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Carriage Of Goods By Road

Volume 14: debated on Tuesday 8 December 1981

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10.28 pm

I beg to move,

That this House takes note of European Community Documents Nos. 9675/81 and 4632/79, and of the Department f Transport Supplementary Memorandum of 21st March 1980 on Document No. 4632/79, and welcomes the Government's intention of pressing for further liberalisation of European road haulage, and of ensuring that any increase in road haulage quotas takes account of United Kingdom requirements.
The House turns now to the subject of international road haulage, and particularly the road haulage interests of this country which are vital to our trade, especially that with Continental and Western Europe. The arrangements upon which this Community document bear are those by which hauliers carry goods between European countries. The foremost concern of the House is obviously about the arrangements that enable British hauliers to take our goods to Europe and to bring back exports from Europe.

Our arrangements are dominated by the fact that most, if not all, European countries place a limit on the number of journeys that can be made by foreign lorries through their territories. The result is that we must make arrangements whereby those limits imposed by other countries do not have too adverse an effect upon our hauliers. We issue permits to British hauliers who wish to trade internationally. Those permits are, of necessity, limited by any quotas imposed upon us by other countries. We try to negotiate appropriate quotas with the countries concerned to give our hauliers access to the markets that they require.

Unfortunately, because of the policy of some Western European countries in recent years—but not only Western European countries—the permits available for allocation by the British Government are not always adequate for the needs of our international road hauliers. They can sometimes have a damaging effect upon our road haulage industry and can restrain the growth of its trade and its ability to carry goods across the Channel. It can sometimes inhibit the development of small firms. It also means that the Department of Transport is sometimes involved in rather difficult discussions about how to ration the allocation of permits in accordance with the quotas that we have negotiated with our friends abroad.

We reach satisfactory arrangements with most countries. However, in 1981, because we did not have enough permits to issue to our hauliers, a rationing system had to be introduced for France, Italy, West Germany, Portugal and, at one stage, Yugoslavia.

It is obvious from the brief description that I have given of a system no doubt familiar to many hon. Members—because they have constituency problems arising out of the permit arrangements—that the British interest, upon which I hope that the House is agreed, lies in increases in the quotas that allow permits to be issued to British hauliers to enter the rest of Europe. That has always been in the British interest. Successive Governments have pressed upon our neighbours and friends the need to liberalise trade and to reduce what we believed to be unnecessary restrictions on the ability of our hauliers to take part in international trade.

Not every country takes the same view. The national interests of European countries generally tend to be determined, in part at least, by not only political outlook but geography. We are, as most hon. Members who are familiar with the map of Western Europe will realise, on the edge of the Continent. Therefore, our interest lies in getting trade into and out of the rest of Europe. The other countries of Central Europe find that much traffic merely wishes to pass through their territory. They take what is known as transit trade, which involves the lorries of other countries entering at one border and leaving at another and merely passing through the territory. Understandably, they take a less expansive view of the need for the growth of that traffic.

The result is that, as we are not a transit country to anywhere—except to a limited extent to the Republic of Ireland—countries such as Britain, Holland, Eire and Greece believe that the quotas should be eased, while other countries such as Germany, Austria and those in Central Europe tend to be more cautious about liberalisation.

The arrangements that I have described clearly involve Britain in negotiations with those countries that inhibit trade. Most, if not all, do, but the Benelux countries impose no restrictions. Most of our international road haulage—95 per cent. of it—is governed by bilateral agreements with other countries. Those agreements vary in form, but normally the permits that we can issue to British hauliers prohibit or severely restrict what is known as third country traffic. For instance, a lorry registered in Britain may not pick up goods in France for delivery in Germany. It may not pick up goods in any second country for delivery to a third.

Furthermore, a haulier on a trip involving several countries often must obtain from us a bilateral permit for each country, which poses difficulties if permits are in short supply from some of the countries along the proposed route. The remaining 5 per cent. that is not covered by bilateral agreements is covered largely by the Community quota that we have agreed with our Community partners.

The Community quota system was set up on a permanent basis in 1976 after an experimental period which started in 1969. Although the permits are not large in number and account for only a small proportion of our international road haulage, the Community permits have certain advantages. Holders of permits issued under this quota may make unlimited journeys in any one year, so long as they are using one vehicle at a time, between any two points in the Community so long as the two points are in separate States. For instance, a British haulier can take a load from London to Paris and then take a different load from Paris to Munich. On the other hand, a British haulier could not take a load from London to Paris and then a load from Paris to Marseilles because he would not be allowed to take part in internal trade inside France. Community permits are more attractive but very limited in number.

When the system was introduced, the intention was of a kind which was predictable, given the principles which underlie the Treaty of Rome and the European Community. It was that the Community quota system would eventually lead to freedom for haulage throughout the Community. Each year the possibility of increasing it in that direction is examined. Progress is, however, slow, and the total Community quota still consists of only 3,827 permits, of which the United Kingdom share is 418. One reason why this Community document was recommended for debate by the Scrutiny Committee was, as the Committee explained, that it was very concerned about the slow progress which is being made in increasing the Community road haulage quota.

The Minister has said that the eventual aim is to allow liberalisation and freedom of movement. That would be a splendid idea, but how does this coincide with the statement in the regulations and the several statements in the Community that the aim is not liberalisation and freedom but the allocation of quotas which would align supply and demand and fix prices, which is basically a Socialist solution?

The Commission probably shares the long-term British aims that I have described. I am describing the original intention when the quota arrangements were introduced. I agree with my hon. Friend that the aim should be liberalisation of road haulage throughout the Community. The Commission proposals are modest because of the great difficulty in getting political agreement on that throughout the Community. There have been difficulties because of the problems I explained when I began—that other countries' interests do not coincide with our own. The result is that the Commission proposals which we have before us are, unfortunately, from the British point of view, modest. On the other hand, they are probably realistic.

It is the intention of the British Government to support the key Commission proposal, which is for an increase of 20 per cent. Certainly the Government's position will be to seek as great an increase as we are able to obtain at the forthcoming Council of Ministers.

Out of, I think, 8,000 permits, why is the British quota only 400, or one-twentieth? That seems to be a very small proportion.

The division of permits is based on history and where they started from, which is not the responsibility of the present Government in our negotiations. But one of the problems that arises is the question of the share, so long as the quota is limited, and again the British Government have an interest, in which I hope that the whole House will support us, in pressing for the right basis for increasing that share.

If the right hon. Gentleman wishes to intervene on this matter, perhaps I may finish the point first.

As regards the basis on which the share is made, in the early days of our membership of the Community, increases in the quota for each member State were made—I shall keep using jargon phrases throughout my speech; it is inevitable with Community documents of any kind—based on what is known as the linear system. That meant, for instance, that a 25 per cent. increase in the total quota, meant a 25 per cent. increase in the number of permits available to each country. In 1978 and 1979, however, a new arrangement was introduced. I think that it was resisted, but there was reluctant acquiescence by the previous Government. Half of each country's increase was linked to that country's average use of permits in terms of tonne kilometres the previous year. Any arrangement of that sort works against the United Kingdom. Our problem vis-à-vis Western Europe is the time that is taken to cross the sea, which reduces our hauliers' possible usage of the permits. I understand that the previous Labour Government opposed that arrangement in negotiations and this Government have continued to oppose it. We wish to revert to the linear arrangement so that any increase is shared out exactly between all countries.

Last year the issue did not arise, because Germany and Italy blocked any increase in the Community quota. I expect hon. Members to argue that the share should be fairer and that the move should be towards liberalisation. However, we have to be left free in the Council of Ministers to negotiate a realistic political compromise. The Government hope that we shall do better than last year when two other countries successfully blocked any increase in the quota.

I understand that 400 permits have been allocated to the United Kingdom. What is the corresponding figure for France?

I might be able to produce that information when I reply later. It is a substantive motion and I understand that I am entitled to reply. Certainly the number of permits for France is substantially greater than that for the United Kingdom. It is no part of my role to defend the existing division. The right hon. Member for Battersea, North (Mr. Jay) has underlined the need for any increase in the quota system to be determined on a fair basis for the United Kingdom.

The hon. and learned Gentleman has referred to the 400 permits for the United Kingdom and to other permits that are less "liberal". Is he satisfied with the method of distribution within the United Kingdom? Hon. Members will have received complaints from certain hauliers to the effect that they are unhappy about the way in which the system originated and in which it is perpetuated. The EEC system of permits inevitably means that they have to be distributed in the United Kingdom by means of a system that is linked to our domestic arrangements.

The hon. Gentleman's intervention has given me an opportunity to find the quota for France. In 1980–81 France was given 627 permits, whereas the United Kingdom was given 418. France had 16·7 per cent. of the total Community quota and the United Kingdom had 11·1 per cent., which was a slight move in the wrong direction for us, given the arrangements that we agreed in 1978. Although France is much larger geographically than the United Kingdom, it has a population and an economic activity that are remarkably similar to ours.

As I have said, the very existence of these policies is something of which the Government by no means approve. Quota restrictions do not always meet the demands of British hauliers. It is necessary for us to operate a permit system and to ration the permits between the hauliers who require them. Any system of rationing is regarded as satisfactory by those who receive permits and unsatisfactory by those who do not.

We receive a flood of complaints about the arrangements which are operated by the Department's office in Newcastle, which have been agreed by the Road Haulage Association Ltd., the Freight Transport Association and representatives of road haulage interests. I face repeated complaints and representations from hon. Members and constituents, but I feel that the arrangements are fair and reasonable. It is an area in which a great deal of mythology has sprung up about how they are operated. Every aggrieved haulier seems to believe the countless stories about how they are obtained in various ways. If there are specific complaints that hon. Members wish to make, I shall move into that aspect of the allocation of permits and seek to take up the matter when I reply.

Is the Minister satisfied that there is some way of ensuring that when licences are not required in one part of the country, or are handed in, the information is made available to other areas so that hauliers who have been waiting for permits can take up unused ones?

There are often allegations that people hold permits and do not use them, but they tend not to be substantiated. Once permits are surrendered or a firm ceases to operate an international business, the permits are reclaimed for the pool by the office at Newcastle and we follow agreed procedures for allocating them to new applicants. All those difficulties flow inevitably from the restrictive policies of our neighbours which enforce a rationing system on us.

If the House wishes, I can give details later on how we allocate the Community quota permits. We adopt a different system from that adopted for bilateral permits, because our negotiating position with the Community is different from the negotiating position with France and Germany. If we favour any British hauliers it is those that are proposing to use permits in a way that will reduce the resistance of recipient countries to issuing us more permits.

I am grateful to my hon. and learned Friend for giving way again. The previous Secretary of State worked hard, with my hon. and learned Friend's help, to acquire more permits; and MEPs, particularly the Conservatives on the transport committee, including Mr. Robert Moreland and others, worked hard in support of that objective. It is cynical to blame the system. The skilled bargaining that my hon. and learned Friend and the previous Secretary of State have conducted has achieved great advances.

My right hon. Friend the previous Secretary of State and I lost no opportunity to press on other member States the need to increase the quota, and the present Secretary of State is following that policy vigorously. At first, we achieved an increase in the Community quota, but all increases were blocked in 1980. To be fair to the German Government, I should say that we achieved a desirable concession from them in the early days of our term of office and the then Minister of Transport in Germany provided a generous increase in the German quota. It remains a difficult and uphill battle.

I agree that the European Parliament is an important forum. It discussed the Commission document recently, and the British proposals were strongly supported by the Conservative MEPs. It is essential to get their agreement before any changes in the quota can come about. I think that our colleagues can carry a majority in the Parliament.

Returning to the proposal before the House, it is to be on the agenda of the Council of Ministers on 15 December and one purpose of our debate is to judge the mood of the House to confirm the Government's negotiating position at the Council. Our negotiating position will be that there should be an increase in the EEC quota and that it should be on a basis that is fair to this country.

The Commission has proposed an overall increase of 20 per cent. for 1982. If we could achieve that or anything like it, the House would have to accept that it was satisfactory for Britain. The Commission also proposes a complex new formula for distribution between member States. It takes into account not only previous usage, but total exports by road and the distance of the applicant country from the national geographical centre of the Community, which is taken to be Frankfurt.

Under that formula the United Kingdom's increase would amount to only 12·7 per cent., because insufficient weight is given to the distance factor and undue emphasis is given to our low volume of exports by road.

The Government's attitude to the proposals is that we share the Scrutiny Committee's concern about the slowness of progress in increasing the multilateral quota. At meetings in Brussels we have consistently pressed for faster growth, but we continue to face difficulties and a lack of enthusiasm from other countries.

It is daunting to find that countries that are accustomed to accusing the British of being non-communautaire on other aspects of policy give a very non-communautaire response on road haulage. I approve of a communautaire view being taken on many questions, and I find such responses particularly galling. The House, at least on this occasion, is agreed that liberalisation should underlie membership of the Community. We shall continue to seek significant annual increases, but we must be realistic about our chances of rapid advance, and we must recognise the position of our Community partners.

The British Government are not satisfied with the Commission's proposal for allocating the increase between member States. In our opinion the weight given to geographical distance is insufficient to compensate for the lost usage that we suffer because of our need to make sea crossings for all our trade. We are not opposed in principle to any formula, but the United Kingdom favours, and will press for, a straight percentage increase for each member State this year. However, the House must face the fact that in recent years it has not always been possible to secure that, and a compromise may be necessary. Therefore, I assure the House that the Government will seek the best possible terms for the United Kingdom, but in the end we may have to bear it in mind that to have some increase on less than the perfect basis would be better than to have a repeat of 1980, when we had no increase.

I do not want to labour this point excessively this evening, as it will be laboured heavily tomorrow. One reason why we can only demonstrate low usage—measured in tonne/kilometres—of our permits is that our United Kingdom weight limits for road haulage are lower than those of nearly all the other member States. The Government's proposed increase to 40 tonnes would therefore improve matters in that area as well as enable all hauliers to carry an additional 25 per cent. pay load for negligible extra cost. That is yet another benefit to the haulage industry of the United Kingdom as a whole.

I deliberately trail my coat on the issue, knowing that there will be a debate at greater length tomorrow. Given that when they read my words hon. Members will find that what I say is incontrovertible, tomorrow there should be not so much derision but more substantiated evidence for the sweeping dismissal of the claims that heavier lorry weights without bigger lorries would improve the terms of trade from the British point of view with Western Europe, in a considerable number of ways. I am content to leave the battle for tomorrow, although hon. Members will probably touch on it tonight.

With regard to the immediate problem, I hope that the House can at least tonight have a completely non-partisan and entirely United Kingdom approach to the proposals. The British interest is totally clear. We shall press for it at the Council of Ministers.

The House will not wish to limit our negotiating freedom by an absolute commitment to one particular course of action in Brussels, so long as it welcomes the general policy lines that I have outlined. From the point of view of the hauliers and the British economy, any increase in the quota would be welcome. The House can rest assured that the Government will do their utmost to secure the most favourable terms possible.

Finally, I shall say a few words about the other documents that are down for debate. They relate to the liberalisation of own account traffic, which is lorry traffic carried by producers in their own fleets. That is a less important matter, because it was negotiated and brought into effect over 12 months ago. Freeing that traffic from the need for permits has made life much easier for own account operators. It has also benefited hire and reward hauliers because more bilateral permits are now available for their use, as the own account people do not need to apply for the permits. That represents a small but significant step towards the removal of operating restrictions on road haulage within the Community.

The British Government hope that they can carry on making steps in that direction. If we are to have a common and open market throughout the Community, we should remove unreasonable restrictions on trade. That involves the removal of unreasonable restrictions on the transport of our goods. I hope that the British interests will be improved as a result of our forthcoming negotiations.

10.54 pm

I hope that the House will be highly sympathetic to the Under-Secretary. We have rarely seen a man so firmly hoist with his own petard. He has argued with great passion in all the debates on the road haulage industry in the House since he took office that we should have nothing to do with quantity licensing, but he is now charged with the task of suggesting on behalf of the Government that his right hon. Friend the Secretary of State should be given a free negotiating brief encouraged by the House to go to the Council of Ministers and argue for an improvement in a tight licensing quota system to be run by the Community.

The motion refers to two very different Community documents. As the Minister said, one totally frees own account operators from quota restrictions. The other, which relates to hire-and-reward operators, applies the tightest of quotas and restrictions. They are so tight that they cover only about 5 per cent. of international road haulage in the EEC.

The latter is a binding, directly applicable regulation to control the number of authorisations issued by the Community to each member State for the carriage of goods by road between EEC countries. It should be seen as a further step to transfer the control of the capacity of international road freight transport in the Community from the bilateral agreements between member States to the EEC quota system.

I also have sympathy with the hon. Member for Southend, East (Mr. Taylor). Like me, he cannot find a great deal of evidence in Community memoranda to support the idea that the Commission intends to liberalise European road haulage. On the contrary, in the document there is a lot to suggest that the Commission wants to go in a different direction.

The document states that in operating the quotas the Commission wishes to balance supply and demand, as it judges it to exist, to avoid excess capacity in the transport industry and to stop cut-throat competition. It wishes to introduce a market analysis system which would enable the Council of Ministers, year by year, to adjust the quota, so that it relates not only to the capacity that can be offered by the road haulage industry but to the capacity that can be offered by the canals and inland waterways to transport and the railway system.

Is not that wholly consistent with Common Market plans for organising steel and agriculture, which involve bureaucratic assessment of markets, big protection and a great deal of red tape, all of which are basically akin to Socialism? Therefore, why on earth is the Labour Party against the Common Market and why the blazes is the Conservative Party for it?

My argument is not with the hon. Gentleman but with the Government's policy. In so far as the Community has regard for varying modes in the development of the transport system, that is attractive to Socialists. However, I wish to deal with other matters more directly related to the proposal than what will be done in the long run.

A further aim stated in the document is that the Commission wishes to relate the sophisticated supply-demand calculation that it hopes to make when it has the benefit of the market analysis not only to the capacity of the railways, waterways and the road haulage system but to the potential for those types of traffic, which is a highly sophisticated planning operation.

We should perhaps clarify what side we are all on. The motion invites the House not only to take note of the Commission document but to welcome the Government's policy of liberalisation. We are not asking the House to approve or to welcome the Commission document. Indeed, as the right hon. Gentleman said, our policy is inconsistent with that of the Commission document, which we wish to change in a direction which I believe that on this occasion my hon. Friend the Member for Southend, East (Mr. Taylor) would approve.

Is the right hon. Gentleman saying that he actually approves of the Commission document but opposes the Government's wish to move in a slightly different direction, although our policy is clearly in the interests of the British road haulage industry?

No, I am not saying that I in any way approve of the Commission document. I merely seek to make it clear—I think that I have done so with reasonable success—that there is no suggestion in the Commission's own document that it will listen with a sympathetic ear to any Minister who goes to it at this stage asking it to change the quota system so as to liberalise European road haulage. Indeed, a great deal in the Commission document points the other way.

The Government are asking the House to give them a negotiating brief to go to the Council of Ministers and try to negotiate some liberalisation of European road haulage under the quota system. That is what the debate is about. for one am glad that we have the chance to debate the matter before the Council of Ministers makes a decision on it. Incidentally, I do not think that the House had a chance to debate the other instrument referred to in the motion, which I should have thought would be a matter of considerable significance, particularly to hon. Members who believe in the liberalisation of European road haulage. So far as I know, that was put into effect without any hon. Member being able to give a view.

It is absolutely clear that, whatever else the Commission believes in and however it wishes to operate the quota system, there is much in its approach to suggest that if it has its way this will be a fairly carefully planned operation. United Kingdom experience of the quota system so far has not been very happy, as the Under-Secretary of State fairly pointed out. In 1973, we had only 99 out of 1,378 authorisations. In 1980, we had only 418 out of 3,751. Last year, there was no increase at all as I understand that the West German Government were entirely opposed to a straight percentage increase in the number of authorisations issued. I believe that an increase of about 25 per cent. was being proposed.

The Commission, faced with the blocking of the proposal by one member Government, has therefore developed another formula. I shall not go into it in depth, as the Under-Secretary of State described it very fairly. It rests on two components. Half is based on the linear increase, which is pro rata to the number of authorisations already held, and half is based upon the degree of use that a country has been able to achieve with the authorisations previously granted.

Both those elements will militate against United Kingdom interests—the first because we start with a small number of authorisations, and the second for a number of reasons, some of which the Under-Secretary of State has already mentioned. A major disadvantage is that British lorries going to or returning from the Community spend some time on boats crossing the North sea or the Channel, thus not clocking up a very fast rate of tonne-kilometres to prove their great use of authorisation.

The formula proposed in the directive therefore means that the United Kingdom and Ireland, both being in the same position in as much as lorries must be taken across the sea, will receive 53 and 43 authorisations respectively, whereas Italy will receive 85, Denmark 87, Belgium 102 and West Germany 125. It is agreed in the House that we as a country shall fare badly if the proposal goes ahead, particularly if we approve the Government's line of liberalisation.

How shall we deal with the matter? We should like that decision to be taken by the House tonight. Would it be better if we were comletely to reject this directive? I believe that that is the way in which to deal with the matter. If we give in and tell the Government to do what they can to obtain liberalisation, but in the end we are only
"taking note" of the motion, the Government will have to decide and the House will not be on the record as having rejected the proposition.
The position is still one in which the United Kingdom can, to a considerable extent, look after the interests of its international road haulage by negotiation of the bilateral arrrangements. At present, only 5 per cent. of journeys are covered by Community quotas and if the directive is agreed to, the percentage would rise by only 7 per cent. or 8 per cent. The overwhelming majority of journeys are made under the bilateral arrangements, some of which are in accord with the Government's intention.

Our bilateral arrangements in Luxembourg, Belgium, Holland and Denmark impose no quantity licensing whatever. They have a quality licensing requirement under which we respect their technical requirements on our vehicles entering their countries, and they respect our technical requirements when their lorries enter our country. For those four countries the Government's aim is better achieved by staying with the bilaterial arrangements.

There are only three countries in which there is any appreciable problem with the quantity licence—France, Italy and West Germany. Even with West Germany it has been possible, under bilateral negotiations, to have over 14,000 single-journey authorisations, in Italy over 40,000 and in France over 50,000 authorisations. It would be better—even from the Government's standpoint, which is not necessarily our standpoint—for the Government, if they cannot get the Community to drop this directive and go for one that gives a fairer share, to reject any agreement on this type of directive.

It would be helpful to have an extension of the co-operative quota system that enables a United Kingdom haulier to arrange a return journey for a haulier from another EEC country and in return receive a permit so that he can make a return journey from another Community country. At least that would make for efficient use of lorries, which, again, is part of the Government's policy.

The own-account operations directive is an entirely different proposition and I do not understand how the Government can logically couple the two in the motion. The former provides for a total liberalisation of own-account activities and we do not need to endorse or reject it because it is already in operation.

If the Government want to make progress on EEC lorry quotas, they might attempt successfully to have the matter placed in the framework of the tripartite discussions of the Community—the discussions between Government and employers' and union representatives. Whatever differences the employers have in international transport, they have some understanding and expertise of what happens when lorries cross borders. That is not automatically the prerogative of Government. They both have an interest in the businesses surviving, particularly when a number of transport companies are either going bankrupt or in grave financial difficulties.

At present there is an excess of road and rail capacity in the Community, so this is not the best time to be discussing the extension. There is probably spare rail capacity of about 15 per cent. to 25 per cent. which, if used, would considerably benefit the Community. In those circumstances, the EEC would be better engaged in promoting harmonisation of transport, rather than the liberalisation of one mode of transport.

We have to decide whether it would be right for the Secretary of State for Transport to negotiate on liberalisation under the quota system with a free hand. In my opinion, that would not be right. The view of the House would be better expressed if we rejected this draft EEC legislation. The House is agreed, I think, that the formula it embodies is unfair as between the countries of the EEC, and that it works against United Kingdom interests, even more than did the previous formula. For those reasons, I believe that the House should reject the legislation.

11.11 pm

The Minister introduced this debate in a very delightful way, and we all enjoyed his speech. However, I am sure that he will agree that what we are doing tonight shows the nonsense of dealing with Community issues in the House of Commons. We are being asked to take note, first, of something that has happened, and, secondly, to call for liberalisation in a measure which is designed to move away from liberalisation.

In calling for liberalisation, we are calling for something which is totally inconsistent with the whole principle of the draft directive. In this directive, which relates to 5 per cent. of the number of quotas given for vehicles moving across Community borders in the international market, we are considering a move away from the bilateral agreements towards a Common Market share-out of these authorisations.

The reason is given in the Community document. It says:
"The Community authorisation … has undeniable advantages compared with bilateral authorisations, as regards both consistency with the principles of the Treaty of Rome and the rational and efficient organisation of the international carriage of goods".
I put three questions to the Minister. First, how can he say that this is a move towards liberalisation, when the principle set out in the draft directive is for bureaucrats to make an assessment of the supply and demand, the potential supply and demand, what can be carried by waterways, railways and transport, and having done that, to make a statement or a decision on the number of lorries which should be allowed, and how many should be given to each country? Surely that was the principle contained in the old Barbara Castle Transport Act, which we in the Conservative Party fought day and night. Is it not the principle whereby a bureaucratic assessment is made of what the market can bear and then there is a carve-up by bureaucrats and other so-called experts?

It is exactly the same principle that we are seeking to arrange for the steel industry, whereby bureaucrats will assess production and demand, and then decide what the prices should be. It is the same principle as was set out in Lord George-Brown's national plan. Surely, it is the principle on which all Socialist arrangements are based.

I am not worried about the motion. It is a silly motion. If carried it would have no effect. Moreover, it would not have any effect if we rejected it. Once the Minister has taken action, it is done, it is binding on the House, and there is nothing that we can do about it.

It worries me that while we have a splendid Conservative Government, who are courageously adopting Conservative principles, trying to introduce more free enterprise and competition, and to move away from bureaucracy, we are moving in the opposite direction by accepting such Common Market plans and arrangements. Last night, we had an example of that when a few hon. Members debated an order on employment law that was contrary to all the principles that the Government put forward. Paragraph 4 of the Community document states:
"For the Community quota to help achieve the aim of aligning supply with demand in the transport sector, the capacity put on the market for the international carriage of goods by road under Community authorisations must not purely and simply supplement that already authorised by bilateral agreements, but must form part of a broader context enabling the two systems to be linked".
In other words, an assessment of supply and demand is to be made. Who should make such assessments? The Minister knows that eventually the Council of Ministers will take advice from the Commission and from the Common Market bureaucracy.

What is meant by the references to price-fixing on page 6, subparagraph (c), which is entitled:
"Trend in freight rates on traffic links between the Member States"?
The subparagraph sets out a price-fixing arrangement whereby the movement of goods between the six original member States is based on an arranged price. It states:
"Rates outside this bracket are tolerated if agreed to under special contracts meeting specific conditions".
In other words, the Community wishes to move further toward such price-fixing arrangements. They will be fixed by the industries and bureaucracies concerned.

The Minister's heart is in the right place, but, given what has happened before and what is happening now, does he not think that we are being trapped into moving step by step towards a system in which our major industries—and eventually our whole conomy—will be enmeshed by a series of Socialist Euro-wide plans that will be bureaucratic and against all that the Conservative Party stands for? When applied, they will distinctly damage the United Kingdom.

I think that the Minister accepts that point. He said that Britain had come out badly from all the previous arrangements and from dividing up the various licences available. The Commission document proposes a 20 per cent. increase in the total number of permissions but that Britain should get only a 12 per cent increase. That is in addition to an arrangement that is already very unfair to Britain. We are constantly being told about the increase in our trade with the Common Market, although, of course, that includes oil. However, trade in manufactures show an adverse trend. For example, last year we had a deficit with Germany of over £2,000 million in manufactures, which is about double our trade deficit in manufactures with Japan, which the Foreign Secretary told us cost us tens of thousands of jobs.

All the evidence shows that whenever we move away from bilateral agreements towards a Common Market plan, we come out worst. Britain gets a raw deal. Even the Euro-fanatics will agree that Britain gets a bad deal from the common agricultural policy, compared with other member States. As regards the plans for steel, Mr. MacGregor will certainly be successful in cutting his losses. He is doing so by means of Euro steel increases, by closing capacity and by having Euro steel inspectors rushing round the country to ensure that steelworks do not increase their productivity and so produce more than the Common Market allows. Shortly, the same will apply to farming and inspectors will ensure that our farmers do not produce too much. Just as such introductions have been made to steel and agriculture, I fear that we are moving step by step towards a Common Market agreement under which Britain will get far too low a share.

On the liberalisation measure affecting "C" licences, there is an agreement which our old friends, Italy and France, do not like. They have refused to exclude owner transport from the United Kingdom's bilateral quotas with them. There has been this splendid liberalisation but France and Italy have applied a special caveat that will damage existing bilateral agreements with this country.

I am not criticising the Minister, who is one of the best Conservatives in the Government and who believes in Conservative principles. I wonder if he cannot combine with some of his sensible colleagues to ensure that we do riot become more deeply involved in this Common Market business. The more that that happens, the more we become involved in Socialist planning and arrangements that are damaging to this country. The Minister, who accepts, I believe, that the effects will be damaging, says that there will be a 20 per cent. increase in the number of special permissions. My hon. and learned Friend says that 12½ per cent. is not good enough and that we should get the same as other countries but that room must be allowed to negotiate. I am sure that the Minister will negotiate hard and fast and do his best for Britain. Even my hon. and learned Friend accepts, however, that the best that can be achieved is that which applies in other countries.

I should like Department of Industry and other Ministers to consider this matter seriously. I recognise all their efforts on behalf of Conservatism, freedom and competition and all the spendid work of the Chancellor of the Exchequer which may not be received well outside but which will help Britain in the long term. All this is undermined, step by step, by our further enmeshment in the Common Market. The effects can be seen in the common agricultural policy, a bureaucratic, Socialist arrangement that will work against the interests of our farmers, although they have benefited until now by the price increases. The same will happen in the steel industry and again, increasingly, in road haulage.

The Minister is a decent guy, an honest man and a good Conservative. Although my remarks will not have the slightest effect immediately on Government policy, I hope that I have laid the seed in the minds of the Minister and some of his sensible colleagues that these measures are not only damaging to our country but totally opposed to Conservative principles for which all are trying to fight—[Interruption.]—and which I believe will work. However, in what is a dangerous situation, we find ourselves supporting Socialist policies that are crazy while the Labour Party, for no apparent reason, opposes the policies that it would like to apply in Britain.

There has been a great historical accident. Just as the Conservatives were hooked on devolution and began to wonder how the blazes we became involved, we now have a similar situation in which we are hooked increasingly in a Common Market that is wholly opposed to all that we stand for. Again, by an historical accident, the Labour Party is on the wrong side. In the state of flux that exists in British politics, all those who are confused are finding their way into the Liberal-SDP alliance. I hope that there can be a great re-think, perhaps privately behind closed doors, to get the parties on the right side of this absurd argument.

11.23 pm

I look forward to the day when the exchange of parties to their right sides advocated by the hon. Member for Southend, East (Mr. Taylor) drives the last right-thinking Englishman into the arms of the Liberal-Social Democratic alliance. I have been concerned about the problems of road hauliers in my constituency over the existing permit system. Those problems persist despite the alleged over-capacity. Situations arise where a haulier finds that he cannot get a permit but discovers through trade sources that permits are available in other parts of the country. This is difficult for hauliers to understand. It is especially galling when hauliers are trying to assist local firms exporting heavily into the Common Market.

The Jus-Rol frozen food company in my constituency exports extensively to Germany and uses local hauliers. Its practice has not been to operate on an own account basis but to use local hauliers to carry its goods. Several other local concerns export items such as frozen food and knitwear into the Common Market and want to give business to local hauliers only to find that they are asked to take hauliers from East Anglia and other parts of the country because permits are available there but are not available in their own part of the country. I press upon the Minister the need to improve the way in which the distribution of permits is organised. I also press for more permits.

The only logical course seem to be to support the Government in their desire to increase the number of Community permits available for use by British hauliers. I was fascinated by the argument by the hon. Member for Southend, East because he implied that if we were not a member of the European Community the problem would disappear and we should not have to seek permits to take our heavy lorries into other European countries. The contrary is true. The European Community would still be there, but it would lack the influence of British Ministers, of whatever party, and it would be going even further down the path of bureaucratic control and organisation. It would have a permit system and would not offer its permits to British hauliers.

Even if the Community did not exist, the countries to which we take our vehicles would be there, would be operating permit systems and have their own reasons for restricting heavy lorry traffic on their roads. None of that would go away.

Does the hon. Gentleman accept that if the EEC sends, as it does, about £2,000 million worth more of manufactured goods into the United Kingdom than we send to it, we are in an ideal position to negotiate good bilateral agreements, as we did before?

The hon. Gentleman's assumptions about what would happen if Britain left the Community are absolute hooey. The idea that we could develop a vastly superior trading position by trying to operate outside the tariff wall is absurd. It is absurd to base speculations on that wholly mistaken assumption. If we were not members of the Community, our task would be no easier when negotiating arrangements for our haulier to export to the Community. It would be a great deal harder.

The hon. Member put his finger on the dilemma that faces the Labour Opposition. Why are they inviting us to vote against the Government's motion? I listened with fascination to the careful argument advanced by the right hon. Member for Barrow-in-Furness (Mr. Booth), who said that the Minister would not be able to achieve greater liberalisation because the burden of the documents was against greater liberalisation. He ended his speech by saying that greater liberalisation was not what he wanted. He said that he wanted greater harmonisation. He was trying to have it both ways. He argued that the Minister would not be able to achieve his declared objections but that he did not have much sympathy with those declared objectives anyway.

The right hon. Gentleman should grasp with enthusiasm the determination to follow what the hon. Member for Southend, East regards as Socialist measures. I am not sure that I can regard harmonisation as an objective that the Government should pursue. Harmonisation is a disease in the European Community.

The Community should examine the balance between its transport policies and ways in which it can encourage the use of rail and inland waterways. I do not disagree with the Germans in their desire to put road vehicles on to trains for long trips through Germany. It is a reasonable objective to put some traffic onto rail so that it completes its journey by road. Liberalisation of the permit system is required. I support the Government in seeking to achieve that.

11.28 pm

I agree with every word that the hon. Member for Berwick-upon-Tweed (Mr. Beith) said. In view of all the political movements discussed, I must say that there is no question of me seeking to join the Social Democratic and Liberal alliance. That is the end of that. I also agree with my hon. Friend the Member for Southend, East (Mr. Taylor), who said kind things about our mutual belief in Conservatism and who seemed to expound a policy for international transport which coincides with the views of the hon. Member for Berwick-upon-Tweed, the majority of hon. Members and myself.

We should prefer arrangements which involve no restrictions on road haulage going to Europe. Some of the more difficult countries are not in the EEC. Trying to get our lorries into Austria and Yugoslavia is sometimes very difficult. Portugal is by no means always forthcoming either. We regret these national quotas, which are restrictions on international trade, and we regret the need to have any such arrangement. In an ideal world there should be free entry for lorries into all European countries, with no quantity licensing but with the strictest quality licensing to make sure that safety is observed and that overloading is not permitted.

I therefore entirely agree with my hon. Friend the Member for Southend, East that the Commission document falls short of that desirable policy that he and I would like followed. I take a different view from my hon. Friend on the whole question of membership of the Community, but I am certainly not blind to its faults, and I feel that to go far down the road indicated by a great deal of the document would be undesirable. That is why the Government are inviting the House only to take note of the document. That is the Commission proposal that will be on the table and upon which the discussions of the Council of Ministers at their forthcoming meeting will be founded.

The reason why the Government go on to invite the House to approve our desire to liberalise is that the one way in which liberalisation can be carried out to the benefit of the British road haulage industry is at least by increasing the number of permits available to it under the quota system for so long as that lasts. We propose to press for that. We propose to press in so far as we can get near to it in the negotiations, for an increase on a linear basis—an equal percentage for all member States—avoiding these tortuous so-called economic analyses which lead to the rather curious conclusions in the formula that is proposed for the Council. I hope that most hon. Members will agree that we should take note of the document—there has to be a Commission proposal for any discussion to take place—and will then welcome the policy that the Government will pursue at the forthcoming meeting.

The Commission may make its proposal, but, of course, as right hon. and hon. Gentlemen know, the Commission is not the decision-making body in the Community. It is not a question, as the right hon. Member for Barrow-in-Furness (Mr. Booth) said, of trying to get the Commission to abandon all this. The discussion will take place at the Council of Ministers, and it will be the representatives of the Governments of the 10 member States who will have to reach a conclusion. In those negotiations we shall press for the more liberal approach that I believe will benefit this country.

That makes my position clear. It is, I suppose, distinct from that of the right hon. Member for Barrow-in-Furness, although his policy was not altogether clear. I accept that he was short of time, and that he was not given quite the opportunity, in a restrained debate, to explain in full. However, it was surprising to hear such a stout anti-European urging the harmonisation of transport in this area, when two pro-Europeans such as the hon. Member for Berwick upon Tweed (Mr. Beith) and myself feel great suspicion about the need for harmonisation in this and many other subjects. Also, I do not have a clue what harmonisation of transport would mean in the EEC, where there is a wide range of policies.

I move on to the one serious point made by the right hon. Gentleman that troubles me; it was also made by my hon. Friend the Member for Southend, East. It concerns the effect of rejection of the motion tonight. My understanding—perhaps we should make this clear so that other member States know the negotiating position of the Government and the wish of the House—is that right hon. and hon. Members will be voting against the motion not because they do not want an increase in the number of permits for British hauliers, but because they disapprove of the details of the Commission document.

However, the motion invites the House only to take note of that document. Voting against the motion—and, by implication, against the document and the policy of liberalisation—would leave the Government to go to the Council of Ministers with no negotiating mandate to do anything to alleviate the problems of the British road haulage industry. That is a state of affairs that no right hon. or hon. Member should welcome.

The fears of my hon. Friend the Member for Southend, East may be based on whether our position represents a move away from bilateral quotas. It most definitely does not, as I began by saying. Community quotas represent only 5 per cent. of our international road haulage. We regard the Cummunity quotas as being in addition to bilateral quotas in so far as we can negotiate them.

There is no question of our agreeing to anything in the forthcoming Council that would involve an increase in Community quotas and thereby a reduction in bilateral quotas. Given the state of the economy and the road haulage industry, and the need to maintain and increase the employment of many of our hauliers who want to engage in international trade, we have to press for an increase in the quotas we have. Even the recent tiny proposal that Britain should be given six extra permits was rejected by the European Conference of Ministers of Transport. That includes Ministers from the EEC and the rest of Europe. On that occasion the proposal was rejected by the Yugoslays and Austrians, who effectively blackballed the attempt.

We need to achieve as great an increase as we can but there is no question of one area being developed at the expense of the other. The position I ask the House to approve is that we should go to the negotiations with some flexibility, because we cannot dictate to our partners—we must negotiate. In the end we cannot make progress if they decide to block us.

I would like to feel that the Government were free to negotiate the maximum increase they can in the Community quota and to do so on a basis that as near as possible matches the legitimate requirements of this country. I quite accept that that is not the formula as laid down in the Commission document. I hope that at the Council we can negotiate, if not a linear increase, a formula less harmful to our interests.

That is the purpose of the motion, upon which I hope there will be no vote. If hon. Members choose to vote I hope that it will not be misunderstood by our partners, because there are some interests in Western Europe that might like to leap at the opportunity of saying that the people in Britain do not want an increase. That view has not been expressed here.

All that we are interested in is how best and how quickly we can get the kind of increase to which we all believe British road haulage is entitled.

Question put:

The House divided: Ayes 99, Noes 56.

Division No. 19]

[11.36 pm

AYES

Alexander, RichardFarr, John
Ancram, MichaelFletcher-Cooke, Sir Charles
Atkinson, David (B'm'th,E)Forman, Nigel
Beaumont-Dark, AnthonyGarel-Jones, Tristan
Beith, A.J.Gorst, John
Berry, Hon AnthonyGow, Ian
Biggs-Davison, Sir JohnGriffiths, Peter Portsm'th N)
Boscawen, Hon RobertGummer, John Selwyn
Bright, GrahamHamilton, Hon A.
Brinton, TimHawkins, Paul
Brooke, Hon PeterHawksley, Warren
Brown, Michael (Brigg&Sc'n)Heddle, John
Bruce-Gardyne, JohnHogg, Hon Douglas (Gr'th'm)
Budgen, NickHunt, David (Wirral)
Bulmer, EsmondJopling, Rt Hon Michael
Butcher JohnLee, John
Cadbury, JocelynLester, Jim (Beeston)
Carlisle, John (Luton West)Lloyd, Peter (Fareham)
Carlisle, Kenneth (Lincoln)Macfarlane, Neil
Clarke, Kenneth (Rushcliffe)MacGregor, John
Cockeram, EricMcNair-Wilson, M.(N'bury)
Cranborne, ViscountMajor, John
Dover, DenshoreMarlow, Antony
Dunn, Robert (Dartford)Mather, Carol
Edwards, Rt Hon N. (P'broke)Maxwell-Hyslop, Robin
Fairgrieve, Sir RussellMills, Iain (Meriden)

Moate, RogerSkeet, T. H. H.
Montgomery, FergusSmith, Cyril (Rochdale)
Morrison, Hon C. (Devizes)Speed, Keith
Murphy, ChristopherSpeller, Tony
Myles, DavidSproat, Iain
Neale, GerrardStanbrook, Ivor
Nelson, AnthonySteel, Rt Hon David
Neubert, MichaelStevens, Martin
Newton, TonyStradling Thomas, J.
Normanton, TomTaylor, Teddy (S'end E)
Onslow, CranleyThompson, Donald
Page, Richard (SW Herts)Viggers, Peter
Parris, MatthewWaddington, David
Patten, Christopher (Bath)Ward, John
Penhaligon, DavidWarren, Kenneth
Percival, Sir IanWatson, John
Proctor, K. HarveyWells, Bowen
Renton, TimWheeler, John
Rhodes James, RobertWickenden, Keith
Rhys Williams, Sir BrandonWilkinson, John
Roberts, M. (Cardiff NW)Wolfson, Mark
Ross, Stephen (Isle of Wight)
Rossi, HughTellers for the Ayes:
Sainsbury, Hon TimothyMr. John Cope
Shaw, Giles (Pudsey)and Mr. Ian Lang.
Shepherd, Colin (Hereford)

NOES

Adams, AllenHaynes, Frank
Barnett, Guy (Greenwich)Home Robertson, John
Bennett, Andrew(St'kp'tN)Homewood, William
Booth, Rt Hon AlbertHooley, Frank
Callaghan, Jim (Midd't'n&P)Hoyle, Douglas
Campbell-Savours, DaleHughes, Robert (Aberdeen N)
Cocks, Rt Hon M. (B'stol S)Jay, Rt Hon, Douglas
Cowans, HarryJones, Dan (Burnley)
Craigen, J. M. (G'gow, M'hill)Lestor, Miss Joan
Crowther, StanLitherland, Robert
Cryer, BobMcCartney, Hugh
Cunliffe, LawrenceMcKay, Allen (Penistone)
Cunningham, Dr J. (W'h'n,)Miller, Dr M.S.(E Kilbride)
Dalyell, TamOakes, Rt Hon Gordon
Davidson, ArthurParry, Robert
Dayis, T. (B'ham, Stechf'd)Powell, Raymond (Ogmore)
Deakins, EricPrescott, John
Dean, Joseph (Leeds West)Robertson, George
Dormand, JackSever, John
Dubs, AlfredSkinner, Dennis
Duffy, A. E. P.Snape, Peter
Eastham, KenSpearing, Nigel
Edwards, R. (W'hampt'n S E)Stoddart, David
Evans, John (Newton)Stott, Roger
Fletcher, Ted(Darlington)Walker, Rt Hon H.(D'caster)
Foulkes, GeorgeWelsh, Michael
George, Bruce
Gilbert, Rt Hon Dr JohnTellers for the Noes:
Hardy, PeterMr. James Hamilton and
Harrison, Rt Hon WalterMr. George Morton.

Question accordingly agreed to.

Resolved,

That this House takes note of European Community Documents Nos. 9675/81 and 4632/79, and of the Department of Transport Supplementary Memorandum of 21st March 1980 on Document No. 4632/79, and welcomes the Government's intention of pressing for further liberalisation of European road haulage, and of ensuring that any increase in road haulage quotas takes account of United Kingdom requirements.