European Community (Transport Policy)

Orders of the Day — Greater Manchester Bill [Lords] (By Order) – in the House of Commons at 11:40 pm on 7th April 1981.

Alert me about debates like this

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]

Photo of Mr Tom Bradley Mr Tom Bradley , Leicester East 11:54 pm, 7th April 1981

My purpose in raising this Adjournment debate is to draw attention to the lack of progress towards establishing a common transport policy for the European Economic Community and to restate the vital need to formulate an overall strategy for transport in the interest of the economic well-being of the Community as a whole.

Transport is one of the four areas of activity specifically identified in the Treaty of Rome as forming the "Foundations of the Community". The first annual report of the EEC Commission said, that transport is a service indispensable for the growth of all productive activity … its historical past, its social and strategic role, the scale of existing and future investment, the advent and rapid expansion of new means of transport involve far-reaching intervention by public authorities". It went on to indicate that those features made it difficult for the drafters of the treaty to lay down in detail the ways of integrating transport in the Common Market.

But the concept was clear. Part II of the treaty, articles 74 to 84, lays down that the objectives of the treaty shall be pursued by Member States within the framework of a common transport policy and specific provision and rules were inserted for dealing with discrimination against the carriers of other member states, transport rates and charges, State intervention and subsidies.

The history of the application of those provisions of the Treaty of Rome is, by common consent, a sorry story and the pursuit of what is called a "small steps" policy for more than 20 years has badly shaken public confidence in the achievement of a common transport policy. Although some success has been achieved in the harmonisation of social provision, the development of common accounting practices for railway undertakings and so on, progress in many more areas requiring positive action has been painfully slow.

A detailed report on the state of progress of the policy, drawn up in early 1979 by the European Parliament's regional policy, planning and transport committee, claimed that the Council of Ministers has never had a policy of any kind, but has simply shilly-shallied from one file to another. It was also critical of the Commission which, it said, should not have released the Council from its responsibilities.

At the end of 1979 hopes were raised when the Commission prepared a green paper on the role of the Community in the Development of Transport Infrastructure and those hopes were reinforced by the enthusiasm of the then Transport Commissioner, Richard Burke, in his advocacy of the draft regulation on support for projects of Community interest. Interest in this country was stimulated by the green paper as it seemed to some to be a possible source of long-term EEC expenditure which could help to correct the imbalance in the United Kingdom's contribution to the EEC budget and might even attract support for a fixed link across the Channel.

The optimism that shone through the green paper was in such striking contrast to the disappointing and undistinguished record of the Community in transport policy that the Select Committee on Transport of which I am chairman decided to undertake a short inquiry into the infrastructure proposals and their implications for this country. Our conclusions are recorded in the Committee's first report to the 1979–80 Session of Parliament and reflect the uncertainties and doubts that we discovered are involved in trying to define the concept of what is called "Community interest". Other difficulties were encountered which served only to underline the unsatisfactory responses that one receives when seeking to go beyond the legal obligations of the Council. The Committee's experience was rather unrewarding.

In my view, it is essential to press the Council of Ministers for action on transport because of the relative importance of the transport sector to member countries' economies and because I share the conviction that a more coherent approach in this area will bring general benefits to the people of Europe. As usual, it is a question of priorities and the need to ensure a proper distribution of resources.

I have referred to the relative importance of the Community transport sector, which is steadily increasing. That of agriculture has declined. Transport now accounts for 6 per cent. of the Community's gross national product—that is, more than agriculture—for 15 per cent. of total capital investment, and for 40 per cent. of capital investment in the public sector. The share of the Community budget allocated to agriculture is widely regarded as disproportionate and, in the current year, gathers over 70 per cent. of the appropriations. This should be compared with the share allocated to transport amounting to only 0·003 per cent. of the total budget.

All hon. Members, whatever their political affiliations—I remain an unrepentant European—feel that the Common Market is in need of structural reform and the mandate given to the Commission by the Heads of State last year to prepare proposals for budgetary reform have widespread approval. It is essential to see the Community budget reflecting an overall approach to transport policy that takes realistic account of recent economic developments and, in particular, of the energy crisis and environmental considerations, not to mention the interdependence between transport and other vital policy areas.

At a time of economic recession and appalling unemployment, Community assistance for improving transport infrastructure could only contribute to general economic expansion, development and the stimulation of trade. Any reduction in transport barriers, bottlenecks and frontier procedures should create savings and help the process of convergence of member States' economies. It could certainly narrow the gap in living standards between the richer and less-favoured nations of the Community.

I should like to consider certain policy areas. In transport infrastructure, the need for a coherent policy to overcome what are clearly identifiable bottlenecks in the transport of people and, most important, of goods is self-evident. Without the provision of adequate transport links between the centre and the periphery of the Community, the creation of a genuine free market for goods in both directions will be doomed. Moreover, the pursuit of such a policy should be a positive benefit to the United Kingdom, not only in our dealings with other member States but also in our internal transport networks. Some of the main, identified Community bottlenecks such as the cross-Midlands route from Ireland to the Haven ports or the route from the Midlands to the South Coast ports are important in internal United Kingdom terms as well as in Community terms.

Recent years have seen a continuing deterioration in the financial situation of railway undertakings. Forecasts indicate that with unchanged policies the railways' share of the traffic is likely to continue to fall. There is a great need for a change in emphasis in Community railway policy in this decade. New initiatives and actions have to be taken if present market and financial difficulties in railway operations are to be reversed. I understand that the Commission has examined the situation and will be placing before the Council a paper which examines a list of options and proposals for a new Community railway policy, including a new examination of public service obligations. This is of particular relevance to the future of our own work. I hope that the Secretary of State's response will be based on the desirability of maintaining a full range of transport modes.

The connection between regional policy and transport policy is easy to establish. A fair competition policy is impeded by fiscal and legislative barriers stemming from physical obstructions that must be broken down. The fact that the Community's transport sector accounts for about 18 per cent. of total energy consumption argues for the need for a transport infrastructure that will reduce our dependence on imported energy sources. It hardly needs to be said that an industrial policy could be securely based on Community funding for transport infrastructure with its multiplier effect for steel and other construction sectors.

Surely the time is ripe for a new impetus. Can we expect it? The history of decision making on transport in the Community is depressing. Time and again the Commission, supported by the European Parliament, has tried to tie down the Council of Ministers to a coherent programme of action to implement the transport chapter of the Treaty. Time and again the assembled Transport Ministers shrugged their shoulders and did nothing. In 1962, the Commission submitted an action programme on transport, but it was not adopted by the Council. In 1973, a Commission communication to the Council contained a work programme for 1974–76. The Council merely took note. In 1977, the Commission proposed a further programme of work in transport for 1978–80. Again, it was noted by the Council. Two weeks ago, the Transport Council at last adopted a resolution identifying the main areas of policy on which it would "attempt to make progress", but it merely took notice of the Commission's priority programme and timetable for action.

The number of outstanding Commission proposals for action in transport, which have already been endorsed by the European Parliament and the economic and social committee, now stands at no less than 32. The list includes many matters of considerable significance to the United Kingdom and the EEC transport system as a whole. Apart from the draft regulation on the financing of transport infrastructure projects, it covers a range of proposals relating to the functioning of the transport market, the harmonisation of taxation and social legislation, and relations in transport between the Community and its trading partners.

I understand that the Council of Ministers now delegates responsibility for drafting decisions, not to the Commission—as was the firm intention of the authors of the Treaty—but to a body called the permanent representatives' committee. There is no public or parliamentary control over that group of officials, whose work appears to be wrapped in impenetrable mystery. So an under-staffed Commission submits periodic proposals to meetings of the Council, which are infrequent and ill-equipped to deal with them. Ministers then send the proposals back to the permanent representatives' committee, which has no legal status and no negotiating powers.

European and national parliamentarians have a duty to break that deadlock and improve the system. We are coming up to Britain's Presidency of the Council of Ministers, and a great opportunity exists for an initiative. That may have been provided already by the Dutch, who put forward an idea on infrastructure which concentrates initially on two aspects--frontier crossings, and facilities for combined transport. It is a great deal more limited than the Commission proposal that I mentioned earlier, but it provides the opportunity for an earlier start than otherwise might have been expected.

I understand that the Secretary of State supports the Dutch proposals, and I welcome that. In answer to a written question from me last week, the Secretary of State confirmed that at the meeting of the Council of the Transport Ministers held on 26 March a resolution was adopted identifying the main areas of transport policy in which it would attempt to make some progress. That is not enough. There is no difficulty about describing problem areas; the difficulty lies in getting something done.

The Secretary of State also told me, as part of his written answer, that he was disappointed about the lack of progress towards infrastructure support, on railways policy and on the proposed increase in the Community's multilateral road haulage quota, but he said that he would continue to work for a constructive solution to all those problems. The opportunity to do so lies ahead during our Presidency. It is in our national interests that the opportunity should be seized. I hope that the Under-Secretary will be able to tell me tonight that it is the firm purpose of the British Government to endeavour to break the logjam which has obstructed progress in implementing one of the basic principles of the Treaty of Rome, namely, the realisation of the transport infrastructure network matching Community requirements.

Photo of Kenneth Clarke Kenneth Clarke , Rushcliffe 12:10 am, 7th April 1981

The hon. Member for Leicester, East (Mr. Bradley), who is Chairman of the Select Committee on Transport, has raised an important topic. I agree with much of what he said. I accept that if the country is to achieve the benefits of the free market which the European Community presents to us it is necessary to remove restrictions on the free movement of goods and passengers within the Community. Considerable economic advantages could flow from any moves in that direction and from any attempt to harmonise arrangements in the Community. There is a great deal of common Community interest in establishing the right transport infrastructure which the Community must, at some time, tackle.

I regret the lack of progress towards a real Community transport policy. I hope to persuade the hon. Gentleman that the Government share his general aims and his disappointment at the lack of progress. The Government are not contributing to the delay. We hope for more progress and will continue to strive for the achievement of it in any practical way.

The hon. Gentleman was right to say that article 3 of the Treaty of Rome lays down guidelines for a common transport policy. Articles 74 to 78 make more detailed, but unfortunately generalised, provisions which, had they been put into effect, would have established common rules for international transport within the Community and common operating conditions for carriers when moving between member States.

The articles are aimed at the elimination of any aids to particular transport industries or parts of transport industries which might discriminate between member countries and distort the transport market.

The aims of the Treaty of Rome when it was signed were for the establishment of a free transport market within the Community, fair competition between modes and between carriers from different member countries, and a free choice of mode and style of transport for the passenger and customer. Britain accepted those aims 'when it entered the European Community. The present Government believe that they are desirable.

The Government favour, and continue to press for, the liberalisation of the transport market within the Community with the steady removal of obstacles to the free movement of our goods and passengers and carriers within the Community. We would certainly support any regime which established fair competition between modes and, carriers and the harmonisation of conditions of competition.

Since the signing of the Treaty another objective has emerged—the possibility of European Community financial support for transport infrastructure. I refer in particular to that which facilitates movement across boundaries—in our case across the Channel—between member States where there is a Community interest in removing bottlenecks and improving the free flow of goods and people.

The objective was established early on and the Commission set up a committee to examine the matter in 1973. A draft regulation was submitted as a result to the Council of Ministers in 1976. The last Transport Commissioner, Commissioner Burke, pressed for progress until his period in office came to an end. The present Government favour in broad principle the establishment of financial support for transport infrastructure within the Community, but progress has been limited. For 24 years not enough progress has been made. Some objectives have been achieved. But the pace of progress has been disappointing. We should like to make more progress in the right direction.

Before we talk ourselves into a deep state of mutual gloom on the topic we must remember that there has been some progress. There is a European transport policy and some achievement. For example, since 1975 the Commission has defined, and the Council of Ministers has agreed, the broad lines of approach towards harmonising relationships between railway undertakings and Governments. The main aim of the policy is greater managerial and financial independence for the railway undertakings in the hope that distortions to the rail market which might obstruct the free movement of goods over boundaries will be removed.

Some progress has been made towards achieving these objectives, but uniformity has by no means been achieved throughout the European Community. There has been some limited progress towards common accounting principles for railways and also towards common methods of costing international rail freight traffic, but in neither of these cases is there yet full harmonisation.

There has been progress also as regards the requirement for members to report fully on their railways every two years and to disclose the full nature of aid they are receiving from the State. Again, comparisons are difficult and limited progress has been made because, although all member States give assistance in one way or another to their railway undertakings, inevitably there is a very wide divergence of practice between member States. It is, therefore, difficult to harmonise arrangements, as would be desirable if we were to establish a Community policy. Common rules have been established for the basis upon which acceptable State aid should be given where it meets the social needs of transport and compensates for what has been described as public service obligations.

The present PSO payment that we make to British Rail is made in accordance with the EEC directive on the nature of the public service obligation payments. There are some current Commission proposals for revising the rules on PSOs, in which the Government are certainly interested, although there is a danger that the present proposals are likely to be over-elaborate and difficult to apply, so the Government will wish to be somewhat critical of the details of the new rules which the Commission intends to apply.

Steps have been taken, therefore, at least to begin to clarify the principles and practice of railway finance within the Community. If further progress can be made, it will enable member States' undertakings to be compared and that might enable us to move towards a more harmonised practice of railway finance and railway movement throughout the Community. So far the achievements are undoubtedly modest in the railways field. We remain interested and will adopt a constructive approach to any proposals that the Commission produces in that field.

As regards road haulage, progress in the European Community on regulating lorry traffic has been a good deal more substantial. As the House knows, the whole European Community now subscribes fully to most of the important social regulations which govern drivers' hours and rest periods. This means that, given the substantial flow of goods carried by various operators from member States all over Europe, the competition between them is established on a reasonably fair basis, with the same road safety obligations resting upon operators in each member State.

The drivers' hours regulations are extremely important road safety measures, which protect other road users against lorries being driven for excessive hours in any one day by a driver. The latest step that this country has taken towards complying with EEC social regulations will be completed when the tachograph becomes compulsory in the United Kingdom next year.

There are also uniform European Community standards regarding heavy vehicle noise and emissions. We have recently been able to reach agreement on a form of Community driving licence, where previous British Governments had been holding up agreement on that measure, and we also have established common rules on the recognition of certain professional qualifications in the road haulage field.

There is a directive, to which the hon. Member for Leicester, East referred, for the adjustment of national taxation systems, which is concerned to ensure that all vehicles above a certain weight meet at least the marginal cost they impose on road infrastructure. This has been agreed in the Council in principle although, unfortunately, it has not yet been finally implemented. However, this country is certainly going to move in that area of policy in directions which comply with that directive entirely.

In lorry traffic there has, therefore, been considerable harmonisation of conditions of competition, except for the important gap of weights and dimensions, on which there has been disagreement for a number of years. This country has recently produced the Armitage report on weights and dimensions and it is necessary for the House and the country to come to some agreement about dimensions and weights of lorries that suit our own conditions before we can move towards any EEC agreement. Certainly, Sir Arthur Armitage has strongly recommended that we do not go to the present proposals for EEC limits on the axle weight of vehicles, which would be excessive for our roads and cause damage to our bridges.

Nevertheless, once we have established what this country desires, it should be possible then to reach some understanding on size and dimensions, weights and so on, which is acceptable to this country, and also, I suspect, acceptable to most EEC countries—one would hope all—because they are subject to the same environmental pressures and interests as we are but also wish to achieve uniformity of competition and the maximum economic benefit from their road haulage industry.

One area in which insufficient progress has been made is in the free movement of lorry traffic between countries in regard to the carriers from each member State. We still have bilateral agreements with countries governing that, and several countries—particularly France, Germany and Italy—impose strict quotas on the number of British lorries that they will admit carrying our goods into and across their territories. Those quotas are restrictive and, are not adequate for our carriers, and this Government constantly press the other member States of the Community to increase their quota allocation because we believe that the action of some of the European Governments is plainly contrary to the principles of the Community and is a deliberate obstruction to free trade between member States.

The Community has been helpful in establishing a system of multilaterial road haulage quotas, and when British operators are able to obtain those they, like the operators from other member States, are able to make as many trips as they want in one year across the boundaries of member States. But there are only 4,000 such quotas in total, so that this country gets a very small number. That is another area—the liberalisation of the road haulage market—where the British Government would like to see much more progress.

With regard to infrastructure support, the Government are playing a constructive role and see potential advantage in establishing some kind of financial support from the Community for projects of Community interest of the kind contemplated in the draft regulation. I entirely accept the description which the hon. Member gave of the present imbalance between agricultural spending and the rest within the European budget. He is right in saying that that is particularly unfortunate, given that agriculture accounts for only about 5 per cent. of GNP for the Community as a whole and transport accounts for 6 per cent., whereas the spending of the Community is in quite different proportions.

Before we can make real progress something has to be done to restructure the Community budget as a whole. That is a much wider question, but as long as agriculture continues to dominate the present budget there cannot be substantial European Community funds for other worthwhile industrial purposes of the kind that we are talking about. Given that that large matter can be tackled and some progress made, as the Government would wish, there should be prospects for EEC financial support. We have a number of queries on the regulations and would like to see sea and air transport included as well as the present road and rail proposals. There is obviously need to reach a sensible agreement on what is meant by Community interest. We also want to know the size of the aid concerned and the forms which it will take. Nevertheless, the British Government's position is that we would like to see some progress towards agreement on those matters.

At the Transport Council on 26 March my right hon. Friend supported the very valuable initiative of the Dutch Presidency which suggested that there should be at least a pilot scheme on which all members could agree and on which some progress could be made. I deeply regret that it was not possible for that to be carried through the Council of Ministers. We shall continue to work as constructively as we can. We feel that the work that has already been done on the bottlenecks report has not been wasted, because we have been able to identify ways in which the road system might be helped, and we have, of course, the Channel link in which we have a great interest, which seems to us to be a reasonable example of the kind of international link of genuine Community interest which might benefit from support.

Having shared the hon. Member's disappointment, I do not think that we should abandon the aims that he set out. The Government have to be careful in this area and look after national interests when considering what comes before the Council of Ministers. We are not among the laggards. We are among those trying to press for progress. Perhaps in the Dutch Presidency and in the British Presidency this year we can at least take some limited steps in the right direction.

Question put and agreed to.

Adjourned accordingly at twenty-four minutes past Twelve o'clock.