Motion to Take Note
My Lords, the report was published in May 2019 based on an inquiry by the EU Internal Market Sub-Committee. The majority of our evidence was taken between July and November 2018 in the run-up to the publication of the outline political declaration and Mrs May’s draft withdrawal agreement. It all now sounds like ancient history so this report might be seen as a bit out of date and hardly worth bothering your Lordships with at this stage. The problem is that the questions asked by the committee in the report, which reflected the concerns of the transport sectors, still have not been answered. Even in recent days, it has been made clear by the road haulage sector, in particular, that it still does not consider that it has received satisfactory answers as to the Government’s intention.
Perhaps I should explain that this was my last report as chair of the sub-committee; the noble Baroness, Lady Donaghy, took over from me in grand style. We will hear from her shortly. Also, the EU Internal Market Sub-Committee ceased to exist after the restructure earlier this year. The noble Baroness, Lady Donaghy, now chairs the EU Services Sub-Committee, but much of the transport brief is in the hands of the EU Goods Sub-Committee, chaired by the noble Baroness, Lady Verma. It was a great experience chairing the former sub-committee. I extend my thanks to the members for all their important contributions to this and other reports; above all, I thank the staff, particularly Rosanna Barry and Francesca D’Urzo, who put in heroic efforts on this and earlier reports.
However, we are now 20 months on. The report itself is a bit bifurcated. Although our evidence was clearly focused on what we felt was needed for a full-scale transport aspect for a free trade deal, the subsequent failure to find a Commons majority in support of the then Government’s Brexit deal meant that we had to concentrate also on increased preparations for no deal. We now have a serious case of déjà vu. The reality is that we—and, crucially, those working in and reliant on our cross-border transport sector—are in much the same place: waiting for clarity on the kind of arrangements we will have with the EU while simultaneously preparing for the possibility that there will be no arrangements at all.
Indeed, the Road Haulage Association made this precise point in paragraph 56 of the report. It said:
“If we find ourselves here again in two years’ time, looking at a situation where we are leaving but we do not know what customs arrangements we will have and what the permits are for road haulage, we will be in the same position as we are in now.”
Only last week, after a meeting between the haulage industry and Michael Gove, the Road Haulage Association said that there has been “no clarity” on how border checks will operate once the transition period ends after December. The Freight Transport Association expressed similar frustrations.
The report addresses not only road haulage but also bus and coach travel, private drivers, vehicle standards, rail and maritime transport. I will address each of these modes in turn and then put some questions to the Minister.
I turn first to road haulage. The EU has a liberalised single market framework for cross-border road haulage. Operators with a community licence may transport goods across, between and within other member states. Therefore, a haulier from one member state moving goods entirely within another is known as cabotage. The transport of goods between two member states by a non-resident haulier is known as cross trade. This is all made possible by the community licence system, which, of course, the UK will now be outside. The Government told us that 43% of international trips by UK hauliers involve an element of cross trade, cabotage or both. That said, UK hauliers are only part of the story: the EU and particular member states also have interests in aspects of UK cabotage and cross trade arrangements, and a trade-off between these interests in a future haulage agreement could benefit both sides—but we are nowhere near that.
The Minister said that we are looking for reciprocal arrangements, but we know that there are quite serious differences between the two sides. The UK negotiating position suggests that both sides should be entitled to provide services to, from and through each other’s territories with no quantitative restrictions. However, the EU negotiating position on open market access for road freight transport is that UK hauliers should not be granted the same level of rights and benefits as those enjoyed by EU hauliers in respect of cross trade and cabotage. Clearly, any form of reciprocity, even if we get an agreement, is not going to be the same as “carry on as usual”. Without an agreement on UK-EU haulage arrangements, hauliers moving between the UK and EU would need to rely on the European Conference of Ministers of Transport—ECMT—permits, which are much more restrictive and very limited in number or, possibly, on the revival of historic bilateral agreements from individual member states.
Therefore, what can the Minister tell us about how much progress has been made in the negotiations or other arrangements for road haulage? Does the Minister agree that if no deal is found, the number of available ECMT permits will be vastly outstripped by demand from UK-based hauliers? Is it true that demand exceeds likely supply by at least four to one? Can and will this shortfall be addressed by other arrangements? When we faced the possibility of no deal, the EU had agreed a short-term contingency arrangement that would operate for a period of months. Is that contingency arrangement still on the table or do we have a new one? If not, do the Government intend to revive historic bilateral haulage agreements with individual member states, or is some other multilateral form of conference envisaged? Even if there were an agreement on no tariffs between the UK and the EU, and no quantitative restrictions, the EU would require new administrative procedures and there would be checks at our ports. Last week, after their meeting with Ministers, the RHA and the FTA claimed that the proposed electronic system will be ready to be put into operation from January. Can the Minister tell us whether that is true?
We have to face facts: extra checks and regulatory procedures will cause delays. What is the Minister’s current assumption about the slow-down of traffic through Dover and the effects of back-up and long traffic jams on Kent roads? The Government clearly anticipate this log-jam. Can the Minister tell us how much new lorry parking space is demarcated in Kent and back to the M25? Is it true that a designated Covid test centre near Ebbsfleet has just been requisitioned for a lorry park?
Of course, we must recognise that this is not a matter for just the road haulage sector. The whole of our food supply sector, the manufacturing industry’s dependence on integrated component transfer between different countries, and the supply of medicines and chemicals are all largely dependent on the just-in-time delivery ability of our road haulage sector. Therefore, there are a lot of questions on road haulage, none of which seem to have been answered effectively.
Briefly, on the bus and coach transport aspects, the UK’s accession to the Interbus agreement—a multilateral treaty for passenger transport, which includes the EU—would, for the most part, ensure the continuation of cross-channel ships without any great difficulty. However, it is currently limited to one-off, occasional journeys such as coach holidays or school trips and does not include regular, scheduled services or transit through non-contracting parties, such as Switzerland. The limitations of the Interbus agreement will have a particularly critical impact on the island of Ireland. The Government’s negotiating intention seems to be to secure continued connectivity for commercial passenger transport, but it is also clear that Monsieur Barnier’s mandate only affects the use of Interbus. Will the Minister tell us whether cross-channel bus and coach transport is likely to be limited to arrangements under the Interbus agreement? Has any further progress been made on the extension of Interbus to include regular and special regular services?
There is also the issue of private motorists, which does not seem to be covered in the Government’s negotiating document, issued last February. EU arrangements provide for the mutual recognition of driving licences and drivers from EU member states, so that they do not need to carry proof of third-party insurance cover or have any other requirements while driving in the EU. Without similar successor arrangements, UK drivers wishing to drive in the EU will need to carry an international driving permit and a green card as proof of insurance. Do the Government expect to reach an agreement with the EU on mutual recognition of driving licences? On the insurance side, will the Minister confirm whether the UK will be part of the green card-free circulation as of 1 January 2021?
We also touched on the issue of vehicle standards. The Government’s negotiating objectives speak of type approvals based on UN regulations as well as co-operation mechanisms to address regulatory barriers. Can the Minister clarify whether the Government seek to achieve mutual recognition of type approval for whole vehicles, and, if so, whether this objective is shared by the EU?
On rail, the Government’s negotiating document makes no mention of it. Indeed, it was made clear from the outset that there would be no comprehensive rail agreement with the EU: instead, a bilateral approach would be taken with Ireland, France, Belgium and the Netherlands to maintain existing international services. Will the Minister tell us how that is going? Can we be assured that the necessary bilateral arrangements will be in place by 1 January? While the Government’s approach to the implications of Brexit for the rail industry focuses on the maintenance of cross-border passenger and freight services, our report sets out that our rail industry’s interactions with the EU are more wide-ranging. Indeed, UK and EU operators, manufacturers and drivers access each other’s markets to mutual benefit. Witnesses told us that south of Derby, almost half of the rail supply industry workforce is from the EU. Therefore, do the Government see any need for maintaining mutual market access for operators, manufacturers and drivers beyond what can be achieved through a limited number of bilateral agreements? At this point, I note—slightly more positively—that while the UK has been active in the development of common standards in the rail sector, this was one area where the inquiry witnesses saw some potential opportunities for divergence from the EU which would meet more local conditions on our domestic routes.
Turning to maritime issues, maritime is, of course, largely liberalised and dependent on international standards. However, we were struck by the failure to mention the European Maritime Safety Agency in the Government’s position, despite the fact that that was one of the objectives agreed to in the political declaration. The more recent negotiating agreement makes no reference to the EMSA co-operation. Can the Minister confirm that the necessary preparations have taken place for UK authorities to have access to safety, security and environmental information formerly provided by EMSA when we pass beyond 1 January?
We devoted a significant part of our report to the situation on the island of Ireland. That has now been overtaken by the bigger, controversial issues relating to movements across the border and between Great Britain and Northern Ireland, so I will not go into that in great detail today except to emphasise that one of the most detrimental effects of Brexit will be on the Republic of Ireland. We need to ensure that those relationships with our nearest neighbour are dealt with properly. Do the Government think that they will reach an agreement specific to Irish trade with the EU or will we have another bilateral agreement with the Irish Republic?
In summary, we have inched toward a bit of an understanding of what some aspects of UK-EU service transport will look like in just over three months’ time. However, the industry itself says that that is not enough. Our hauliers in particular, and those who rely on cross-border bus services, are in the dark. My final question for the Minister is: if a free trade agreement with the EU does not emerge—which will now have to be by the end of October—will the earlier contingency arrangements that were proposed by the EU operate for a few months? In other words, are we not faced with an immediate cliff edge? If they do not operate, do the Government intend to put in place any contingency measures themselves to buffer the market access and to ensure some smoothness of transfer into the EU, which will benefit not only our haulage industry but much of our manufacturing and food-supply sectors? I beg to move.
My Lords, this debate, as the noble Lord, Lord Whitty, said, is very late. The report from the Committee of which he was a member is old, and the Government’s observations attached to the report are out of date. They date from the time that Ministers thought that leaving the EU would be pain-free. Now we must face fast-approaching reality. We want to know the latest information on the current state of the negotiations. Separately, we need the latest intelligence on how the new arrangements, whatever are, will affect people.
I will deal with the easy bits first. Will train travellers via the Channel Tunnel be separated as they get on and off their trains from people travelling to and from Europe on EU passports? Will passengers arriving either by air or sea have to occupy separate channels to those with British passports—whether they be red or blue—and other EU travellers? Have arrangements been put in hand to cater for the logistical problems that this will cause in terminals? We presume that passengers arriving by air and sea will be dealt with in the same way as passengers arriving by rail.
The noble Lord, Lord Whitty, has said that shipping will not be affected, but in fact a great deal of shipping is short-sea shipping. The thing that matters most is that the lorries that come and go on the ferries and the lift-on/lift-off containers are turned around very swiftly. If they are not, the economics of running the short-sea crossings—specialised in Dover, but also affecting other ports—will be very difficult to manage and very much more expensive. Unless those lorries come off and on almost simultaneously, as they do at present, more ships and more port facilities will be needed.
What about traffic arriving by lorry? What arrangements are being made? That is what the noble Lord, Lord Whitty, pressed. The hauliers, who, almost to a man, were probably supporters of the Government on Brexit, are in the dark as to what will happen. Are we to have massive lorry parks? Whereabouts will they be? Will they be a permanent feature of our landscape? Will planning consent be needed for them and will local authorities be involved in granting it? Will they grow into freight villages? If they have servicing, sleeping, refreshment and other facilities they will become small towns. Who will pay for them? It is normal in transport for an operator to pay for his own terminal facilities. However, the lorry drivers who use these new facilities should pay something towards the cost of providing them. Who will control the inevitable crime that will surround such areas? They will be targets for criminals of all descriptions, whether those smuggling people or goods.
I fear the Minister will have to answer so many questions in this debate that I will not go on listing them, because the noble Lord, Lord Whitty, has done that very comprehensively. However, unless there are answers, and quickly, as well as coronavirus we will have food shortages in our shops.
My Lords, as one would expect from the EU Committee, containing so many distinguished members with considerable experience of these matters, this is an authoritative report. Of course, as has been pointed out, it is now two years old and a great deal has happened since then.
I will speak relatively briefly on road and maritime matters. On road haulage, it seems that there are two outstanding problems that I read about. I read that a group of eight logistics organisations wrote to the Government recently expressing concerns about IT systems and paperwork, as well as about keeping the supply chain going. Personally, I think that they exaggerated the concerns about food shortages. That is nonsense. Do your Lordships remember about two years ago, when the Opposition demanded a statement about the food catastrophe that we would not be able to get iceberg lettuces from Spain? “So what?” I thought, “They are tasteless rubbish in any case”. The supermarkets brought them from California instead. There will not be shortages of food, but we may not get strawberries from Morocco in December as easily as before.
The media and too many politicians believe that trade happens because politicians and Governments make it happen. Not so; trade happens because there are people wanting to buy things and people wanting to sell them those things. We have seen how Covid-19 has changed the way businesses have managed to get round obstacles to acquire and sell goods. Do we seriously expect French cheese sellers not to find a way to get their products to the UK as speedily as possible, or for our retailers not to similarly find new suppliers and new delivery routes? The same goes for all EU food manufacturers and suppliers, so let us not exaggerate the dangers of food shortages.
As for new routes, can the Minister update us on the progress being made on enhancing alternative ports for import and export in addition to Dover? As for the IT problem, I simply do not know—I suspect that most of us do not—but I look forward to the Minister reassuring us on that point.
Finally on road haulage, I turn to the question of Brussels’s refusal to grant British truckers wide-ranging access to the EU. Britain wants truckers to be able to continue picking up and dropping off goods inside and between EU countries. I understand that we also want transit rights for drivers crossing to places such as Turkey. In return, I understand that we have offered the right for EU trucks to travel to Ireland via the UK. I would like the Minister to update us on those discussions as well.
Surely we have a very strong hand to demand reciprocal rights. The vast majority of Irish/EU trade goes through Holyhead, with only a small amount directly moved between the Republic and EU countries. Quite simply, if the EU does not permit our truckers to pick up return loads in EU countries, it will suffer more if we refuse to let its truckers do the same on journeys to Ireland. I hope that the new Minister, my noble friend Lord Frost, will make that threat abundantly clear, in the nicest possible way, and that he will also point out that we have no intention of doing it unilaterally, so the EU should sensibly play ball here.
Turning to maritime, it was refreshing to read the committee’s report showing that the UK is in an excellent position and that maritime transport is largely regulated by international rules, not the dead, bureaucratic hand of the EU. Every day in coming to this House I see the wonderful International Maritime Organization building on the other side of Lambeth Bridge, which is a symbol of the UK’s leading role in maritime matters and rule-making.
The report of the noble Lord, Lord Whitty, quotes the Government’s White Paper:
“The maritime sector is liberalised at a global level. On that basis, UK ship operators will be able to serve EU ports largely as now, following the UK’s withdrawal from the EU.”
The report goes on to say:
“Maritime transport is generally liberalised and underpinned by an extensive body of international law. Post-Brexit, UK and EU ship operators will in most respects be able to access each other’s ports as at present.”
However, the report raises concerns about cabotage—mentioned by the noble Lord, Lord Whitty—which is regulated at EU level, and says that some companies could be affected. Can the Minister confirm how much that would be on a worst-case scenario and how many companies would be affected? I read somewhere that it would be very few, as it is a small part of our business.
Surely any losses in that area can be more than compensated for if we push ahead with free ports. I am a huge supporter of free ports, and I quote the International Trade Secretary Liz Truss, who said:
“Freedoms transformed London’s Docklands in the 1980s, and freeports will do the same for towns and cities across the UK. They will onshore enterprise and manufacturing as the gateway to our future prosperity, creating thousands of jobs.”
Supporting this claim, the construction group Mace says that free ports could help create 150,000 new jobs, while annually contributing £9 billion to the UK economy. I understand that the British Ports Association has joined forces with a number of organisations—the Port of Milford Haven, the Port of Tyne and the Institute of Export and International Trade—to create a new trade campaign called Port Zones UK. In September, the alliance published a report outlining a number of areas of intervention the Government should look into if they want to attract international investment as part of their free port programme. The study also promotes
“regional growth centred on key UK transport hubs, through the designation of enhanced ‘Enterprise, Development and Free Trade Zones’.”
In conclusion, can the Minister comment on the progress we are making in pushing ahead with free ports, and does she agree that the jobs created and money invested would far outweigh any losses caused by cabotage?
I commend the Government on the robust stance we are taking on negotiations with the EU and all the excellent preparations being made for a no deal, and I look forward to hearing from the Minister.
My Lords, I am pleased to take part in this debate on a report on which we worked very hard. It gives me the opportunity to pay tribute to my noble friend Lord Whitty, who chaired the EU Internal Market Sub-Committee, and to the staff, who had an enormous quantity of evidence to sift through. My noble friend is a hard act to follow, and I believe that the report’s recommendations remain valid 16 months after its publication. We spent equal time on all the important areas—not least the impact on the Northern Ireland economy, as my noble friend said.
I will say a little about private motoring but will concentrate mainly on road haulage. On private motoring, can the Minister say whether there is any progress on achieving—as my noble friend Lord Whitty asked—the green-card-free circulation area? Also, in the Government’s response to the report, they stated that the Department for Transport was “progressing” bilaterals on driving licence recognition. How much progress has been made and how many bilaterals have been pencilled in, even if not formally signed? Thirdly, do we have any figures showing demand for international driving permits and whether the Post Office route has led to problems?
We know how important road haulage is to the lifeblood of our economy. The CBI indicated that there is more roll-on roll-off lorry movement between the UK and the EU through major ports each year than there are container ships to and from the UK and the rest of the world. Using the Department for Transport’s statistics, the CBI said:
“The consequences of no deal for the haulage sector will ripple through the economy, not least for food and drink trade, with food products accounting for 15% of all commodities exported via road and 36% of imports.”
The Freight Transport Association says that the average haulier operates on a 2% profit margin, so any costs arising from no deal with be passed on to its customers.
In the Government’s response to our report, dated July last year, the then Minister, Chris Grayling, talked about the new exit date of 31 October and referred to the preparations still being in place for the original 29 March leaving date. Apart from another new date of 31 December 2020, we have had two new Conservative Administrations and one or two new Transport Ministers. I do not think that the 16-month gap will have led to many changes. The negotiations are still ongoing, with road haulage still a point of friction.
I accept that the Covid-19 pandemic has further complicated the task. Nevertheless, I have a few questions for the Minister as to whether there have been any changes since our report was published. The Government understandably want a deal, seeking reciprocal arrangements that are “as frictionless as possible”. It is stated that a permit scheme was “not our preferred position”. Has there been any progress in this area?
Recommendation 6 of the report indicated that we did not consider a cabotage agreement essential to the UK, apart from the separate issue of Northern Ireland. However, given the figures for some east European countries, the UK must have some leverage in this area, as those countries will want to protect their interests. I would be interested in the Minister’s comments on that as negotiating leverage. If there is no agreement on cross trade or cabotage, what help will the Government give UK hauliers to adapt their businesses?
Recommendation 5 indicated that some sectors or operators might be more badly affected by no deal. However, the Government were unable at the time to identify those areas. Are we any clearer about these sectors and operators? The Government referred to
“the main effect being an adjustment in how hauliers operate.”
What assistance, if any, will they receive for that adjustment?
Recommendation 7 refers to the possibility of
“a limited, shared allocation for cabotage and cross-trade journeys”,
and thought this “might provide a model” for the future. Does the Minister agree? How burdensome might it be?
Recommendation 8 refers to
“social standards and conditions of employment.”
“The limited benefits of regulatory divergence are unlikely to outweigh the opportunities of greater market access.”
The Government’s response referred to
“how EU regulation may develop in future.”
Surely the Government do not expect to future-proof any deal? I know of few negotiated deals anywhere that achieve that.
Referring to the ECMT permits—I apologise for the jargon; it stands for the European Conference of Ministers of Transport—the demand vastly outstrips supply. The Government accept that these would be additional to other market access arrangements and are not sufficient on their own, and said that they do not intend to rely on such permits. The Government say that they are working with the industry on “practicalities”. What are those practicalities?
On bilateral agreements, the Government are—quite rightly—concentrating on an EU-level arrangement. However, the Government’s response says
“where existing bilateral agreements revive on exit”.
It sounds a bit like Sleeping Beauty, does it not? Can we know what these revivals on exit will be?
Finally, I want to ask the Minister for an update—as did the noble Lord, Lord Bradshaw, and my noble friend Lord Whitty—on the position of lorry parks and other contingencies in Kent, both from the road haulage point of view and regarding the environment for the citizens of Kent.
We owe an enormous debt of gratitude to road hauliers for helping to keep the UK fed and provided for during the Covid-19 pandemic. I speak as someone whose late uncle was a lorry driver, as were my two brothers-in-law, who are now retired. My stepson is still a lorry driver. I hope very much that the Minister can give us some more concrete information. I must say, I am doubtful, but nevertheless I welcome any information since the publication of this report.
My Lords, it is a pleasure to follow the noble Baroness, Lady Donaghy, who always speaks with great authority. I also thank the noble Lord, Lord Whitty, and his sub-committee for such a well-considered and wide-ranging report. Despite being of some vintage, it is still very relevant, in that the issues that it raises have largely not been addressed so far, for reasons that may be in part understandable.
The various aspects of transport considered in depth are of central importance in the life of the United Kingdom as a great trading nation—and indeed as a great travelling nation, as we no doubt will become again as we succeed in negotiating the challenges of Covid. I hope that the Minister will be able to set out the general context of our discussions with our European neighbours, in relation not just to transport issues but to progress in negotiations overall because this clearly has an effect on the nation’s mood and on all the issues that we are looking at today and many others. I hope that she will also be able to say something specifically about health protection in Europe. While that is not a transport issue as such, it clearly affects our haulage drivers and travellers. The GOV.UK website says, quite correctly, that the European health insurance card is valid until the end of this calendar year but goes on to say about travelling to Europe from 1 January 2021:
“Your EHIC might not be valid ... Buy travel insurance that comes with healthcare cover before you travel.”
I wonder what the latest is. It is important for UK hauliers and travellers that we know the position, and in plenty of time for those who will travel in 2021.
The same applies, perhaps without the same urgency in that very obvious sense, in relation to roaming charges, which are also important for context setting. I know that there is no change in the transition period, but is the Minister able to give us an update on roaming charges? Will they return after the transition period? I appreciate that some phone companies have said that they will not for them, but are we succeeding in negotiating a position on this across all the countries of the EU? She may be able to set out the current scenario with precision. If not, I hope that she will write to me, copy that to other Members who contribute to the debate and place a copy in the Library. Those issues are backdrops to transport; they are not directly transport issues but of course are vital for travellers.
I will move to transport issues, and specifically those relating to road transport: road haulage, bus and coach and private motoring. As was noted by the noble Lord, Lord Whitty, there is lack of clarity on road haulage, which is the dominant form of freight transport in the United Kingdom. The vital nature of arrangements to preserve EU-UK market access for hauliers is undoubted, so where are we on this? The community licence system looks as though it will be lost, but is some suitable alternative being pursued and what is the likelihood of that being successful? As has been noted, the European Conference of Ministers of Transport permits are limited and unlikely to meet demand. Can the Minister confirm that that is not our preferred option and that we are focusing on some new licence system across the EU rather than the specific number of permits, which seems very much against British interests? Bilateral agreements may be an alternative, but clearly they are more clunky and clumsy than the previous more streamlined system.
Like others, including the noble Baroness, Lady Donaghy, and the noble Lord, Lord Whitty, I express concern about potential delays for immigration and customs controls and the consequences that that might have for Dover and Kent and, indeed, for Holyhead. I wonder what arrangements are in place and what are our best estimates of likely delays, lorry parks and the consequences if we have no agreement. News on that and on the position of the Government in preparation for that would also be welcome from the Minister.
On bus and coach travel, I note that we are proceeding on the basis of seeking to maintain UK-EU services, which would clearly be of great benefit. The difficulty with the Interbus arrangement is that it currently applies in relation to occasional services only, not regular or special regular services. Can the Minister confirm that we are seeking to extend the Interbus application with the EU states and the other states, largely in eastern Europe, which are also signatories and what is the likelihood of that to at least make things somewhat more palatable if we are unable to get a wider arrangement? Of course, it would still not apply to third-party countries, including countries such as Switzerland, so it is very much second best, but some update on that would be useful.
Turning finally to private motoring, again, it would be good to have an update from the Minister on whether we are able to escape to a more pervasive, mutual system from the international driving permit and green card insurance systems because they involve a visit to the post office, which is not always convenient, particularly for people who are not necessarily resident in the UK. What about the possibility of an online system to substitute for the post office system? Once again, it is clearly not the most desirable system.
Overall, confining my remarks to the road side of things, I wonder whether the Minister can give us an update and some indication of the likelihood of agreements to prevent what clearly is not desirable. A no-deal position is not what the Government want, I know, and is not what the country needs, particularly at present. If she were able to give us some reassurance and some indication of what arrangements are being made if that should happen—which we do not want—I would be most grateful.
My Lords, I join the congratulations to the noble Lord, Lord Whitty, and all members of the committee for this excellent report. Yes, time has marched on, but there seems to be little development that negates their excellent work and the contribution that they have made. I will ask the Minister a couple of questions for when she sums up. I very much associate myself with the comments of my noble friend Lord Bourne on roaming and mobile phone costs. I have pre-empted this personally by purchasing a SIM card that is valid in Denmark; in fact, I do not think that it is valid over here. That is my way of getting round the mobile phone charges that may come into effect.
I will refer briefly to work that relates more to road freight than to road passenger transport. The EU sub-committee on which I sit had cause to undertake an inquiry and look closely at the Irish border and the Northern Irish-Irish freight issue. I know that the noble Baroness, Lady Ritchie, is affected by it. It will have a huge impact on agri-foods. Equally, as we heard from the noble Lord, Lord Whitty, in presenting the findings of the report today, passenger transport—whether private or bus and coach—across the Irish border will be impacted if no deal is in place, so an update from the Minister on that would be particularly helpful.
On vehicle standards, paragraph 118 states:
“For vehicles to be registered, sold and enter into service, they must be type-approved by a recognised authority.”
Can the Minister assure us that we will be in a position where future arrangements will be covered by mutual recognition for type-approval? If that were not the case, it would obviously mean that two separate approvals would be required for vehicles entering the UK and the EU. That would have cost implications for manufacturers that would inevitably be passed on to consumers. I support the Government’s intention to seek mutual recognition for type-approvals for a mutually beneficial arrangement. As paragraph 118 says
“there is no exact precedent for such a regime”
so I hope that my noble friend will have good news on that.
I want to say a bit about cabotage and cross trade as it relates to lorries—road haulage—buses and sea. I was obviously privy to some of the negotiations as an MEP when the issues were negotiated, but they have had huge beneficial effects and an impact on the economy. Any loss of cabotage or cross trade benefits would be very difficult indeed.
I will also point to another advantage that I believe the European Parliament was at the forefront of, and that is the requirement that coaches must have seat belts fitted and that they must be worn. That was against the backdrop of a number of fatal accidents, often leading to children, but adults as well, being either fatally injured or suffering life-changing injuries. That was a very positive development that I hope we can have regard to.
My noble friend Lord Blencathra spoke glowingly about free ports. I am also very keen on free ports, but we have to be honest and bust this myth that we have had to leave the European Union to have free ports across Britain. Free ports exist across the European Union. Nothing in all the time we have been a member of the European Union has prevented us having free ports. We can park that one in whatever car park we will have after 1 January. Luxembourg, which does not have a coast, has free ports. Today’s good news is that we can already have free ports and we do not need to wait for 1 January to have that.
On cabotage, I am again very proud of the role the European Parliament has historically played in that regard. Paragraph 30 in the report’s recommendations says:
“Loss of cabotage rights would have negative implications for some UK operators.”
I hope my noble friend will be able to put a figure on that and give us some assurance that our operators will continue to enjoy cabotage rights at sea, on the roads and on the buses. As the report has highlighted, this has been so economically beneficial.
I welcome this opportunity. It is still very timely, because we are almost at the 11th hour of the 11th day of the 11th month. It is a very positive contribution to the debate, and I look forward very warmly to what my noble friend has to say in response to the queries raised.
My Lords, it is always a pleasure to follow the noble Baroness, Lady McIntosh of Pickering. I congratulate the noble Lord, Lord Whitty, and the members of his sub-committee on presenting such a comprehensive report on the impact of Brexit on maritime, road and rail links. Coming as I do from Northern Ireland, I will concentrate on the important east-west maritime links between Northern Ireland and Ireland, and the UK and further into the European mainland, and on cross-border rail and bus links, which are essential to our local economy on the island of Ireland, whether you reside in Northern Ireland or in the Republic of Ireland.
In reading the reports and some of the background, I noted some commentary that suggests that there is continuing disagreement between UK and EU negotiators over aspects of the future relationship in transport matters, which has helped put the brakes on progress in the current negotiations, with talks on the future of road haulage reportedly at a standstill. In fact, other noble Lords have already referred to this, most notably the outgoing chair of the committee, the noble Lord, Lord Whitty. I note the committee’s conclusion:
“The island of Ireland’s distinct social and economic ties place unique demands on its future transport arrangements. These conditions may not be best-served by broader negotiations on UK-EU transport arrangements. A solution may be found in an integrated bilateral approach to arrangements for passenger transport by rail and road.”
Maybe the Minister could provide us with an update on those negotiations.
The EU’s no-deal contingency measures made special allowance for passenger transport around the Irish border, albeit temporarily. The requirement for cabotage rights for passenger services on the island of Ireland precludes any reliance on the Interbus agreement or a future agreement based thereon. It is vital that a deal is reached to preserve Northern Ireland/Ireland bus services under any Brexit scenario. Where and what are the specific plans to do just that? What work has been done with the EU and the Irish Government, as one of the 27, to do just that? Maybe the Minister can provide an update. The UK has a strong interest in the maintenance of cabotage rights on the island of Ireland. Could the Minister confirm how this disparity will influence, or is influencing, its approach to negotiations on market access for hauliers?
The Government have said that the Dublin-Belfast Enterprise line, which I have used on many occasions, will instead be addressed through bilateral agreements. What is the current position? That rail line very clearly needs to be maintained, sustained and enhanced to minimise the journey time between Belfast and Dublin, and vice versa, to underpin our local economy. The Government state that they are
“fully committed to maintaining the success of cross-border services, both through the Channel Tunnel and on the island of Ireland”,
and that they have been working
“with authorities in the UK and the relevant Member States, as well as the operators themselves, to ensure operators hold appropriate licences with EU validity in order to continue operating without disruption in the event of no deal.”
The Government also say that they are
“committed to ensuring that the Belfast Agreement is respected and that North-South co-operation in the field of transport continues.”
Further to my previous question, what contingency plans are in place to ensure the smooth running of the Belfast-Dublin Enterprise rail line? I realise that might be repetitious on my part, but it is very important to the Northern Ireland economy.
I note that the Government agree with the committee, in their response to the report, that
“it is important to secure the continuation of cross-border bus services on the island of Ireland”.
What work has been done and is continuing to ensure that this happens? What has happened to work on cabotage rights by the British Government and the EU for hauliers on the island of Ireland? What contribution from the UK prosperity fund will be made available for the continuing upgrade of the infrastructure on a cross-border basis? What discussions have taken place with the EU and the Irish Government, as one of the 27, on buses and rail links?
I have one final issue, which is to do with goods carried by Irish and Northern Irish hauliers that will start in the single market, pass out of it, and, at Calais or other continental ports, come back into the single market again. Has there been any resolution on that? Given the EU’s entirely justifiable need and desire to protect the integrity of the single market, how this will work creates another problem for our hauliers. Will lorries from the island of Ireland, both north and south, have to travel with sealed containers? Other noble Lords referred to the fact that, when you travel as a haulier from Northern Ireland, in the main you have to travel through Britain to go to mainland Europe. The noble Lord, Lord Blencathra, already referred to this. All the travel goes via Holyhead or Belfast, or other ports at Warrenpoint and Larne, to Britain and then on to Europe.
In the last few days, we have been warned that lorry drivers might have to spend days queuing to get through Dover and on to the cross-channel ferries. Will Irish lorries, with their goods already meeting EU rules and standards, be allowed to fast-track these queues? If so, who will ensure their security as they pass British lorries and their drivers, with frayed tempers all round? If not, what will happen to perishable goods from the EU going back into the EU? Will Irish hauliers have to pick up the cost of that ruined food? We should bear in mind that haulage companies on the island have a north and a south headquarters, and sometimes have an all-island aspect in terms of their ownership. They could have British-Irish ownership—so we must be mindful of the general economy.
I am conscious that the report was produced during the time of Theresa May and the backstop, which was succeeded by two different Conservative Governments and the Northern Ireland protocol. Now, we have the internal market Bill. In addition, ports in Northern Ireland have been instructed to provide the infrastructure to deal with the tariff arrangements, and in the last week, a company, Fujitsu, has been appointed to deal with the computerised arrangements for those tariff requirements. Will the internal market Bill currently before Parliament have an impact on those transport arrangements for maritime, rail and road?
I realise that I have asked a lot of questions—[Inaudible.]—if the noble Lord requires that. As a consequence, I make my submission.
My Lords, it is a great pleasure to follow the noble Baroness, Lady Ritchie of Downpatrick, who asked a lot of interesting questions. I look forward to my noble friend the Minister’s response to some of them.
On her latter point about the impact of the internal market Bill, I am not an expert on this but it seems that we are all trying to reconcile the fact that there must not be a hard border between Great Britain and Northern Ireland or between Northern Ireland and the Republic of Ireland. We could try to reconcile that in the way that the European Union might do, in a legalistic way—that is, by saying that, if there is an absence of border checks between Great Britain and Northern Ireland, there must be border checks between the Province of Northern Ireland and the Republic of Ireland. That is a legalistic but misplaced view. But, equally, it is a misplaced view on our Government’s part to think that they can simply dispense with the requirement to know, and have some evidence of, whether goods that are leaving Great Britain for Northern Ireland are genuinely at risk of entering the single market elsewhere beyond Northern Ireland. We will have to deal with that issue and, no doubt, we will have many hours of debate on the internal market Bill to try to resolve it—but it has not been resolved in over a year, which is why the former Prime Minister, Theresa May, resorted to the backstop. Perhaps I am in the minority, but I thought that she did a rather good job of putting the backstop together. But there we are—it is too late now.
On the point made by the noble Baroness, Lady Ritchie, I note that the Irish Times published an article today reporting that the Irish Road Haulage Association is looking for a daily direct ferry link from the Republic of Ireland to Le Havre because it is so anxious about depending on access for its hauliers through Great Britain and across the channel links. I am sorry that it thinks that, and I am sorry that confidence in hauliers’ ability to come and go between Great Britain and the continent of Europe is so lacking. That is what we need to deliver.
Noble Lords talked about road issues; I will do so too. I am confident that I can focus on that issue knowing that the noble Lord, Lord Berkeley, is to come next. He will say far more about rail transport issues and will do so far better than I possibly could.
As a former member of the EU Internal Market Sub-Committee, I want to say how much I appreciated the excellent chairmanship of the noble Lord, Lord Whitty. He did a fantastic job, as did the noble Baroness, Lady Donaghy, as his successor before the committee was wound up and redistributed. The report we are debating was extremely useful at the time. I do not imagine that we would have thought a year ago that it would be as useful now—but I think that it probably is. Many of the questions derived from the report are exactly as relevant now as they were a year ago; it is just that there is now so little time now to deal with this matter. It must be dealt with rapidly.
I will not reiterate all the questions, but I want to add one or two points of my own. First, important as hauliers’ permits are, the number one issue is hauliers being able to move through borders speedily and with minimising the delay. We knew, and discovered during the course of our evidence-taking, that the cumulative impact of additional delays on the part of hauliers through the port of Dover, for example, would accumulate exponentially. Unfortunately, we are all beginning to discover what exponential trends look like, and they are potentially extremely damaging. The issue is not simply about permits or customs—it is about the smart freight system. That clearly was at the heart of the reason why the Road Haulage Association only very recently, after a meeting with the Chancellor of the Duchy of Lancaster, said that the Whitehall meeting was “a washout”. I think that it was about a lack of clarity about the delivery of a smart freight system.
May I make a further suggestion? It is difficult now to put in place systems that rely on information technologies at very short notice. But for a long time we should have been preparing a trusted trader scheme that would allow the people taking goods across to the continent to do so with much-simplified customs requirements. In particular, it would allow for those border requirements to be made before the hauliers arrive at the port, minimising the checks that need to be made at the port itself. That is what happens with the authorised economic operator scheme but, important as it is, that scheme is far too complex and costly for most small businesses to deal with. It is clear that a simplified version of the scheme should be put in place. The legislation is available: the relevant section on authorised economic operators in the Taxation (Cross-border Trade) Act allows different classes of authorised economic operator to be specified by Her Majesty’s Commissioners for Revenue. So, even now, such regulations could be put together and put in place before the end of the year.
Many noble Lords talked about the availability of permits, in the absence of the community licence scheme, following the completion of the implementation period. We know from evidence given to us that what was available under the European Conference of Ministers of Transport represented only 5% at best of transport needs. So far, there is nothing in what the Commission has published, including its notification to member states on 9 July this year, to indicate that it will make any substantial number of additional permits available. We must therefore be aware that this is not dependent on a Canada-style free trade agreement between us and the European Union since, by definition, Canada does not have any such agreement. It is a separate agreement. A suite of agreements will need to be reached between ourselves and the EU. We should not take the view that nothing is agreed until everything is agreed; we should be getting on and agreeing some things. In this context, although the mandates of the two sides clearly differed, compromise is of the essence. In this area, compromise in making additional permits available for UK hauliers, and for UK hauliers to understand the scale of the permits available to them, would make an enormous difference. The sooner that is done, the better.
I have one final point, on private motoring, in which I suppose I have an interest as, I guess, we all do in one form or another. We understood that international driving permits may, or may not, enable us to drive freely across Europe, depending on the relationship with member states. As others have done, can I ask my noble friend to tell us much more about what the department has done to arrive at bilateral agreements with member states? The Commission’s notification in July said that driving licences
“will no longer benefit from mutual recognition under Union law”
“will be regulated at Member State level.”
However, it referred only to member states that are contracting parties to the 1949 Geneva Convention on Road Traffic, whereas we heard evidence that we also need to be aware of the 1968 Vienna Convention on road traffic. In any case, I suspect that what is required is a set of bilateral agreements, so the question is to what extent are those bilateral agreements in place.
Finally, I reiterate the point made by my noble friends who were members of the committee. It is clear that many EU hauliers derive substantial economic benefit from bringing goods to this country and engaging in cabotage in this country. On the face of it, it seems to me perfectly clear that EU member states would want there to be a mutual agreement that would allow many EU hauliers to continue to provide haulage services to and in this country; the permits required for UK hauliers on the continent of Europe are, by comparison, relatively modest in scale. Therefore, it seems to me that there ought to be an agreement available. If the arrangements break down and we are in a position where our hauliers cannot go to the continent and continental hauliers—in particular, eastern European hauliers—cannot act in this country, everybody will lose out, including many of our businesses that rely on eastern European hauliers.
Last Thursday morning, I was on the A14 heading west. Every other large truck that I passed or that passed me was from Poland, principally, or Slovenia, Romania or Bulgaria. Eastern European hauliers are here in their thousands, and we want them to be here because we do not have the haulage capacity to replace them. Therefore, we need this part of our suite of agreements with the EU to be put in place as fast as we can.
I call the next speaker, the noble Lord, Lord Berkeley. Lord Berkeley?
Can the noble Lord, Lord Berkeley, unmute?
We will try to go back to the noble Lord, Lord Berkeley. I call the noble Baroness, Lady Scott of Needham Market.
My Lords, I hope that we are successful in retrieving the noble Lord, Lord Berkeley, since he is certainly always worth listening to.
I am grateful to the noble Lord, Lord Whitty, for introducing the committee’s report. With much of the evidence almost two years old, I am really quite alarmed that it has taken so long for the report to come forward for debate. Having chaired an EU sub-committee myself, I know just how much work goes into these on the part of Members and staff but also witnesses and those who give evidence.
More than 20 years ago now, I was a county councillor in Suffolk and deputy chair of the Local Government Association and I was appointed to the transport committee of the EU Committee of the Regions. It was clear then that membership of the European Union and the way it was developing were making significant changes both to the demand for transport across the continent, as the single market expanded, and to the way in which transport was organised and the various regulatory frameworks that underpin it. The noble Baroness, Lady McIntosh, is exactly right to say that there were many good things and it is a pity that we will lose those, and perhaps seeing what we can salvage from that would be an excellent way forward.
We have moved far beyond the stage of bemoaning Brexit, and what we must do now is focus on the practical implications, which are now just a matter of weeks away. What is surprising, in a report that is as old as this, is just how few of the committee’s concerns have been addressed, as the noble Lords, Lord Whitty and Lord Lansley, have pointed out. It has become clear that transport, and particularly road transport, is still a significant point of difference between the UK and the EU. As recently as 2 September, Mr Barnier reflected that UK demands were too close to wanting existing single market-style rights, without meeting any of its obligations. That does not bode well, and nor does the current mood music emanating from Downing Street.
We need answers to pressing issues right now. It will not be good enough to wait until problems ensue, because then we are likely to be trying to put in place hasty solutions, perhaps sought from a position of weakness—I am not as optimistic as the noble Lord, Lord Blencathra. In that case, we will need real co-operation with our former partners, and I am afraid that the sort of rhetoric that we have seen so often is not creating the harmonious environment that we need. Nowhere will that impact more than in Northern Ireland, as we heard from the noble Baroness, Lady Ritchie.
A large-scale study carried out in July by Descartes, a leading logistics business, found that two-thirds of large firms are very or extremely concerned about longer delays in their supply chain that would impact their business post Brexit. Fewer than one in five of UK businesses are prepared for a no-deal Brexit, and two-thirds of businesses have had their preparations disrupted by Covid-19. That is not a happy picture.
I shall concentrate most of my remaining remarks on road haulage, because that reflects the balance of this afternoon’s debate, but I shall make one quick point on maritime. Maritime transport is indeed an international trade and is regulated internationally very effectively by the International Maritime Organization, as the noble Lord, Lord Blencathra, pointed out. As a former board member of Lloyds Register, I know the IMO very well, and I know that, effective as it is, it is not in any way democratically accountable. Indeed, when I was chairing a sub-committee and asked the IMO to come and give evidence to our inquiry, it simply refused and said, “We don’t do that,” so I think that the noble Lord needs to be a little cautious about the extent to which the IMO might be a model.
Returning to roads, Logistics UK has just warned that the new freight management system will not be ready in time for the end of transition in January. Can the Minister confirm whether that is the case and outline what will be done in the interim? The special permits and bilateral agreements with individual member states will facilitate some EU-UK haulage, but they will almost certainly not be sufficient to meet demand and will require negotiation. As the noble Lord, Lord Bourne said, it is going to be clunky. With no-deal Brexit looking increasingly likely, what is the Government’s assessment of the impact of no deal on the road haulage industry and subsequently on the supply chain?
The report highlights the importance of consultation with the haulage industry. Last week it was reported that Mr Gove had met representatives in talks that the Cabinet Office described as constructive. That is a relief, I thought, until an unnamed source from the haulage side described the talks as a “washout”. More constructively, the chief executive of the Road Haulage Association, said that they
“fell far short of our expectations.”
So while we are still embroiled with Brexit, the EU is continuing to develop new proposals. At the end of July, it produced its new mobility package, which will impact on freight transport access and access to the profession. Can the Minister say how the UK will respond to these rule changes and how they will impact on UK drivers in the EU and vice versa?
I want to ask the Minister about the lorry parks, which the noble Lords, Lord Whitty and Lord Bourne, and my noble friend Lord Bradshaw all mentioned. Here in Suffolk we are pretty sure we will end up having one. I understand why the Government have to do this in the way that they are suggesting, but I am sure that they will understand that it leaves a lot of local communities concerned. Can the Minister give any kind of assurance that, in the absence of the usual planning processes, there will be any mechanism for local communities to have their say on important details, such as the hours of working, mitigation for noise and light pollution, and increased and perhaps unsuitable use of local roads?
If we have some sort of normality next summer, many thousands of people will want to head to mainland Europe for holidays and many will want to come here. As things stand, we have mutual recognition of driving licences and drivers’ insurance cover when in the EU. Without similar successor arrangements, it is not at all clear what will happen next year. UK drivers will need an international driving permit. I understand that the committee’s recommendation that there should be an online option still has not been carried out and that you still have to go to the post office in person. Will the Minister say what will be done to improve the accessibility of the permit? What will be the position for EU drivers coming here?
With regard to bus and coach travel, can the Minister confirm that passenger rights conferred by the EU regulation have been transferred to the UK body of law?
Finally, the report points out that bus and coach travel is liberalised at the EU level, and the committee has called for an agreement to retain reciprocal market access. Without that, Interbus will be of very limited use. Can the Minister update the Committee on progress on bus issues? I look forward to hearing from her.
I understand that connection with the noble Lord, Lord Berkeley, is still impossible, so I call the next speaker, the noble Lord, Lord Tunnicliffe.
My Lords, I thank my noble friend Lord Whitty for introducing the report. It seems surprisingly fresh despite the fact that it is 16 months old. It is fresh because virtually all the questions it asks have not been answered. That is to a large extent echoed by many participants in today’s debate. With the exception of the noble Lord, Lord Blencathra, who has a degree of heroic optimism, which I hope comes to pass, but I doubt it will, most participants have noted a number of questions left outstanding. The exception to this, to some extent, is the questions and important issues brought out by the noble Baroness, Lady Ritchie. After her, the noble Lord, Lord Lansley, hit the nail on the head by saying that there is very little difference between where we were 16 months ago and where we are now, except that now we have so little time.
The report before the Committee demonstrates, above all, that the UK needs to get on and deliver a Brexit deal or risk a multitude of issues for UK-EU surface transport. The implications for road alone, detailed in this report, are enormous. The uncertainty over UK-EU market access for hauliers benefits nobody, and sadly still remains, 16 months after the report was published.
Of course, the concerns noted in the report are held not only by the committee. Earlier this month, road hauliers warned that the Government are “sleepwalking into a disaster” over their border plans for the end of the Brexit transition period on 31 December. Groups representing truckers have written to Ministers warning of “severe” disruption to supply chains. Rod McKenzie, from the Road Haulage Association, said the Government should
“act now before it’s too late.”
He told BBC News:
“It is a real case of the government sleepwalking to a disaster with the border preparations that we have, whether it is a deal or no-deal Brexit at the end of December.
The supply chain on which we are all dependent to get the things we need could be disrupted and there is a lack of government focus and action on this…
When we are trying to emerge from the crisis of Covid, if we then plunge straight into a Brexit-related crisis, that will be a really difficult moment and we need real pace.
The difference here is between a disaster area and a disaster area with rocket boosters on.”
Subsequently the group held a meeting with Ministers. The Road Haulage Association described its meeting with Michael Gove about post-Brexit arrangements as a “washout”. The body said there had been no clarity from the senior Minister on how border checks will operate when the transition period ends after December. The Road Haulage Association chief executive Richard Burnett said that it,
“fell far short of our expectations.”
He went on:
“The mutually effective co-operation we wanted to ensure seamless border crossings just didn't happen and there is still no clarity over the questions that we have raised.”
Since the publication of the report, fresh concerns have emerged from the industry over the preparedness of customs agents, IT systems and physical infrastructure. Can the Minister detail what steps the Government are taking in response to these issues? Can she spell out in detail how the road haulage industry will operate from the beginning of January in the event of no deal? The report specifically called on the Government to work closely with the road haulage industry and, based on a number of recent comments by the industry, it seems unlikely that this is ongoing.
Unfortunately, the issues with the Government’s policy for road transport are not restricted to haulage. Bus and coach travel remains a popular mode of transport between the UK and Europe, and the report notes the importance of the Interbus agreement to allow this. Can the Minister confirm whether the ratification of the Interbus agreement and its protocol is still expected by the end of the transition period?
On personal drivers, although the point in the report relating to the mutual recognition of driving licences was agreed for the transition period, what is the situation from 1 January? Can the Minister detail what steps the Government have taken to communicate with drivers to ensure that there is clarity about whether they need an international driving permit?
On rail meanwhile, many of the issues in the report remain outstanding. The report makes clear, in particular, that the Government’s decision to leave the European Union Agency for Railways is fraught with issues. Can the Minister confirm why the Government did not pursue the option of associate membership? On the Channel Tunnel—which, as the report notes, plays a pivotal role in UK-EU trade—it appears there are still issues relating to its continued operation which remain unsolved. Last week, the European Council noted France’s intention to renegotiate aspects of the treaty of Canterbury, which was signed with the UK in 1986. Can the Minister confirm the Government’s position on potential negotiations?
With only months to go until the end of the transition period, it could be expected that the Government would be prepared for all eventualities, but many questions remain unanswered. Can the Minister confirm what engagement is taking place with rail stakeholders and, specifically, what advice is being offered for the possibility of leaving the transition period without a deal?
Recently, the European Commission advised rail stakeholders to ensure establishment in the EU, authorisation by the European Union Agency for Railways and certification by EU-based notified bodies and designated bodies. Can the Minister confirm where such similar advice has been issued by the UK Government?
Maritime is another area fraught with uncertainty. The UK is in the fortunate position where maritime transport is dealt with mostly by international law, providing for access to ports in any situation. However, questions remain over the future of areas such as roll-on roll-off ports. Can the Minister provide an update on recent negotiations in this regard? In anticipating potential disruption to services, can the Minister detail what measures are being implemented to ensure that shipping routes remain open?
At a time of enormous uncertainty, the transport industry needs competence and consensus so that the country can move on and recover. We are in the middle of a public health emergency and an economic crisis, yet Ministers are instead preoccupied with the task of preparing for a cliff edge. I hope that the Minister can at least provide assurances on the issues that noble Lords have raised today and assure the Committee that the Government will do everything in their power to get on and deliver a Brexit deal.
I am afraid that we are still unable to connect with the noble Lord, Lord Berkeley, so I call the Minister.
My Lords, I thank the noble Lord, Lord Whitty, and congratulate him and his committee on this report. Although it was published well over a year ago, many of the areas that it covers areas remain relevant today as negotiations continue. To an extent, that will mean that I will not be able to answer all the questions asked because, of course, many of them remain outstanding. That is one reason why the Government have endeavoured to set a deadline by which agreement should be reached, so that we can then make progress with whatever follows. The report makes it absolutely clear that we must be ready for the next phase, whatever that may be.
In transport, we are focused on arrangements that will maintain connectivity, specifically for road, air and maritime transport. We do not need an agreement with the EU on rail as we can already ensure connectivity using other arrangements. The report being debated today covers road, rail and maritime. I shall endeavour to cover the points that were made; as ever, if I am unable to respond to everything, I shall write.
Our aim is to agree a liberalised market for road transport—for haulage, buses and coaches—with no quantitative restrictions. Any agreement must respect our right to decide for ourselves how we regulate those sectors in the UK. Road haulage is, of course, very important. As my noble friend Lord Lansley pointed out, the volumes going across the short straits, for example, are much greater for EU hauliers than for UK ones. Over the course of the pandemic, I have had the opportunity to have many frequent and productive conversations with the road haulage sector. One thing that I took away from my conversations with people from that sector is that it is fantastic to speak to them but sometimes they do not lobby subtly; it is often very black or white, with very few shades of grey. Obviously, conversations will continue with road haulage representatives; we appreciate their input.
We are starting from a position in which we want point-to-point movements and transit, and we are open to discussions on additional rights. These would not be along the lines of our current rights under EU law. We appreciate that the relationship between the UK and EU will be of a different nature, but there are sensible operating flexibilities—for example, around cabotage and cross trade—that would make haulage operations more efficient by reducing traffic and helping the environment. Indeed, we have UK hauliers who want to get to Turkey via the EU, and there are a lot of EU hauliers who want to get to Ireland via the UK. It seems to me that an agreement should be possible.
Turning to permits, which have been addressed by many noble Lords—particularly the noble Lord, Lord Whitty—the UK and EU agree on the importance of securing unlimited, permit-free rights to access each other’s territories. There is a range of ways in which that could work, including the mutual recognition of existing documents issued to UK and EU hauliers for international carriage without the need for new paperwork. However, if a permit-free agreement is not reached, the framework and systems established through the Haulage Permits and Trailer Registration Act will allow us to cater for a full range of outcomes, including a permit scheme. For the avoidance of doubt, the UK Government have made it clear that they do not want to see the introduction of permits for transport services between Northern Ireland and Ireland.
ECMT permits will continue to provide market access for UK hauliers in any Brexit outcome, but many noble Lords have noted, including my noble friends Lord Bourne and Lord Lansley, that they are limited in number. We do not intend to rely on ECMT permits alone; instead, ECMT permits will provide additional capacity to UK hauliers alongside other market access arrangements, such as bilateral agreements with member states. In the absence of an appropriate agreement, the UK would be open to discussing contingency measures with the EU and would seek to supplement the ECMT permit system with bilateral agreements. The UK has historic bilateral agreements with all EU member states—aside from Malta, for reasons of geography—and it is our assessment that 21 of those agreements would come back into effect should an overall deal with the EU not be reached. The ones that have expired offer a good basis for discussions relating to a new agreement.
On passenger transport services, the UK has already made arrangements to accede to the Interbus agreement, as noted by many noble Lords, which will secure rights for UK operators that undertake occasional services—that is, coach holiday-type services. The agreement will be shortly expanded to cover regular and special regular services. The extension to regular and special regular services will take effect, for the contracting parties who sign it, on the first day of the third month after four parties, including the European Union, have signed it. I am very pleased to note—this is very significant—that the EU has now signed the agreement, and we would expect other parties to join in signing that agreement so that it can come into effect in due course. As the committee’s report highlights, the Interbus agreement does not provide for transit through the EU to countries that are not contracting parties to the agreement. The Government recognise the need to secure road transport arrangements with the EU that allow transit.
I turn to private motoring which, as my noble friend Lord Lansley pointed out, will probably impact most of us, as we like to travel to the EU. We are committed to establishing arrangements with member states, which, frankly, minimise bureaucracy. Arrangements for driving licence recognition and exchange do not form part of a free trade agreement. Therefore, Department for Transport officials are progressing bilateral discussions with member states to agree arrangements from January 2021; those arrangements will be publicised in due course.
International driving permits may be required to travel to the EU. They are currently issued by more than 3,000 post offices. The noble Baroness, Lady Donaghy, asked what additional capacity might be available, should demand be too great for the capacity. There is the possibility of a further expansion to an additional 1,500 post office branches, if the demand is significantly increased. At the current time, the average driving distance to a post office with an IDP service is around two miles; 95% of the population is within five miles of an IDP-issuing post office branch, and 99% is within 10 miles.
My noble friend Lord Bourne mentioned introducing an online system. The introduction of such a system would need to take into account that data for Northern Ireland is not held by the DVLA; that would not make any introduction impossible, of course, but perhaps a bit more challenging. For the time being, we are confident that the post office system will be able efficiently and effectively to meet demand.
On motor insurance, the Government believe that the UK can and should remain within the green card-free circulation area once we leave the EU. The UK is maintaining the requirement for third-party motor insurance for travel, and meets all requirements needed to remain a part of this area. We continue to urge the European Commission to commit to issuing an implementing decision that would ensure that UK motorists can drive in the EU without a green card, and vice versa.
On vehicle standards, the UK is an active and respected member of the United Nations Economic Commission for Europe World Forum for Harmonization of Vehicle Regulations, otherwise known as UNECE. We expect to maintain the high level of influence on the development of international vehicle technical standards that we currently enjoy. UNECE leads on the development of safety standards which are adopted globally, including by the EU, and internationally harmonised versions of the EU’s environment standards are in development. The UK is already taking the opportunity to lead on the development of standards for new technologies—for example, on assisted and automated driving—through the relevant UNECE groups.
On type approvals, there is currently no precedent for a regime of mutual recognition of whole vehicle type approvals between the EU and a third country. The Government’s approach is to emphasise opportunities for co-operation, as well as ongoing mutual recognition of UNECE approvals issued by the UK’s type approval authority, the Vehicle Certification Agency, or the VCA, and its EU counterparts. The VCA will continue to issue these UNECE approvals, which already cover the majority of requirements needed to access the EU market. From the end of the transition period, manufacturers will need GB type approval to allow registration of new vehicles. The VCA is, of course, working with manufacturers to ensure that they will be ready for the end of the transition period.
On rail, I am very sorry that the noble Lord, Lord Berkeley, was unable to join us today, as he would clearly have taken a great interest in this area. We are fully committed to supporting the success of our vital international rail links through the Channel Tunnel and on the island of Ireland, for business and leisure travellers and freight, and we have supported operators in establishing robust measures to ensure that they continue in the future.
On the Channel Tunnel specifically, the Government are engaging with France to establish bilateral agreements to further support the continuation of services through the Channel Tunnel and to provide long-term certainty for operators. The Government have also published technical notices on rail transport to communicate to operators—including both current and prospective cross-border operators—the steps that they will need to take to hold valid EU licences from the end of the transition period.
The noble Lord, Lord Bradshaw, asked a series of questions about arrangements for passengers on the Eurostar and, indeed, on other modes of travel, at passport control. I can confirm that the necessary preparations are being made.
Turning to maritime, while ships will continue to trade between UK and EU ports in all scenarios, a free trade agreement can provide assurances to both parties that their shipping companies will not be treated in a discriminatory way. The UK’s approach to negotiations did not make reference to shipping. Neither the UK nor the EU has ever suggested that it will restrict access to ports by the other party’s shipping. Engagement between the two sides on maritime has been constructive.
With regards to divergence, in areas where the EU has legislated—and which are not regulated by the international organisations—there is scope for divergence. One such example is domestic shipping services in UK waters. While we do not in practice prevent companies from other countries providing such services, we have removed the rights in EU legislation that member states had to provide these services. It is for the UK, not the EU, to decide on such matters.
A number of noble Lords, including my noble friend Lord Blencathra, mentioned maritime and cabotage. Maritime cabotage is not typically liberalised in trade agreements. This allows trade areas such as the EU, and other countries, to make their own provisions. The UK and the EU start from a position where UK legislation provides member states with cabotage rights. Some significant EU countries in terms of shipping—including the UK, Belgium, Ireland and the Netherlands—already have an open approach to cabotage by all countries. Other EU countries restrict cabotage by third countries. It is difficult to establish the precise figures for maritime cabotage, but we know that UK shipping companies undertake much more international business than cabotage business.
The UK will continue to engage globally on maritime transport, including through organisations such as the International Maritime Organization. While the nature of our relationship with the European Maritime Safety Agency—or EMSA—will change, we will continue to work with our European partners to ensure we maintain high levels of safety, security and environmental standards. We co-operate, for example, through the Paris memorandum of understanding, to share information on port inspections to target unsafe and polluting ships.
The Maritime and Coastguard Agency, the MCA, and the Marine Accident Investigation Branch, the MAIB, have put in place the necessary systems to replicate the systems previously provided by EMSA databases. In two cases, the systems have been operational since last year; the MCA stood down a third system, which is involved in the surveillance of the sea for oil pollution. The MCA has continued to use the EU CleanSeaNet system during the transition period but is reprocuring the contingency solution for the end of the transition period.
Leaving the EU means that we have an opportunity to do things differently, whether or not that is a trigger for free ports, as pointed out by my noble friend Lady McIntosh. It is true that the Government have big plans for freeports. We plan to introduce up to 10 of them. A public consultation closed on 13 July. We will publish a full response in due course.
I turn to readiness and contingency planning. Over the next few months there will be a lot of that, particularly as the outcome of the negotiations is known. Many of the changes will depend on what happens in the negotiations, but many will need to take place anyway because we are leaving the single market and the customs union. As part of our preparations to date, we have published the border operating model, announced a new £50 million support package to boost the capacity of the customs intermediary sector, and committed to building new border facilities across Great Britain for carrying out customs checks. We are also undertaking an intense period of engagement across all sectors to improve readiness.
Many businesses will be developing the plans that they had already put in place for previous dates. However, we also recognise the impact that the pandemic will have had on their ability to plan. For that reason, the Government are taking a pragmatic and flexible approach to using some of our regained powers as a sovereign nation. By deciding to introduce new border controls in three stages up to 1 July 2021, industry benefits from extra time to adjust to the new procedures. Pragmatism will remain a hallmark of our policy development in the run-up to the end of the transition period on 31 December and beyond.
We have discussed traffic management in Kent many times over recent years and there are now well-established traffic management plans in place. These are currently being revised and we are working closely with the Kent Resilience Forum as we always do. We will draw on the previous planning for no deal, using a combination of on-road lorry holding in the M20 contraflow and off-road sites. We will, of course, need to incorporate changes to reflect the role of the new smart freight system, which I will come to in a second. In areas outside Kent, we continue to support the local resilience forums and each area likely to be affected is also reviewing its traffic management plans ahead of the end of the transition period.
On lorry parking specifically, the Government have committed to supporting ports and airports to put in place new or expanded border facilities in Great Britain for carrying out required checks, as well as providing targeted support to ports to build new infrastructure. Given the scale of infrastructure required and where there is a lack of space in ports, the Government are aiming to provide inland sites at strategic locations. A number of noble Lords had many questions about lorry parking, and I will write to them, as I have further details on planning and considerations for local communities.
I turn now to the smart freight service, which will be up and running for January 2021. To minimise any potential disruption, we are working with businesses and the haulage sector to ensure that it is effective and simple to use. In brief, we want and need traders and hauliers to be ready to travel, particularly at the short straits. This was noted by my noble friend Lord Lansley. I also note his comments on the trusted trader scheme. The SFS will simplify and automate the process of establishing the border readiness of a haulier, and it will be compulsory to cross at the short straits. Once a few details have been entered, the SFS will tell the driver that green means the driver is okay to travel; amber means the driver must go to an HMRC office of departure or a third party consignor; and red means that some or all documents are missing and the driver needs to go back, speak to the trader and get the missing documents. If the driver does not get a green light, they will not get a Kent access permit. That will mean that they should not be driving around Kent. If they are found driving around Kent, they will get a £300 fine.
On the island of Ireland, noted by the noble Baroness, Lady Ritchie, we fully recognise the importance of maritime links between Northern Ireland and Great Britain. During the pandemic, of course, we have been working closely with the Northern Ireland Executive to keep services running and continue the flow of goods. As also noted by the noble Baroness, the Enterprise train service between Belfast and Dublin is vital, and robust and effective arrangements are already fully in place to ensure that that service can continue.
I thank noble Lords for the exceptional quality of the debate today. I understand that we will probably go around this track again in the coming months, and I would be delighted to do so. I will, of course, write with further details on matters that I was unable to address today.
My Lords, I very much welcome the detailed response given by the Minister and thank everybody who took part in this debate. However, the response still leaves a significant number of questions open, and I will just comment on two or three things.
The main problem is focused on road haulage. The noble Lord, Lord Bradshaw, rightly admonished me by saying that there were vitally important bits of the maritime sector which were, themselves, part of the system for road haulage, particularly in respect of the ro-ro arrangements at Dover. That is our biggest problem, although it is not our only problem, and I still do not think that we have had a clear indication for the industry. I appreciate, having been a Transport Minister myself, the Minister’s reference to hauliers not lobbying subtly. That is certainly true, but sometimes that is understandable. They do not feel that they have yet got sufficient assurances that the outcome from the Government is actually going to be clear. I am not sure that the Minister is actually yet in a position to give them that assurance. I hope that she is right about the electronic system, which does, of course, require haulage companies to have prepared their drivers for it, as well as the Government to have completed the testing of the system themselves. Normally, that is a familiarisation process that itself takes a significant amount of time, but it effectively has not started yet.
One problem of this report is that we were slightly more optimistic at that time than perhaps some of us are now. We thought it was highly probable that, by now, there would be a free trade agreement, which would mean that there were no tariffs. Clearly, if there are tariffs, that complicates matters considerably, and the amount of regulation and potential delay at ports increases significantly. We also thought—at least I did; I do not necessarily speak for everyone—that there would be quite quick side-agreements on transport matters, which are effectively technical matters on which we could have reached agreement. I appreciate that these discussions are still going on, and have gone on for some time, but that is not the reassurance that the haulage sector in particular requires. Of course, when I talk about the haulage sector, I would not disagree with the noble Lord, Lord Blencathra, that trade will adapt. Of course it will; there will be different patterns of trade. However, there is a cost to be absorbed here, and that cost will be faced not only by the haulage industry itself but also by consumers at the end of the line and by key parts of British manufacturing industry, which are part of an integrated European production line. There will be a serious knock-on effect of any failure to deliver effective systems for road haulage and related sectors.
I thank everybody who has taken part. I apologise to my noble friend Lady Ritchie for not spending more time discussing the island of Ireland. That is part of a bigger problem, which I am sure your Lordships’ House will have to address shortly. The impact of Brexit on both Northern Ireland and the Republic of Ireland in terms of their trade systems will be an important dimension.
Other things are still not clear, from driving licences through to the way in which the railway system will treat passengers who come off on either side of the channel. We have not really talked much about passenger rights and experience, but that is another dimension on which the Government will have to seek some degree of clarity before we move into a new situation beyond 1 January.
I thank the Minister and, as I should have said earlier, thank her department for producing a detailed response very quickly, unlike some departments in respect of Brexit reports from the EU Select Committee. It takes the work of the Select Committees seriously, and I appreciate that the Minister has done so today. However, we are still short of some answers, and time is running out. In one form or another, the House, as well as the Government and the industry, will need to return to these issues. Meanwhile, I thank everybody who took part, particularly the Minister, for their contributions, and I beg to move.
Committee adjourned at 4.28 pm.