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House of Lords Hansard
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Department for Transport (Fees) (Amendment) (EU Exit) Regulations 2018
17 October 2018
Volume 793

Considered in Grand Committee

Moved by

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That the Grand Committee do consider the Department for Transport (Fees) (Amendment) (EU Exit) Regulations 2018.

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My Lords, these draft regulations would be made under the powers conferred by the European Union (Withdrawal) Act. They form part of the work being done to adjust our existing legislative framework in readiness for our leaving the European Union. The draft regulations, if approved, will make amendments to three Department for Transport fees orders to correct deficiencies in the orders arising from the withdrawal of the United Kingdom from the EU. This will be done by removing references to the Secretary of State carrying out functions to comply with EU law. Those functions will continue but under domestic law rather than EU law.

The fees orders themselves do not set fees, nor do they amend, raise or lower fees. They set out in secondary legislation the matters that can be taken into account when setting fees for delivery of the functions specified in the orders. For example, for any of the functions prescribed in the orders, account can be take of the proportion of the cost in providing staff, premises, equipment and facilities that are attributable to the carrying out of the relevant function. The actual fees for the functions listed in the orders, such as for driving licences, are contained in other secondary legislation. Generally, before any change can be made to the fee level in that other legislation, the Minister must first have the agreement of the Treasury, then conduct a consultation with representative organisations of those affected and consider the impact on stakeholders. The Minister must take account of that impact in deciding whether to proceed. Only after this process has been followed can the SI to change the fee be laid before Parliament.

The functions contained in the fees orders are all in the areas of road vehicles and drivers. They are carried out by three of the Department for Transport’s executive agencies: the Driver and Vehicle Standards Agency, the Driver and Vehicle Licensing Agency and the Vehicle Certification Agency. The functions that are relevant to the draft regulations are: driver licensing, vehicle registration, international road haulage permitting, vehicle type approval certification, the approval of tachograph calibration centres, international road passenger transport authorisation, licensing to operate public service vehicles, licensing to operate goods vehicles and, lastly, enforcement against UK and non-UK drivers and vehicles that break the law on these matters. The fees orders relate to both EU and domestic law, and the regulations before the Committee are concerned only with amending the EU-related aspects of the orders.

In conclusion, the amendments contained in this instrument are to ensure that the fees orders recognise EU exit but otherwise maintain the status quo. I commend the regulations to the Committee.

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My Lords, I am grateful to the noble Baroness for outlining these regulations with such brevity and clarity. I have a couple of questions, though. As she said, they cover international agreements, driving licences, vehicle registration, public service vehicle operation and licences to operate goods vehicles. I believe we have added licences for trailer operation, or something, which we discussed in some legislation—I cannot remember its name now—a few months ago.

The Minister mentioned non-UK drivers. Does this change mean that the charges are going to go up? Did the European Union previously have any control or oversight or a role in setting these charges? It is always very easy to say that the costs of doing it are going up. There may have been some control or advice from Brussels as to how these things should be assessed and charged.

Lastly, the noble Baroness mentioned that there might be some changes to the licences of non-UK drivers. The impression I get is that licences from other member states will no longer be valid in this country. How do drivers get new licences and are they going to be charged a rate seen by most people to be reasonable—or is it going to be one of these Home Office ones that make you pay £500 to try to dissuade you from coming? I hope it is the former and not the latter. I look forward to the Minister’s comments.

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My Lords, I thank the Minister for her clear explanation. I believe this is the first in a very long line of statutory instruments on transport issues that are directly related to Brexit. I want to express my regret that the time and effort of the Department for Transport is being mopped up in this way when we face so many transport challenges. We would considerably appreciate its efforts being put to another use.

I want to ask a couple of questions that are not unlike those from the noble Lord, Lord Berkeley. I want to start with the Explanatory Memorandum. Paragraph 4.1 says:

“The territorial extent of this instrument is the United Kingdom”.

Then it says that,

“the territorial application is either the United Kingdom, or Great Britain”.

I am concerned about whether the devolved Administrations have been properly and fully consulted. These SIs are really going to annoy and upset the Scottish Government in particular. Therefore, it is particularly important that the Government maintain clear and detailed discussions with them on these things.

In the policy background section in the Explanatory Memorandum, paragraph 7.4 says that fees orders lay out the costs that the Government can take into account when setting fees. Paragraph 7.5 summarises the sorts of things that can be taken into account. They are very logical: driver licensing, vehicle registration, international permits and so on. Paragraph 7.9 then makes it clear that the Department for Transport is responsible for this legislation. It contends that these changes are “minor” and simply recognise Brexit. It says that, as a result:

“Stakeholders will not be impacted”.

I query that statement because, as current fees are not set by the EU but take into account the framework to which the EU has given approval, there are limits and requirements set down by the EU which are taken into account in the costings. After Brexit, surely we will be free to take into account what we wish to when the fees are set. So, just as the Government can vary the level of fees, they can now start taking into account other things. That chimes with the concerns expressed by the noble Lord, Lord Berkeley, that the Government will be freer to change policy on this—to take an attitude which does not only cover costs but makes money, or to use it as a deterrent to people taking up these rights. My argument is that the fees could well change and that it is therefore not accurate to say that there will be no impact on stakeholders. I hope I am wrong and will listen with interest to the Minister’s explanation.

Finally, paragraph 13.1 states:

“The legislation does not apply to activities that are undertaken by small businesses”.

Really? A significant slice of the haulage market is in the hands of small and medium-sized businesses with just a handful of employees. In addition, the haulage industry moves the products of a range of producers and is used to import components, ingredients and so on into this country. This involves both small and large businesses. Surely the Government should have given some consideration to the impact of this on small businesses. My concern is that if the Government decided to charge another £50 it probably would not mean make or break to large haulage businesses—it would be passed on to their customers, of course—but if they start to charge another £50 or £100 to small businesses, it might well make them uncompetitive in an already difficult situation. Our hauliers would be put at a disadvantage internationally, and anything in addition which makes life more difficult for them should be avoided. I would welcome any assurances the Minister can give on this.

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This SI refers to goods vehicle licensing in the UK—or England, Great Britain, whatever—and as about 80% of the trucks crossing the channel are now driven by Romanians or Bulgarians or people from other member states, where the trucks may also be registered, what happens to the licensing of the vehicles from these member states if they come in here? Will they be subject to the same arrangement or is there another arrangement that would require them to be registered? If so, will they have to do that at the frontier and so on? I hope not.

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The noble Lord has found an ingenious way of adding an extra question and I will pass it on to the Minister.

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I thank the Minister for explaining the purpose and content of the SI, which we will not oppose. In the light of concerns that have been expressed about the possible effect on fees in future and other possible impacts, will the Minister gives us some clarification on the consultation? Paragraph 10 of the Explanatory Memorandum states:

“A consultation is not considered necessary as the amendments are minor and technical in nature and do not impact upon either business or the individual”.

Does that mean that there has been literally no consultation, or have some bodies or organisations been consulted? If so, which organisations or bodies have been consulted about this SI and its contents?

As the Minister said, the regulations amend the Department for Transport’s fees orders covering the road traffic field. Fees orders do not set fees but specify functions and their costs which may be taken into account in setting fees. These regulations amend those orders by removing references to the Secretary of State having functions to carry out to comply with EU obligations or requirements on the basis that we are withdrawing from the European Union. Those functions referred to in the fees orders will no longer be carried out under EU legislation but will continue to be carried out by the Secretary of State under domestic law as provided for by the European Union (Withdrawal) Act 2018. As the Minister said, the functions currently carried out by the Secretary of State under EU legislation are those relating to international road haulage permits, type approval certification, tachograph calibration centres, international road passenger transport authorisations, driver licensing, vehicle registration, licences to operate public service vehicles and licences to operate goods vehicles.

The SI relates to a situation where we have withdrawn from the European Union. It would appear that it covers a no-deal situation and our intended departure on 29 March next year. What is the position if there is a deal approved by Parliament and that deal entails a transition period with continued membership of the customs union and/or the single market for an unspecified of time or other provisions that do not provide for a clean break on 29 March next year? What is the need for this SI in that scenario? We may not in reality have withdrawn from the EU because we would still be bound to accept that some or all of its legislation applies to us. We would not be able to alter it unilaterally and we would also be bound by any subsequent amendments made to that legislation by the European Union pending our full withdrawal.

What then would be the relevance of an SI, such as the one we are now considering, coming into effect on 29 March next year, which asserts in paragraph 2.4 of the Explanatory Memorandum:

“The relevant EU related functions specified by the Fees Order will, after EU exit, no longer be carried out in pursuance of EU legislation”,

when, if there is a deal, these functions could have to be, including to the extent, for a possible period of time unknown, that we would also have to abide by EU legislation that was further amended by the EU without our agreement? Would it not be better, with a decision on a deal apparently close, to withdraw this SI and wait until we know whether there is a deal and, if there is, produce an SI which reflects the reality and terms of that deal? It is, after all, not the fault of this House if the Government are having difficulty adhering to their intended timetable for progress in negotiations with the EU, as appears to be the case. It would be helpful if the Minister could spell out what the impact of a deal with a transition period could be on the provisions and relevance of this SI, and whether during the transition period agreements could be reached or arrangements made that could have an impact on the terms and relevance of this SI.

I turn to one other point. The Haulage Permits and Trailer Registration Act gave the Secretary of State the power to introduce regulations to charge fees for international road transport permits if a new permit scheme is required, as UK-issued Community licences will no longer be valid in the EU if we leave unless an agreement is reached otherwise. The Government have previously said that any permit fees would only cover the cost of any new scheme and that the detail on fees would be consulted on later in 2018 when the outcome of the negotiations was clearer. Has the consultation started, or has the lack of clarity at the moment over how the negotiations with the EU will end precluded the commencement of the consultation?

Since an issue of concern is that hauliers or taxpayers will incur additional costs if a new scheme is required, does that not underline the importance of continuing with the Community licensing system? Once again, would it not therefore be better to be discussing this SI once the outcome of the negotiations was clearer and the SI itself could reflect that outcome? The SI is not intended to come into force for another five and a half months, yet we are being asked to agree to it now when it is not clear to what extent we will or will not be continuing to follow EU legislation, including any subsequent amendments to the legislation, after the SI is intended to come into effect on 29 March 2019.

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My Lords, I thank noble Lords for their consideration of these draft regulations. As the noble Baroness said, I am afraid they are the first of many EU exit transport regulations. The purpose of these regulations is indeed to make minor and technical amendments to the three pieces of legislation that we are discussing, by amending the language used to take account of EU exit, but otherwise to maintain the status quo.

As I said in my opening remarks, the regulations themselves do not set, raise or lower fees. The fees orders are supplementary to existing powers that the Secretary of State has in other legislation, and that other legislation sets the fees. The regulations do not in any way extend the powers of the Secretary of State or relate to a change in the fees.

I turn to the questions that were asked. The noble Lord, Lord Berkeley, mentioned the Haulage Permits and Trailer Registration Act, as did the noble Lord, Lord Rosser. We have consulted extensively with the industry on that and we will be discussing the regulations under that Act soon. There is a government response to the consultation, which I will forward to the noble Lord, explaining where we are on fees. We will be discussing that soon.

As I said, the regulations do not set or change the fees themselves but merely set out what can be taken into account, so charges absolutely will not go up. There has been a role for the EU Commission in setting the charges in the past but there will not be after exit.

For the non-UK driver—an issue raised by the noble Lord, Lord Berkeley—EU driving licences will continue to be recognised in the UK post Brexit, as set out in some of our recent technical notices, so the charges for getting a GB driving licence will not change.

On the question of devolved Administrations, which the noble Baroness, Lady Randerson, mentioned, we are working closely with them throughout our entire SI programme—obviously more so on some which are directly relevant than on others, but on every one we are working closely with them. Some of the fees orders’ functions are GB-wide—for example, driving licences, as Northern Ireland has its own regime and its own legislation to set its own fees—while others relate to the whole of the UK.

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The Minister mentioned that driving licences from EU member states will still be valid. That was in the technical note and I should have mentioned it; I am sorry. What about licences for vehicles? Are we involved in quotas and the like? If so, how would that work? Will a Bulgarian vehicle need a licence to operate in the UK?

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That is very much subject to negotiations. We hope to agree a mutually beneficial deal with liberalised access to continue as it is for haulage firms. Bilateral permits exist. In the event of no deal, we will work bilaterally with the countries involved to agree permit systems. We are very keen to pursue continuing the access that we have at the moment, which would be reciprocal. That is what we are working towards.

The noble Baroness is quite right that many of our goods are moved by small businesses and we are reliant on them for that. I agree that an increase in charges would adversely affect them but, as I said, the regulations do not change the fee or regulate businesses. The fee orders determine what the Secretary of State can consider rather than regulate small businesses. That is why it is noted as such.

The noble Lord, Lord Rosser, asked about consultation. We are working closely with all our transport stakeholders on the Brexit regulations. We have spoken to them about all the different SIs. This SI will not affect stakeholders. All it will do is remove the obligation on the Secretary of State to take note of the European Union.

On the impact of a deal, which we are all working hard to achieve, the SI will come into force on exit day, which is defined in the withdrawal Act as 29 March 2019. Ultimately, the coming into force of the SI will depend on the outcome of the EU negotiations and any new legislation arising from that outcome. If the UK reaches a withdrawal agreement with the EU, that agreement is expected to provide for an implementation period. We have announced that in that event, we will introduce to Parliament a European Union withdrawal agreement Bill as a primary means of implementing the agreement. Exit day would remain as 11 pm on 29 March 2019 but the coming into force of the SI may be reviewed and delayed until the end of the implementation period. The SI may not be needed, but it is part of our readiness work, as are the SIs to come, which we strongly believe we should be doing as a responsible Government. Noble Lords are aware of the number of upcoming SIs and the limited parliamentary time, so we will spread them out between now and exit day to get through them. Obviously, if a deal is reached and an implementation period is agreed, that will affect that.

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Can the Minister say something about what is said in the regulations under “Citation and commencement”? She said that the regulations will come into force on exit day. We have been told repeatedly by the Government that we will exit the European Union on 29 March next year, but I sense from what she just said—I am sure that she will correct me if I am wrong—that the reference to exit day may not apply to 29 March 2019 if a deal is done, so the Government accept that we may not withdraw from the European Union on that day. Is that the Government’s position?

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As I said, exit day will remain 11 pm on 29 March 2019. When this SI comes into force is currently defined in the withdrawal Act but should a deal be reached where we get a withdrawal agreement, the implementation day of the instrument could change through the subsequent Bill that the Government will bring forward to implement the withdrawal agreement in UK law.

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I am not sure whether the Minister has responded to my point, but I asked whether there was any possibility that during the transition period, agreements could be reached or arrangements made that could have an impact on the terms and relevance of the SI. Is it the Government’s position that even if there is a transition period, nothing will happen then that could have an impact on the relevance of anything in this statutory instrument?

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The expectation is that with the withdrawal agreement we will have an implementation period. During that period we would be covered by current EU laws and therefore this secondary legislation would not come into effect. Obviously I cannot give a guarantee of that because we do not yet know the outcome regarding the withdrawal agreement and it has yet to pass through Parliament, but the expectation is that during the implementation period we would continue as we are and the SI would not come into force until the date agreed through the withdrawal agreement Bill that will be coming through the House.

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Is the Government’s position that in any discussions during the transition period nothing would be agreed that might have an impact upon the relevance of this SI and necessitate it being altered, other than its effective date?

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I am afraid I am not able to give a definitive answer to the noble Lord’s question. As I said, we have yet to agree a transition or implementation period with the EU. As we do not know those terms, I am not able to answer the question. However, our expectation is that throughout that period we will continue as we are so this SI would not come into effect until a date set out in the EU withdrawal agreement Bill.

I take the noble Lord’s point that the negotiations and discussions on that agreement are ongoing, and the outcome of that may of course affect what we do in future. However, due to the number of regulations that will have to be discussed in order to ensure that our statute books are fit for 29 March should we not reach an agreement, we think it is the responsible thing to do to keep going with this programme and start these discussions between now and exit day.

I reiterate that the detail around the delivery of the specified functions and the prescription of the fees that can be charged for delivery are set out in other legislation. Making this proposed instrument would merely enable the continuation of the current fee-setting process by removing references to the EU after we leave, so things would absolutely continue as they are.

Motion agreed.

Committee adjourned at 6.37 pm.