Brexit: Road, Rail and Maritime Transport (EUC Report)

Lord Whitty Excerpts

Monday 21st September 2020 Grand Committee

Moved by

[Lord Whitty]

That this House takes note of the Report from the European Union Committee Brexit: road, rail and maritime transport (39th Report, Session 2017–19, HL Paper 355).

[Lord Whitty (Lab) [V]]

My Lords, the report was published in May 2019 based on an inquiry by the EU Internal Market Sub-Committee. The majority of our evidence was taken between July and November 2018 in the run-up to the publication of the outline political declaration and Mrs May’s draft withdrawal agreement. It all now sounds like ancient history so this report might be seen as a bit out of date and hardly worth bothering your Lordships with at this stage. The problem is that the questions asked by the committee in the report, which reflected the concerns of the transport sectors, still have not been answered. Even in recent days, it has been made clear by the road haulage sector, in particular, that it still does not consider that it has received satisfactory answers as to the Government’s intention.

Perhaps I should explain that this was my last report as chair of the sub-committee; the noble Baroness, Lady Donaghy, took over from me in grand style. We will hear from her shortly. Also, the EU Internal Market Sub-Committee ceased to exist after the restructure earlier this year. The noble Baroness, Lady Donaghy, now chairs the EU Services Sub-Committee, but much of the transport brief is in the hands of the EU Goods Sub-Committee, chaired by the noble Baroness, Lady Verma. It was a great experience chairing the former sub-committee. I extend my thanks to the members for all their important contributions to this and other reports; above all, I thank the staff, particularly Rosanna Barry and Francesca D’Urzo, who put in heroic efforts on this and earlier reports.

However, we are now 20 months on. The report itself is a bit bifurcated. Although our evidence was clearly focused on what we felt was needed for a full-scale transport aspect for a free trade deal, the subsequent failure to find a Commons majority in support of the then Government’s Brexit deal meant that we had to concentrate also on increased preparations for no deal. We now have a serious case of déjà vu. The reality is that we—and, crucially, those working in and reliant on our cross-border transport sector—are in much the same place: waiting for clarity on the kind of arrangements we will have with the EU while simultaneously preparing for the possibility that there will be no arrangements at all.

Indeed, the Road Haulage Association made this precise point in paragraph 56 of the report. It said:

“If we find ourselves here again in two years’ time, looking at a situation where we are leaving but we do not know what customs arrangements we will have and what the permits are for road haulage, we will be in the same position as we are in now.”


Only last week, after a meeting between the haulage industry and Michael Gove, the Road Haulage Association said that there has been “no clarity” on how border checks will operate once the transition period ends after December. The Freight Transport Association expressed similar frustrations.

The report addresses not only road haulage but also bus and coach travel, private drivers, vehicle standards, rail and maritime transport. I will address each of these modes in turn and then put some questions to the Minister.

I turn first to road haulage. The EU has a liberalised single market framework for cross-border road haulage. Operators with a community licence may transport goods across, between and within other member states. Therefore, a haulier from one member state moving goods entirely within another is known as cabotage. The transport of goods between two member states by a non-resident haulier is known as cross trade. This is all made possible by the community licence system, which, of course, the UK will now be outside. The Government told us that 43% of international trips by UK hauliers involve an element of cross trade, cabotage or both. That said, UK hauliers are only part of the story: the EU and particular member states also have interests in aspects of UK cabotage and cross trade arrangements, and a trade-off between these interests in a future haulage agreement could benefit both sides—but we are nowhere near that.

The Minister said that we are looking for reciprocal arrangements, but we know that there are quite serious differences between the two sides. The UK negotiating position suggests that both sides should be entitled to provide services to, from and through each other’s territories with no quantitative restrictions. However, the EU negotiating position on open market access for road freight transport is that UK hauliers should not be granted the same level of rights and benefits as those enjoyed by EU hauliers in respect of cross trade and cabotage. Clearly, any form of reciprocity, even if we get an agreement, is not going to be the same as “carry on as usual”. Without an agreement on UK-EU haulage arrangements, hauliers moving between the UK and EU would need to rely on the European Conference of Ministers of Transport—ECMT—permits, which are much more restrictive and very limited in number or, possibly, on the revival of historic bilateral agreements from individual member states.

Therefore, what can the Minister tell us about how much progress has been made in the negotiations or other arrangements for road haulage? Does the Minister agree that if no deal is found, the number of available ECMT permits will be vastly outstripped by demand from UK-based hauliers? Is it true that demand exceeds likely supply by at least four to one? Can and will this shortfall be addressed by other arrangements? When we faced the possibility of no deal, the EU had agreed a short-term contingency arrangement that would operate for a period of months. Is that contingency arrangement still on the table or do we have a new one? If not, do the Government intend to revive historic bilateral haulage agreements with individual member states, or is some other multilateral form of conference envisaged? Even if there were an agreement on no tariffs between the UK and the EU, and no quantitative restrictions, the EU would require new administrative procedures and there would be checks at our ports. Last week, after their meeting with Ministers, the RHA and the FTA claimed that the proposed electronic system will be ready to be put into operation from January. Can the Minister tell us whether that is true?

We have to face facts: extra checks and regulatory procedures will cause delays. What is the Minister’s current assumption about the slow-down of traffic through Dover and the effects of back-up and long traffic jams on Kent roads? The Government clearly anticipate this log-jam. Can the Minister tell us how much new lorry parking space is demarcated in Kent and back to the M25? Is it true that a designated Covid test centre near Ebbsfleet has just been requisitioned for a lorry park?

Of course, we must recognise that this is not a matter for just the road haulage sector. The whole of our food supply sector, the manufacturing industry’s dependence on integrated component transfer between different countries, and the supply of medicines and chemicals are all largely dependent on the just-in-time delivery ability of our road haulage sector. Therefore, there are a lot of questions on road haulage, none of which seem to have been answered effectively.

Briefly, on the bus and coach transport aspects, the UK’s accession to the Interbus agreement—a multilateral treaty for passenger transport, which includes the EU—would, for the most part, ensure the continuation of cross-channel ships without any great difficulty. However, it is currently limited to one-off, occasional journeys such as coach holidays or school trips and does not include regular, scheduled services or transit through non-contracting parties, such as Switzerland. The limitations of the Interbus agreement will have a particularly critical impact on the island of Ireland. The Government’s negotiating intention seems to be to secure continued connectivity for commercial passenger transport, but it is also clear that Monsieur Barnier’s mandate only affects the use of Interbus. Will the Minister tell us whether cross-channel bus and coach transport is likely to be limited to arrangements under the Interbus agreement? Has any further progress been made on the extension of Interbus to include regular and special regular services?

There is also the issue of private motorists, which does not seem to be covered in the Government’s negotiating document, issued last February. EU arrangements provide for the mutual recognition of driving licences and drivers from EU member states, so that they do not need to carry proof of third-party insurance cover or have any other requirements while driving in the EU. Without similar successor arrangements, UK drivers wishing to drive in the EU will need to carry an international driving permit and a green card as proof of insurance. Do the Government expect to reach an agreement with the EU on mutual recognition of driving licences? On the insurance side, will the Minister confirm whether the UK will be part of the green card-free circulation as of 1 January 2021?

We also touched on the issue of vehicle standards. The Government’s negotiating objectives speak of type approvals based on UN regulations as well as co-operation mechanisms to address regulatory barriers. Can the Minister clarify whether the Government seek to achieve mutual recognition of type approval for whole vehicles, and, if so, whether this objective is shared by the EU?

On rail, the Government’s negotiating document makes no mention of it. Indeed, it was made clear from the outset that there would be no comprehensive rail agreement with the EU: instead, a bilateral approach would be taken with Ireland, France, Belgium and the Netherlands to maintain existing international services. Will the Minister tell us how that is going? Can we be assured that the necessary bilateral arrangements will be in place by 1 January? While the Government’s approach to the implications of Brexit for the rail industry focuses on the maintenance of cross-border passenger and freight services, our report sets out that our rail industry’s interactions with the EU are more wide-ranging. Indeed, UK and EU operators, manufacturers and drivers access each other’s markets to mutual benefit. Witnesses told us that south of Derby, almost half of the rail supply industry workforce is from the EU. Therefore, do the Government see any need for maintaining mutual market access for operators, manufacturers and drivers beyond what can be achieved through a limited number of bilateral agreements? At this point, I note—slightly more positively—that while the UK has been active in the development of common standards in the rail sector, this was one area where the inquiry witnesses saw some potential opportunities for divergence from the EU which would meet more local conditions on our domestic routes.

Turning to maritime issues, maritime is, of course, largely liberalised and dependent on international standards. However, we were struck by the failure to mention the European Maritime Safety Agency in the Government’s position, despite the fact that that was one of the objectives agreed to in the political declaration. The more recent negotiating agreement makes no reference to the EMSA co-operation. Can the Minister confirm that the necessary preparations have taken place for UK authorities to have access to safety, security and environmental information formerly provided by EMSA when we pass beyond 1 January?

We devoted a significant part of our report to the situation on the island of Ireland. That has now been overtaken by the bigger, controversial issues relating to movements across the border and between Great Britain and Northern Ireland, so I will not go into that in great detail today except to emphasise that one of the most detrimental effects of Brexit will be on the Republic of Ireland. We need to ensure that those relationships with our nearest neighbour are dealt with properly. Do the Government think that they will reach an agreement specific to Irish trade with the EU or will we have another bilateral agreement with the Irish Republic?

In summary, we have inched toward a bit of an understanding of what some aspects of UK-EU service transport will look like in just over three months’ time. However, the industry itself says that that is not enough. Our hauliers in particular, and those who rely on cross-border bus services, are in the dark. My final question for the Minister is: if a free trade agreement with the EU does not emerge—which will now have to be by the end of October—will the earlier contingency arrangements that were proposed by the EU operate for a few months? In other words, are we not faced with an immediate cliff edge? If they do not operate, do the Government intend to put in place any contingency measures themselves to buffer the market access and to ensure some smoothness of transfer into the EU, which will benefit not only our haulage industry but much of our manufacturing and food-supply sectors? I beg to move.

--- Later in debate ---

[Lord Whitty (Lab) [V]]

My Lords, I very much welcome the detailed response given by the Minister and thank everybody who took part in this debate. However, the response still leaves a significant number of questions open, and I will just comment on two or three things.

The main problem is focused on road haulage. The noble Lord, Lord Bradshaw, rightly admonished me by saying that there were vitally important bits of the maritime sector which were, themselves, part of the system for road haulage, particularly in respect of the ro-ro arrangements at Dover. That is our biggest problem, although it is not our only problem, and I still do not think that we have had a clear indication for the industry. I appreciate, having been a Transport Minister myself, the Minister’s reference to hauliers not lobbying subtly. That is certainly true, but sometimes that is understandable. They do not feel that they have yet got sufficient assurances that the outcome from the Government is actually going to be clear. I am not sure that the Minister is actually yet in a position to give them that assurance. I hope that she is right about the electronic system, which does, of course, require haulage companies to have prepared their drivers for it, as well as the Government to have completed the testing of the system themselves. Normally, that is a familiarisation process that itself takes a significant amount of time, but it effectively has not started yet.

One problem of this report is that we were slightly more optimistic at that time than perhaps some of us are now. We thought it was highly probable that, by now, there would be a free trade agreement, which would mean that there were no tariffs. Clearly, if there are tariffs, that complicates matters considerably, and the amount of regulation and potential delay at ports increases significantly. We also thought—at least I did; I do not necessarily speak for everyone—that there would be quite quick side-agreements on transport matters, which are effectively technical matters on which we could have reached agreement. I appreciate that these discussions are still going on, and have gone on for some time, but that is not the reassurance that the haulage sector in particular requires. Of course, when I talk about the haulage sector, I would not disagree with the noble Lord, Lord Blencathra, that trade will adapt. Of course it will; there will be different patterns of trade. However, there is a cost to be absorbed here, and that cost will be faced not only by the haulage industry itself but also by consumers at the end of the line and by key parts of British manufacturing industry, which are part of an integrated European production line. There will be a serious knock-on effect of any failure to deliver effective systems for road haulage and related sectors.

I thank everybody who has taken part. I apologise to my noble friend Lady Ritchie for not spending more time discussing the island of Ireland. That is part of a bigger problem, which I am sure your Lordships’ House will have to address shortly. The impact of Brexit on both Northern Ireland and the Republic of Ireland in terms of their trade systems will be an important dimension.

Other things are still not clear, from driving licences through to the way in which the railway system will treat passengers who come off on either side of the channel. We have not really talked much about passenger rights and experience, but that is another dimension on which the Government will have to seek some degree of clarity before we move into a new situation beyond 1 January.

I thank the Minister and, as I should have said earlier, thank her department for producing a detailed response very quickly, unlike some departments in respect of Brexit reports from the EU Select Committee. It takes the work of the Select Committees seriously, and I appreciate that the Minister has done so today. However, we are still short of some answers, and time is running out. In one form or another, the House, as well as the Government and the industry, will need to return to these issues. Meanwhile, I thank everybody who took part, particularly the Minister, for their contributions, and I beg to move.

Motion agreed.