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Goods Vehicles (International Road Transport Permits and Haulage Within the EU) Regulations 2024

Volume 837: debated on Thursday 18 April 2024

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Goods Vehicles (International Road Transport Permits and Haulage Within the EU) Regulations 2024.

My Lords, I beg to move that these regulations be considered. They have two main purposes. First, they implement fully some specialised provisions contained in the EU-UK Trade and Cooperation Agreement, which I will refer to, if I may, as the TCA, in relation to UK-based operators and drivers. These provisions are connected to declarations for most lorry drivers working for UK-based operators when they make journeys between two points in the European Union.

The TCA provisions had a go-live date in 2022. They have been implemented administratively in the UK already, through the glossing provision in the European Union (Future Relationship) Act 2020. These regulations add enforcement powers and increase legal certainty. The full implementation of these provisions is needed to ensure continued, reciprocal access for the movement of goods vehicles between the UK and EU.

Secondly, this instrument amends legislation governing the allocation of permits for the purposes of the transport of goods outside the United Kingdom. The UK has made several new or amended bilateral road transport agreements with countries outside the EU since the previous legislation in 2018. The 2018 regulations —specifically, the International Road Transport Permits (EU Exit) Regulations—also catered for a no-deal Brexit. This instrument revokes and replaces the 2018 regulations.

The background to this is that, at the beginning of February 2022, new requirements provided in the TCA between the UK and the EU came into force. These changes apply to the operators of goods vehicles and their drivers involved in the commercial transport of goods within the territory of the EU and within the UK. Direct journeys between the UK and EU, and vice versa, are outside these requirements. For example, a journey by a UK operator from London to Paris is exempt from these requirements, but a journey made by a UK operator between Paris and Nice is not exempt. Similarly, an EU operator travelling from Berlin to Newcastle is exempt, but an EU operator travelling between Newcastle and Manchester is not and a posting declaration would have to be made.

Operators and drivers who are involved in making journeys affected by the TCA requirements are required to post information about this into a database, which will provide a declaration document that can be scrutinised by enforcement authorities across the European Union and within the UK when required. There is also a process to seek and check further information as part of enforcement procedures.

The instrument being debated today relates to the implementation of enforcement requirements associated with the posting of road transport workers, for UK operators undertaking journeys, including cabotage, in the EU using drivers that they employ directly. Reciprocal provisions applicable to EU operators working in Great Britain were implemented by the Goods Vehicles (Licensing of Operators) (Exemptions and Modifications) (Amendment) Regulations 2023, which came into force on 1 October 2023. Those regulations were laid before Parliament on 18 July 2023 under the negative procedure.

There are two principal areas of change. First, this instrument enables enforcement in the United Kingdom against in-scope UK operators who do not fulfil the requirements associated with the posting of transport workers. It is already possible for reported failings of licensed UK operators related to posting declarations to be considered by traffic commissioners in Great Britain and the authorities in Northern Ireland. This is further to provisions amended in 2022 about the repute of licensed operators. This assisted compliance with the relevant TCA provisions in the short term.

However, it is important to have a longer-term and more sustainable approach to demonstrate compliance with the TCA, which is vital to the UK’s international road haulage and the UK’s wider supply chains. Therefore, this instrument provides for specific enforcement related to posting declarations in some circumstances at the roadside. It also assists follow-up inquiries related to operators who have not co-operated with EU-based enforcement agencies. The agencies can contact the UK authorities to request follow-up action, and the TCA prescribes timelines for these to be dealt with in the UK. This instrument also covers goods vehicle operators not requiring an operator licence.

This instrument treats compliance with the posting requirements as a condition of making a specified journey and makes it an offence not to comply with the condition. The approach of making compliance with specified conditions a requirement is already taken for road haulage permits. That approach is part of the Haulage Permits and Trailer Registration Act 2018. The position in relation to enforcement and fines largely mirrors the 2018 regulations, although a change has been made to enable the power to stop.

Secondly, this instrument revokes and replaces with updated provisions the International Road Haulage Permits (EU Exit) Regulations 2018. This is being done to reflect bilateral road transport agreements that the UK has implemented and ratified since 2018 with countries outside the EU, including Azerbaijan, parts of the former Yugoslavia, Switzerland and Ukraine.

The instrument makes other revisions to the 2018 provisions to improve clarity. Although many aspects provided for under this instrument, including the fee levels for permits, are the same as for the 2018 regulations, revoking and replacing the 2018 regulations as opposed to amending them provides for a clearer and more consolidated approach.

Returning to posting declarations, I highlight that the provisions apply to workers who are under a relevant contract, specifically those who are employees or workers. It is important to note that agency workers and self-employed workers, for example owner drivers, are not subject to postings requirements. This mirrors the scope in the EU regulations, which also carve agency drivers and self-employed drivers out of scope.

If a goods vehicle has two drivers—so-called double manning—a posting declaration can be required for both drivers, one driver or neither, depending on their employment status. The regulations apply only when they are undertaking journeys between two points in the European Union. Control officers in the EU can check the credentials of other drivers of UK-based vehicles during journeys within the EU. This would apply to self-employed drivers, for example. The inclusion of the posting procedures in the TCA limits the extent of EU controls on most drivers for UK-based goods vehicle operators on journeys within the EU. It prevents EU member states imposing other control measures. Before the EU legislation was put in place, there had been examples of EU member states putting more burdensome national requirements in place.

The regulations also facilitate the enforcement in the UK of the maximum number of internal journeys that UK operators can undertake within the EU under the TCA. This is limited to a maximum of two laden journeys following the laden arrival of a goods vehicle. Further restrictions apply to cabotage in the EU, which is journeys from one point to another in the same EU country.

These regulations are necessary to ensure that the UK upholds a key part of the EU-UK Trade and Cooperation Agreement, thereby ensuring that movements of goods for trade can continue to take place between the UK and the EU. They also ensure that the UK’s bilateral agreements are reflected in legislation. I commend them to the Committee.

My Lords, I thank the Minister for his explanation. I am sure he will forgive me a bit of a weary sigh, because I remember all this from the first time round. As it gradually dawned on us that the assurances that a post-Brexit trade deal would be the easiest trade deal in history were completely wrong, we realised that we were facing a much more complex set of rules and restrictions for the logistics industry, especially those smaller businesses that wanted to continue to trade with the EU.

Other sectors that have particularly suffered in recent years have been not just those trading from the UK to an EU country but, as the Minister explained, those wanting to operate cabotage services. A badly affected sector is performers—musicians and artists of various sorts—who have found it impossible to take their goods, vehicles, scenery, costumes and so on from one country to another. All this has contributed to a decline in the numbers trading and a deterioration in the balance of trade, which specifically has hit small businesses very hard.

Optimistically, I had hoped that we were over the worst and that we would gradually rebuild our trade, as people got used to the new restrictions. Apparently, that is not so, because this instrument appears to be tightening up the rules. The Minister’s introduction, which was very complex and detailed—and extremely helpful—underlined that this is going to carry on being complicated.

Paragraph 6.3 of the Explanatory Memorandum refers to

“the required outcome of the effective enforcement of posting requirements”,

so my first question to the Minister is: can he explain precisely how and to what extent the system was failing before? In a way, I am interested in the mood music behind this change. Have EU countries complained that UK operators are not doing it properly? Have we had international complaints, or are we complaining about EU operators coming here without the required permissions? What is the scenario that has led to these changes?

I realise that there are references in this SI to agreements that go well beyond the EU, but so much of our trade depends to this day on the EU, and even more did in the past. That was the easy way to do business. It was no more complex to go to the EU than it was to go from Yorkshire to Surrey, for example. Therefore, any step that makes things more complicated is a matter of concern.

To reiterate, my first question is: are the Government tightening up as a result of an international request that we do so? My second question concerns Schedule 3, which lists a series of fees. Are they being increased, compared with the previous situation? If so, by how much? All of this is very complicated, especially if you happen to be a small business, so my third question is: what are the Government doing to ensure the new arrangements are adequately publicised and that that publicity is available well in advance of the implementation?

Finally—I hope that the Minister will indulge me—trade is, of course, a two-way thing. As he will know, from 30 April we will be imposing new import checks on meat and plants, leading to the payment of a common user charge of up to £145 per consignment. Can the Minister explain why the Government have given only 27 days’ notice of the size and scale of these charges? How far is that being advertised? In what way are those new charges linked to this trading set-up that we are discussing, or are they not linked in any way at all? I realise that it is not part of the same piece of legislation, but is it part of a reciprocal deal and agreement? The final words the Minister uttered related to the TCA being part of the agreement. This is, of course, part of a whole package—a whole deal—so I am asking about the relationship between those payments and what we are discussing here.

My Lords, I also thank the Minister for his presentation of this SI. He added a certain overview, which is useful. I found myself in a difficult situation with this SI, both because it is complicated and because the normal excellent support I get from the staff in our office was overwhelmed by the fact that the member of staff was doing Rwanda, so I had to try to do it myself.

I set about by trying to understand the thing. I do not know whether it is my age, and that I am just slowing down, but I found it very complex. It was not helped by the fact that the format of the Explanatory Memorandum has been changed—much to my surprise, because I learned the old one and knew where to go. That took me a little while to recover from, but eventually I found that Morag Rethans was my contact. We made contact and she helped me, over quite a long phone conversation, to work through the various bits of the agreement. Yesterday morning, I understood all parts of the SI. I do not think I understood them all at the same time, and my understanding of them has certainly faded a bit in the past 24 hours. I always like the contributions of the noble Baroness, Lady Randerson, because she is so much more diligent than me and finds little corners in what has been happening.

In a sense, I was content to clarify my mind—the Minister may have to correct me on this—that this was a piece of domestic legislation which took the agreements that we have, particularly the TCA and agreements with other peripheral states, as a given. As far as I can see, there is nothing in this instrument that changes our formal relationship with the EU and those peripheral states. What it does is mend holes in our own regulations that make the interface with other states incomplete and messy. The solution is designed to ensure that UK domestic law fits with our international obligations. In particular, it gives an enforcement mechanism to ensure that its impact is uniform, both in the UK and reciprocally with visitors to the UK.

By the time I had made my limited progress in understanding, I could not actually see any particular flaws in the SI, per se. Thinking in macro terms, it would have been great if we had done it sooner, because the closer it had been to the completion of the TCA and so on, the more likely that it would have fitted together. However, that has passed—let us not worry about it.

The problem with this agreement is that we left the club, and the club did not like us leaving. The negotiations that took place with respect to this area—the noble Baroness, Lady Randerson, and I go back at least five or six years on this issue—left the problems relating to road transport at a disadvantage compared with where we would like to be. Unfortunately, the only way of getting to where we would like to be would have been to maintain membership of the European Union. Since we on these Benches accept that we are no longer a member, it is our responsibility to conclude agreements that smooth the relationship as far as possible. As far as I can see, that is what this instrument does.

I object in many ways to the £5 million in relation to the assessment—saying that you do not need a proper impact assessment. The beauty of a full impact assessment is that the person doing it has to look at other solutions and, by looking at them, we are at least in part reassured that what is proposed is the best solution, having been exposed to other possibilities. I do not see anywhere where there could have been a better solution but it would have been better to have had a full impact assessment, with the team working on it considering all the solutions before coming to this one. With those few comments, I am content.

Moving outside the brief, in a sense, and joining the noble Baroness, Lady Randerson, it seems to me that, compared with some of the fears we had way back before this was firmed up, a pretty practical situation has been developed—as I say, this is the UK end of it—and that the biggest damage is in what one might call the musicians and artists area. I would like an assurance from the Minister—this parallels the noble Baroness’s concern—on what, if anything, the Government are doing about that. Is this still a live issue? Can we have some assurance that it is being pursued because it seems to me that, for most tasks, the regulations that exist now are practical?

It seems that, in this area, however, it is a heavy burden. As I understand it, for larger operations, the problem is overcome by dual registration of specialist transporters and so on, but that area, which is so important to the UK economy, starts off with two or three blokes and their instruments in a Transit van. Previously, they could wander around the continent and so on. I know that that is what the Common Market is about and that we are not in it anymore; nevertheless, it is a considerable blow to emerging musicians and artists, so I hope that the Government might make some progress in that area.

I thank noble Lords for their consideration of these draft regulations and their contributions. I will now attempt to respond to some—or all—of the specific points that were made.

These regulations are required to ensure that the UK continues to meet certain obligations of the EU-UK Trade and Cooperation Agreement, which enables ongoing market access to the EU for the UK haulage industry. Failure to legislate to fully implement posting requirements would risk challenge from the EU around a potential breach of the TCA, the key treaty for our ongoing trading relationships with the EU. The regulations assist the UK’s competent authorities to deal with operators who have refused to co-operate with foreign authorities. The UK’s competent authorities are the traffic commissioners, for Great Britain, and the Transport Regulation Unit, for Northern Ireland. The regulations increase the tools available to them and their ability to prevent attempts to evade the rule of law.

In 2023, the UK laid regulations that provided competent authorities with powers to enforce posting requirements related to EU operators working in the UK. It is important that the UK is seen as fair and implements the reciprocal provisions for UK operators, who are subject to the same requirements in the EU. Additionally, domestic legislation must be updated to reflect the progress of partnerships with countries outside the EU—including several new and amended bilateral road transport agreements, to which I alluded earlier, that have been signed since 2018. Although UK operators working abroad outside the agreements take a chance of facing enforcement abroad, by matching UK law to these agreements, the regulations demonstrate the UK’s commitment to honouring them fully.

I turn to the point made by the noble Baroness, Lady Randerson, and the noble Lord, Lord Tunnicliffe, about UK haulage access rights abroad. During the TCA negotiations, the UK proposed specific market access rights for specialist hauliers servicing tours for cultural events, arguing that the nature of their work was specialist and different from general haulage activities. UK negotiators attempted to differentiate cabotage arrangements from touring. They sought to permit the carriage of goods entering the EU from the UK being unloaded and reloaded at various points in the EU and returning to the UK unaltered. The EU did not accept this proposal, seeing these different arrangements as a way of getting additional cabotage rights which are unprecedented for non-EEA/EFTA countries. To support the cultural touring sector, the Department for Transport implemented the dual registration measure in the summer of 2022. This measure relates to HGV operators.

The noble Baroness, Lady Randerson, raised engagement with stakeholders. Throughout the development and implementation of these measures associated with the posting of transport workers, we have been engaging with industry stakeholders to promote the changes and helping businesses to know what they need to do. An 8-week public call for evidence was held from 29 June 2021 to 24 August 2021 which received 113 responses which were published on GOV.UK; 64 of these responses were from representatives of organisations. Following this, we also held a closed consultation on the proposed legislative measures with six key stakeholders, including industry associations. Consultees were broadly supportive of the proposals, and the majority thought that the additional burden imposed on businesses would be low. The devolved Administrations have been consulted on the details and proposed effects of the regulations throughout the process, including a specific consultation from August to October 2023 about the postings and international permits provisions of these regulations.

On the impact assessment, which was raised by the noble Lord, Lord Tunnicliffe, the Department for Transport undertook a post-implementation review of the 2018 regulations. Permit numbers have not been oversubscribed. There have been no reports of impact by the industry.

On communications to the industry, which was raised by the noble Baroness, Lady Randerson, the changes made by these regulations will be communicated with the industry via trade associations, updates to GOV.UK and other relevant channels. Information is already available where there have been changes to permit requirements in international road transport agreements. Communications with trade associations were done when international road transport agreements were implemented.

Posting requirements already apply to road transport operators and drivers for journeys between two places in the EU. Guidance has already been published. The provisions of this instrument do not affect what road transport operators or drivers need to do to comply with the posting requirements. On the point raised by the noble Baroness, Lady Randerson, on fees, they are not being increased.

On the point raised by the noble Lord, Lord Tunnicliffe, as a result of the trade and co-operation agreement, the UK is required to implement some changes related to road transport from 2022 onwards. This is because the related EU acquis was, when the TCA was negotiated, known to be being changed from 2022. Therefore, provisions were included in the TCA for changes to come into effect later. These later changes include changes to the road transport operator licensing regime, which the UK made in 2022. They also include changes in relation to the posting of transport workers affecting in-scope drivers of goods vehicles, which is the subject of these regulations. These changes were written into the 2020 TCA, albeit with later commencement dates.

To conclude, these regulations are an important step in the UK’s future relationship with the European Union and an important part of the EU-UK Trade and Cooperation Agreement that we agreed when leaving the EU. Implementing these regulations will ensure that UK operators found to be breaking the rules included in the TCA—an important treaty for our ongoing trading relationship with the EU— can be dealt with appropriately. The regulations also update requirements related to road haulage permits, including in the light of new and better bilateral road transport agreements between the UK and certain non-EU states.

Motion agreed.

Committee adjourned at 3.45 pm.