Haulage Permits and Trailer Registration Bill [Lords]

Robert Goodwill Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Monday 14th May 2018 Commons Chamber

[Chris Grayling]

We worked on this carefully. The important thing to say is that this is not in any way related to broader discussions about border matters. We are aware that some hauliers travel from Belfast to Dublin to Holyhead to deliver their goods within the UK—we are talking about a UK business delivering its produce within the UK—so this provision is simply designed to ensure that that will not be impeded in any way by the regulatory system. I will say a bit more about that later in my remarks, but we want to ensure that nothing can undermine the integrity of the UK and people who travel from point A to point B within it. That is very important to me.

The final details of the scheme will, of course, depend on the agreements that we reach, and the Bill allows for that. It creates flexibility and allows us to make regulations on the allocation of permits to best meet the needs of the economy. Guidance on the allocation process will be issued to hauliers.

This aspect of the Bill also allows the Government to charge fees in relation to applications for permits and the grant of permits. I stress that our aim is purely to set those fees on a cost-recovery basis so that we minimise the impact on hauliers; this is not designed to be a revenue-raising mechanism. The system is simply designed to cover its own costs, and the amounts involved will be relatively small for anyone seeking a permit. The fees will recover only the day-to-day cost of administering the scheme. The set-up costs of the scheme are being funded as part of a £75.8 million grant from the Treasury to the Department for Transport as part of our preparations for all the different Brexit scenarios.

The Bill provides for the first set of regulations made under clauses 1 and 2 to be subject to the affirmative procedure, which means that the House will be able to scrutinise the new permitting system fully and properly. The first regulations will set out the overarching framework that will be used for the provision of permits under any future agreements. As I have outlined, we are confident that we can maintain our existing liberalised access with the EU, but the Bill will help to cater for any possible future permit arrangement with the EU.

On timing, we plan to have the system for a permit scheme ready by the end of the year. It is important that we make sure that we are prepared for all eventualities. Any applications for permits after the relevant regulations are in force will be dealt with under this system. The first regulations made under clauses 1 and 2 will cover the permits required under existing international agreements, including provisions relating to Armenia and Ukraine. If we then agree a permit-based arrangement with the EU, we will make further changes to the regulations to cover the agreement reached. In the unlikely scenario that we end up with a restricted number of permits to the EU as part of a future relationship, we have committed to providing a report to Parliament. That report must assess the effects of such restrictions on the UK haulage industry during that year. That assessment is, of course, vital, but I reiterate that this is about a flow that is more inward than outward, both in goods terms and in haulage terms, so I remain confident that we will reach a sensible agreement for the future. The permit scheme is necessary to make sure that trucks have their equivalent of the international driving licence to cross borders. I will not allow us to get into a position in which the industry does not have the administrative basis to take its business forward in all eventualities.

Before I move on to part 2 of the Bill, let me touch briefly on the 1968 Vienna convention on road traffic, which the UK signed 50 years ago and which the Government have recently ratified. The convention will come into force here before 29 March 2019. It was introduced by the United Nations to enable international road travel and to increase safety by establishing common rules for roads around the world. It builds on the earlier 1949 Geneva convention on road traffic and, indeed, the 1926 Paris convention, which was the first in this policy area and which the UK has already ratified. Why does it matter? Because we need to make sure not only that trucks can come across borders, but that we are able to line up with the rules in other countries, such as Germany, on trailer registration.

The second part of the Bill gives the Government powers to establish a trailer registration scheme to meet the standards in the 1968 Vienna convention. Many EU countries have similar schemes. It will mean that UK operators will be able to register trailers before entering countries that require trailer registration for travel on their roads. By trailers, I mean not the trailer on the back of a car that carries a tent, but full HGV trailers that cross borders to carry goods from point A to point B. The Bill will allow us to set the scope of such a scheme’s coverage.

The detail will be set out in regulations, but our intention is to require only users travelling abroad to register their trailers. It is not UK-only, but purely about those travelling internationally. Only commercial trailers weighing more than 750 kg and all trailers weighing more than 3.5 tonnes will need to be registered. As was clearly set out in the other House, the duty to register will apply almost exclusively to international hauliers. Virtually all private-use trailers, such as caravans and horse trailers, will not fall within the scope of mandatory registration, because it is rare that trailers of that kind weigh more than 3.5 tonnes.

We will consult on the scope of the trailer registration scheme over the next few months, and we will try to make sure that we are in good shape later this year to put in place the right scheme, depending on the nature of our agreements and what is required to ensure the smooth flow of trade across borders. We plan to recover the costs of running the scheme by charging fees, which we expect to be lower than those currently set out for the registration of motor vehicles. It is of course important that the new arrangements are complied with; if they are not, we will apply existing penalties to those who transgress.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

Many hauliers hire trailers for specific uses. If trailers are used predominantly in the UK, they obviously will not be registered. What sort of timescale does the Secretary of State think would be reasonable for registering a trailer before it embarks on an international journey?

[Chris Grayling]

In all this, we will want the process to be as rapid as possible. There will inevitably be a surge at the start when hauliers look to register trailers that will be used internationally, but my hope is that once that initial surge is over, it will be possible to carry out the registration very quickly when there is a change of circumstance. We do not expect to have a system that is so expensive that it deters somebody who wants to register a trailer in case it is used internationally. We want to ensure that there is only a small cost to businesses. Many people will want to register their trailers in case what my right hon. Friend highlights happens.

We listened carefully to the debate in the other place and we are working on a report on trailer safety, which is a policy area in which proper analysis will be beneficial and will help safety on our roads. Off the back of the report, we will be able to offer a clear and comprehensive analysis of the complex issue of trailer safety and towing-related accidents. That was a constructive element that came out of the debate in the other place, and we will certainly engage with it.

On the question of the island of Ireland, the Bill covers the whole United Kingdom, other than two provisions that amend legislation in Great Britain and Northern Ireland respectively. Road haulage policy and trailer registration are devolved in Northern Ireland, but not in Scotland and Wales. We have been working with all the devolved Administrations as the Bill has developed. With regard to the Republic of Ireland and Northern Ireland, the Bill supports the commitments made in the December 2017 joint report to avoid a hard land border. This is an enabling Bill, and the Government will preserve the constitutional and economic integrity of the United Kingdom.

The Government are committed to ensuring that trade and everyday movements over the land border continue as they do now. The Bill does not create a permit regime in relation to the Republic of Ireland and Northern Ireland, nor does it create a hard border between them. It means that trailers travelling only between the UK and Ireland will not need to be registered. It also avoids the situation that I described earlier in which someone who chooses to go via Dublin to come over to the UK finds themselves needing a permit even if they are moving purely within the United Kingdom. I can confirm that the Bill will not impact on border arrangements and that there will not be, as a result, any new transport-related checks at our borders.

--- Later in debate ---

[Andy McDonald]

If the Secretary of State had looked at the papers over the weekend, he would have seen exactly why. A lot of people are making their plans to get out of the UK if necessary. That is exactly what has happened. He is playing with fire on this, and he really should wake up and smell the coffee.

The Government have done little to help the road haulage industry. They have made a complete and utter dog’s breakfast of contingency planning for the M20 motorway. A lorry park off the motorway has been desperately needed to help alleviate problems during Operation Stack, and it is all the more needed ahead of Brexit next March. Yet the Department for Transport failed properly to undertake the critically important environmental risk assessment before the planning process for the £250 million project and had to scrap it last September. This incompetence will have disastrous consequences. If this Government cannot successfully plan how to build a lorry park in Kent, how do they expect anyone to believe that they are capable of introducing an alternative haulage permit scheme?

[Mr Goodwill]

The hon. Gentleman says, rather surprisingly, that this Government have done nothing for the road haulage industry. Is he not aware that the HGV levy brought in to level the playing field between foreign and UK hauliers brought in £96 million in the first two years after it was introduced in 2014, and that the previous coalition Government increased the speed limit on single-carriageway roads from 40 mph to 50 mph, which made a great contribution to improving logistical efficiency?

[Andy McDonald]

If the right hon. Gentleman had had the pleasure of listening to the Road Haulage Association last week, and the FTA as well, he would probably agree with me that they are not exactly overjoyed by the prospect of the uncertainty that is facing them. A lot of these companies are small companies working on very small margins. He raised the issue of costs that are now going to be put on to those companies. He should be worrying about how that is going to impact on them.

[Mr Goodwill]

Will the hon. Gentleman give way?

[Andy McDonald]

No. I am not trying to be rude, but I need to make progress. I have taken a lot of interventions.

The ongoing supply of labour is a huge concern for the road haulage industry. The average age of an HGV driver is now 55 and only 2% of the workforce is under 25. The industry is enormously reliant on the 60,000 non-UK EU nationals and any restriction on the supply of skilled workers will undoubtedly have a negative impact.

Ministers urgently need to reassure the road haulage industry that Brexit will not result in more delays at borders as well as that it will not have to bear additional red tape and costs. The Government need urgently to provide clarity about customs, borders and future regulations, about which there are real and deep concerns. Ministers continually argue that economic self-interest will mean that things naturally gravitate towards protecting British business. That is a naive and irresponsible view that is already damaging UK industry.

I pay tribute to the noble Lords, whose work has improved the Bill. The Delegated Powers and Regulatory Reform Committee in the Lords described the Bill as

“wholly skeletal, more of a mission statement than legislation”,

said that the Committee was

“in the dark because the devil will be in the regulatory detail”,

and urged the Government to provide

“illustrative examples…of at least some of the regulations to be made under the main delegated powers in the Bill”.

As the future relationship is a matter for the Brexit negotiations, this is an enabling Bill that contains little detail and grants the Secretary of State significant powers. The fact that so few details are on the face of the Bill also speaks to the lack of strategy and progress in the Government’s approach to exiting the European Union. The Secretary of State should of course have the powers needed to mitigate the damage to the UK haulage sector caused by a failure to retain current arrangements, but those powers should not be excessive. For example, an argument has been made in favour of a sunset clause so that the powers do not remain on the statute book ad infinitum.

Following pressure in the other place, concessions were made. I am glad that clauses 1, 2, 12 and 17 will be subject to the affirmative procedure, taking account of the recommendations of the Delegated Powers and Regulatory Reform Committee to the effect that regulations made under certain clauses should be subject to a vote of both Houses. I am pleased that the Government tabled an amendment introducing a new reporting requirement, requiring the Secretary of State to lay a report before Parliament annually that assesses the effect on the UK haulage industry of any restrictions that apply to a permit scheme agreed with one or more EU member states. The impact of a future permit scheme has the potential to be far reaching with many unintended consequences, so it is right that the Secretary of State should report to Parliament.

In the light of the Government’s abysmal failure on road safety, which has seen the number of specialised road traffic police plummet while the number killed and seriously injured on our roads rises year on year, I urge the Secretary of State not to attempt to remove Labour’s amendment on trailer safety. The amendment is eminently reasonable, and requires the Government to assess evidence on the incidence of trailer-related road accidents and, only if the evidence justifies action, for a new MOT-style mandatory safety standards testing scheme to be created.

I note that when it was introduced in the other place the Bill would have allowed for permits to be allocated on a first come, first served basis or through a lottery, creating a situation where companies would be left queuing overnight or waiting with their fingers crossed that their company’s name would be pulled out of a hat. I am glad that, after criticism from the noble Lord Tunnicliffe, this was changed.

In Committee, Labour will continue to identify any further unintended consequences of the Bill, and will look to strengthen the accountability to Parliament and restrict the powers granted to the Secretary of State where necessary. Labour believes that getting the right deal for transport and its networks must be the highest priority for the Brexit negotiations. Nothing less than the future of the country is at stake. Only Labour’s clear policy of a customs union with the EU can ensure that trade can flow and grow. The Government should put country before party and provide the same.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

I am slightly astonished at some of the points that the hon. Member for Middlesbrough (Andy McDonald) made on behalf of the Opposition. I know him well—we often travel down on the train from the north-east together—but he has spent most of the past quarter of an hour attacking the Government for implementing the decision made by 65.5% of the voters in Middlesbrough, and by over 60% of people in Cleveland as a whole, to leave the European Union.

[Andy McDonald]

Does the right hon. Gentleman not agree with me that the voters did not vote to be worse off?

[Mr Goodwill]

The hon. Gentleman has fallen into the other trap that many Labour colleagues fall into, which is arguing that the people were too stupid to understand what they were voting for. They knew precisely what they were voting for. They knew it would be tough, but they put the interests of the country before short-term economic advantage. I believe that the Government are negotiating to get the best deal for Britain and one that will be to the long-term benefit of our country.

[Mrs Anne Main (St Albans) (Con)]

Does my right hon. Friend share my surprise at hearing the hon. Member for Middlesbrough (Andy McDonald) say that any attempt to restrict the supply of workers coming in from the EU would be resisted? Labour Members’ support for a customs union and their not wanting any restriction on the freedom of movement of workers shows that they are in denial about leaving the European Union.

[Mr Goodwill]

My hon. Friend has correctly identified that Labour Members are all over the place on this subject. There was no shortage of “Project Fear” in debates during the referendum campaign—people knew they were voting for something that would be very tough for this country—but, by and large, they voted because they understood the facts. I turn again to the point that Labour colleagues often make, which is that people did not know what they were voting for. Yes, they did: they were intelligent enough to understand the arguments, and to say otherwise is to insult the many people in Yorkshire and the north-east who voted to leave the European Union.

[John Redwood]

Did my right hon. Friend also notice that Labour Members’ case seems to be that the EU is so nasty and unpleasant that it would deliberately wreck its own exports to us to make a point, yet they want to be more closely aligned with people and an organisation that would do that? I just do not understand what they are talking about.

[Mr Goodwill]

As always, my right hon. Friend makes a valid point. It is not in the interests of the German motor industry, the French agriculture industry or industry right across Europe to cut off its nose to spite its face. If that were the case, I am sure that German motor manufacturers would be beating a track to Chancellor Merkel’s door to make that very point.

I have not seen one recently, but I remember following lorries down the road and reading a sticker saying, “If you’ve got it, it’s been on a truck”. Although progress has been made in switching freight to rail or short sea shipping, the last leg of any journey invariably involves a truck. We heard from the hon. Member for Middlesbrough about Dover. It had 2.6 million truck journeys last year, with 1.6 million trucks going on Le Shuttle, which is 11,500 per day. Dover represents 17% of all UK trade coming in, worth £122 billion last year.

It is not just on this side of the channel that people are making such a case; Calais chiefs have also stressed the necessity of a frictionless border. Jean-Marc Puissesseau, president and general manager of Port Boulogne Calais, has said that the port boarded 2 million lorries last year. Without an agreed system in place, we could face 30-mile queues on both sides of the channel—every day, not just when the French seamen go on strike. During such a strike, some UK motor manufacturers, and indeed BMW in Bavaria, were three days away from stopping production. As we have heard, Honda relies on 350 trucks a day on a one-hour just-in-time delivery schedule. It is in no one’s interest not to get a deal.

[Sammy Wilson]

The right hon. Gentleman is making his point very sharply and well. Does he accept that even the permanent secretary of Her Majesty’s Revenue and Customs has made it quite clear that the picture painted by the Opposition spokesman is very far from the truth? We can have a frictionless border at Dover, and not need have a lorry park on the M20 or the checks he described.

[Mr Goodwill]

I will come to that point as I expand my comments.

Turning to trucks and the importance of the road haulage industry, it is currently in vogue to demonise diesels, and Volkswagen must take some of the blame for that. However, if one looks at the trucks operating under the Euro 5 and Euro 6 regulations, one sees that heavy vehicles pretty much perform as expected. The reason for that is quite simple: although the analytical equipment that exposed Volkswagen was not previously small enough to go in a car boot, it has for a long time been small enough to go on the back of a truck, so trucks actually comply very well with the regulations. Indeed, industries have always stepped up to the mark when a higher level of regulation has been proposed, and there is no reason whatever why the regulations will be slackened once the UK leaves the European Union.

As one of the few Members, I suspect, who holds what used to be called a class 1 heavy goods vehicle licence, I spent many hours driving HGVs—transporting potatoes to make oven chips or, as part of the family business, transporting sulphuric acid. I have also driven 44-tonners in France, Belgium, Germany and Holland, so I know a bit about their haulage system—indeed, I wish we had motorway service stations as good as theirs. We rely on our haulage companies, our 320,000 drivers and our logistical organisations to literally keep the wheels of business turning, and they are equally important in cross-border trade.

The Bill could be described in part as a just-in-case Bill—a safety net in case the Brexit negotiations fall off the trapeze—although the permits will also be useful in how they apply to non-EU states. It is unlikely that we will not get a deal, because I think we all understand that it is in everyone’s interest to get a good deal in place for the other side of Brexit.

International trade relies on the capability of vehicles, as well as the goods they carry, to cross international borders. To ensure that vehicles minimise empty running, logistical operations need to be flexible. That is why we have cabotage rules in place, so that non-EU trucks can carry out work here before returning, hopefully loaded with exports, to their home country. When there are short-term capacity problems, the rules can be lifted temporarily, as was the case when a shortage of car transporters coincided with the new registration plate.

The single market for transport services is one baby that we must not throw out with the Brexit bathwater. Yes, we are leaving the single market, but we must keep the flexibilities, liberalisation and competitive elements that benefit trade and jobs. We have always promoted this mechanism, often in the teeth of opposition from member states such as France that see competition from eastern European hauliers as “social dumping” rather than as a competitive element that raises everyone’s game.

In the absence of an agreement, the Bill is our fall-back plan B. In a post-Brexit scenario, one expects the standards that our haulage industry has to comply with not to change radically. Vehicle safety and emissions standards will not be eroded when the UK leaves the EU. Innovations such as autonomous automatic braking, selective catalytic reduction and particulate traps apply to vehicles manufactured and used in Europe. I expect that the Euro 6 standards will be identical to the new UK 1 standards, as I guess they will be called, after Brexit. Similarly, it is in no one’s interest to start a race to the bottom on drivers’ hours.

So much for the vehicles. What about the goods they carry? Whether we have a customs partnership, a so-called max fac or some other custom-built customs solution, the system must operate electronically and without friction, and it must not delay vehicles passing through Dover, Holyhead or Newry, or indeed—this is probably our biggest challenge—goods passing from Spain to our loyal friends in Gibraltar.

I do not share the pessimism of some people who have been known as remoaners—incidentally, I was one of those who voted remain. As Shipping Minister, I visited Southampton and Felixstowe and saw the thousands of containers coming in from all over the world and moving seamlessly through the port. The last thing anyone wants to do is to start opening those containers. The same applies to our biggest port by value—surprisingly, not many people know that that is Heathrow, with the holds of long-haul flights laden with goods inbound and outbound to places all over the globe.

Perhaps the most impressive operation I have seen as part of the Industry and Parliament Trust involved Manchester Airports Group and UPS. The hub at East Midlands airport deals with thousands of parcels every night. Customs duty is collected by the shipper, who navigates a complex administrative system, without the parcel—whether from Beijing, Detroit or Tokyo—stopping for a moment, either on its journey to a UK destination or on its way to trans-shipment on a departing flight. Using the widely recognised “known shipper” arrangement enables truly global trade to function between dozens of jurisdictions and with myriad permutations. For example, some hydraulic components attract a different tariff depending on whether they are destined to be fitted to a tractor or an aircraft. East Midlands is impressive, but nothing compared with the operations in Cologne or Louisville, Kentucky. As I say, this system is already delivering frictionless trade every night. We do not need to reinvent the wheel—or indeed the hub.

I hope such arrangements can be put in place before the end of the transition period. I agree with James Hookham of the Freight Transport Association that the timetable is tight. Until this issue is resolved, however, it will not be possible to initiate free trade, or a freer trade arrangement, with our new global trading partners, so time is of the essence.

Turning to trailers, I note that the UK has now ratified the Vienna convention, which will come into force in March 2019. There have been problems with UK trailers and semi-trailers pulled by non-UK motive units on the continent. The proposals to register trailers will address that. I am pleased that that will not apply to the whole fleet—I must declare an interest in this respect—but only to existing trailers used internationally, and to new trailers as they are registered. I also note the need to facilitate trailer rental, and I am pleased by the reassurance I received from the Secretary of State earlier. We already have a registration system with the Driver and Vehicle Standards Agency, as trailers must pass an annual MOT test, so the Department for Transport will be well aware of the scale of the operation needed.

Belgium—I think uniquely—has a separate registration number for trailers, so the number on the front of a combination will not match the one on the back. Most countries, like us, however, have a plate in the cab that is fixed to whichever trailer is being pulled. The current plating certificate—affixed to the chassis bar of a trailer in most cases—is often hard to find and usually hard to read as well. Has the Minister considered whether the plate fitted to the trailer could have a number or barcode, as is used on shipping containers, that could be read by an automatic number plate recognition-type machine to further facilitate the free flow of vehicles between jurisdictions? I understand that the plate must be fixed to the vehicle, but is there a view on the best position for remote sensing?

In conclusion, I welcome the Bill, but I hope that progress in negotiations will render it superfluous. When we take out insurance, that does not mean that we expect our house to burn down. I think the Government are being prudent. Incidentally, I think the Bill also sends a clear message to EU negotiators that we will not accept a bad deal at all costs and that contingencies are being put in place.