Licensing of Operators and International Road Haulage (Amendment etc.) (EU Exit) Regulations 2019 - Motion to Approve

Part of the debate – in the House of Lords at 4:15 pm on 18th March 2019.

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Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport) 4:15 pm, 18th March 2019

I agree with the noble Baroness. The EU has proposed a complex system. It has been clear that it is not replicating current market access provisions, but it is ensuring basic connectivity and phasing out the current system by the end of the year. However, given that UK hauliers are allowed to have these journeys, we do not expect the vast majority of haulage operations to be able to continue. We have ECMT permits to fall back on.

As I said, the measure is based on the UK granting reciprocal access. To protect businesses and minimise disruption, we are currently offering more to EU hauliers than the EU is offering us, so we are mirroring the situation at the moment. We have the power to amend this and mirror the EU’s offer. The regulation does not cover transit to third countries, but will cover transit to EEA countries such as Norway, so we will use the ECMT permits to those third countries. It also makes it clear that bilateral agreements with the UK can be negotiated and concluded for periods during which the regulation applies—for example, after December 2019—but should we be in a no-deal scenario and should these regulations come in, we will of course be negotiating at pace to understand our future arrangement.

If we leave the EU without a deal, we will not be able to issue Community licences, as we will no longer be a member state. Therefore, we have had to come up with a replacement document: the UK licence for the Community. UK hauliers should continue to carry their current Community licence, which lasts for five years. Only when a Community licence expires will it be replaced by the new UK licence for the Community.

Article 3 of the new EU regulations allows a UK haulier to conduct international haulage on the terms set out in the regulation. The UK road haulage operator licences are defined in the regulation, and in practice, as any suitable licence issued by the UK for the purpose of international haulage. That licence will be the UK licence for the Community, issued by the traffic commissioner. The noble Baroness, Lady Randerson, is right to say that they have a very broad responsibility. Currently, the DVSA issues Community licences, and will continue to do so for the UK licence for the Community.

The noble Baroness mentioned Northern Ireland, raising the very important aspect of cabotage on the island of Ireland. In any scenario, our objective is that traffic there should be maintained without additional burden for businesses or citizens. In the case of no deal, the EU measures preserve the rights of UK hauliers to access the EU market via point-to-point and transit journeys, as well as enabling cabotage and cross-trade within the limits I spoke about earlier. That approach is in line with the joint report published in December 2017 by the UK and the EU, which made clear our steadfast commitment to upholding the Belfast agreement, specifically preserving in full cross-border co-operation on transport.

The regulation includes the cabotage services in Irish border country until September 2019. Should we leave with no deal, we will of course continue to work with the European Commission and the Republic of Ireland to ensure that any long-term UK-EU transport arrangements take into account the unique road transport demands on the island of Ireland. If we are in a backstop situation, Northern Ireland will continue to follow EU regulations, and continue to have access under them.

The noble Baroness also asked about bus and coach operators. EU regulation 1071/2009 provides a framework for the licensing of transport operators—both haulage and bus and coach operators—in member states. The specific licencing for international passenger journeys will be dealt with in a separate SI which we will debate on Thursday. We are just dealing with the specific provisions for haulage here.

Regarding delegated powers, in many cases the reference to “Secretary of State” is a technical change in places where the EU regulation specifies member state authorities; in the UK, those authorities would currently be the traffic commissioner or the Secretary of State. New powers are being inserted into the retained version of EU regulations 1071/2009 and 1072/2009, to enable Ministers to amend retained legislation through regulations. These changes will be required to ensure consistency and the necessary flexibility.

The noble Baroness is right to say that there are different rules for different parts of the regulation. In regulation 1071/2009 we are inserting two powers permitting future amendments. One, in Article 6, deals with the provisions relating to the good repute of transport managers who work for haulage operators. That will be a negative procedure. We are recognised internationally for our high standards in the freight industry and the affected and targeted enforcement from the DVSA and the traffic commissioners, and there is certainly no intention to water down or reduce those standards.

The second new power under regulation 1071/2009 deals with the requirement of transport managers to hold certificates of professional competence—CPCs. The degree to which we recognise foreign CPCs will affect the wider relationship between the UK and the EU, and for that reason, amendments to the criteria for professional competence will be subject to the affirmative procedure. Again, UK hauliers have a good reputation in the EU, due to the high compliance with the standards, which will be maintained regardless of our future relationship with the EU.

The powers to amend substantively the rights of access to the UK, including changes to cabotage under EU regulation 1072/2009, are provided under an affirmative resolution SI. We are inserting three powers, which permit future amendments dealing with the technical requirements for the UK licence for the Community, the technical requirements for driver attestations and the suspension of cabotage. These will be needed if we reach an agreement with the EU in which we need to do reciprocal action on cabotage. As all those powers affect the way in which access to the UK market operates, with implications for reciprocal access to the EU freight market, these are all considered appropriate for affirmative resolution SIs.

The noble Baroness, Lady Randerson, asked about the impact of any short extension period. If there is a short delay, it would also delay when the EU regulation came into force, but it will end on 31 December 2019. It would mean a slightly less complicated EU regulation, because the final two months of the regulation, where no cabotage or cross-trade would be permitted, would not occur, therefore reducing the pressure on ECMT permits. However, it would of course be in place for a shorter period and mean that we needed to ensure we had in place by then a future agreement on access.

On consultation, the noble Baroness was right to point out how big a part of the market small and medium-sized enterprises are. The regulations ensure continuity after Brexit in the event of no deal. We published back in September technical notices on commercial road haulage in the EU which explained what UK hauliers need to do to operate in the EU. We have close and constructive links to trade associations, including the Freight Transport Association and the Road Haulage Association, as well as a range of industry associations and operators, from major operators through to SMEs. We hold regular ministerial and official-level round tables.

Industry is of course concerned about the changes required as a result of Brexit and the little time that it will have to adapt to them. We have discussed this SI with the industry. As expected, it is looking for as much continuity as possible. Where changes are required, it seeks clear guidance from the Government on what it needs to do. This SI is based on ensuring that there are no changes in licensing requirements for hauliers and the minimum change possible in documents that hauliers will require when operating internationally.

I think that I have answered the noble Lord’s question about the European Parliament approving the regulations. It did so last week and the decision will be finalised at the General Affairs Council tomorrow. The proposal was discussed both in Article 50 formation and in working groups with the UK in the room. I think that it is fair to say that the majority of the text was agreed under Article 50 formation, as this is related to our departure from the EU, when we will be treated as a third country, but we have highlighted UK hauliers’ interests at ambassadorial and working-group level. I believe that the regulation did not originally contain any cabotage rights, so we have seen an improvement on that so that UK operators will be able to continue operating cabotage and vice versa.

I hope that I have answered all noble Lords’ questions. If I have missed any, I will follow up in writing. These regulations will make the changes necessary to ensure that retained EU legislation setting out UK operator licensing requirements continues to function properly and allows for the regulation of international market access in the event that we leave the European Union without a deal.

Motion agreed.