the noble Baroness, Lady Randerson, which seeks continued recognition of Community licences issued by the UK in the negotiations. As I outlined on Second Reading, the Government’s objective is to maintain the existing liberalised access for UK hauliers. Road haulage is at the heart of the £110 billion of trade that takes place between the UK and the EU every year. We are confident of success in the negotiations, as the continued movement of goods is in the interests of both the UK and the EU.

As noble Lords have pointed out, access is currently secured through participation in the Community licence arrangements. Outside the EU, only EEA members are currently party to the Community licence system. Although continued participation in the Community licence arrangements could be one outcome, the best way to secure mutual recognition and continued access for our hauliers will be through negotiations. I am afraid I must disappoint the noble Lord, Lord Bassam, in saying that we do not feel it would be right, or beneficial to our negotiations, to place any negotiation objectives in the legislation. As my noble friend Lord Attlee said, that would tie our hands.

The Government will take all reasonable steps to see that there are no restrictions on the movement of goods. This can take many forms, including the Community licence, mutual recognition of the operator licence or a permit-based agreement. Many international agreements that are permit-based do not restrict the numbers of permits exchanged; indeed, some of our existing agreements do not require permits at all, including our agreement with Turkey. As I said, our aim is to continue the liberalised access we enjoy today.

[Lord Bassam of Brighton]

Will the Minister pause for a moment? The noble Earl, Lord Attlee, said that Amendment 1 would set the objective in stone. It would not. As the noble Lord, Lord Tunnicliffe, said, it simply says that an objective of our negotiations should be essentially to retain what we currently have. What is wrong with trying to do that? How does it tie the Government’s hands? I cannot see that it ties their hands at all. The amendment simply says that that should be an objective. If it is only an objective, what do the Government feel binds them in any way?

[Earl Attlee]

My Lords, the answer to the noble Lord’s question is that I imagine that the noble Lord, Lord Pannick, would have no difficulty at all in convincing the courts that the matter was set in stone.

[Lord Bassam of Brighton]

I am not here to listen to the noble Lord, Lord Pannick, in his absence. I am keen to hear the Minister give her explanation, which is what the Committee needs.

[Baroness Sugg]

I will try my best, although I may not be as clear as the noble Lord, Lord Pannick. As I said, the existing Community arrangement is currently only for EU members and EEA members. When we leave the EU, we will not be either of those. What is suggested is one option, but there may well be an equally satisfactory option, such as an unlimited permit system or, as I said, mutual recognition of operators’ licences. We want to be able to keep those options open and not to be sent down the road of agreeing to the Community licence. There is no reason why a permit that replaces the Community licence could not provide the same level of access as exists currently. That could well be our negotiation objective.

On the amendment in the name of the noble Lord, Lord Berkeley, I take the opportunity to reassure him that of course the Secretary of State will take all reasonable steps to meet the demand for permits from UK hauliers. We regularly meet industry to understand its requirements and priorities, which will be reflected in our detailed negotiations with the European Union. While the amendment would not tie our hands in the negotiation, I hope that what I have said gives the noble Lord confidence that it is not necessary to include this aim in the Bill.

[Baroness Sugg]

I understand the noble Lord’s concern. Later, we will discuss Amendment 8, tabled by the noble Lord, Lord Tunnicliffe, which addresses these issues. There is an explanation and, with the noble Lord’s permission, we will address it then.

The amendments on a sunset clause suggest that, should recognition of Community licences be secured as part of our negotiations, Clauses 1 to 3 should cease to have effect. I understand the intention and I agree that we do not wish to create delegated powers if they are not going to be used at any point in the future in relation to EU exit, but I would like to set out why this Bill has a wider application than just to our road haulage access with the EU. It should also apply to the European Conference of Ministers of Transport multilateral permit scheme and our bilateral agreements with non-EU countries.

While these non-EU agreements have, until now, been dealt with under administrative powers, now that we are introducing this Bill we think that it is important that those agreements are brought in scope, so that there is compliance and consistency in the administration, allocation and enforcement of permits with whatever agreement we reach with the European Union. There would be problems with having different legislation covering similar permit schemes. We are keen to ensure that UK hauliers can use one online system to apply and get permits for the EU as well as non-EU countries, as that would reduce burdens on them.

[Lord Bassam of Brighton]

Do I understand the noble Baroness right? Is she seeking to incorporate the ECMT scheme within the parameters of the Community licence? Is that part of the objective of the negotiations?

[Baroness Sugg]

No, not exactly. If the outcome of the negotiations is a permit-based system, whether unlimited or whatever, yes, we would use this legislation for the allocation of other permits for ECMT and non-EU countries. As I said, that is to simplify the system, have everything in one place under the regulations and allow hauliers to have just one point of access. Beyond the first regulations made under this power, they would need to be updated and amended as our international agreements, whether they be with EU or non-EU countries, change over time. We would need to retain the ability to create regulations under the Bill.

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[Baroness Sugg]

I am afraid that until we know the exact system of the permits, we will not be able to give the noble Lord that assurance. Obviously, we need to avoid there being a false market for these permits. We will look at how permits are allocated and if they are limited in any way, which we hope they will not be, we will certainly consider how to avoid that. Again, the allocation system should make sure that additional permits are not allocated to people who are not using them. It is certainly something we will consider.

I hope I have addressed the need for this legislation, regardless of the agreement reached with the EU. I understand the sentiments of noble Lords in proposing these amendments and welcome the discussion it has enabled. However, as I said, we do not believe that the Community licence system is the only way to proceed and therefore do not think the Bill is an appropriate place to set out that negotiation objective. On that basis, I ask the noble Lord to withdraw his amendment.

[Lord Bassam of Brighton]

My Lords, it is the tradition in Grand Committee to agree to withdraw amendments, and I shall shortly do so. However, I am disappointed with the Minister’s response. I thought I gave her a rather generous invitation to accept Amendment 1.

There is something I find more puzzling still. Over the weekend I extended my reading to take in the international road freight permits policy scoping document. While it does not give us a lot more information, paragraph 1.6 says that the Bill is intended to support the Government’s aim of continuing the liberal access for commercial transport to the EU. It goes on to say that the importance of keeping essential trade flowing is recognised by the EU and is strongly in the mutual interest of both sides, and the industry is therefore confident that a deal will be secured to ensure that essential trade flows will continue without any restriction on access.

I take the argument that this is an opportunity for the Government to look at other ways in which haulage could be permitted, not just in the EU but more widely. I welcome the observation made by the Minister about the way in which they are going to try to simplify the permit scheme and, it seemed to me, bring schemes together to look for a simple way forward in the future. The beauty of the Community licence approach is that it is very simple. Once the primary point has been satisfied and you get the standard international operator’s licence in place, things flow from that. Therefore, I do not think that it is too big an ask to try to have that as an objective in the negotiations.

I will obviously undertake to read what the Minister has said in her reply, but I think it likely that I shall want to bring back this amendment, or one very similar, at Report. I do not think we have heard enough from her to persuade me otherwise, hard though she has tried this afternoon. Our haulage industry requires a bit more certainty and a sense of the Government’s direction of travel, what they have in mind and what their objective is.

If I have one fundamental objection to the Bill, it is that it is only a framework and is entirely skeletal. That much is very clear, not least from the reports that have been prepared by the Constitution Committee and the DPRRC. It is not a very satisfactory Bill, because we will end up having something skeletal as a contingency—that is what this Bill is. If we have to press the button and make it go live—to make it work and make it govern the way in which haulage operates as an industry—the Government will end up having to colour in a lot of the blanks that the Bill leaves, and will have to take rather urgent action to do that at a time when most of us, not least the industry itself, will be worrying about issues relating to Brexit.

I am grateful to the Minister for her response and to the noble Earl, Lord Attlee, for his help in attempting to clarify things for her. I am grateful for the support I have had this afternoon for Amendment 1, across the Committee. I therefore beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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[Baroness Sugg]

My Lords, I thank the noble Lord, Lord Berkeley, and the noble Baroness, Lady Randerson, for tabling these amendments and allowing a discussion on the important issue of haulage between Northern Ireland and Ireland. I take this opportunity to reiterate that this Bill does not create a permit regime or hard border on the island of Ireland. Clarity about this issue is of great importance, given the Government’s commitment to having no physical infrastructure or related checks and controls. We must preserve north-south co-operation, of which transport is a priority area for the North/South Ministerial Council, established under the Good Friday agreement.

The regulations brought forward under the Bill may prohibit a goods vehicle from undertaking an international journey to a country outside the UK, unless they have a permit, where an international agreement has been concluded requiring permits to be carried. In relation to Ireland, we have included an additional requirement that the Secretary of State must certify that the Government of Ireland have consented to the use of permits on journeys on the island of Ireland before this comes into force. This has been included to recognise and respect the long history of co-operation with regards to transport on the island of Ireland; the Government believe it is an important addition to the Bill.

Clause 1 is drafted to make it explicitly clear that regulations requiring permits for journeys on the island of Ireland will not be introduced without that clear agreement; we have singled it out because of the importance of ensuring that there is no hard border.

[Lord Bassam of Brighton]

Just to clarify, if the agreement reached with either the EU or the Government in Ireland was such that they consented to a permit regime being introduced for haulage through Ireland, does that not envisage a situation where there might be a hard border?

[Baroness Sugg]

The clause as drafted ensures that there has to be a direct agreement between the UK Government and the Government of Ireland before any such scheme is introduced. It aims to avoid exactly that.

[Baroness Sugg]

The permits would need to be recognised by the EU to be used. As I said, this is an extra clause to ensure that we can also have a separate agreement between the Government of Ireland and the Government of the United Kingdom before anything is put in place.

[Lord Bassam of Brighton]

Picking up on my noble friend Lord Berkeley’s point, does that mean that there has already been some negotiation between our Government and the EU on the possibility, or prospect, of a permit scheme having to be put in place? Are the negotiators aware that this contingency legislation has been drafted and do they see it as a practical way forward, with all other considerations put aside?

[Baroness Sugg]

As noble Lords will be aware, there have been many conversations between the EU and the UK on Northern Ireland and the island of Ireland. Obviously, that was addressed in the December agreement. I am afraid that I am unable to tell the noble Lord, Lord Bassam—despite consulting widely, as the noble Lord, Lord Tunnicliffe, said—whether this specific piece of legislation has been discussed with the EU in detail. I will find that out and write to him. The example we have given in Clause 1 is an attempt to provide clarity on how the prohibition of using a goods vehicle without a permit in regulations may be limited, so it does not apply to journeys on the island of Ireland. It is designed to show that there is flexibility to agree something different on the island of Ireland, which is why we believe it is important to include an illustrative example.

Moving on to the amendment in the name of the noble Baroness, Lady Randerson, the Bill allows for a range of outcomes while also meeting our commitments on north/south co-operation as set out in the joint report. We do not think that the amendment as it stands will allow us that same flexibility. As we have not yet agreed the arrangements for haulage for when we leave the EU, we want to keep that flexibility to ensure that any agreement can be implemented. The Bill does not give the UK Government the power to restrict the number of trucks crossing the Irish border; it gives us the power only to implement any new cross-border arrangements that are agreed directly with the Republic of Ireland. As I say, both the UK and Irish Governments have made clear their commitment to avoiding a hard border and preserving cross-border co-operation in any scenario. There is no question of either Government agreeing to such restrictions on cross-border haulage.

On the question asked by the noble Lord, Lord Snape, on permits and what they will show, obviously we are consulting carefully on that, but we expect it to be the name of the company—as opposed to the truck—its validity and its unique number, which is similar to what we have on the Community licence.

[Baroness Sugg]

We expect that the permits would be the same; it is just that the agreement on how the permit system is enacted would be made only if it was subject to a direct and separate agreement between the Government of the UK and the Government of Ireland.

[Lord Bassam of Brighton]

Would a company based in Ireland but travelling through the UK require a permit?

[Baroness Sugg]

If its journey would then go on to the European Union, yes, it would. However, if it was going just to the UK, that would fall under the agreement.

I understand that these amendments are designed to ensure that there are no new restrictions and to get clarity on the issue of the island of Ireland. We are committed to this goal and believe the current drafting of the Bill has that intention; as the noble Lord, Lord Tunnicliffe, highlighted, it has been extensively consulted on. However, I will take noble Lords’ comments on this—

[Lord Bassam of Brighton]

I am sorry about this but on the permits from within Ireland that means a company based in Dublin, for example, would require a UK government permit to travel through the UK to go to the rest of Europe and beyond. Have we consulted with the Irish Government on that issue? It seems an important consultation to undertake. What if they are not happy for us to have a permit scheme which will apply to companies based in Ireland? I do not know how many of those there are; possibly not that many, although I am sure there are a sufficient number to be a burden on their businesses. Have they actively considered that?

[Lord Berkeley]

Before the Minister responds, I will widen the question a little. My noble friend mentioned the example of a lorry starting in Dublin and going through the UK to the continent, and asked whether it needs a permit. That is why I tabled Amendment 14B, which we shall come on to in due course, to ask whether foreign trucks need a permit to enter the UK. Surely it does not make any difference whether it is delivering from Dublin to the UK or going through the UK to deliver to Paris, as it still needs the same licence. Is my assumption correct?

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[Earl Attlee]

My Lords, I support the initial comments of the noble Lord, Lord Tunnicliffe. It would be a disaster if we had to regulate the issue of permits in the way provided for, but I hope that the Minister can reassure us that we will take all necessary steps to avoid such a situation. However, I think that it is a sensible provision in a Bill as a backstop, while recognising that it would be terrible in the way if we found ourselves in such a situation as the noble Lord described.

[Lord Bassam of Brighton]

My Lords, I support my noble friend Lord Tunnicliffe on this. Pretty much every year, I try to get tickets to go to Glastonbury. You go on the website at 9 am and are still there at 10.30 am, and you suddenly discover that your youngest daughter has got tickets but you have not. There is something clearly wrong about a system that does that in my family, let alone anywhere else. The notion that we might have some random process—first come, first served or whatever—is clearly something that we should not allow ourselves to sign up to.

I want to hear on the record some reassuring words from the Minister. This may be a vague Bill, a schematic Bill, a framework Bill and all the rest, but this matter needs some clarification.

[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.

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[Lord Campbell-Savours]

That did not answer my question.

[Lord Bassam of Brighton]

I am sorry. If we are in one of those desperate situations where there is a shortage of permits compared to what we need, retaining that subsection is extremely damaging because it means that, in most circumstances, we cannot allocate on a needs basis. I should have thought that there are certain things we need to import or export that have a high degree of priority. Having that clause drives a coach and horses through that, does it not?

[Lord Campbell-Savours]

Before the Minister answers, can I ask her to take this away and discuss it in the department? I think she may get different advice when there has been a full discussion.

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[Lord Bassam of Brighton]

The thing about regulations is that they are unamendable. You either buy the package or you reject the lot. This provision does not terribly help, because it could end up contradicting the regulations. That is why my noble friend is suggesting that the Minister might want to take it away to give it a bit more thought. I am struggling to think of a set of circumstances where these two things will work.

[Lord Campbell-Savours]

Can I add to that intervention? I can give the Minister another criterion. What about regional considerations, which might well be in our favour?

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[Lord Berkeley]

My Lords, I will also speak to Amendment 14B in my name.

Amendment 9 is quite simple. It would require the Secretary of State to publish a report saying what is in any agreement that has been made on the allocation of permits for UK-registered vehicles to operate in the EU. I do not need to go into it in any more detail than that. We have had a good discussion about that this afternoon, and I am sure that the Minister will welcome this. She will probably say that she is going to do it anyway, and if she is not going to, she jolly well should. However, there is a reciprocal problem that we have not discussed so far—although my noble friend Lord Snape mentioned it—which is about EU lorries coming into the UK. Amendment 14B would allow the Government to make regulations to issue permits for non-UK registered vehicles to come into the UK. This would include vehicles, as I said earlier, from the Republic of Ireland.

Does the Minister agree that there is a need to issue such licences? I hope that she does, because otherwise, EU lorries will roam around the UK freely, doing exactly what they like, presumably doing cabotage for several months before they run out of fuel. It seems unfair, and I am sure that the European Union negotiators will accept that there has to be a reciprocal arrangement. Does the Minister envisage an allocation of permits to each member state, or will there be one lot of permits to cover the whole 26 or so member states—apart from Ukraine and places like that, because they are not within the EU? If the answer is, “No, it is an EU one and that’s fine”, will the Republic of Ireland to be happy with that, and how will it get its allocation—will it be separate or together?

I can see from past experience that the French and Dutch Governments in particular may want more than their fair share, or more than what we may think is their fair share, so there is the question of how we would deal with that.

Lastly—I hardly dare go back to this question of first come, first served—but how will it be done? I cannot say much more than that, but I look forward to hearing what the Minister says. I beg to move.

[Lord Bassam of Brighton]

My Lords, I have a number of amendments in this group. These amendments have been laid to ensure clarity of purpose in the Government’s strategy. Amendment 12 seeks to get the Government to lay a report within a month of the Bill passing on forecasts of how the permits regime will affect the efficiency of haulage and in every year following. Amendment 13 asks that within three months of the Bill passing the Government produce a report setting out their expectations for future arrangements between the EU and the UK with regard to road haulage. Amendment 14 suggests that within three months of the Bill passing a report on the costs of the future international haulage permit scheme be published.

It is essential to business continuity that the industry knows what the Government are up to and what their expectations are, what forecasts are being made and, most importantly, what costs they are likely to incur should the scheme in the Bill need to be implemented. It is fair to say that the impact assessments published were delphic in the extreme on cost estimating. No figures were given, but there were a lot of words to suggest that there is an expectation that companies in the small and medium-sized haulage sector might seriously struggle with the cost when permits are introduced, particularly given that, on the face of it, it is going to be a full cost recovery system.

The Minister will say that it is too early and that we have not got to the point at which we need to do a lot of this, but at Second Reading she gave some indication of what the range of costs might be for individual permits. We need more information, and there ought to be an obligation on the Government to produce reports setting out forecasts and expectations for future arrangements and costs. Without those things, we will not have certainty in the industry, and the industry definitely needs certainty. From my discussions with the FTA I know that it is concerned not so much about the scheme itself as about how it will work, what the details of implementation will be, the burdens that it will place on its businesses and the likely impact on the haulage industry in the UK generally. These are not unreasonable concerns. We, as responsible legislators, ought to focus on that. I hope that the Government can come up with some answers and will commit to producing reports and assessments of the sort that these amendments describe.

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[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?

[Baroness Sugg]

The DVSA.

[Lord Bassam of Brighton]

Acronyms sometimes get the better of me. So, what will it look like? How will it feel? How will it operate? What additional burdens will it place on the businesses affected? Where will the inspections take place? I picked up the point made by the Minister that they will not necessarily be at ports, but ports may be the best place; I do not know. I have seen lorries subject to customs inspections at ports, which works very well for some operations. We need answers to all these questions.

[Lord Campbell-Savours]

My Lords, I want to ask a very simple question, which is slightly tangential to the amendment, about fuel dipping. Fuel dipping is where the authorities decide, for whatever reason, to test tanks to see how much diesel they are carrying. Of course, these trucks carry a lot of diesel. I do not know where I heard it, but I heard that some countries on the outer periphery of Europe fuel dip in truck tanks so they can charge duty on diesel coming into their country. During the negotiations, we should be aware of any possibility of fuel dipping by member states and make sure that it is excluded and prohibited.