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Grand Committee

Volume 816: debated on Tuesday 7 December 2021

Grand Committee

Tuesday 7 December 2021

My Lords, Members are encouraged to leave some distance between themselves and others and to wear face coverings when not speaking.

Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2021.

Relevant document: 22nd Report from the Secondary Legislation Scrutiny Committee

My Lords, we are here to discuss a statutory instrument related to the introduction of customs controls. I note that this instrument was included for information in the Secondary Legislation Scrutiny Committee’s 22nd report of the Session 2021-22, although it was not drawn to the attention of House. This instrument will also be debated in the other place tomorrow.

The instrument delays for a further six months the introduction of safety and security declarations on the movement of goods into Great Britain where they were not required before EU exit. The Government are introducing it as part of a programme of measures to phase in the introduction of border controls in order to provide relief to businesses given the unforeseeable and ongoing impact of Covid-19 on businesses and global supply chains. The waiver extension will provide more time for businesses that move goods into Great Britain from the EU to prepare for new customs requirements. This is to avoid potential disruption to UK supply chains and at our borders. With this extension, safety and security declarations on these imports will be required from 1 July 2022, instead of the start of next year.

I will now focus on the detail. The UK’s approach to safety and security requirements in its customs regime is governed by the overarching principles in the World Customs Organization’s SAFE framework of standards. The SAFE framework aims to support and facilitate secure supply chains and trade at a global level, while helping to tackle movement of illicit goods such as drugs and weapons. It requires customs authorities to collect and risk-assess data on the movement of goods before they arrive in or depart their customs territories. The data adds to other intelligence sources to keep borders secure. Business and traders are required to provide data in the form of safety and security declarations.

Since the transition period ended on 31 December last year, most traders moving goods from Great Britain to the EU have been required to submit safety and security data on their movements. This has contributed to the intelligence available to Border Force to help it target checks effectively. The EU also requires safety and security declarations on imports and exports. It is worth mentioning that, following the end of the transition period, Border Force and the Home Office continue to co-operate closely with EU authorities and other law enforcement partners overseas to protect our communities and keep our borders secure.

At the end of the transition period, safety and security declarations also became due on imports to Great Britain from the EU. However, the Government granted a temporary waiver, meaning that goods imported into Great Britain from the EU, and from other territories such as Norway, where declarations were not required previously, do not need safety and security declarations. This waiver was designed to give businesses more time to prepare for the introduction of new border controls, and was part of the so-called phased approach, introducing customs controls in stages.

I make it clear that there is no safety or security concern arising from this waiver. While safety and security declarations provide information used to help risk-assess goods entering and leaving Great Britain, they are not the only way we can manage these risks. Other forms of intelligence continue to be used to keep our borders secure, as they were before EU exit, when safety and security declarations were not required for these movements.

Safety and security declaration requirements for these movements were due to be introduced from 1 January 2022. However, as noble Lords will know, in September, the Government announced that we would grant an extension to the current waiver. This extension is due to last for six months. The waiver will now end on 30 June 2022, meaning that safety and security declarations will be required for these imports from 1 July 2022.

This measure does not have any impact on the safety and security declarations required on goods moved from the rest of the world, which are already being submitted.

The extension has been designed to support businesses facing challenges in preparing for this new declaration requirement due to the unprecedented disruption caused by the Covid-19 pandemic. It will benefit UK-based businesses, but we are thinking beyond our own borders. The additional time will be particularly helpful for smaller hauliers, who may not speak English as a first language and are likely to have suffered from a lack of resource. The pandemic has had longer-lasting impacts on businesses than many observers expected—both in the UK and around the world. Giving businesses more time to prepare for new customs requirements will help avoid potential disruption to our borders and supply chains, and protect UK manufacturers and consumers.

Safety and security declarations were not required for imports from the EU before exit day. As a result, this extension will not significantly increase security risks to the UK. Border Force will continue to use intelligence sources to risk-assess the movement of goods and to secure our borders in the same way as it does now.

This instrument does not affect safety and security requirements in Northern Ireland. Northern Ireland remains aligned with the EU’s safety and security zone, as governed by the terms of the Northern Ireland protocol. This means that there are no safety and security requirements for goods moved between Northern Ireland and the EU.

This instrument also has no effect on safety and security declaration requirements for goods imported from the rest of the world, for which these declarations will continue to be required.

In conclusion, this waiver on the requirement to submit safety and security declarations will allow us to support businesses affected by Covid-19 and related global supply chain issues. It will give them additional time to prepare for the new requirements. I beg to move.

My Lords, I am grateful to the Minister for introducing this statutory instrument. It is the latest in a long line of postponements to the introduction of post-Brexit customs controls. I experienced a strong sense of déjà vu when I saw the original announcement of this extension back in September. That sensation returned upon seeing this statutory instrument listed in Forthcoming Business.

I believe this is the first time that the Minister has dealt with this issue, so he will no doubt find it a novel experience. This probably cannot be said for his officials. I am sure that, despite not being able to say so, they are frustrated that they are still dealing with this, rather than turning to other issues.

We are fast approaching a calendar year since the end of the transition period. It is considerably longer since the original withdrawal agreement and accompanying framework for the future relationship were agreed. It is more than six years since the referendum itself. During that time, the UK Government—whether led by Theresa May or Boris Johnson—were clear that the UK would exit the EU single market and customs union and that this would require a variety of new checks as goods entered and exited the country. While the finer points of detail were left until late in the negotiations led by the noble Lord, Lord Frost, on the EU-UK Trade and Cooperation Agreement, the general destination was clear. The Government knew enough to start their work ahead of time. We were told that work was in hand.

We have travelled so far in terms of time elapsed, yet Ministers do not seem to be making a huge amount of progress to deliver on their long-standing promises. HMRC’s justification for this extension is unchanged from the last time we debated this policy: it is to allow industry time to adjust, particularly in the light of the pressures caused by Covid-19 and the wider supply chain disruption.

I am completely in favour of supporting industry through challenging times, but even here the Government’s response has been lacking. Of course, this is just one part of a package, but that package has been criticised by various sectors, including agriculture and the road haulage industry. When we first debated waiving various import and export requirements in 2019, we were told that the powers were a contingency measure that would likely not be needed. But not only were they enacted, they were then extended. We as the Opposition probed the Government on their longer-term plans and ambitions but were supportive of the instrument. I feel that HMRC’s reasoning is beginning to wear thin, but it certainly has been an exceptional time for UK businesses.

My issue with this latest SI is not the Government’s decision to further extend this rather limited import declaration waiver but their complete lack of openness. Back in June, the Minister, the noble Lord, Lord Agnew, said very clearly:

“The Government do not plan to extend these waivers any further. Traders will need to comply with full safety and security declarations on exports from 1 October 2021 and on imports from 1 January 2022.”—[Official Report, 22/6/21; cols. GC 58-59.]

What went wrong? While we are now responding to the arrival of a new strain of Covid-19 with some modest measures, we have been free of curbs on business activity for several months. Although supply chain issues continue to bite, the Government have done what they can, or so we are told, to ease the pressures on business.

I appreciate that the Minister has not responded to previous debates on this topic but could he please provide a full, honest rationale for this new extension? Is it really related to the pandemic and wider supply chain issues, or is it actually about the readiness of new inland customs facilities or even the IT systems they rely on? Bearing in mind that the Government have been wrong on this before, does the Minister expect this to be the final extension, or is it possible that we will see the waiver run until September or December 2022?

Well, my Lords, I have taken part in many debates since I entered the House in 2010 but this one represents a record in that there is only one other Peer here for me to address. I am extremely pleased that that happens to be the noble Lord, Lord Tunnicliffe, whom I thank for his remarks, and I hope I can fully answer his questions.

The instrument proposes a further six-month extension to the waiver on safety and security declaration requirements that would otherwise apply to imports to Great Britain from the EU. In 2020, the UK imported £301 billion worth of goods, from mechanical parts to fresh produce, from the EU. This was 50% of all UK imports. Given the disruption caused by the pandemic, we are keen to ensure that traders have time to prepare for new customs requirements, which will protect UK supply chains and consumers.

After those opening remarks, I shall seek to answer—I hope in full—the questions and observations raised by the noble Lord. He quite rightly noted that, during previous debates, the Government said that we would not extend this waiver and that traders would have to comply with full safety and security declaration requirements on all exports from 1 October 2021 and on imports from 1 January 2022, as I mentioned in my opening speech. However, I assure the noble Lord that traders have been complying with full safety and security declaration requirements on all exports since 1 October 2021, when that waiver ended. A huge amount of work went into ensuring that businesses were ready for those requirements, and they have been operating successfully, without disruption, since October.

However, as I mentioned previously, the unprecedented impact from the pandemic has lasted longer than we could have imagined. While many businesses have taken steps to prepare for the requirements, many more are continuing to struggle with the economic impacts of this pandemic. Over the last six months, we have seen the knock-on effects of the pandemic on global supply chains, representing a further challenge to businesses, particularly smaller traders and hauliers. More recently, although this was after the Government’s initial announcement of the extension of this waiver for imports, we have seen further disruption due to the new omicron variant, as the noble Lord knows only too well.

These ongoing impacts have seen businesses operating in unprecedented circumstances, which is why the Government have taken the decision to further extend this waiver. This extension will support businesses and provide them some welcome relief. As the noble Lord knows, the Government have extended the delay only to the introduction of safety and security declarations; full customs declarations will be required from 1 January 2022. The Government have always taken a staged approach to new customs controls to avoid any cliff edges, and this extension will give businesses time to ensure they are ready for new customs requirements.

The Government are ready to implement safety and security requirements. I reassure the noble Lord that the S&S Great Britain IT system, which receives and risks these declarations, is up and running and being used by traders that import goods from the rest of the world. Inland border facilities are also already in use for Dover and Eurotunnel, and will be in place for Holyhead from 1 January.

To sum up, the Government are introducing this SI as part of our efforts to provide additional support to businesses and help them recover from the lasting impacts of the pandemic. This will also support them to manage the pressures on global supply chains that we are seeing around the world.

Motion agreed.

Solvency 2 (Group Supervision) (Amendment) Regulations 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Solvency 2 (Group Supervision) (Amendment) Regulations 2021.

Relevant document: 22nd Report from the Secondary Legislation Scrutiny Committee

My Lords, I beg to move that the Committee considers the Solvency 2 (Group Supervision) (Amendment) Regulations 2021. This instrument is being made to address deficiencies in retained EU law relating to the supervision of UK insurance groups under the insurance prudential regime known as Solvency II.

The onshoring of large amounts of EU legislation into domestic law was a vast, complex and time-pressured process. I hardly need remind your Lordships that over 60 statutory instruments were passed; one of these related to Solvency II. This was not an easy feat, since Solvency II is a particularly technical and complex regime, so it is unsurprising that, among the sheer volume of complicated work, there was an oversight that means a technical fix now needs to be made. By this instrument, we are taking action now to ensure that this oversight is addressed well before any potential issues materialise from 1 April 2022.

I will explain what the instrument does and why it prevents a cliff edge on 1 April 2022. The UK Government have made equivalence decisions which assess that the insurance group supervision regime in another country, a so-called third country, is equivalent to the UK. To date, Bermuda, Switzerland and the EEA countries have been determined to be equivalent to the UK for the purpose of insurance group supervision. This instrument will ensure that the UK Government’s equivalence decisions achieve in full the objective of avoiding unnecessary duplication of supervisory work.

I will give a practical example of the type of duplication this instrument seeks to remove. Where a waiver is granted by the PRA, a UK subgroup that is supervised at ultimate parent level by an equivalent supervisor will not need to submit quarterly and annual group reporting templates to the PRA, or prepare an annual report known as the “own risk and solvency assessment”, or publish an annual group report known as the “solvency and financial condition report”.

Using a typical large insurer as an example, I will illustrate how extensive these submissions are and the time and cost savings this instrument may achieve. The solvency financial and condition report of a large insurer can be over 100 pages long. It has qualitative and quantitative materials and sets out aspects of the insurer’s business and performance, system of governance, risk profile, valuation methods used for solvency purposes, and capital management practices. The production of such a report requires analysis and co-ordination by experts in multiple disciplines such as actuarial, finance, accounting, internal audit, IT and risk management, not to mention board and senior management input and review. I stress that this is only one example of the supervisory compliance materials that we are seeking to remove.

The costs of duplication would vary from firm to firm but comprise initial one-off costs as well as ongoing costs as high as £500,000 per annum. Without this instrument, the UK subgroup must duplicate these materials at the UK subgroup level, when its parent already produces equivalent materials for submission to the third country supervisory authorities. The advantages are: reduced regulatory compliance cost for the insurance groups; reduced supervisory cost for the PRA; and reduced need for co-ordination between third country supervisory authorities and the PRA where duplicative materials are being reviewed.

The statutory instrument affects UK insurance groups whose parent companies are domiciled in equivalent third countries. Such insurance groups are supervised at two levels: the UK insurance group level is supervised by the PRA, and the ultimate parent group level, the so-called worldwide group, is supervised by the supervisory authority in the relevant third country. Currently, a total of 11 insurance groups are expected to benefit from this instrument. Of the 11, five have parent companies in EEA countries and six have parent groups in Switzerland or Bermuda. Examples of such groups include AXA, Allianz, Ageas and Hiscox. To take Hiscox as an example, it has headquarters in Bermuda and is listed on the London Stock Exchange. With this instrument, the PRA may rely on the supervisory authority in Bermuda to conduct group supervision of the entire group, of which the UK subgroup of Hiscox is a subset.

I assure noble Lords that this is not a relaxation of prudential standards; the proposed changes aim to provide full effect to the Treasury’s equivalence determinations. Although the UK group supervisory requirements are waived, the main safeguard for UK policyholders remains. This main safeguard is the continued supervision of solo UK entities belonging to these UK subgroups. This supervisory work cannot be waived.

In addition to this main safeguard, UK policyholders are further protected via the requirement for UK subgroups to submit supervisory materials to the PRA, where necessary, beyond the reliance that the PRA may place on equivalent supervisors. For example, UK subgroups are still expected to submit the annual consolidated statutory accounts to the PRA. They also need to notify the PRA prior to taking certain actions, such as the acquisition or disposal of subsidiaries and changes to existing borrowing facilities. This ensures that the PRA is still able to protect UK policyholders while supervising the solo UK entities belonging to such groups in a proportionate manner.

The instrument enables the PRA, when certain conditions are met, to defer to third country supervisory authorities, if the UK has determined that the third countries are equivalent for the purposes of insurance group supervision. The conditions are: where compliance by firms would be overly burdensome; and where waiving the requirements does not adversely impact the PRA’s advancements of its objectives. In this circumstance, the PRA may disapply or modify regulatory requirements, which amounts to issuing waivers to UK insurance groups. In effect, the waivers exempt these UK insurance groups from demonstrating to the PRA compliance with Solvency II group supervision requirements at the UK subgroup level. This is in recognition that compliance at the UK subgroup level has already been supervised by virtue of being a subset of the ultimate group that is supervised by the equivalent third countries.

Pre-EU exit, the European Insurance and Occupational Pensions Authority issued guidelines to allow EEA supervisors to issue such waivers. It was under such guidelines that the PRA was able to issue waivers to affected UK insurance groups pre-EU exit. However, these guidelines ceased to have effect in the UK following EU exit. Consequently, existing waivers are due to expire on 31 March 2022, and this statutory instrument confers on the PRA the power to issue new waivers.

On 2 December 2021, in its 22nd report, the Secondary Legislation Scrutiny Committee listed this instrument as an “instrument of interest”. The report noted

“the absence of a level playing field”

in that

“while the UK has granted equivalence to the EU in relation to the supervision of insurance groups, the EU has not reciprocated.”

While that is true, I urge the Committee not to conflate two separate matters. Equivalence determinations are made by the UK and the EU unilaterally. One decision is within the power of the UK Government, and another is beyond the power of the UK Government. Where the UK Government have unilaterally determined equivalence, we have a duty to ensure that our decisions are meaningful and achieve their objectives in full. This instrument ensures that we do not undermine our own equivalence decisions with deficiencies in our domestic law. So, rejecting this instrument does not increase the probability of the EU reciprocating equivalence decisions. Conversely, it would penalise UK insurance groups and our regulator by increasing regulatory compliance and supervisory cost.

After that rather full explanation, I conclude by saying that the Treasury has worked closely with the PRA in drafting this instrument. It has also engaged with the UK insurance industry through its industry body, the Association of British Insurers—ABI. The ABI has informed the Treasury that the industry welcomes this statutory instrument and has no concerns with it. I beg to move.

My Lords, I appreciate the Minister’s introduction of this second statutory instrument. It is a somewhat simpler SI than the previous one but will nevertheless be important in the day-to-day regulation and operation of insurance groups.

As the Minister outlined, the regulations make a series of changes to ease the regulatory burden on the Prudential Regulation Authority—PRA. This is intended to save costs for both the regulator and insurance groups themselves. Under the new arrangements, the PRA would be able to defer to the decisions of the regulatory body or bodies of relevant third countries in certain circumstances. In practice, this is likely to be EU bodies, although the provisions cover non-EU third countries too. Where third countries have been deemed a regulatory equivalent to the UK and happen to host the parent company of a PRA-regulated insurance group, the PRA may choose to defer to relevant decisions made in the other jurisdiction, avoiding unnecessary duplication of work and costs.

We do not oppose these measures. As is noted in the supporting documentation, the current temporary arrangements are due to lapse in March 2022, and it makes sense to adopt a more permanent approach along the lines of this one. The changes, however, are very interesting when considered in a broader sense. First, they provide an example of how our departure from the EU simultaneously changed everything and nothing. Like many sectors, financial services were relying on cross-border trade and collaboration; that is as true for the regulatory bodies as it is for the firms themselves, whether they are commercial banks, traders, insurance brokers and so on. We may have completed the technical exercise of leaving the EU’s regulatory framework, but this SI makes it clear than an ongoing engagement with it remains a necessity.

Therefore, when Mr Sunak said in July that his failure to secure an equivalence decision from the EU meant that the UK was free to take advantage of its new-found freedoms, that was true only on a certain slightly superficial level. We may be free in some senses, but the international policy framework and sectoral norms mean that we cannot and should not become some kind of regulatory pariah. There may be other areas in which the UK can exercise greater flexibility, but even they must fall within certain boundaries.

Secondly, as observed by the Secondary Legislation Scrutiny Committee, this measure resembles something of a one-way street. Through choice, we are affording a certain status to non-UK regulators that our own bodies do not enjoy among their peers. That is not in and of itself a problem, but it is representative of an approach that has left our financial services sector at a disadvantage vis-à-vis what it once took for granted. The lack of content on services in the UK-EU trade deal, coupled with the Government’s failure to secure relevant equivalence decisions earlier in the year, means that our current arrangements fall far short of what we had and what businesses were promised throughout the negotiations.

As I said in my previous speech, we are now nearly a full calendar year into our new relationship with the EU. After a few initial shocks, and with some notable exceptions, businesses are generally adjusting and trying to make the best of the new arrangements. While firms can live with the current rules, many would much prefer the UK to build on existing trade agreements through sensible sector side deals. With that in mind, can the Minister confirm whether the UK has sought a reciprocal agreement in this area? If so, what was the outcome; if not, why was it not deemed appropriate? Although it may fall outside the narrow scope of this SI, can the Minister comment on what came out of our applications for equivalence decisions across the broad spectrum that is financial services? Are they still alive and could the European Commission still choose to respond favourably, or have the Government formally withdrawn from the process?

Like the sector itself, we remain of the opinion that striking additional agreements with the EU on a case-by-case mutually beneficial basis is both possible and desirable. The key ingredient, as ever, is political will. I reiterate that we do not oppose this SI, but I hope that the Minister can provide some hope of an improved deal for the sector going forwards. These measures may make sense on a practical level, but they do little to instil confidence that the Government have a firm grip on what needs to be done to support different strands of our financial service sector, which is after all a cornerstone of the British economy.

My Lords, rather like buses, this is the second debate in a row with only one other contributor. I say again that I am pleased that it is the noble Lord, Lord Tunnicliffe. I thank him for his general support for these measures and for his contributions.

Before I attempt to answer the noble Lord’s questions, I would like to spend a little time reminding noble Lords that the UK’s financial services sector is one of the most open, innovative and dynamic in the world. The insurance sector is the fourth largest in the world: it is a world leader in the provision of complex and bespoke forms of insurance and reinsurance. UK insurance firms held around £1.9 trillion in invested assets at quarter one 2020.

In July this year, the Chancellor of the Exchequer set out his vision for a globally competitive financial services sector, in which nimble policy-making and agile regulation benefit businesses, consumers and the economy, while ensuring appropriate protections and promoting financial stability. In this spirit, we should cut disproportionate duplication in supervisory work, so that we have every chance to compete globally and attract foreign insurers to the UK.

The noble Lord, Lord Tunnicliffe, started by asking for confirmation of whether the UK has sought a reciprocal agreement from the EU in this specific area. If so, what was the outcome? If not, why was it not deemed appropriate? A reciprocal agreement would involve the EU granting equivalence to the UK in respect of insurance group supervision. To reassure the noble Lord, the UK has sought an equivalence determination from the EU for Solvency II, including for insurance group supervision, but the EU has not granted an equivalence determination for the UK. However, it should be noted that a reciprocal agreement will benefit EU insurance subgroups with parent companies in the UK, rather than UK subgroups.

The noble Lord asked what came of the UK’s applications for equivalence decisions from the EU across the broad spectrum of financial services. He asked whether these are still live and whether the European Commission could still choose to respond favourably or whether the UK Government have formally withdrawn from the process. He also asked whether I am able to provide some hope of an improved deal for the sector, going forward.

Ultimately, equivalence is an autonomous unilateral process. As the noble Lord would expect, I am unable to speak for the Commission on how it may proceed, but the Government have made sure that the EU has all the information that it requires to make a positive decision for the UK for all equivalence regimes. We have been clear that the EU will never have cause to deny the UK equivalence because of poor regulatory standards. Again, I reassure the noble Lord that the Government remain open and committed to continuing dialogue with the EU, including about its intentions for equivalence. With those answers, I commend this instrument to the Committee.

Motion agreed.

Heavy Commercial Vehicles in Kent (No. 2) (Amendment) (No. 2) Order 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Heavy Commercial Vehicles in Kent (No. 2) (Amendment) (No. 2) Order 2021.

My Lords, the order before the Committee today was considered previously in an earlier form and I must start with an unreserved apology for having to bring this legislation back to your Lordships’ House.

On 19 October the Grand Committee considered three statutory instruments on heavy commercial vehicles—HCVs—which underpin Operation Brock, the multiagency response to cross-channel travel disruption at the Port of Dover and Eurotunnel. I regret to have to tell the Committee that there was an error in the legislation as passed. This resulted from an error in the drafting of a technical definition and requires correction. Therefore, I am asking noble Lords to consider the regulations, amended slightly to take account of the error, once again.

As I explained back in October, three pieces of legislation underpin Operation Brock. This legislation was first put in place in 2019 in preparation for a potential no-deal departure from the EU and has been amended on several occasions since. Operation Brock replaced Operation Stack. When there is serious disruption at Dover or Eurotunnel, Operation Brock allows trucks on cross-channel journeys to be queued on the coastbound carriageway between junctions 8 and 9 of the M20.

The error which has occurred is in the second of those three orders: the Heavy Commercial Vehicles in Kent (No. 2) (Amendment) Order 2021. This amended the Heavy Commercial Vehicles in Kent (No. 2) Order 2019. When Operation Brock is active, the 2019 order restricts cross-channel heavy commercial vehicles from using local roads in Kent other than those on the approved Operation Brock routes.

The error which was introduced by the subsequent order is in the definition of the roads from which heavy commercial vehicles are excluded when Brock is active. While the error does not prevent the Kent Resilience Forum initiating Operation Brock, it would affect the extent of the enforcement powers that would be available against HCVs using specific roads to avoid any Brock queue. The new instrument before the Committee corrects the error so that the legislation works as intended.

Once again, I apologise most sincerely for the mistake in the earlier legislation and that noble Lords are being asked to consider this order again. We had a good and thorough debate in October and I hope noble Lords will have seen my subsequent letter, dated 1 November, providing further information. I commend this order to the Committee and I beg to move.

My Lords, it is a pleasure once again to address your Lordships’ Committee following a long absence. I have, however, kept fairly well abreast of what has been going on here while I have been away.

What I would like to know is this: because many drivers of HCVs come from Europe, how many have registered for the visas which allow them to work in this country? This is not strictly relevant to this SI but it is important in the context of the amount of traffic which is likely to need regulation under this order. If drivers from the continent are not coming here, it is unlikely that many of these provisions will be needed anyway.

I would also like to know what the effect has been on the volume of traffic passing through the channel ports which would in fact amount to pressure on the roads in Kent. The information available to us suggests that there are a lot fewer drivers from the continent coming here, so that should manifest in there being less flow through Kent.

I should also like to know whether, in light of the pressure on HCVs generally, anything has happened with extra traffic coming by rail through the Channel Tunnel. This is not strictly relevant to this order. None the less, it affects the amount of traffic on the roads—sadly, I am unaware of anything having been done.

Lastly, although this is again not relevant to this order, I want to raise the appalling state of the working conditions of many drivers of heavy commercial vehicles. They contrast most unfavourably with those on the continent. The Government announced that they were going to look at improving the lot of the HCV driver. Unless they make the conditions of work for these drivers better, they are going to score no points at all for what they are doing. This is particularly so for women drivers, whom they are hoping to attract to the profession.

I have no objection to these proposals, but I think the Minister should address these issues if we are to get our traffic with the continent on to a firm footing. I will take the opportunity of raising this in other communications.

My Lords, I take this opportunity to say how nice it is to see the noble Lord, Lord Bradshaw, back in action again. As usual, he made some interesting and relevant comments, even though he often sought to say that they were not strictly relevant to the order. Indeed, some of my questions are geared to the extent to which we need this order, though we certainly do not oppose it.

I think I have understood the reason why we are here today. I thank the Minister for her explanation. If I have understood it correctly, this order corrects an error in a previous order, since the words in the order we are now discussing between “means all” and “other than” at the top of page 2 were left out from the definition of,

“the relevant class of road.”

That meant that the police did not have the powers to impose a fine of, I think, £300 on drivers who were not using the roads specified in the order. When Operation Brock is in force, the 2019 order restricts cross-channel heavy commercial vehicles from using local roads in Kent, apart from those on the approved Operation Brock routes.

How often have the provisions of the order had to be brought into effect since it was first put in place, because of bad weather and industrial action causing serious delays at the cross-channel ports? I think these were the two specific instances which the Government previously gave to justify the order. I say that bearing in mind that the Operation Brock arrangements—which replaced Operation Stack—are now permanent rather than temporary. If the answer is that the provisions of the order have never, or very rarely, been used, do the Government expect the Operation Brock arrangements to be brought into operation more or less frequently in future? For what reasons might this happen—over and above bad weather and industrial action, to which the Government have previously made reference?

If these arrangements have never been brought into operation, how close have we ever been to that happening? Do the Government think it would ever be necessary to bring the Operation Brock arrangements into effect because of disruption at the ports, following a breakdown in our new trading arrangements with the EU, or could such a breakdown never result in a level of disruption that would reach the threshold for bringing the Operation Brock arrangements into effect?

What is the definition of “serious delays or disruption” at the cross-channel ports that might lead to the Operation Brock arrangements being brought into effect, and who makes the decision on whether the serious delay or disruption threshold has been reached? For example, have the arrangements had to be brought into operation recently because of any blockading of French ports by fishing vessels?

Finally, is there a cost to making the Operation Brock arrangements permanent? If so, what is that cost, including how much per day and per week on each occasion that the Operation Brock arrangements are brought into effect? How much does it cost per day and per week to have the Operation Brock arrangements on standby, ready to be brought into effect as and when required?

I do not think the Minister will be wondering why I am asking these questions, but they are similar to those raised by the noble Lord, Lord Bradshaw. How often, frankly, will these provisions be needed? Are we justified in having them on a permanent basis? I am sure she will respond on that issue.

I thank both noble Lords for their contributions to this short debate. I hope to answer as many questions as possible, although I admit that some of the topics are slightly beyond what I had prepared for today. I will write an additional letter. I note that I have already written one which, I believe, covers some of the points raised, but I will read them out from the letter none the less.

I reassure the noble Lord, Lord Bradshaw—I too welcome him back to his place at transport SIs—that traffic with the continent is on a firm footing already. The visa issue he raised will not make any difference at all to the traffic going to and from the continent, but I can tell him that details of the number of temporary work visas granted for HCV drivers in food distribution —that is the narrow band allowed to take up these visas—will be published in the usual way via the Home Office’s quarterly immigration statistics.

In general, the issue here is not necessarily what the business-as-usual traffic in Kent is but whether the scale of disruption happening at the short straits is necessary to protect the people of Kent from extreme congestion as people suddenly decide to rat run through the villages, create havoc and basically stop its economy and social life. That is what we are trying to do with Operation Brock. It is critical to have it on standby so that we can deploy it when needed.

Before I turn to the comments of the noble Lord, Lord Rosser, I might as well mention HCV parking, an incredibly important point that the noble Lord, Lord Bradshaw, raised. The Government are well aware of the issues around drivers’ working conditions. I was in Kent only last Friday, at Ashford International Truckstop, which I had the honour of unveiling a plaque to open. I think it was my second plaque, and I was very pleased with it. It is a very high-quality facility; it has space for 650 vehicles and is located very close to the M20, so will really help people using the short straits. If I can replicate that standard in all the hot spots across the country for HCV parking, I will be happy, but first we have to find where those hot spots are. There is much work to be done; we have a pot of £32.5 million, which we will use to work with the private sector to ensure that our truckers have safe, secure, warm, comfy places to stop.

I turn to the issues raised by the noble Lord, Lord Rosser, who described the minor change to the order very well. It occurred because of circumstances that conspired against us; nevertheless, the system should have made sure that the right SI went to the final place. It did not, and we are reviewing our procedures yet again to make sure that that cannot happen again in future. It is a very minor change.

The usage of Brock is a decision for the Kent Resilience Forum, because it understands its local community best; it understands traffic flows and how disruption would spill over into local communities. The Kent Resilience Forum is made up of all sorts of stakeholders, including the police, the council, National Highways and people who have the interests of Kent at heart and are able to get Brock on to the M20 as quickly as possible to ensure that we coral the HCVs and manage the flow carefully.

Some of what the noble Lord, Lord Rosser, mentioned is already in the letter that I sent on 1 November. There is a lengthy section about costs, which I hope will reassure him. I am happy to answer any further questions he has on that, but the letter sets out the costs to Kent County Council and National Highways of the barrier either being in place or sitting around waiting to be put in the place, in the event of disruption.

Of course, it is for the Kent Resilience Forum to decide what serious disruption looks like and the circumstances in which it might occur. We can probably think of all sorts of cases. We do not know what future weather conditions will be like. Storms in the English Channel may be more frequent; who knows? If I were to stand here three years ago and say that we would need it in the event of a massive global pandemic, you would have laughed at me, so I am not now going to think of a list of situations that would lead to serious disruption. It suffices to say that this decision is not taken lightly; it is resource-intensive and creates disruption. Nobody wants a queue of truckers on the M20, but it is necessary to protect the people of Kent. That is the balance that needs to be struck in the deployment of Brock.

We deployed the QMB at the start of 2021, when we were not sure what the arrangements at the French border would be and whether they would cause delays. It was stood down in April and then deployed again in July. Noble Lords will recall that there was some uncertainty back then as to what would happen at the French border over testing and how long it would take people to get through at the French side. Certainly our numbers were not looking great, even for very small levels of traffic going to France. It was deployed on a precautionary basis for a further two weeks in July, but was subsequently removed when the disruption was not as significant as we thought it would be.

I will write with any further insights I have on that but, in the meantime, I commend these regulations to the Committee.

Motion agreed.

Committee adjourned at 4.43 pm.