Haulage Permits and Trailer Registration Bill [HL]

Lord Whitty Excerpts

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

[Lord Whitty (Lab)]

My Lords, it is a pleasure to follow the noble Earl, Lord Attlee. It takes me back about 20 years to when he and I were exchanging views on regulation of the road haulage industry. I am pleased that he is here tonight.

We should start by recognising the move that has been taken by the Department for Transport. It has produced a contingency plan for, in effect, a downbeat Brexit. In that sense, it is well ahead of any other Whitehall department I know of. I hope, therefore, that the Minister will convey her congratulations to her department and her fellow Ministers.

The first point, which colleagues have made and which I have made in this House in different debates over Brexit, is that without membership of a customs union and probably without membership of the single market, there is no such thing as frictionless trade. There are costs, both administrative costs and on-costs. There are costs to the road haulage industry itself: to the 9,000 or so independent road hauliers, to own-account drivers and to those who run great fleets. As was made clear in the impact assessment, there are also costs to the Government, and of course to the people who rely on the road haulage industry for importing and exporting. Therefore, at the end of the day, there are costs also to consumers.

In this case, the costs are quite seriously aggravated. In effect, as my noble friend Lord Snape indicated, we are reverting to a prehistoric system. The conventions that were established in Geneva and Vienna—the latter of which I think we have not actually ratified—relate to an entirely different era, when economic relations in Europe were supposedly governed by the UN Economic Commission for Europe, under which the Council of Ministers for Transport operated and developed the quota scheme. It is now proposed that we take that back from 50 years ago and put it into operation in the UK now.

That scheme is archaic. It was based largely on bilateral arrangements and was not for the whole of the European Union, and it has quotas. I am not quite sure how the calculation was made but I understand that, under that system, about one-eighth of quota licences will be available compared with the community licences that are currently available to the road haulage industry in the UK. The scheme also does not deal with cabotage, and therefore cuts the UK industry out of profitable trade on the continent and beyond.

The old system has some serious deficits and difficulties. It will undoubtedly be more costly, more administratively bureaucratic and more of an inhibition to trade. It may be necessary as a stop-gap if we do not end up with a deal that gets us closer to frictionless trade—although, even in a free trade agreement, there will still be some friction and some costs. Even if part of that free trade agreement was almost a cherry-picking arrangement for road haulage—it is a large “if”—there would still be a cost involved in moving from a system of absolute access for British hauliers and EU hauliers here to the replacement archaic and limited scheme.

I will make three other quick points. The first relates to Ireland and to the broader Brexit argument. At present, Northern Ireland has devolved powers for the registration of transport vehicles, admittedly within an overall system. The agreement that provisionally was reached in December foresees the alignment of regulations in those areas that support the Belfast/Good Friday agreement. There are all sorts of arguments about whether that is a lot of areas—142 areas have been suggested—or whether it is to be limited to a number of specific areas. In the limited interpretation, transport is one of those areas. Therefore, in default of an overall agreement that allows us no border of any sort, transport would, under the agreement that we signed and which has yet to be put into legal form, require the full alignment of the Northern Irish licensing system with that of the Republic of Ireland—in other words, with the EU system.

The bulk of trade that goes in road haulage across the sea, both from Northern Ireland and from the Republic, is not travelling north-south across the border but east-west, into Great Britain and beyond into Europe. Therefore, we get a contradiction of not having alignment between Northern Ireland and the rest of Britain, which will be an anathema to a number of elements —some of them fairly close to the Government—in Northern Ireland. It will also inhibit trade if we have a different system in Northern Ireland from that of the rest of the United Kingdom.

The Irish dimension in this has not been fully addressed and may not be capable of being so until we have the final version of the December agreement. It may even not be addressed before the withdrawal treaty, or beyond that at the end of the transition. But, at whatever point we contemplate introducing this system, I plead with the Minister to take the Irish dimension into account.

I have two other quick points. If we are to introduce a new licensing and registration system, issues of road safety, environmental performance and driver standards ought to be introduced at the same time.

Finally, I will make a constitutional point. I am not making a big thing about it, but the noble Earl, Lord Attlee, referred to penalties. As a consequence of this system, some penalties can be introduced by secondary legislation. Your Lordships’ Constitutional Committee has taken a fairly hard view on introducing new criminal offences through secondary legislation. To justify doing so, we need more justification than is currently in the Explanatory Notes to the Bill.

I started by congratulating the Minister. I still think it is a good thing that the department is thinking that it may need this contingency, because at the moment it is by no means certain that anything better will be delivered, to put it at its mildest. But I also think that the Government have to face up to some of these very important side issues and not put all their eggs in the basket of solving a problem that is not of their making by reverting to an archaic, expensive and clumsy system.

Haulage Permits and Trailer Registration Bill [HL]

Lord Whitty Excerpts

Report stage (Hansard): House of Lords
Tuesday 17th April 2018 Lords Chamber

Moved by

[Lord Whitty]

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 Whitty (Lab)]

My Lords, Amendment 1 was put down by my noble friend Lord Bassam. I am pleased for him, but regret that he is still in the air between the Aegean and Gatwick and therefore unlikely to make it for this amendment, and possibly for the whole sitting. I hope that he nevertheless comes back refreshed. I am therefore taking on the responsibility for an amendment for which he has argued.

At earlier stages of the Bill, the sheer volume of road haulage traffic between the UK and Europe has been spelled out. Some 67 million tonnes of freight traffic passes through our ports, the frontiers of Europe, the Irish ports and the currently virtually invisible Irish border. The way in which that traffic currently moves, under the provisions of the European Community licensing arrangement, is as close to frictionless as you could get. Whatever the outcome of Brexit, whatever deal we vote on in a few months and in a few years, virtually everyone in the business wants to have a system that is as close as possible to the current European Community licensing system. That applies to the main companies, the FTA, the Road Haulage Association, Unite the union, and to exporters and importers. They all want to keep roughly the present system. That also applies to European importers and exporters. It ought, therefore, to be an object of negotiations that we retain something close to the current system in the long term, even beyond the transition period.

In that sense, we all know where we would like to be; and this Bill, as has been pointed out, is a contingency Bill to provide for a situation where we fall short of what virtually everybody recognises as the optimum—being close to the present system. I was not present in Committee but I spoke at Second Reading, and I concede that it is sensible to have such a contingency. However, we also know from the policy documents that were provided to us at the beginning of the process for this Bill that—according to the rather Delphic words in the text of the Bill—we envisage and propose to go back to a system that existed prior to us being in the EU. No doubt that will be updated and eventually digitalised but it is a pretty clunky system that, in the old days, relied on quotas and bilateral deals. The Bill would allow for regulation providing for a different system, but at the moment the only system on offer is one that reflects trading patterns and technology that are now long past.

--- Later in debate ---

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

My Lords, I shall speak first to the various amendments relating to the negotiation aims, which address the points made by many noble Lords on the continuation of the Community licence regime, before moving on to why we need to make the regulations irrespective of the outcome of the negotiations. I hope I have been clear on the Government’s objective throughout the passage of the Bill: we want to maintain the existing liberalised access for UK hauliers. A mutually beneficial road freight agreement with the EU will support the objective of frictionless trade. We are confident that our future relationship with the EU on road freight, as part of our wider continuing relationship on trade, will be in the mutual interest of both sides.

These amendments would enshrine negotiation objectives in the Bill. On their overall principle, I must be clear that we do not believe that an attempt to mandate a particular stance in negotiations, in the way that these amendments would, is appropriate in the Bill. We will need flexibility to be able to adapt our approach in different areas. I am afraid that I shall not be able to accept these amendments, but I understand that noble Lords need the reassurance that we aim to have in place the arrangements that we need to maintain continued access.

The current arrangements for road freight access between the EU and UK through the Community licence allow drivers to use a single permit for trips between all EU member states. The licence also allows transit traffic through EU member states. Several noble Lords have spoken about the advantages of the Community licence. I am aware of those benefits and that many hauliers would like to see it continue. While continued participation in the Community licence arrangements is one potential outcome of the negotiations—we will certainly discuss it—there are other means to replicate the access that the Community licence provides, which these amendments would rule out.

Our current liberalised non-permit-based agreements with some non-EU countries provide for mutual recognition of operator licences in lieu of the requirement of a permit. The UK-Turkey agreement is one such example. The EU has a similar arrangement in the EU-Swiss land transport agreement, where permits are not needed and mutual recognition is allowed. Our future agreement with the EU could be based on a similar scheme and, if that were the case, permitting would not be relevant. Including the objective to seek continued participation in the Community licence arrangements may make it harder to agree such a beneficial deal for our hauliers.

The noble Baroness, Lady Randerson, has tabled an amendment to the regulations made under Clause 1 that would see them apply only to an EU member state outside the UK, rather than any other country. This would mean that the focus of this part of the Bill will be only on arrangements with the EU. The Bill creates the legal frameworks to deliver for any administrative system that might be required as part of the final deal, but it also caters for our existing bilateral agreements with countries outside the EU. It is important that the Bill enables the regulations to cover these agreements so that there is compliance and consistency in the administration of a permit scheme, the allocation of permits and enforcement in relation to permits.

Non-EU agreements have previously been dealt with under administrative powers. The Bill will repeal the International Road Haulage Permits Act 1975 and bring in an entirely new framework. It is in UK hauliers’ interests to be able to use one system to apply for permits for non-EU countries as well as any permits that may be required, but we are clear that we hope that there would be no such requirement under any new EU schemes. I do not agree with the noble Baroness, Lady Randerson, that this is a coat-hanger Bill, but I am grateful to her for introducing me to a new term. It is important that we do all we can to provide consistency and certainty for the industry in how they can apply for permits and the methods of allocations for these permits. That is why the Bill should refer to all countries outside the UK and not just EU member states.

The noble Baroness, Lady Randerson, is quite right that the World Trade Organization’s most-favoured-nation rules apply to the road haulage sector except when there is an exemption or it is part of a wider free trade agreement, which is of course something we are seeking with the EU. The free trade agreement would cover sectors crucial to our linked economy, such as the haulage industry. On the point made by the noble Lord, Lord Berkeley, on the Chief Whip’s statement, I believe that the words on today’s list were taken directly from page 130 of the Companion. I will not attempt to justify them further, but I am grateful to the noble Countess, Lady Mar, for her intervention on that.

Noble Lords have raised the issue of borders, customs and border delays. I acknowledge the point made by the noble Lord, Lord Berkeley, that much work needs to be done in this area, but this work is happening in consultation with industry. In the case of this Bill, the provision of a permits scheme—whatever its detail or 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.

Moving on to the amendments relating to the wider need to make regulations, irrespective of whether we have a future relationship with the EU that relies on permits, I understand that there is concern about the inclusion of enabling powers in the Bill if they will not be used at any point in the future in relation to our arrangements with the EU. However, as I have outlined, the Bill covers existing permit-based arrangements so we would need to continue to use them.

As the Prime Minister outlined in her March speech, our default is that UK law may not necessarily be identical to EU law, but it should achieve the same outcomes. Specifically on transport, she stated that,

“we will want to protect the rights of road hauliers to access the EU market and vice versa”.

In direct response to the point made by the noble Lord, Lord Whitty, we are not seeking to return to the arrangements that we had before becoming an EU member state. The Bill does not suggest an alternative system—that is a matter for negotiations—but simply puts in place a mechanism for delivering the outcome of those negotiations. That is the responsible thing to do.

I have been clear on the Government’s objective for the negotiations in relation to the UK haulage industry. We aim to stay as close to the status quo as is reasonably practical. That objective is shared by the haulage industry and noble Lords across the House. We do not believe that this amendment is necessary; it may have the unintended consequence of making the objective of continued liberalised access harder to achieve. I therefore hope that the noble Lord feels able not to press his amendment.

[Lord Whitty]

My Lords, I thank the Minister for that reply. She made a number of points, which I take on board. I understand why she does not want us to tie the hands of the negotiators—the noble Earl, Lord Attlee, made roughly the same point. I would have hoped that we could find a form of words that introduces the Bill that does not refer to the negotiations, but as a default situation, were we unable to preserve the Community licence scheme. Unfortunately, neither I nor my noble friend Lord Bassam have found a form of words, and it is getting a bit late in the process for this Bill. However, I wonder whether the Minister is prepared to accept that there could be a form of words that makes it clear that this is a contingency Bill. It might not go all the way back to 1973 or 1968, but it allows an entirely different permit-based system to operate. That is our default position if we are not to continue with the present system or something close to it.

--- Later in debate ---

[Baroness Sugg]

My Lords, in Committee we discussed the process by which permits may be allocated to hauliers in a future permit scheme, should there be one. I am bringing forward an amendment that clarifies the Secretary of State’s powers to make regulations catering for all the different scenarios that may arise. The amendment does not change the Government’s policy on the methods that need to be available to allocate permits. Instead, in response to previous discussions, it aims to make legislation clearer on what regulations may include, while ensuring that regulations can be made specifying all the methods of selection we need to have available to us.

I understand that noble Lords are concerned about the use of these methods, so I will set out how we would use them and explain why they are on the face of the Bill. The Bill enables regulations to be made which provide that permits are required for a journey, if they are needed. Whether they are needed or not will depend on the agreements we negotiate. The Bill also makes regulations to make provision as to how the Secretary of State will decide whether a permit is granted. Regulations may specify criteria or other methods of selection. To ensure that the Secretary of State has the power to make regulations that cater for different approaches, the Bill provides that the methods of selection may include an element of random selection and “first come, first served”.

On first come, first served, our existing permit schemes are undersubscribed, so our applicants have always received what they have applied for. For example, in 2017 we issued 66 permits for Ukraine from a quota of 400; for Georgia we issued six permits from a quota of 100. This means that permits are issued on demand, and in these cases it makes sense to issue permits as we receive applications—on a first come, first served basis. In the future, where there are more permits available than are applied for, we will issue permits to all eligible applicants.

This drafting, with reference to “first come, first served”, ensures that the Secretary of State clearly has the power to provide in regulations that permits may be allocated on that basis. This is clearly a simpler process for the Government and hauliers where the supply exceeds the demand, but it means that hauliers will not be asked for as much information and additional criteria do not need to be applied, which will keep the process as simple and quick as it can be.

Moving on to random selection, the Bill enables regulations to be made that specify how the Secretary of State will decide whether a permit should be granted. That provision can include specifying criteria or other selection methods, which could include an element of random selection. If the demand for permits exceeds supply, we will look to allocate them in a way that maximises the benefits to the UK economy and that is fair and equitable to UK hauliers. We will set out this criteria in regulations and the Secretary of State will provide guidance relating to the information that applicants must provide.

As I said previously, we will be consulting on the criteria to be included in regulations, but these could include relevant factors such as the need for an applicant to hold a valid operator’s licence, the environmental standard of the vehicle authorised to be used by a permit, the sector the applicant operates in, or the proportion of a haulier’s business that is international. However, there might be cases where the application of criteria does not enable the Secretary of State to allocate all the permits. It is necessary, therefore, that other methods of selection should be available. As I said, the exact details of any permit scheme, if needed, are yet to be determined, so we want to ensure that the Bill enables regulations to be made that address scenarios where the application of criteria needs to be supplemented by other methods of selection.

I have listened to concerns noble Lords have raised that all permits will be allocated randomly and that getting a permit could be purely a matter of chance, but this is not the case. Where random selection is used, it will not be used on its own without any criteria being applied. The change of drafting to,

“an element of random selection”,

is a constraint on the delegated power to ensure that random selection cannot be used on its own. I state again that, while we expect some of these provisions not to be necessary, in passing this legislation we must ensure that the Secretary of State has the power to make regulations that enable a range of outcomes. That is the responsible thing to do.

We have made explicit mention of the method of first come, first served and random selection in the Bill to make it clear that the Secretary of State has these powers. Given that there might be circumstances in which these methods are used, it is appropriate that these powers are spelled out clearly in the Bill. This will ensure that there is no doubt that these powers are available to him and will provide transparency about what may be included in regulations. We have aimed to be open about the potential use of these methods and I have sought to set out the circumstances in which we envisage that these methods may be used.

I recognise the concerns raised about this wording and I hope that the detail and the amendment as set out will allay some of the fears about how the powers might be used. As I said, we will be consulting on the draft regulations. Additionally, the Government have tabled an amendment that will require the first regulations made to be subject to the affirmative procedure. We will come to that later, but it will mean that noble Lords will have the ability to scrutinise the regulations and, in particular, the way in which the Secretary of State has used his power under Clause 2.

As I have stated, I am confident that we will reach an agreement where all hauliers who seek a permit can get one—if, indeed, we need a permit system—but, as a responsible Government, we are preparing for all outcomes. I hope that the amendment makes the intention of the clause clearer and that noble Lords will support it. I beg to move.

[Lord Whitty]

My Lords, I have Amendment 5 in this group. The noble Baroness has in part answered the issues it is intended to raise, but it is not very clear in the Bill, in which the criteria for granting a permit seem to be entirely an issue of allocation of numbers, in terms of either the number of drivers or the number of vehicles, and what is available for a particular country. The amendment attempts to say to Ministers that there also need to be some qualitative criteria as to whether permits are given.

In the way the noble Baroness described it, the consultation might include that, but I would like that to be a little more explicit. We need to make sure that the operators who apply for and are given permits have reached certain standards of performance in relation to safety and maintenance, and to the employment and training they provide for their drivers and others; in relation to certain financial criteria that enable them to be of good financial repute; and in relation to certain environmental standards, as well as safety standards.

I hope that the consultation will cover all those things. What the Minister has said clearly includes that, but it is slightly odd that the wording of the Bill does not refer at all to regulations. I would therefore be grateful if the Minister could even more explicitly reassure me that these issues will be taken into account when criteria are established as to the suitability of operators to receive permits under the new system—if we need a new system.

[Baroness Randerson]

My Lords, to take further the argument put forward by the noble Lord, Lord Whitty, I note that the Minister said that the Government would seek to maximise the benefits to the UK economy in the way in which permits are distributed—and that needs to be done in a way which seeks to enhance the good repute of the industry and therefore of our country. I was struck by a point put to us in a briefing from Unite, which suggests that permits should be linked to the good repute of the operator; for example, their record on driver infringements should be taken into account, not just to reward good practice but to incentivise further good practice. I raise this issue because I seek an assurance from the Minister that the Government will be prepared to investigate such an approach, which seems a much fairer system than that suggested in Committee, when we talked about first come, first served and some kind of balloting system. There needs to be something to encourage good practice in the industry.

--- Later in debate ---

Moved by

[Lord Whitty]

9: Clause 5, page 3, line 43, at end insert—
“( ) If continued UK participation in the EU’s Community Licence arrangements is not agreed as part of the United Kingdom’s withdrawal agreement with the EU, regulations must provide an exemption from fees for UK registered hauliers for the period of five years beginning with the date on which the new international road transport permit scheme is introduced.”

[Lord Whitty]

My Lords, there are three amendments in this group. Amendment 9 is another of my noble friend Lord Bassam’s amendments. Evidently, either the European open skies aviation system or the Gatwick Express have not yet delivered him to this Chamber.

Amendment 9 deals with much of the territory that was discussed in the previous amendment. Indeed, it was discussed in Committee when the noble Baroness, Lady Randerson, had an amendment to delete the whole of this clause. The amendment was intended by my noble friend Lord Bassam to be a compromise and effectively say, “Let’s not charge a separate fee for the new permit system for five years to avoid an unnecessary or unfair additional cost on the hauliers”. Some of this has been dealt with in the previous discussion, and the Minister has indicated that it may not be a large amount of money. Nevertheless, it is an increased cost in a sector that is facing other additional costs, as I explained in relation to earlier amendments—costs at the frontier, the cost of documentation and so on—and one in which margins are already very low and competition is particularly acute. A new permit system really should not require a new payment by the hauliers themselves.

The other complication was also alluded to by the Minister: at present there is no charge for the Community licence. The Government argue on occasion that the charge is covered by the operations licence—the domestic licence, in other words—but if that is the case and we move to a new system, I have not noticed the Treasury arguing on grounds of full-cost recovery that the operating licence fee should therefore be reduced. This is an additional and unfair charge on the haulage industry which particularly hits SMEs, and there are quite a lot of single-driver or two or three lorry operations in the sector.

I therefore hope that the Minister will recognise that there is a need to cushion the burden, and the amendment would give her the opportunity at least not to introduce it for several years, during which the totality of the new system could, hopefully, be fully tested, made completely digital and therefore reduce the cost recovery required. We could then perhaps end up with a rational system of what falls on the basic licence and what falls on the European licence. There is therefore still an argument for the amendment. Although I accept much of what the Minister said about the size of the cost, it is nevertheless an additional cost on a precarious industry.

The other two amendments, which are actually mine, relate to a different issue. This in part relates to concerns expressed by Unite the union that aspects of the Bill’s provisions, particularly this clause, suggest that the responsibility falls on the individual driver rather than the operator. The responsibility for meeting the criteria in the regulations to follow and for operating within the new permit system must fall to the operator. The driver, whether contracted or employed by the operator, should not be the person penalised, but the clause explicitly states that, in certain circumstances, it should be the driver who is penalised.

Amendment 10 recognises that the operation of the system will at some point become completely digital. That would make life easier for the driver and, indeed, the operator, in that the driver would not have to find umpteen different documents for a multinational trip and ensure that they were all up-to-date and in order, but could present all that on an iPhone or an iPad. Explicitly recognising that in the Bill would be useful.

My second amendment deals with the issue of the driver’s as against the operator’s responsibility. Clause 8(2) specifically makes the driver responsible for any breach of regulations by failure to show documents, but it is the operator’s responsibility that the driver should have those documents and the operator should ensure that all of his or her lorries are furnished with those documents. The idea that that is primarily the driver’s responsibility is wrong: it must be part of the operator’s responsibility.

I am not saying that it is intended to remove all responsibility from the driver. Clearly, the driver has a responsibility to co-operate with the authorities and if the driver is obstructive or obstreperous to the examiner or whoever is trying to enforce the rules, that driver would be caught by Clause 8(3), which provides that anybody who obstructs the implementation of the regulations commits an offence. That would include the driver in those circumstances, but responsibility for ensuring that both the vehicle and the documentation are in order must lie with the employer or the operator. My amendments give the Minister a possible way out of that. She or her department may find a better way but, at the very least, I would be grateful if she could accept the principle, on the record, and say clearly that the Government’s intention is for it to be the responsibility of the operator, and that the regulations under the Bill will carry that out.

--- Later in debate ---

[Baroness Sugg]

My Lords, I will first address enforcement and Amendments 10 and 11. The sections on enforcement use the model of enforcement powers that are already in place in the context of operator licensing, Community licences and permits. Under current arrangements, the Community licence is the paper document that hauliers are required to carry in the vehicle and show to inspectors on request, so a switch to paper copy permits, should they be needed, will not fundamentally change this process.

The noble Lord, Lord Whitty, is right to highlight the benefits of digital documents. We want to see the haulage sector moving in this direction and are working towards that, but unfortunately we are not there yet. The Bill already provides the flexibility to move to that digital system in the future. Clause 1 provides that the permit,

“may be in any form the Secretary of State considers appropriate”.

That would enable the Secretary of State to specify the form of permits as digital once we have all the processes in place for that and once the industry is ready for it. Some of our existing permit agreements with other countries require a paper permit to be carried, and indeed all our existing permit schemes are currently paper-based, so it would be slightly counterproductive to insist on a digital permit at this stage. However, I can reassure the noble Lord that we are working towards that and that the current drafting allows us to move to that as and when we are ready to do so.

On the noble Lord’s amendment to Clause 8, the offence in Clause 8(2) relates to the conduct of a driver when a requirement is made of him or her by an examiner. Clause 6(2)(a) requires a driver to produce any permit carried on the vehicle to an examiner, and failing to do so without reasonable excuse would be an offence under Clause 8(2). That offence is relevant where a driver is frustrating enforcement activity, and mirrors similar offences for failing to produce documents carried on the vehicle, such as drivers’ hours records under Section 99 of the Transport Act 1968.

I absolutely understand the noble Lord’s point that if a driver has been sent on a journey by an operator without the necessary permit, the driver should not be punished for that. I agree, and to avoid this we included the wording,

“that is carried on the vehicle”,

in Clause 6(2)(a). Therefore, the driver will be prosecuted for failing to show a permit only if there is one on the vehicle which has been provided by the operator. If that is the case, that would be an offence under Clause 8(1), and that offence applies to the operator, so the driver would not be prosecuted for failing to produce a permit if they had never had such a permit in the first place. I hope this clarifies the scope of these offences to the extent that the noble Lord feels able not to press those amendments.

On the cost element of this group, the amendment proposes that fees should not be charged for five years. I have already outlined, and am happy to do so again, that our aim is to set fees, should they be needed, on a cost recovery basis and to minimise those costs to hauliers using any permit scheme. If we were to exempt hauliers from any permit fees for five years, these costs would have to be borne by another party. That would either be the taxpayer or it would need to be done via the cost of the operator licence, as the noble Baroness, Lady Randerson, pointed out, which would mean that all freight operators would pay for it. The latter would be more in accord with the principles in Managing Public Money which we are trying to stick to.

The noble Lord, Lord Whitty, is right to predict that I will use the argument that the costs of issuing Community licences are covered by operator licensing fees, which also operate on cost recovery. The issuing of Community licences is a small part of the costs of the operator licensing regime, and these fees are kept under review. If we no longer have to issue the Community licences and this reduces the cost to be covered by the fees, of course we will consider that when the fees are reviewed.

However, overall we think it is fairer that those who benefit from a service cover its running costs, rather than have all hauliers or all taxpayers paying for a benefit that only a small number get. Earlier, I confirmed that the fees will cover only the day-to-day running costs, with the Government covering the set-up costs of the scheme, which is being funded as part of our grant from the Treasury. Again, I am happy to confirm that we will do all we can to keep those fees low.

I hope that this discussion and the fact that the fees, should they be needed, will cover only the running costs will reassure the noble Lord that the fees charged to hauliers will be proportionate and stop an additional burden being imposed on the taxpayer. I can also reassure noble Lords that, should the government amendments be accepted, these fees, should they ever be needed, will be subject to three further measures: a statutory consultation with the industry; an affirmative procedure to allow proper parliamentary scrutiny of the regulations; and a report following their introduction to examine the impact on the haulage industry.

The noble Lord, Lord Whitty, has again suggested that we might benefit from further discussion on this. However, as with Amendment 1, I feel that I have been clear about the Government’s position on the Bill and the Government have nowhere further to go. Therefore, if the noble Lord wants to push the matter further, he will have to test the opinion of the House today. However, I hope that with these reassurances and the government amendments that we will come to later, he will feel able to withdraw his amendment.

[Lord Whitty]

My Lords, I am slightly disappointed by what the noble Baroness has said, and I also need to take heed of what she said on the previous group of amendments. Talking about the money, as I understand it, after the initial set-up costs, which will be borne by the taxpayer, it is still the intention to put a charge on hauliers for a service that will replace the Community licensing system, which is not currently charged for but is covered by the costs of the domestic operators’ licences.

I fully accept that from time to time these arrangements have to be reviewed, but with this amendment I am saying that at a time when hauliers are faced with substantial changes and increased competition from people who are still in the European Community licencing system, this will be seen as a charge on their costs. It is correct to say that we need to protect taxpayers’ money, but we also need to protect the industry, which eventually contributes to taxpayers’ money. Therefore, I am not sure that I am satisfied with the noble Baroness’s answer on that.

In relation to the other two issues, I take the point about digital provision and the fact that we are not there yet; nevertheless, it is right that the Minister has put on the record that a digital presentation of the documentation would be accepted. However, I am not entirely clear that she has gone far enough in relation to the driver’s responsibility, because Clause 8(2) implies a rather wider range of circumstances than simply refusing to provide documentation which is on board. When it comes to the regulations, the Minister will need to look at that a bit more tightly if we are not to transfer the responsibility of meeting the documentary requirements and other provisions, which lies with the operator, to the individual driver. She probably accepts that in principle but I am not sure that the Bill says that at the moment, and I hope that the regulations will do so. The reassurance that she has given us that the regulations will come through the affirmative procedure is helpful.

Returning to the issue of money, I do not think that what the Minister has said will reassure the industry significantly. However, she has allowed herself some elbow room on this. In view of the degree to which she has tried to give reassurance in respect of previous amendments and this group of amendments, I will not press this amendment tonight, although she challenges me to do so. The Government need to address this matter and to come back to us in a way that reassures the industry. It may be that, even at Third Reading, she will be able to say something more in that direction. However, for the moment, I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

--- Later in debate ---

Moved by

[Lord Whitty]

15: Clause 12, page 8, line 36, at end inset—
“(v) the renting out of trailers.”

[Lord Whitty]

My Lords, this group of amendments deals with the situation for the trailer market. It is clear that the provisions in the back half of the Bill, which deals with trailers, are important and welcome. As the noble Earl, Lord Attlee, said, at one point I had to be quite familiar with all this, but, thankfully in some ways, I have lost touch with parts of the industry in the interim. Nevertheless, it has been represented to me that the trailer market and the use of trailers is actually quite a complex subject—although a more pejorative word is sometimes used. For example, trailers are shared, hired out, or picked up by a driver for one operator and delivered to another, used for part of the journey and then used by another operator. What I am querying in the text is that the reference to the operator or keeper does not seem to include the part of the trailer market that is effectively hiring out. They are either hiring out for money or hiring out in kind by swapping one trailer for another or for a whole range of different services for trailers. It is a complicated area but it is important that those who hire out vehicles have the same obligations on registration, safety and the offences created by the Bill as do operators who always use their own trailers or operate on simpler, less complicated arrangements.

This is a significant part of the market without which the whole system would not operate, or at least it would be hugely more costly and inconvenient to operate without it. Therefore, those who hire out trailers, on whatever terms, are an important part of the efficiency of the sector. But they, likewise, have responsibilities. The Bill should reflect that they have the same responsibilities for registration and related matters as other operators within the sector. I beg to move.

[Baroness Randerson]

My Lords, the noble Lord, Lord Whitty, raises an important issue which did not have much discussion in Committee. It is a complex issue partly because it is possible to stick a registration plate on a trailer but not really know which trailer it is for. It appears to be the same trailer, but it could be a different one, depending on what is pulling it. We need a system to specify who is responsible and who is operating in a rental market for trailers. We should remember that rental trailers range from trailers used to cart excess household rubbish to the tip through to camping trailers for holidays and up to large commercial trailers. It is a big market. We must also take account of the important issue that, at the commercial level of the industry, drivers swap trailers regularly. In order to be fair to the drivers, there needs to be a simple way for them to check that the trailer is properly registered and safe. That is a key issue that we did not address at all in Committee.

--- Later in debate ---

[Lord Whitty]

I thank the Minister for her response. The noble Earl, Lord Attlee, said that this matter is no different from hiring tractors or any other form of vehicle, but this part of the Bill deals with trailers. At a casual read, it did not appear to cover the hiring, letting or contracting out of trailers. The Minister assures me that it does; I assume her lawyers know what they are talking about. She also assured us that this would be covered explicitly in the consultation. I am therefore prepared to accept that it will be covered, that there is no loophole and that this is not an area that the very commendable tightening up of trailer registration would miss. Not covering this would lead to anomalies. It is slightly odd that “keeper” or “user” includes hirers; nevertheless, if it does, I accept that, as long as it is clarified to the industry and those who enforce the regulations that we have yet to see and that the Minister rightly says will be widely consulted on. Subject to that, I thank the Minister and I will withdraw my amendment.

Amendment 15 withdrawn.

--- Later in debate ---

[Earl Attlee]

I think it was really good that we had the benefit of a pep talk from the noble Countess, Lady Mar, who is on the Woolsack as we speak, because I can correct the noble Lord on a material point: my point was that it is not essential to have a registration scheme if you want to have a testing scheme, even for light freight. Even now we have a testing scheme for HGV trailers but we do not have a registration scheme. It does not mean that I do not think it is important; it is just that it is not necessary to have a registration scheme.

[Lord Whitty]

My Lords, I too was not going to intervene in this debate but one additional point occurs to me that the noble Baroness might like to take note of. To make the point I have to declare an interest: I am chair of the Road Safety Foundation and of an organisation called EASST, which deals with projects on road safety—roads and vehicles—in eastern Europe, the former Soviet Union and Asia. My point is that Britain has often led the way in road safety. Statistics are difficult to come by, but anecdotally the number of problems with trailers in developing countries with inadequate road systems in central Asia and even in eastern Europe is quite substantial.

We have heard of horrific cases here from my noble friend Lord Tunnicliffe, but there are equally horrific anecdotal cases from other countries. Given the respect in which Britain’s road safety expertise is held around the world, a report of the kind that my noble friend’s amendment calls for could well influence global road safety and therefore be a contribution from the DfT to the new global Britain, and could be presented that way to otherwise reluctant colleagues in the House of Commons who might not accept simply another report. It is important that we maintain that lead on road safety and this is one area which, to my knowledge, has not been systematically addressed in the international road safety community.

[Baroness Sugg]

My Lords, safety is of course very important and warrants due care and consideration whenever we are legislating. Under the proposals in the Bill, around 80,000 commercial trailers, and a negligible number of non-commercial trailers, would fall within the mandatory scope of the scheme. It would not affect the 1.7 million trailer users who solely use their trailer domestically. We believe that this approach balances the need to offer clarity to UK operators and enable them to continue to operate internationally, without placing undue costs and administrative requirements on businesses and non-commercial users.

It may be helpful to explain the existing regimes in place to ensure high standards of safety and roadworthiness of trailers. This includes an annual testing regime for larger trailers and an approvals regime for new trailers. The current annual testing regime applies to almost all trailers weighing over 3.5 tonnes, with very limited exceptions. Certain other categories are also included, such as those weighing over 1,020 kilograms with powered braking systems. This regime covered the testing of almost a quarter of a million trailers in 2016-17. The pass rate at first test last year was 88%. The separate approvals regime is very similar to that which is in place for motor vehicles and covers new trailers ahead of their entry into service. This means that almost all new trailers are approved either by model or on an individual basis ahead of taking to the roads.

The amendment seeks the collating of a report on the number and nature of accidents involving trailers. I confirm to noble Lords that this data is already recorded in the annual Reported Road Casualties in Great Britain report published by the department every September, which I am happy to share with noble Lords; there is also a copy in the Library. It contains extensive details of all vehicles and persons involved in accidents reported to the police that occurred on a public highway, involving at least one motor vehicle and where at least one person was injured. The noble Lord, Lord Tunnicliffe, pointed out the limitation that those are the only figures included. The report recorded statistics for more than 136,000 accidents resulting in injuries and has informed the department’s ongoing work on road safety, for which my honourable friend Jesse Norman is the Minister responsible. The number of recorded accidents involving a trailer in 2016 was 4,352, which accounted for 3.2% of the total number of accidents in 2016. The total number of accidents involving trailers has decreased by 21% in the last 10 years—a significant improvement.

The noble Lord, Lord Tunnicliffe, spoke of the tragic death of Freddie Hussey. I pay tribute to the campaign of his family and his local MP. Following this incident, the department and its agencies have undertaken significant work as part of our continuing commitment to improve towing safety standards. Highways England has launched the national towing working group, which brings together a range of stakeholders. The DVSA published further guidance regarding safe towing practices.

Noble Lords will appreciate that towing, by the fact of involving two vehicles, is more complex than driving a motor vehicle alone. The noble Baroness, Lady Randerson, highlighted some of the issues that can be faced. It requires not only the safety of the vehicles involved but knowledge of and education on driving and towing safely. Alongside effective enforcement of existing provisions, the department believes that education is integral to continuing to reduce the number of accidents related to towing.

My honourable friend the Roads Minister has been particularly engaged on the issue of trailer safety and has met Karin Smyth, the local MP for the Hussey family. He will be attending the trailer safety summit later this month alongside a range of industry stakeholders to take stock of the progress that has been made and decide what more can be done. I absolutely echo the sentiment of noble Lords that each death that occurs on the roads is a tragedy and we must do all we can do avoid them, but I hope noble Lords will agree that these figures and the work I have spoken of underline the fact that the trailers on our roads exhibit good standards of safety and our current approach is seeing steady improvements.

We remain of the view that it is not appropriate to include these amendments in the Bill, but the debate they have raised has been valuable. We will continue to review safety regimes on an ongoing basis, but I appreciate the wish of noble Lords for the department to look further at this issue of trailer safety, and I have discussed this in detail with my honourable friend the Roads Minister. We have asked officials to review what further steps could be taken on trailer safety and the reporting measures that are in place.

Although we remain of the view that trailer registration and indeed a trailer safety check are not integral to improving these standards, it is of course appropriate that we continually look for opportunities to consider data collection, review our conclusions on registration and testing, and raise standards of safety on the roads. As such, I am pleased to be able to commit the department to producing a dedicated report on trailer safety. This report will ensure that our existing reporting on trailers accurately covers the complexity involved in accidents involving towing where issues may arise from a vehicle, trailer or indeed the capability of the driver of the towing vehicle. After looking at the reported road casualties document, I agree that we could and should look at the way that we report trailer safety. It can definitely be improved. The report will also consider the role that registration and testing may play in continuing to improve trailer safety standards. We will certainly discuss this with the Caravan Council and other industry representatives.

As my noble friend Lord Attlee said, following our previous session I have arranged for him to meet the Roads Minister to further discuss trailer safety. On behalf of my honourable friend the Minister, I would like to extend this invitation to all noble Lords with an interest in the subject. The contents of this report I have committed to can be discussed there in more detail. I hope noble Lords are reassured by the statistics I have outlined and by the approach that the department is taking more generally. I thank the noble Lord, Lord Tunnicliffe, for suggesting a report in his amendment and I am pleased to be able to agree to such a report.

As I have throughout debate on the Bill, I have attempted to take on board the views of all noble Lords. I fully agree that the department should consider this issue further but, with my commitment to such a report, I do not think it is necessary to seek to include the amendment in the Bill by dividing the House. With the agreement to a report and the offer of a meeting with my honourable friend the Roads Minister to discuss the contents of such a report, I hope that the noble Lord feels able to withdraw his amendment.