Haulage Permits and Trailer Registration Bill [HL] - Second Reading

– in the House of Lords at 5:25 pm on 27th February 2018.

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Moved by Baroness Sugg

That the Bill be now read a second time.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

My Lords, the UK’s road haulage sector directly contributes £13.1 billion to our economy and plays a major role in carrying £35 billion in trade between the UK and the EU. It is estimated that almost 200,000 people are directly employed in the road freight sector in Great Britain. These figures alone highlight the importance of the sector to the UK economy. The commercial haulage industry is critical to ensuring the continued movement of goods between the UK and EU. Hauliers are planning for the years ahead and they want certainty that any future deal can be implemented smoothly.

I hope noble Lords will welcome that the UK’s overall aim in the negotiations with the EU is to maintain the existing liberalised access for commercial haulage. We anticipate success in the negotiations, building on the progress made last December. However, it is only right and responsible that the Government should prepare for a range of scenarios. As part of the Government’s EU exit legislation programme, the Bill provides a sensible framework for the UK to use, if required, as part of our agreement with the EU. The Bill also ensures that the UK can fulfil its international obligations and be ready to operate in the international arena when we leave the EU. I hope noble Lords from all sides can support the Bill’s intention.

There are two parts to the Haulage Permits and Trailer Registration Bill. The first will give the UK Government the ability to introduce arrangements to operate a road haulage permit scheme, if that is what is required as part of our deal with the EU. Currently, hauliers have to hold an international operator’s licence and an EU community licence to operate on the continent. The Bill puts in place a legal framework for the Government to establish an administrative system to issue permits, if required, as part of the final deal. This part of the Bill is designed to provide a flexible framework for any system that may be needed, without placing any undue regulatory or financial requirements on the industry. It will come into effect only if our international agreements require it, and it applies only to UK hauliers travelling abroad.

Permits are a key feature of almost all international road freight agreements outside free trade areas. Indeed, the UK already has several permit-based agreements with non-EU countries, including Belarus, Georgia, Kazakhstan, Morocco, the Russian Federation, Tunisia and Ukraine. The UK also has liberal non-permit agreements with Serbia, Albania and Turkey. While we currently administer some types of permits, the numbers that we issue are very small, so the Government are putting in place plans to deal with future international agreements that may require permits. The Bill will allow the UK Government to distribute permits that we negotiate with overseas authorities to UK operators. The type and form of permit will depend on the agreements that we negotiate. It also contains powers to determine how to allocate permits in the light of any agreement reached, based on criteria that will be set out in the regulations with further guidance on how they will be applied in practice.

This section of the Bill also allows the Government to recover the cost of the scheme through the charging of fees that will be in line with current arrangements for international permit schemes. We are committed to ensuring that any additional requirements or costs to the road haulage industry are minimised. There are a total of 13 provisions containing delegated powers within the Bill to establish the permitting system, should we need it, and a trailer registration scheme. Of course it is important that we get these regulations right, and we will be consulting with industry on the detail later this year.

Before moving on to Part 2 of the Bill, it may be helpful if I say a few words about the 1968 Vienna convention, which is subject to a separate parliamentary process but is related to the trailer registration section in the Bill before us today. The Government have recently laid a Command Paper with the intention to formally ratify the 1968 Vienna Convention on Road Traffic, which the UK signed in 1968. We intend that our ratification will be completed on or before 29 March 2019. The convention was introduced by the United Nations to enable international road travel and to increase safety by establishing common traffic rules. The convention builds on the earlier 1949 Geneva Convention on Road Traffic and the 1926 Paris convention, both of which the UK has already signed and ratified.

Moving on to the second part of the Bill, the Government are seeking powers to establish a trailer registration scheme to meet the registration standards in the 1968 Vienna Convention on Road Traffic which I just mentioned. Many EU countries already comply with this convention and have similar registration schemes. This part of the Bill will ensure that UK operators will comply with the obligations of those countries that require registration of trailers travelling on their roads.

The Bill provides powers to set the scope of coverage for a trailer registration scheme. While the detail of the scheme will be set out in regulations, our intention is to require only operators who take trailers abroad to register their trailers. The scheme will apply to commercial trailers over 750 kilograms, and all trailers over 3.5 tonnes. I would like to reassure noble Lords that private-use trailers such as caravans and horse trailers would not fall within the scope of the mandatory registration scheme. Furthermore, this scheme would not apply domestically.

This section of the Bill also allows the Government to recover the costs of running this scheme through the charging of fees. The fees will be significantly lower than those currently set out for the registration of motor vehicles. It is of course important that these new arrangements are complied with. Offences will be created in relation to trailer registration that mirror existing offences for motor vehicle registration.

On devolution, the Bill covers the whole of the United Kingdom. Haulage permitting and trailer registration are reserved matters in Scotland and Wales, and this matter is devolved to Northern Ireland. The department has been working closely with all devolved Administrations as the Bill has been developed.

On the Bill’s application to the island of Ireland, this legislation supports the commitments made in the December joint report. These commitments include avoiding a hard land border and preserving the constitutional and economic integrity of the United Kingdom. We want to see trade and everyday movements over the land border continue as they do now. The Bill will not create a permit regime or a hard border on the island of Ireland. Trailers travelling only between the UK and Ireland will not need to be registered.

Your Lordships will be well aware that there are many other considerations when considering the movement of goods across to the EU, including the future customs and border arrangements. Separately to the Bill, my department is working closely with the Department for Exiting the EU and HMRC as part of the cross-government borders working group to manage impacts to borders after we leave the EU. I can confirm that the Bill will not impact on border arrangements and that there will be no new transport-related checks at our borders.

I look forward to this Second Reading debate on the content of the Bill. As I have already outlined, this Government are committed to ensuring that this sector can continue to prosper as we leave the European Union. As part of the Government’s EU exit legislation programme, the Bill prepares us for a range of scenarios and will ensure that the UK can fulfil its international obligations and be ready to operate in this sector when we leave the EU. The Government have been supported by industry for bringing forward these measures. I hope that noble Lords will recognise this Bill as the Government taking a responsible approach in their contingency planning, and I welcome your Lordships’ expertise in ensuring that this legislation is as well designed as possible. I beg to move.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Labour 5:33 pm, 27th February 2018

My Lords, towards the end of my time as part of the usual channels the Government Chief Whip advised me that we would be receiving this Bill as a Lords starter. I recall thinking at the time that it was not one of those mentioned in the Queen’s Speech, and becoming instantly suspicious. I should tell the House that suspicion is an integral part of a Whip’s training. Later it comes as second nature.

Despite the distinct lack of interest in the Bill displayed in the Chamber today, I was right to be concerned. It is the first major piece of Brexit contingency legislation I have seen and is in essence a panic measure. Sam Coates of the Times got it right when he said on 7 February, “Last week No.10 said there was no date for the bill; there wasn’t a date and there was lots of work to do. Six days later it was published”. Someone in the department finally persuaded Mr Grayling that it was not a given that there would be agreement on road haulage arrangements after 29 March 2019.

It is a fact that without a system of fully effective multilateral road haulage arrangements, our businesses would literally grind to a halt. In the event of no deal, this legislation is hugely important. The alternative is chaos at our borders and ferry ports. It would make Operation Stack look like a minor hold up in B-road Britain. Thinking about it, I am staggered at Mr Grayling’s complacency in not requiring the Bill earlier and not ensuring that it had Queen’s Speech clearance.

In her customary charming way, the Minister has set out the Bill’s main provisions. Currently, we benefit from eminently sensible EU regulations that flow from the International Road Haulage Permits Act 1975—legislation, I might add, so old that it was enacted the year I graduated. The current regulations require road hauliers to have a Community licence for all operations in or through EU countries. Post Brexit UK-issued Community licences will no longer be valid, unless of course we have secured agreement. UK hauliers would be able to use European Conference of Ministers of Transport permits. These provide for a multilateral quota scheme, are limited in number and do not cover the full range of haulage operations currently permitted by the Community licence.

The problem with the ECMT permit scheme is that it is limited to 102 permits annually. These are specifically allocated to a company for use for one international journey at a time. If the permits are allocated to only the most modern vehicles—Euro 6—the number increases to a maximum of 1,224 permits a year. Currently, approximately 300,000 UK registered powered vehicles travel from the UK to the continent, and that is without adding in those travelling to the Republic of Ireland, so reliance on ECMT permits alone would cripple our haulage sector and is simply untenable. It would be a bit like tickets for Glastonbury: you just about get online and they are all sold out in seconds. The permits will be gone. Even with rationing, some sectors would be given first refusal—and who would want to decide between essential medicines and fresh foods for supermarkets? These are decisions we should not have to make.

The second part of the Bill introduces a trailer registration scheme, which will be required following the UK’s ratification of the 1968 Vienna convention. This makes sense even though ratification triggers the need for a registration scheme. A failure to put one in place would mean that unregistered trailers could be turned away at the borders of countries that have ratified the convention.

As the Minister recognised, the road haulage sector is vital to the UK’s economy. It contributes £11.2 billion to it and enabled the UK to import and export 8.9 million tonnes of goods in 2014 alone. Additionally, foreign-registered HGVs carry 34.2 million tonnes of goods as part of the current Community licence scheme. It keeps supply chains working for our vital food and agriculture sector. The Community licence arrangements secure our industrial base, facilitate economic growth in EU trade and keep the construction industry and high-tech sectors moving forward. Without it, business here in the UK would grind to a halt and we would cease to be a major trading nation.

Eighty per cent of goods go by road, 47% of goods we exported in 2015 went to the EU and 54% of goods imported came from that same source. The impact of a failure to put in place either an agreement following a Brexit deal or a scheme, if there is no agreement, can be judged by the scope of the current Community licence. It is issued free of charge to the UK hauliers who sign a standard international operators’ licence. Community licences are issued to operators. Office copies must be retained and certified copies held on each vehicle on each international journey. Certified copies are not specific to each vehicle. At the end of 2016, 9,745 UK hauliers possessed a licence and more than 35,000 certified copies had been issued. This scheme is extensive and essential to our nation’s economic health and success.

The most effective option, so that we do not have to rely on the Bill, will be to negotiate and agree a bilateral road transport agreement with the EU, which in turn could be part of a wider trade agreement or a stand-alone agreement separate from a customs union. This should be done as a matter of priority and be in place before Brexit, or before the end of a transition period, if one is agreed. Frankly, anything short of an agreement replicating existing arrangements with no quantitative restrictions will greatly disrupt and constrain cross-channel trade.

We need arrangements that place no additional administrative or financial burdens on hauliers. It is only by achieving this that people avoid damaging the road haulage sector and the economy as a whole. It is difficult to see how a Brexit that does not include, as a minimum, membership of a customs union could be compatible with preserving the current ease of transit of goods. In that context, can the Minister say something about costs when she sums up? I ought to add that I made the mistake yesterday of taking a look at the DfT’s memorandum accompanying the Bill and the two impact assessments of costs to government and business. It is worth reminding ourselves that at present, the Community licence comes at no cost to hauliers. The memorandum makes it clear that there will be full cost recovery. Those costs will cover the issuing of permits for both road haulage and trailers, and the enforcement of the scheme, including compliance inspection.

Will the Minister tell the House how much each permit will cost, how long the application process is expected to take, whether it will be an online system, what it will cost the Government to establish the scheme, how much the trailer registration scheme will cost and how much registering each trailer will cost? Given that this Government are supposed to be concerned about the cost of regulatory burdens on businesses, have they done any cost modelling of the impact on the businesses affected?

If the haulage sector is looking for sympathy from the Government it will not find much in the impact assessments, which simply say that larger businesses will require more permits and incur higher costs. They say that 99.6% of the haulage sector is made up of SMEs, which account for 45% of road freight turnover. The Government say that,

“smaller businesses may find it harder to absorb the additional costs of a permit scheme. Operators typically have tight profit margins and smaller scale businesses may have more difficulty in absorbing the new costs”.

That is a pretty sobering assessment, and my worry is that Ministers have yet to realise the seriousness of the position.

Rightly there has been concern in the aviation sector about the failure to agree a deal, leading to a cliff edge for the European aviation market. As yet, freight has not achieved that degree of realisation. The Freight Transport Association has estimated that the logistics sector contributes over £121 billion GVA to the UK economy. We need the Government to safeguard that return. We also need to ensure the mutual recognition of driver qualifications. This needs to be agreed early on in negotiations to secure cross-border operations for drivers and operators. Currently drivers and transport managers need to hold certificates of professional competence to operate a heavy duty vehicle in the EU. The haulage sector will require legal certainty post Brexit, as the Minister acknowledged, to guarantee mutual recognition. Can the Minister provide a timetable for resolving this and say what progress has so far been made?

The Government are keen to present this Bill as a last resort, but the lack of progress in the Brexit negotiations make it increasingly unlikely that the DfT’s preferred outcome will be achieved. I worry that insufficient thought has been given to the unintended consequences of Brexit on freight haulage. The Government have not reassured me by publishing this Bill, which is a panic measure. They have published nocost assessments for the sector, nor have they given any detailed assessment of the impact of added bureaucracy on businesses or the on-costs.

As a result, I intend to table amendments asking the Government specifically to negotiate a deal which replicates the benefits of the current Community licence and brings the UK within its purview. I shall also be asking the Government to report on the impact of the international road transport permits regime on the efficiency of haulage between the UK and the EU. If we cannot have an agreement that allows business as usual for haulage, we could end up with one of Mr David Davis’s dystopian fantasies—only it would not be a fantasy, but a fact.

The Bill should, and no doubt will, be supported by Parliament in an attempt to prevent chaos on day zero for Brexit, but it is a far from satisfying way of dealing with a problem almost entirely of the Government’s making—for example, the shoddy way they have dealt with negotiations. I worry about this Bill, and this House should too.

Photo of Lord Teverson Lord Teverson Chair, EU Energy and Environment Sub-Committee, Chair, EU Energy and Environment Sub-Committee 5:45 pm, 27th February 2018

My Lords, I had the great privilege and enjoyment of working in the road freight industry for the first 17 years of my career. It was rather different from my parliamentary career but it was just as competitive—in fact, it was more competitive. As the noble Lord, Lord Bassam, said, this is probably the most competitive sector in the economy, with a large number of SME companies operating in it. Any costs, charges, delays or extra bureaucracy—red tape as we normally call it—will have a very negative impact on the sector. This is an unintended consequence of the Brexit negotiations, particularly the red lines on the customs union and single market that the Government have chosen. I shall come back to that theme later. This is an unnecessary and—in the sense that it was not in the Queen’s Speech—unexpected Bill, which promises the industry quite a substantial amount of extra red tape.

Looking at the size of the issue, there are some 4 million cross-border truck movements in and out of the United Kingdom per annum. This is an addition to the customs issue, which the Minister herself mentioned. There will be extra costs there, too: an average of £500 a day for the delay of a truck going across a border. The number of customs declarations will have to go up from 55 million to something like a quarter of a billion. In Dover, there are 10,000 freight movements a day, with no holding space for delay. There are issues around rules of origin and phytosanitary conditions. Hauliers and road transport operators will have to deal with all those issues post Brexit, based on the red lines the Government have put down. So this is an important Bill, but it is part of a larger problem and challenge to the industry to adjust over a relatively short period to the new, post-Brexit situation. This will be challenging financially, time-wise, bureaucratically —in every way—to an industry that is always under pressure.

The noble Lord, Lord Bassam, has given an excellent summary of the majority of the issues, so I will ask the Minister a number of questions. I, too, would like to understand the cost to hauliers of these permits. In her introductory remarks, the Minister said that it would be comparable to the cost of permits in countries that we deal with elsewhere in the world. Presumably we have a fairly good idea of what those are; the analysis will be there. I would be interested to hear about that. Are we certain, as negotiations stand, that we can keep the community licences we have at the moment during the transition period? Having seen the correspondence on the offer from Brussels on the transition deal and the Government’s response, I do not see this as an issue. I hope we will have a breathing space of two years, 18 months or whatever it is. It is important for the industry to understand how much of a breathing space it might have, provided we do not come to no deal in the meantime.

On trailer registration, there is an absolutely huge number of trailers. I am slightly reassured by the Minister that it will relate only to trailers used on international movements. However, hauliers may often not be aware which trailers they might or might not want to use and feel they have to register their whole fleets. Does the Minister have an estimate of the number of trailers and semi-trailers in the United Kingdom that will have to be registered?

What is happening about foreign vehicles coming into this country? This is the other side of the argument. What are we expecting as a permit system from them? Are we going to give them free access? Are we going to allow them to undertake cabotage in the UK, as we will almost certainly be stopped from doing in other European Union countries? Will we charge them road fund licence fees for operating on British roads? As I understand it, foreign or cross-border traffic by road transport is heavily dominated by EU 27 rather than British vehicles. Are we to have issues around paying for our roads and infrastructure?

Does the Bill require new IT systems in the Department for Transport and, if so, have they started to be developed? Are they complex? Are they being put out to consultants? I hope not. Can we be certain that this will happen? As we all know, IT systems are one area of development where we need urgent and rather forced change when things go wrong and we do not meet deadlines. I am unclear whether these regulations apply to or will be needed by other EU countries for own-account operations, as well as hire and reward. Most of the commentary in this area is around hire and reward, but what about the own-account organisations?

I am very pessimistic about this. If the Government stick to their red line of being outside not just the customs union but the single market, I can guarantee that this legislation and scheme will be necessary. There is not a chance that, outside the single market, we will be able to have a similar system to community licensing. That is described by Mr Barnier as cherry picking. A number of colleagues, the noble Lord, Lord Whitty, and I met him last week, and he once again made the point that Britain would not be able to cherry pick if it is not in the single market. This is one of those areas, so I very much regret its bureaucracy and cost, and that this unnecessary act will indeed be necessary if we have a Brexit that is outside the single market.

Photo of Lord Snape Lord Snape Labour 5:52 pm, 27th February 2018

My Lords, it is a pleasure to follow the noble Lord, Lord Teverson. I acknowledge his experience in the road haulage industry. It is also a pleasure to follow my noble friend Lord Bassam of Brighton, who spent far too many years in the silent cell of the Government Whips’ Office. He reminds us today how much he was missed in the years he spent away.

It is always a pleasure to listen to the Minister. She has not been in her position long, but she has a mellifluous tone that makes it difficult to disagree with her, no matter what she says. In the early part of her speech, she said that the Government anticipate success in their long-term arrangement with the EU. I wonder whether she can tell us why the Government anticipate success. From Minister after Minister at the Dispatch Box we hear this philosophy that our future relationship with the EU will be all right on the night. This is exemplified by her opening remarks about this Bill and yet, so far, we have not seen any evidence that the Government are making great progress in this or any other area of Brexit. Perhaps when she winds up, the Minister will give us further cause for encouragement about their progress.

She mentioned in passing the 1968 Vienna convention and that it will become the fallback position for the United Kingdom if the worst comes to the worst and there is no long-term deal for the road haulage industry. We have avoided the convention for 50 years. Although we were initially involved in its preparation, the United Kingdom has never implemented or signed it. What makes that change of heart necessarily beneficial for the future? What guarantee can the Minister give us that our ratification of that convention, after five decades, will be allowed, bearing in mind that the Government have expressed their reservations about certain aspects of it. The parking of vehicles facing oncoming traffic and the lighting of parked vehicles at night are just two areas of the convention from which, as I understand it, the Government will seek exemption. Can she give us any assurance that the Community or the other signatories to the convention will be prepared to go along with our ratifying those parts of it that we find suitable? The view seems to be that our negotiations with the EU are such that it will agree to virtually anything that we propose regarding agreements and conventions.

What further grounds for optimism does the Minister have in relation to the convention? Her optimism is not particularly shared by the road haulage industry. I refer her to the latest press release on the Bill from the Freight Transport Association. It says that the biggest long-term challenge for the UK freight industry is the tiny number of travel permits that will potentially be available for British truck drivers if no other solution is found through an EU trade deal. Under existing international treaties, between 103 and 1,224 permits a year are available to deal with more than 300,000 journeys by 75,000 British trucks. There are no real grounds for optimism for the future if we are to have a rationing system and a small number of permits for British trucks. I am old enough to remember Winston Churchill talking about setting the people free and abolishing rationing back in the 1950s, yet here we are, as an act of desperation, considering legislation that brings back rationing of permits for British trucks. It is scarcely a Conservative measure, as I am sure the noble Baroness will agree.

As my noble friend from Brighton, Lord Bassam, pointed out, chaos regularly reigns on the M20. If the French ferry workers decide that there is a dispute, in no time at all the M20 motorway becomes a massive car park. If we have to fall back on the provisions of the legislation before your Lordships today, it will not be difficult to imagine—this is not scaremongering—that the chaos on the M20 may well be repeated daily. Again, I think the House is entitled to some assurance from the Minister about the future.

Part 2 of the Bill concerns the licensing of trailers. It seems to me that a triumph of hope over reality is inherent in the proposals here. The convention requires the setting up of a new system for the registration of trailers and the issuing of international driving permits if the EU refuses to recognise UK licences. Perhaps the Minister can tell us how many such permits are likely to be issued and how the road haulage industry will cope with a limited number of permits for an enormous number of trailers. The noble Lord, Lord Teverson, referred to cabotage. As far as I can see, there is no provision under the Bill for cabotage to continue. Among the benefits of membership of the EU for the road haulage industry is the ability to pick up goods in one part of Europe and take them to another. There is no provision for the extension of such benefits in the Bill.

It seems that we are just striking blindly into the dark in this as in so many other aspects of Brexit, and that the Government have no real idea of how to take things forward. This measure has been brought forward at the last minute, with less than a year to go before, at least theoretically, we leave the EU. I fear that it will take more than the Minister’s optimism, refreshing though it is, to reassure those in the road haulage industry that the Government know the best way forward over the next months and years.

Photo of Earl Attlee Earl Attlee Conservative 6:00 pm, 27th February 2018

My Lords, I am grateful to my noble friend the Minister for introducing her Bill. My noble friend and other noble Lords are right to draw the House’s attention to the importance of the road haulage industry, both internally and internationally. I will not weary the House by repeating the arguments so well put by other noble Lords. I declare an interest: I own two classic heavy goods vehicle tractor units and one very large trailer. However, they are not used commercially and it is extremely unlikely that they would go overseas.

My main parliamentary activity is to take a very close look at the UK prison system. We have far too many prisoners and insufficient resources to look after them properly. I am therefore pleased that Clauses 8 and 17 do not provide for imprisonment for any offences. However, the maximum fine relating to international road traffic permits must not exceed level 4 on the standards scheme, and only level 3 for any of the trailer registration offences. Given the commercial and competitive pressures that operators are under, which some noble Lords have talked about, the penalties appear to be quite lenient and I would like to understand why. The Minister may tell us that this is in order for the offences to be consistent, which would be a good reason. Also, I do not understand why the drafting in Clause 17(6) provides that offences can be tried only summarily, whereas the drafting in Clause 8, 5 and 6 is not so clear. There does not seem to be a consistent provision for offences—but I expect there is a good reason for that and my noble friend the Minister might want to write to me about it.

The noble Lord, Lord Bassam of Brighton, has obviously been extremely well briefed. However, he talked a lot about the current situation with permits and not the future. We simply do not know what the future will be. The Bill is purely an enabling measure. It does not seem a panic measure to look twelve months in advance of when the provisions may be needed. I expect that the negotiations will be difficult and may go right to the wire. They nearly always do, as noble Lords know perfectly well. However, we should not forget that there would be very serious difficulties for industry, commerce and transport within the other EU states if some sensible agreement were not reached.

Having the Bill in place is only a sensible precaution. However, I would expect that the most likely outcome is little real change. It would not be sensible for ourselves or our EU friends to have anything else. I do not believe that the doomsday scenario that many noble Lords seem to enjoy portraying will ever come to pass. I assure the House that I will be vigorously supporting my noble friend the Minister.

Photo of Lord Whitty Lord Whitty Chair, EU Internal Market Sub-Committee, Chair, EU Internal Market Sub-Committee 6:03 pm, 27th February 2018

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.

Photo of Lord Berkeley Lord Berkeley Labour 6:11 pm, 27th February 2018

I am grateful to the House for allowing me to speak in the gap.

I am interested in the way in which the Conservative Party has done a complete U-turn on this issue over 25 years. When I was building the Channel Tunnel, one of the arrangements Margaret Thatcher was pleased about was that she negotiated cabotage mainly with France because the French haulage industry was not keen to have British trucks going into France and doing cabotage there. In return for building all the trains in France, Mitterand allowed the UK to have cabotage. That was the start of the single market in transport, and here we have the same party trying to close it down today, which I find rather sad.

I saw Barnier and his team last year, as did the noble Lord, Lord Teverson, and he gave me the same message: industry must be prepared for a cliff edge and there will not be any cherry picking. Nothing seems to have changed. The Bill is a good start as an attempt to cherry pick but, as many noble Lords have said, what about the continental drivers who are going to come to the UK? About 80% of cross-Channel traffic is now provided by non-UK registered trucks and drivers, and I cannot see much point in setting out what we want unless we can reach agreement with the European Commission as to what happens the other way. Many noble Lords have referred to this.

It is worse with the issues in the Republic of Ireland, to which the noble Lord, Lord Whitty, briefly referred. I have an interesting paper on Brexit produced by the Irish Academy of Engineering, which gives many statistics, including that about 1 million trucks or unit loads cross the frontier from the Republic. Some of them are destined for Northern Ireland while others go straight across the sea. The report states that 95% of the units go to and from Great Britain and two-thirds of the traffic to and from the continent goes through what they call the “land bridge”. It points out that that will involve four customs checks unless the system is changed. I cannot believe that the Irish Taoiseach, Mr Varadkar, whom I have met once and who I think is doing very well in sticking up for the Republic, will be pleased about that.

I understood the Minister to say in her opening remarks that there was no need for registration, whether for trucks or trailers, between the Republic and Northern Ireland. I do not know, but I hope that she will be able to clarify that in her response to the debate. As many other noble Lords have said, I do not see how we can have no checks on registration between the Republic and Northern Ireland and no checks on registration across the sea.

Finally, several noble Lords have put this to the Minister. If we have a system for issuing licences for trailers, trucks or drivers, how long will it take to develop and how much will it cost? She will remember that HMRC was asked a similar question last autumn: what would it cost to handle the customs on trucks? The chief executive said that it would take five years to develop an IT system, he could not say what it would cost and the work cannot start until HMRC knows what has to be done. We are going to have five years of misery on the licensing, assuming the Department of Transport can do as well as HMRC—I do not know whether it can—before something good comes out of it, if it ever does. I look forward to the Minister’s response.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour 6:16 pm, 27th February 2018

My Lords, I want to intervene only briefly. On 5 December last year, I spoke in a debate on trade and customs policy, in particular on the issue of the allocation of CEMT permits, and I expressed some concerns. Some noble Lords may well recall the debate. My experience goes back almost 50 years, when I was in business and I had trucks. We were running our goods abroad into markets in Europe and importing components into the United Kingdom. When I read this Bill, I was disturbed by one sentence, which is set out in Clause 2(2):

“The methods that may be specified under subsection (1)(d) include random selection and first come, first served”.

I can tell the Minister what that means, because I have seen it with my own eyes: corruption. The old permit system was corrupting. I know that because the hauliers used to tell us about it. The drivers told us how they would get through customs posts in various parts of Europe. At the Mont Blanc tunnel, customs officers were bribed, as they were at the Brenner Pass tunnel because very often the permits the hauliers were running on were illegal. I have some of those permits with me, which I found this morning, and they go back almost 35 years. Now I might get a phone call from the civil servants asking what I know about it, but I do not intend to tell them—it is their responsibility to find out how it was done. It was common practice throughout the allocation of permits. In his place behind the noble Baroness on the Front Bench is a former Minister of Transport who will recall what happened because I think he took over while the old permit system was still in operation, or perhaps I am wrong. I think that the old system was completely cleared out by the beginning of the 1990s, but I am not altogether clear on that.

All I am saying is that, if the system was capable of corruption then, given that the language used in this Bill is very similar to the language that must have been used in the legislation at that time, it will be corruptible in the future. Before we go into Committee, Ministers should be briefed on how the system was corrupted so that, when we start producing examples of what happened, at least they will be able to give us a sensible reply.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport) 6:20 pm, 27th February 2018

My Lords, this is a surreal situation. Earlier this afternoon we were discussing outer space, spaceports and lasers—innovations and challenges of the 21st century—and suddenly here we are, with this Bill and the 1968 Vienna Convention on Road Traffic, which is 50 years old. In a way, it is an analogy for the whole of Brexit, an attempt to return to the world of yesteryear, because if you look at the Vienna convention, you will see that it has not, in all senses—despite some updating—withstood the test of time. It conjures up a different world.

It appears that, although we signed this convention, we have never ratified it. We have to do so now, because one of the realities of post-Brexit life will be that we can no longer be assured that we will be able to travel freely abroad to the 27 EU countries. With huge sadness, therefore, I say that what the Government are setting out to do in this Bill, given their commitment to a hard Brexit and thus the likelihood of a no-deal Brexit, is a sensible kind of insurance policy. It is truly tragic, however, that we are in this situation. This Bill, and the speed with which it is being pushed through, is symptomatic of the kind of crisis management we can expect from now on, as one thread after another of the EU web unravels and the Government work desperately to keep it all together. After all, this Bill, as other noble Lords have pointed out, was not on the Government’s list of Brexit-related Bills in the Queen’s Speech. It is one that the Government have only recently realised we need, and I am sure it will be the first of several.

The background to the Bill is that the UK has just weeks to ratify the convention in order to give the required 12 months’ notice before Brexit day. The current situation is that hauliers require a standard international operator’s licence and they can also request, free of charge, a Community licence, which allows them to work in EU countries. There is a single permit for all EU states, which—crucially—also allows cabotage: journeys within one EU member state made by a haulier from another EU state. So far, so simple, but it is part of a much more complex overall picture. Community licences are also valid in EFTA states. In addition, the UK has bilateral agreements and is a member of the European Conference of Ministers of Transport. There are 43 countries participating in this multilateral quota scheme, but not all are participating on the same terms. These 43 countries include all the EU countries except Cyprus and 17 others—from Albania at one end of the alphabet to Ukraine at the other. That is just a very simplified snapshot of a hugely complex set of arrangements that our hauliers will have to confront, without the core certainty of easy access to 31 other countries on the basis of one free Community licence.

The Road Haulage Association has already warned that relying on ECMT permits would be inadequate for market demand, would be very bureaucratic and would not allow cabotage. In its estimation, there will be 75,000 trucks chasing 1,300 permits, which it says will devastate the industry. I therefore ask the Minister if she could explain to us how the 80% of hauliers who are EU nationals will be affected by this. Any new scheme is likely to result in cost to hauliers and to the people for whom they transport goods, as well as to the Government—by which I mean the taxpayer—in setting up the new scheme and operating it.

Let us look at this from the EU perspective, because the Government have been very vague about what they want but the EU has been very specific about the situation as it sees it. The UK will exit the internal market for road transport. This means the end of market access based on the community licence, of cabotage rights, of mutual recognition of driving licences and vehicle registration documents and of the cross-border enforcement of traffic offences—I want to emphasise how important that is. There are fallback positions—for example, the 1949 Geneva Convention, which can be used to deal with driving licences—but they are complex and uneven. The end of cabotage and transit rights beyond those covered by ECMT permits will mean a considerable reduction in territorial and market access.

I have a couple of questions for the Minister about haulage permits. Given that Community licences are free, what is the Government’s estimate of the likely cost of obtaining one of the alternative permits that the Bill enables? On trailer registration, the National Caravan Council has already voiced its concern that the Bill allows non-commercial trailers to be brought within its scope. How and when do the Government think that might be necessary? There is already an established NCC registration scheme. Are the Government going to duplicate that, which would of course mean significant additional bureaucratic cost and burden for people operating trailers? The Government have a voluntary registration scheme for trailers called the certificate of keeper, which is designed to deal with the issue raised by Germany having slightly different rules on trailers, involving inspection. However, only some 260 permits are issued per year. I gather that the Government have said that they cannot expand this scheme; perhaps the Minister will explain why.

The Government expect to have the trailer permit scheme in operation by the end of this year, so, clearly, work has been done in preparation for it and answers should be readily available. When will the Government consult the industries on this? What is their estimated cost of a trailer permit? What will be the basis for the cost—will it be the size of the trailer or the use? I also want to push on the definition of a commercial trailer. The briefing states that it will not apply to horse trailers, because they would be non-commercial, but what about horses being transported to horse shows? In the same competition, you can have professional riders and amateur riders, with the horses, I assume, separately classified. Perhaps the Government need to give answers on such issues.

I have a particular concern about the island of Ireland. The Government say that Ireland is by far Northern Ireland’s biggest trading partner and give various assurances that permits will not be required. However, their own briefing states that permits will be issued for travel on the island of Ireland only when it is at the agreement of the UK and Ireland, and that this could be part of a bilateral agreement or the UK-EU future relationship agreement. That means just about anything you want to make it mean, and I do not find it reassuring.

The Bill deals with only road transport but our industry and agriculture rely on the rail and maritime sectors, as well as air freight, of course. I have dealt with air freight in debate here on the open skies Bill that I have introduced, but I want to ask the Minister about the rail sector. Leaving the single European rail area will mean the end of the mutual recognition of operating licences, safety certificates, train driver licences and vehicle authorisations, among other things, and the end of the UK’s participation in the European Union Agency for Railways. In the maritime sector, leaving would mean the end of mutual recognition of seafarers’ certificates, of participation in the European Maritime Safety Agency and of free-as-of-right access to port services. The big question is: what are the Government doing to prepare for a no-deal Brexit and its impact on the rail and maritime sectors, as well as dealing with it in the Bill?

Finally, this Bill would not be necessary if the UK remained in the single market. It demonstrates that a hard Brexit will have a huge impact on the haulage industry, an industry on whose shoulders sits so much of our economy and our prosperity.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury), Shadow Minister (Transport) 6:31 pm, 27th February 2018

My Lords, I get a sense from previous speeches—most of which have stolen the contents of mine, so I shall try to be short—that an awful lot of people are trying to understand the road haulage legal environment. That includes myself, and I admit to failing, so if I make assertions I will not be upset if the Minister tells me I am wrong.

It seems that in anticipation of multiple scenarios, the Government are doing three things: ratifying the 1968 Vienna Convention on Road Traffic; introducing a registration scheme for trailers; and introducing the capability of issuing permits. The 1968 Vienna convention was, I believe, signed at the time but not ratified. I got married in 1968 and that is a long, long time ago. It is difficult to understand why we have not ratified this convention earlier. My studies tell me that we depended on the 1949 Geneva convention before that.

The Vienna convention is now being ratified, which includes a process in this House—not that it is easy to notice that. The convention was laid in both Houses on 8 February this year and it will be dealt with under the Constitutional Reform and Governance Act 2010. This is a most unsatisfactory process because the only way you would know it had been laid is if you had picked up the Lords business and minutes of proceedings documents, for the fact that it was being laid was publicised on one day only, as is the convention of this House. The 2010 Act allows 21 sitting days for any Peer to pray against it. This is not the same as a negative instrument but it would create a debate. Because I would have to take the debate, I shall not pray against it. Why are the Government doing that? I quote from their own Explanatory Memorandum:

The UK signed the 1968 Convention on 8 November 1968, and has now decided to ratify it for reasons of uniformity, to increase safety and to facilitate international traffic”.

One of the foolish things I did was to get a copy of the convention. It is quite long and in oldish language, but I assume the key paragraph is paragraph 3 of Article 3, on page 7, which states:

“Subject to the exceptions provided for in Annex 1 to this Convention, Contracting Parties shall be bound to admit to their territories in international traffic motor vehicles and trailers which fulfil the conditions laid down in Chapter III”.

It then goes on to specifics. But essentially, it seems to be the technical requirements to allow a vehicle to move internationally, and includes specifications about licences and what is to be accepted as a licence. A consequence of our decision to ratify that, as I understand it, is that it implies that trailers should be registered. This brings me to the Bill, which covers the two other things I mentioned: the registration of trailers and the issuing of licences.

As a generality, we will support the Bill, simply because, as with motherhood, you cannot deny somebody who is trying to create a contingency. It is an absolutely mad situation, but you still have to support the necessary procedures to cover the contingency. The registration of trailers more widely would seem quite a sensible thing to do. I would be interested in the extent to which registration of trailers includes the safety requirements that the registration of tractors does. It seems to me that it would be an anomaly if trailers are not required under British law to be as safe as their tractors. I cannot see, more widely, why one should be allowed to pull a trailer that does not meet the same safety standards as the vehicle you are pulling it with, although that may be outside the Bill.

We come now to the more significant part of the Bill and the fact that the Government propose to create an administration scheme for the issue of permits. It would have been irresponsible not to but, frankly, it is far from desirable. It is undesirable because it will create costs in an industry that works on very small margins and because requiring a new permit to be carried will invite friction at borders. All we learn about this industry is that friction at borders will be a significant hazard to successful operation.

What does the future hold for us? There is a contrast between the United Kingdom and the European Union here. In the United Kingdom, we have weekends at Chequers; in the European Union, they have a Commission. The Commission does not seem to know about weekends at Chequers, but just gets on and pumps out this stuff. One of the things it is doing now is pumping out documents called “Notice to Stakeholders”. I have in front of me the one created by the Directorate-General for Mobility and Transport, dated 19 January this year in Brussels, and titled, “Withdrawal of the United Kingdom and EU Rules in the Field of Road Transport”. Its tone is hardly friendly. I quote:

“In view of the considerable uncertainties, in particular concerning the content of a possible withdrawal agreement, road transport operators within the meaning of Article 2 of Regulation (EC) No 1071/20094 are reminded of legal repercussions, which need to be considered when the United Kingdom becomes a third country. Subject to any transitional arrangement that may be contained in a possible withdrawal agreement, as of the withdrawal date, the EU rules in the field of road transport no longer apply to the United Kingdom. This has, in particular, the following consequences in the different areas of road transport”.

This four-page document goes into a number of areas, but in the part entitled, “Access to the profession/to the market”, there is the following statement:

“As of the withdrawal date, a Community licence issued by the competent authorities of the United Kingdom will no longer be valid in the EU-27. Hauliers established in the United Kingdom will no longer have access to the internal road haulage market in the Union”.

That is the document’s only bright spot in its four pages. It also states:

“However, the multilateral quota system managed by the European Conference of Ministers of Transport (now International Transport Forum) would apply at that point”.

Hurrah, there is a fallback—until we look into what the fallback is. It is a convention or agreement—I am not sure of the right term—between 43 states, which includes all the EU states except Cyprus. The mechanics of that are laid out in an International Transport Forum document; that organisation now runs this scheme. Its document has many pages but I shall quote from one small part of it. Chapter 3, entitled “Issuing and limits of ECMT licenses”, states:

“ECMT licences … are multilateral licences, delivered by the ITF/ECMT, for the international carriage of goods by road for hire or reward by transport undertakings established in an ECMT Member country, on the basis of a quota system, the transport operations being performed: between ECMT Member countries; and in transit through the territory of one or several ECMT Member country(ies) by vehicles registered”.

Apparently, we have a process that we can fall back on.

However, the magic word is “quotas”. The quotas, we are told, have a maximum number—1,224—of multiple-use annual permits. The Lords Library briefing suggests that there are 30,060 certified copies of the community licences. As far as I can see, that is the equivalent of the permit. The only problem is the difference between them—that is, the number of permits that would be available in this quota are some 4% of the certified copies that have been issued. The effect of this would clearly be catastrophic. Clearly, the Government anticipate the problem of not having enough permits, because they include in the Bill—in Clause 2(2)—a reference to how they will manage a situation where there are insufficient permits. They go on to say that the Bill will,

“include random selection and first come, first served”.

I cannot think of anything more terrifying than that system.

The Government anticipate failure and I have to say, with their present attitude to the customs union and single market, it seems that there is a very steep hill to climb. Failure would be unacceptable. Society could not exist. The noble Earl, Lord Attlee, pointed out that, normally, societies avoid catastrophic situations. Sadly, looking back over the past century, often they did not. This could be just such a situation, be it in road haulage, air transport or maritime.

My only real question for the Minister is: can she set out how the Government plan to achieve transport agreements that will leave us with a viable and flourishing road transport industry?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport) 6:45 pm, 27th February 2018

My Lords, as always, the experience and knowledge in this Chamber has been extremely insightful, and I thank all noble Lords for their contributions. Many noble Lords have pointed out the importance of the Bill to ensuring that there is no disruption to the haulage industry when we leave the EU, and of course I entirely agree. This is responsible planning to ensure that we are ready to deliver the outcome of the negotiations, whatever that may be. I think we all agree on our aim to retain the existing liberalised access for commercial haulage. I welcome that agreement; it may be one of the few that we have during the progress of the Bill.

I apologise that the Bill was not announced in the Queen’s Speech, as highlighted by the noble Lord, Lord Bassam, and the noble Baroness, Lady Randerson. The gracious Speech outlined that alongside the EU (Withdrawal) Bill there would be complementary legislation and that is what this is, but I apologise that it was not explicitly pointed out then.

Many noble Lords, including the noble Lords, Lord Bassam and Lord Teverson, asked about costs and fees for both haulage permits and trailer registration. As I said in my opening words, the Bill provides powers for the Government to set and charge the administration fee. We are consulting on the details of the fees and charges for haulage permitting later this year. Again, as I said, we are doing this in order to minimise any additional burdens and costs for business. We are fully aware that this is going to be a cost for large and smaller haulage firms. The fees will be in line with the current international permit schemes. The noble Baroness, Lady Randerson, asked for some examples. An ECMT permit for one year currently costs around £133 and a bilateral permit for one journey costs around £8, so that is the kind of ballpark figure that we are looking at. However, the exact nature and costs of the permit scheme will depend on the outcome of the negotiations, so we will be setting that out.

On the question of trailer registration, the Bill again provides the powers to set the fees to cover the administration. Again, we are aiming to minimise those as far as possible in order to reduce any burden or cost to businesses. There will be no ongoing annual fees associated with trailer registration. I think the noble Lord, Lord Teverson, asked about numbers; we expect around 80,000 or so will be registered. Once the trailer is registered, the only further fees would be for any subsequent reissue. The system for that is still in development and the cost is still to be determined. We have been doing quite a lot of exploratory work on this and are confident that the registration fee will be significantly below that of the current vehicle registration fee, which is £55.

On caravans, a subject raised by the noble Baroness, Lady Randerson, the scheme will apply only to commercial trailers over 750 kilogrammes. We are speaking to the caravan society, as the noble Baroness mentioned, to further clarify that.

I raised the issue around horses and whether, if a horse was travelling to race abroad on a commercial basis, that would count. I was reassured that horses in that case would be in an all-in-one vehicle; I do not quite know what to call the vehicles, but they would not be in a trailer horsebox. My colleagues tell me that a horsebox is an all-in-one vehicle, rather than a horse trailer, so they would be covered. However, I am going to go back and clarify that further.

The noble Lord, Lord Bassam, asked about the permit application process and how it will work, and the noble Lord, Lord Berkeley, mentioned HMRC. We are working with an existing organisation, the Driver & Vehicle Standards Agency, on the system to allocate haulage permits. That will be building on existing IT systems to create an online permit application system. Obviously hauliers are already familiar with applying to the DVSA for paperwork related to domestic and international travel, so we hope that they will welcome this. Again, we are committed to trying to minimise any additional requirements, and we are working closely with industry to develop those plans. The aim is absolutely that we will be able to take applications and issue permits in advance of exit day, and we are on track to be able to issue permits in late 2018.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Labour

My Lords, are the Government so well advanced in their thinking on the permit scheme that they have scoped out an IT system with one of the providers? Are they in negotiation with companies that do outsourcing on data and so on to try to work out exactly what sort of system they might want to put in place and think about what sort of contract they might want to set?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

We are working with the existing IT system at DVSA, so there would be no additional contract. I can certainly provide the noble Lord with further details on that.

The noble Lord, Lord Teverson, asked about the implementation period. Obviously, this is being discussed. The Government have been clear that the implementation period will be based on existing rules and regulations. I hope that we will reach agreement on that soon, which should provide some reassurance to industry.

The noble Lord, Lord Bassam, asked about the recognition of driver qualifications. The treatment of drivers’ certificate of professional competence will—again—depend on the outcome of negotiations with the EU, but our objective is absolutely to ensure that following our exit from the EU, CPCs will continue to be recognised.

The noble Lords, Lord Teverson and Lord Berkeley, asked about access for foreign hauliers, including cabotage. These, again, are important issues for negotiations that we are considering carefully for any future arrangement. In any scenario, there is existing domestic legislation to provide appropriate access for foreign hauliers coming to the UK, so the Bill does not address that specifically. However, as the noble Lord, Lord Berkeley, pointed out, it is an important part of the negotiations, and it will obviously be part of the discussions.

The noble Lord, Lord Tunnicliffe, and others mentioned ECMT permits. The permitting system operated by the European Conference of Ministers of Transport is an international agreement entirely separate from the EU and will not be part of our negotiations. The ECMT permits currently allocated to the UK are little used and we have absolutely no intention of allowing them after we leave the EU.

As much as I would love to give the noble Lord, Lord Bassam, a timeline for our transport negotiations, I am unable to do so. We are working closely with industry to understand its requirements and priorities, and have been doing so since the result of the referendum. We represent those views to the Department for Exiting the European Union. That department and the Department for Transport stand ready to move forward with the transport negotiations as soon as they begin.

The noble Lord, Lord Snape, spoke about optimism. I agree with him that we do not want to return to rationing. We are optimistic in these negotiations and am pleased that at least my noble friend Lord Attlee shares that optimism. It is absolutely to the mutual benefit of us and the European Union that we maintain liberal access; 84% of the freight transported between the UK and continental Europe is operated by EU hauliers, and it is in both our interests that we have a successful outcome.

Photo of Lord Berkeley Lord Berkeley Labour

If this goes ahead and we have licences here for drivers and trucks to operate on the continent, we will presumably need some approval process. Perhaps it would not be a taxing system but it could work alongside the customs declaration for all the 80% of foreign trucks coming into the UK—either into Northern Ireland from the Republic or from the continent. Has that been taken into consideration?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

Certainly not in the context of the Bill. I apologise for going back to this, but exactly what that will look like is a matter for the discussions with the European Union as part of the negotiations.

The noble Lord, Lord Snape, asked about the reservations to the Vienna Convention on Road Transport. We will be making reservations in respect of six sections of the convention, relating to jaywalking, parking direction and so on. They apply only domestically and will not affect the other countries. It is usual practice for countries, on ratifying the convention, to put forward such reservations. We do not expect there to be any issue on that.

Photo of Lord Snape Lord Snape Labour

If that is the case and it is all so simple, why have we not endorsed the Vienna convention over the past 50 years?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

We have been relying on the agreement that we have with the European Union, and because we are leaving the EU we have to bring forward something else.

The noble Lord, Lord Tunnicliffe, asked questions around the convention process. We are following the usual process for Command Papers and have done our best to highlight this issue. The convention is detailed and the Secretary of State has offered a meeting with all Peers and MPs to discuss the Bill and the convention. As the noble Lord pointed out, there is a process to discuss the matter further on the Floor of the House and I would be delighted to do so if anyone would wish to.

The noble Lord also raised the issue of safety for trailers. I do not believe there is a safety requirement in the Bill, but I will take that suggestion away and look at it further.

Photo of Earl Attlee Earl Attlee Conservative

My understanding is that the tractor unit is subject to the plating and testing regulations, as is the trailer, and they are also subject to type approval regulations that are already in place.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

I believe that to be the case, and that therefore the Bill will not affect safety, but I will clarify that and write to my noble friend.

My noble friend Lord Attlee asked about penalty drafting within the Bill. We have drawn up the penalty levels from the original 1975 legislation so the offences are consistent with that. I am told that Clause 8 puts the offence in respect of a permit scheme in the Bill along with the penalties, which are summary only. Clause 17 enables regulations to be made which include the offences and penalties. Clause 17(6) restricts those regulations to include summary offences only, but perhaps I can write to my noble friend further on that.

On Ireland, the noble Lords, Lord Berkeley and Lord Whitty, and the noble Baroness, Lady Randerson, all rightly highlighted the importance of ensuring that we get the legislation right for the island of Ireland, and I should like to say a few more words about that. The Bill does not create a permit regime or a hard border on the island of Ireland. Again, the Government are committed to ensuring that there is no hard border. We want trade and everyday movements over the land border to continue as they do now. Half of the imports and exports by road are to and from Ireland and 89% of this trade is going between Northern Ireland and Ireland. There is no history of restrictions on road haulage, and that must remain the case.

To make clear the commitment not to create a hard border on the island of Ireland, we included Clause 1 explicitly to provide that permit regulations may not apply to journeys on the island of Ireland unless there is an agreement on the provision of permits between the UK Government and Irish Governments. To reiterate, trailers travelling between the UK and Ireland will not need to be registered. I very much agree that this is an important issue and something we need to keep in mind as the Bill progresses.

The noble Lord, Lord Tunnicliffe, and many other noble Lords mentioned borders. The provision of a permit scheme, whatever its detailed 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. The haulage permits part of the Bill relates to UK hauliers, but, as noble Lords mentioned, EU hauliers also benefit from hauling to and from the UK. The DVSA already carries out checks on vehicle operating standards on our road network rather than at the borders and we would expect that to continue and include checks for permits if those are required as part of the deal with the EU.

The noble Lord, Lord Campbell-Savours, raised an interesting point on corruption. It is certainly something we must avoid. I will make sure that I am fully briefed on previous issues with the system ahead of Committee so that we can avoid them.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

Perhaps I may make a suggestion: that the department bring in operators who were operating in the 1960s and 1970s. There will be some around and they will remember what happened.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

If we can track them down, we will certainly get them in. I thank the noble Lord for that suggestion.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Labour

Perhaps I can take the noble Baroness back to an earlier point about trailer registration. I do not know whether she has looked at the department’s impact assessment, but it says that one of the indirect benefits will be improvements for road safety, and trailer registration is part of that. It strikes me that this is an opportunity, if the department wants to look at it that way, to secure some long-term benefits from trailer registration, and the Government might want to focus on it in their post-Brexit evaluation of road safety issues.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

I thank the noble Lord for that suggestion and will go back and study exactly where the safety requirements fall, and whether there is an opportunity within the Bill to further improve safety. I know that there is quite a lot of work on trailer safety going on in the department at the moment.

Photo of Earl Attlee Earl Attlee Conservative

Perhaps I can assist the House. There is already a system of trailer identification to make sure that trailers are properly tested. The issue is whether there should be registration and therefore a number plate on the rear of the trailer.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

I thank my noble friend for that clarification.

The noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Randerson, mentioned the Commission’s paper setting out its general approach to the options for future partnership on rail, maritime and road transport. We think that is an opening position from the Commission, drafted with its own interpretation of EU red lines. We welcome its recognition of the importance of keeping transport flowing after we leave the EU. This is clearly part of the EU’s internal preparatory discussions and will not necessarily represent where negotiations will end up. The proposals are designed to be thought-provoking, and we are pleased that they will at least ensure that member states focus on transport issues.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

I understand the Government’s view that these EU papers are just an opening position, but actually they are a factual statement. How we move forward from that is another issue, but the papers are making a factual statement. Will the Minister address the fact that those papers cover rail and maritime as well as road? My question was: how will the Government deal with rail and maritime? Will there be legislation similar to this Bill?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

We do not currently believe that there needs to be legislation for the maritime and rail sectors. Obviously there is preparatory work going on, but we do not have any further updates for the noble Baroness on that. As and when we need to bring forward legislation to prepare ourselves, we absolutely will, in the same way as we have done with this.

The Government have introduced this Bill as part of the preparations for the UK’s withdrawal from the EU. I say again that we are committed to ensuring that liberal access continues for the commercial haulage sector. We all agree on how important it is that that continues. We are confident that a future partnership between the UK and EU in this area is in the interests of us all, and we are optimistic about the negotiations.

This legislation shows that this Government are acting responsibly—I hope noble Lords will welcome the preparations, as many have, in various tones—in case preparations are required as we move from our current membership of the EU to our future partnership. My noble friend Lord Attlee rightly called this a sensible precaution, and I will pass on the congratulations of the noble Lord, Lord Whitty, to the department for being so well prepared. Of course, there are many wider issues relating to leaving the EU that will be of much interest to noble Lords. Many of them are being debated at length in the EU (Withdrawal) Bill. I hope that the sensible measures in this technical Bill will help ensure that the UK is prepared for all eventualities and I welcome noble Lords’ broad agreement on this, and their contributions to delivering it as the Bill proceeds through the House.

I thank again all noble Lords for their contributions to the debate this afternoon—in particular the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Randerson, who, like me, are on their third piece of transport legislation today. We will carefully consider all the points raised, and I look forward to discussing them further in Committee. I ask the House to give the Bill a Second Reading.

Bill read a second time and committed to a Grand Committee.

House adjourned at 7.03 pm.