Common Rules for Access to the International Market for Coach and Bus Services (Amendment etc.) (EU Exit) Regulations 2019 - Motion to Approve

– in the House of Lords at 1:48 pm on 21st March 2019.

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Moved by Baroness Sugg

That the draft Regulations laid before the House on 26 February be approved.

Relevant document: 20th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B).

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

My Lords, the regulations that we are considering will be made under powers in the European Union (Withdrawal) Act 2018 and will be needed in the event of no deal. This instrument amends the retained EU legislation governing access to the international passenger transport market and associated domestic implementing legislation to deal with deficiencies that would otherwise exist when the UK leaves the EU.

EU regulation 1073/2009 establishes the conditions for the international carriage of passengers by coach and bus within the EU and cabotage within member states by non-resident EU operators. It covers regular timetabled services and occasional services such as holidays and tours. It establishes for this purpose a system of Community licences, which act as the international bus and coach licences used within the EU, and enables these licences to be issued by the competent authorities of member states.

Section 3 of the withdrawal Act will preserve EU regulation 1073/2009 in domestic law, and Section 2 will preserve implementing domestic legislation, including the Public Passenger Vehicles Act 1981 and the Road Transport (International Passenger Services) Regulations 2018. This SI adjusts the language and references in those pieces of retained legislation, and five other pieces of legislation, to recognise that the UK is no longer a member state.

The SI also amends the retained UK version of regulation 1073/2009 to allow EU-based operators to continue to access the UK market in a no-deal scenario on a unilateral basis by means of the recognition of Community licences and control documents—other than new authorisations for regular services—issued by EU authorities under EU legislation. Existing authorisations for international regular services into the UK will continue to be recognised to avoid any additional administrative burden for operators.

This SI also covers Northern Ireland in its territorial extent. The devolved Administration have to make some consequential changes to their devolved legislation, and that is subject to a separate instrument.

The retained regulation 1073/2011 will apply only to EU-based operators. In the event of no deal, UK operators will be able to continue to access the EU market through accession to the Interbus agreement. This is an EU multilateral agreement that allows bus and coach operators to carry out occasional services between the participating countries—currently, the EU and seven other contracting parties in eastern Europe. At present, the UK is party to the agreement through its EU membership. Although the agreement currently covers only occasional services it is being extended to cover regular services, but this process has not yet concluded.

As part of contingency planning for no deal, the Government have deposited their instrument of accession to the Interbus agreement. This means that the UK will become a contracting party to the agreement in its own right. Due to the way the rules of the Interbus agreement apply, this will happen on 1 April. The Government are currently working closely with the European Commission to agree a way to close the two-day gap if we leave without a deal on 29 March.

In acknowledgment of the fact that the extension of the Interbus agreement to regular services will not be in place by exit day, the European Commission has extended the scope of its measure for an EU regulation on common rules ensuring basic road freight connectivity to include regular passenger services. This regulation was formally adopted by EU Ministers on Tuesday and will apply to UK passenger transport operators running regular services to and from the EU for the first nine months after exit, if we should leave without a deal. The Commission’s proposal is based on the UK reciprocating, and the draft regulations that we are considering today will reciprocate those conditions for EU operators in the UK.

Coach travel provides a low-cost, safe and environmentally friendly way to travel. Coaches from continental Europe bring in some 1.6 million visitors each year, and in Northern Ireland travel across the border is a commonplace daily activity, with 900,000 journeys per annum. These regulations allow for the continuation of EU bus and coach services in the UK and reciprocate the EU regulation so that UK regular services can continue to operate to and from the EU.

These regulations are essential to support our tourism industry and to ensure that international services can continue to run. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour

My Lords, I am grateful to the Minister for bringing this SI and for her introduction. She has probably answered my question, but from reading paragraph 7.3 of the Explanatory Memorandum it looked as if UK operators would not be able to operate on the continent from 30 March. I think she has confirmed that that is no longer the case because of these more recent agreements. I hope we will be able to see a continuation of this important traffic without any interruption. What the French customs and immigration people do is of course a different matter, but let us hope that at least the services can run. I hope this will continue and that therefore the services that go to many member states across Europe can continue without getting bogged down in too much bureaucracy. As the Minister has said, it is a very important market.

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

My Lords, here is an SI that does not replicate what exists now, yet, astonishingly, there has been no formal consultation on it. The Explanatory Memorandum claims that it makes just technical amendments, but really it does much more than that. We must remember how important this industry is to us. Every year there are 3.6 million journeys to and from Britain by coach and 1.6 million overseas visitors coming to Britain by coach. That is 4% of all foreign tourists who come to Britain, and 83% of that 4% are from the EU. On the return leg, 1.1 million British residents go abroad by coach, of which 99% go to the EU. Looking at Northern Ireland, which is very important as well, there are 900,000 border crossings from Northern Ireland to the Republic and vice versa in a year.

The EU regulation allows reciprocal access for regular scheduled services and for occasional services—we would call them coach holidays. This SI provides unilateral access for current EU operators after Brexit in the hope that there will be reciprocal arrangements. I will turn to that later. The SI was originally recommended for the negative procedure. I was disturbed to see that, because I believe it is sufficiently important to be worthy of the affirmative procedure. Anyway, we are discussing it now.

I have some questions for the Minister. In future, EU coach operators will have to apply to the International Road Freight Office, when previously they received authorisation for coming to the UK from their home state. The DfT estimates that there could be up to 600 applications for authorisation for regular services at a cost to the Government of up to £95,500. Will the Government be charging an extra amount for this service? It did not need to exist before, so any charge would be additional. Is the IRFO being given sufficient additional resources? The Explanatory Memorandum also refers to a separate SI coming through for Northern Ireland. When will that be? Can we expect to see it in the next few days?

Obviously, things will be more complex and bureaucratic for EU operators. What will the Government do to make them aware of what they will have to conform to? What work are the Government doing with coach operators on the continent of Europe to make sure that the industry is fully aware of the change to the processes?

The Government hope to solve this problem in the long term by joining the Interbus agreement. The problem is, first, that the agreement does not allow cabotage and, secondly, that it applies at the moment only to occasional services. This will of course impact specifically on National Express and Translink in Northern Ireland, because they are the companies that provide the bulk of the regular services. Translink provides a lot of cabotage services as well.

In any event, the UK first has to join the Interbus agreement. I gather that the Government ratified it on 30 January. Will the final accession date that we were given of 1 April still apply if Brexit is deferred? Is it the case that we cannot accede until Brexit, or is 1 April a fixed date? At the moment, if we were to leave at the end of next week, there would be a two-day gap when services could not run. That might not seem like the end of the world, but it could be inconvenient and a real problem for the companies concerned. If they tried to run services without that specific authorisation there would obviously be insurance implications for them.

The Government believe that a protocol to the Interbus agreement will be signed in the near future to allow regular and special regular services to be included as well, but I gather that that could take at least three months to come into effect. Maybe the Minister could update us on whether the signatures on the protocol are progressing well. As I understood it, it was going rather slowly at first, and I believe that we need at least four signatures for it to come into force.

Photo of Lord Berkeley Lord Berkeley Labour 2:00 pm, 21st March 2019

Would the noble Baroness care to speculate as to whether progress would have been so fast if this had been called European Interbus?

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

I think we have a complete rewriting of the dictionary in Britain at the moment. We are not allowed to use the word “European” in any technical or official sense.

The EU is proposing a regulation to maintain basic road connectivity, which the Minister referred to. Does she share my concern that this is for a very limited period? Part of it applies until December, but only until September in Northern Ireland for cabotage and so on. It is all very messy, and therefore very complex for those operating in that industry. Do the Government intend to publicise this on GOV.UK? I am seriously concerned that while this will not apply to big companies, small coach operators in particular—there are quite a few of them in the industry—will find it difficult to keep pace with the very complex changes that the EU and the Government between them are proposing as short-term solutions. What about progress with the bilateral agreements that the Government are proposing to sign? How many countries have signed up so far to those?

On the publicity to the general public for all this, we are coming up to peak coach holiday season at this moment. Easter will be the beginning of high season for coach operators. Are passengers fully aware that they are in a situation of some uncertainty in relation to the ability of UK coach operators to ply their trade in Europe?

Photo of Lord Eames Lord Eames Crossbench

My Lords, I welcome the explanation given to us about the complicated nature of this SI. I shall speak particularly about the local situation in Northern Ireland. Once more, this is an example of how that part of the UK will feel the full force of Brexit, not only for Translink and the regular services that it provides across the border, which was once simply the border with the other part of Ireland but will now become the frontier with the EU. There is genuine anxiety in the industry about, first, the complicated nature of running regular services across the border and, secondly, the many local employers of small coach services that are frequently—especially, as the noble Baroness, Lady Randerson, said, as we come into this season—crossing the border, going into the Republic and vice versa.

As the Minister reminded us, there will be a separate SI, but I suggest that there is bound to be an overlap between what this SI covers and the individual SI for Northern Ireland. If Northern Ireland is part of the United Kingdom there is bound to be that overlap. Can the Minister reassure the House that special attention will be paid to Northern Ireland’s difficulties in this respect, since we will feel the full force of Brexit when it comes?

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury), Shadow Minister (Transport)

My Lords, this SI is a little complex. It seems to be about timing. One gets an uncomfortable feeling that the Government had tackled aviation, marine and road haulage when suddenly someone woke up and said, “We’d better do coaches”. As you read through the Explanatory Memorandum, initially it seems to be an asymmetric situation where EU operators get all the provisions that they have now but UK operators do not, and then you turn to paragraph 7.3, which says:

“The EU have proposed a legislative change that will extend many of the provisions of the existing market access Regulations till 31 December 2019”.

Extending “many” means that it does not extend all. Could the Minister spell out which provisions of the existing market access are not allowed under this agreement? Has the agreement become EU law? I believe the answer is yes, but I would like her to spell that out in simple language. If it is the law that I am thinking of, it declines and then expires on 31 December 2019.

Having not declared any interests in coach operations, I confess that I know nothing about the Interbus deal. Could the Minister spell out what it will mean if it is fully ratified, as is implied in the Explanatory Memorandum? Will it give UK operators the same freedoms as they have now? If not, could she spell out the freedoms that they will not have? Will the Interbus agreement supersede the necessity for the special arrangements that I believe the EU has introduced?

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

I thank noble Lords for their contributions. Turning to the questions on consultation from the noble Baroness, Lady Randerson, I say that the aim of this legislation is to maintain the status quo as far as possible through technical amendments to the existing regime. We have engaged with the Confederation of Passenger Transport, as the main industry representative, and the Federation of Passenger Transport Northern Ireland, the FPTNI. The industry has been supportive of the application to join Interbus, as this will give liberalised, unlimited access to run occasional services in the EU, which covers the vast majority of activity by GB operators. There is little use of cabotage on occasional services, because UK carriers are normally taking the same group of passengers to a destination in the EU, then bringing them back.

We have been working closely with industry to make sure it is informed. While this SI makes technical changes, this SI, the EU regulation and the accession to the Interbus agreement together give maintenance of the status quo. Letters are going out to every operator which holds an international licence, to inform them about future processes. The trade association, the Confederation of Passenger Transport, is making members aware via social media, newsletters and email, and the information on GOV.UK which the noble Baroness referred to.

The noble Baroness asked about the effect on the International Road Freight Office. Relatively few authorisations are required by EU operators. We expect there to be about 150, rather than 600—600 is the top end of the estimation. There is a simple process; operators have to pay only for postage and, possibly, translation. Some operators already apply directly through the IRFO rather than their home member state, so we do not expect there to be a huge effect.

There is an issue with this two-day gap. It might be helpful if I explain why we have it. The Interbus agreement can come into effect only on the first of the month. If we had laid the SI earlier, the agreement would still have come into effect on the first of the month, as the agreement itself specifies that. We cannot become a contracting party until we leave the European Union. We are working closely with the European Commission to find a solution to overcome that gap in provision—

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

Have I understood this correctly? Suppose we were to leave the European Union on the 15th of the month—I am plucking a date out of the air—we could not access the Interbus agreement until the first day of the following month. Therefore, we should be grateful that it is only a two-day gap, because it could be a gap of about 28 days, if things work out wrongly.

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

The noble Baroness is right: we are grateful that it is only a two-day gap. Should we not leave on 29 March, we may have a longer gap to contend with. However, we are working closely with the Commission and are very optimistic about getting a solution. Our preferred approach is to deposit a note verbale with the General Secretariat of the Council, stating that we propose that our accession be treated as coming into effect on the first day of exit. Once we have resolved that, we hope that we will be covered regardless of the length of the gap. That is particularly important for Northern Ireland, as I believe there are some major sporting events going on which will require lots of cross-border travel.

The Interbus agreement provides for liberalised occasional coach services—holidays, school trips and private tours between contracting parties. As I mentioned in my opening speech, those parties are the European Union and seven eastern European members. We intend to accede to the protocol of the agreement in our right regarding the international regular and special regular carriage of passengers by coach and bus. The protocol to expand the service to regular services is in progress.

The noble Baroness points out that the process has been quite slow. It opened on 16 July 2018. As of 13 March, no contracting parties had signed the protocol. We need only four contracting parties; obviously we will be able to sign it once we become a contracting party. We think we will see other signatories join but, if it is not in place by 31 December, we could either negotiate an extension for regular and special regular passenger services with the EU, which are covered under the current EU regulation, or seek to put bilateral agreements in place. At the moment, we think Interbus is the best solution to provide regular services, but we have options if that is not the case.

On Northern Ireland, the noble and right reverend Lord, Lord Eames, asked about overlap. There is overlap in this. Regulations 4 to 8, which amend the European legislation, extend to the UK, and Regulations 2 and 3, which amend the domestic legislation, extend to Great Britain. The necessary changes to the domestic legislation in Northern Ireland are being introduced through a separate instrument, which is currently being considered by the scrutiny committees. This SI, taken together with the consequential SI for Northern Ireland, will effectively ensure that services can continue to operate. The noble Lord clearly states that they are incredibly important and we must ensure that they continue. That regulation provides a time-limited solution on the basis that we offer reciprocal rights to the EU, which is what this regulation does; taken together, they will allow services to continue. The EU regulation includes the ability for UK operators of regular services to undertake cabotage in the border counties until 30 September 2019. Of course, Northern Ireland operators will be able to operate occasional services into the Republic of Ireland once our membership of Interbus comes into effect.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury), Shadow Minister (Transport) 2:15 pm, 21st March 2019

On 1 January 2020, by which time the EU regulation will have expired, and assuming there are a satisfactory number of signatures to the Interbus agreement, to what extent will the situation for UK operators be different from the situation today?

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

On 1 January 2020, assuming that we have all the signatories that we need and the Interbus agreement is in place, the main issue will be cabotage, as the Interbus agreement does not cover cabotage. UK operators will not be able to provide cabotage in the EU. There would be a separate arrangement for that for Ireland, but UK operators will not be able to do it. There is very limited UK-operator cabotage in the EU; as I said, most journeys go out and come back. However, that is the main implication and the main difference.

Photo of Lord Berkeley Lord Berkeley Labour

Following up on that, I would have thought cabotage was pretty important for coach operators. Does this restriction apply in the other direction for continental operators coming here?

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

This SI allows EU operators to continue cabotage operations. We do not have figures on how much cabotage takes place. The new EU unilateral regulations allow cabotage for regular and special regular services in the Irish border regions until 30 September 2019, when we will have something else in place. However, other cabotage is not permitted and, as I said, the Interbus agreement does not allow cabotage.

There is little exercise of cabotage from UK operators, because services are usually hired for a group of passengers who return to the UK, such as for a school trip or tour. Regular services allow cabotage as part of an international journey, but all current UK-to-mainland-Europe timetabled services, such as Eurolines, are operated by non-UK companies, so they will not be affected by Brexit.

As we have said, cabotage forms an integral part of cross-border bus journeys on the island of Ireland. Such services are incredibly important for remote communities. We recognise that the provision within the legislation proposed by the EU offers a solution, but that solution is based on reciprocity, which is what we are doing through these SIs.

I suppose that one could say that this is an asymmetric agreement at the moment. We are allowing cabotage within the UK, but these things are of a temporary nature. When we join the Interbus agreement and have future discussions with the EU on our relationship—

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

I am sorry to ask this, because I have not been following the debate, but I am interested in the principle just enunciated. There is asymmetry but there is reciprocity. Is one way different from the other?

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

I am not sure that the noble Lord was here for my opening statement where I set that out.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

I am afraid that I was not. Does that mean that I should not intervene?

Noble Lords:


A noble Lord:

No, you are not to intervene.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

All right. I am sorry. I was interested in what has just been said; that is all.

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

I am very happy to explain again that this SI sets out our position in relation to EU operators coming into the UK; there is no restriction on cabotage in that regard. However, the EU regulations restrict cabotage, which is why they are asymmetric. We still need to reciprocate the access, which is what this SI does.

I hope that I have answered most of the questions raised. If I have missed any, I shall follow up in writing. This instrument is needed to allow the continued operation of international bus and coach services in the event of no deal until such time as fully reciprocal arrangements are in place.

Motion agreed.