Brexit: British Airlines
Baroness Randerson Excerpts(5 years, 2 months ago)
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Baroness Sugg
IAG has a very complex ownership structure, as do many airlines. This is truly an international industry. Its EU airlines will need to satisfy the EU requirements, but they have six months to do so. These EU regulations will not have any effect on BA, which is a UK airline with a UK operating licence. It will need to meet our requirements and it does so.
Baroness Randerson (LD)
My Lords, the Government have devoted a lot of taxpayers’ money to try to avoid major lorry queues around Dover. East Midlands Airport is the aviation equivalent of Dover: it is our major freight airport. The infrastructure around that airport will not be able to cope with long queues in the event of a no-deal Brexit. What assessment have the Government made of the problem in that area? What measures are they planning to put in place to avoid lorry queues and congestion around East Midlands Airport?
Baroness Sugg
The noble Baroness is right to point out the importance of East Midlands Airport for our freight capacity. In the event of no deal, the Government are designing customs arrangements in a way that ensures that goods can continue to flow. As we have made clear, we will not compromise security on the border, but keeping goods flowing is of vital importance. We are working very closely with East Midlands Airport to minimise disruption.
HS2: Electricity Supply
Baroness Randerson Excerpts(5 years, 2 months ago)
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Baroness Sugg
My Lords, I am sorry to dash my noble friend’s hopes but we remain committed to phases 1, 2a and 2b of HS2. As I have said, it will improve connectivity across our country. Our railways are full, with the doubling of passenger numbers since privatisation, and it is essential that we build a new line to allow space on other rail lines and thus improve things for passengers.
Baroness Randerson (LD)
My Lords, I am pleased to hear the Government’s continued support for HS2, but the department which failed to set up a contract to deliver a few extra ferries is unlikely to inspire public confidence in the management of big projects. How are the Government ensuring that every aspect of the HS2 costings is re-examined and questioned so that we can be confident that it is good value for money?
Baroness Sugg
My Lords, I agree with the noble Baroness that we have to ensure that the project is good value, because £55.7 billion is a lot of money. The full business case is planned for later this year, and that will reassess the phase 1 scheme against the standard business-case criteria. That business case will provide an updated benefit-cost ratio for the phase 1 scheme.
Aviation Security (Amendment etc.) (EU Exit) Regulations 2019
Baroness Randerson Excerpts(5 years, 2 months ago)
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Baroness Randerson (LD)
My Lords, this SI deals with the legislative framework for aviation security in the UK covering everything from screening passengers to the rules governing access to airports. This is a hugely important field and one where the UK has an extremely good reputation based on rigorous efficiency and the fact that we were one of the first countries to take up the option to introduce more stringent measures on security. Safety at our airports is of course based on the pooling and swapping of key information—a process that has been built into the EU system which this SI dismantles—so I have some questions for the Minister.
On paragraph 6.4, the reassurance here on the use of the affirmative procedure is so gloriously vague that, to be honest, it is meaningless. We might have some affirmative SIs as a result of this, but on the other hand we might have some negative ones. We are given no proper measure of how that decision will be made. I would be grateful if the Minister could give us some information on how that judgment will be made. This is a fundamental area for our country.
Paragraph 6.6 of the Explanatory Memorandum refers to the revoking of Commission decision C(2015) 8005 and then states that the decision is so sensitive that we cannot be allowed to know what is in it. I have to say that this is a first for me. In my experience, I have never known the Government to revoke a secret power. Can the Minister give us some information as to what this might be about, even if she cannot give us the details? Certainly, can she explain why it is impossible to give us that information?
The question of airport inspections is important because we rely on the inspection of airports in other countries in order to ensure that UK flights and UK citizens are safe. We use the information from those inspections to give warnings to UK citizens that they should not fly to certain airports and to discourage airlines from doing so. This system relies on a free flow of information of a very sensitive nature. In future, we will inspect our own airports. That produces two questions in my mind. First of all, how will we make sure we keep in step with the rest of the world on those inspections and the terms on which they take place? Secondly, how will we continue to share information with the remaining 27 EU countries? The sharing of the information is the absolutely crucial thing here.
I move now to the granting of operating licences, which is dealt with in paragraph 7.3(h) of the Explanatory Memorandum. What will be the impact of removing the provision for mutual recognition between member states in the case of the granting of operating licences?
Finally, the EU has a system of mutual recognition of approved air cargo carriers, whereby approval is given following inspection. Once we leave the EU, we will no longer benefit from this system and will have to set up our own system of inspection and designation. To start with, it is explained here, we will recognise all those carriers we currently recognise, but, obviously, things will move on pretty fast. New companies will enter the field, new information might come to light about existing carriers, and so on. We will have to erect a new system that will be expensive to the taxpayer, but also—this is an important point—to the companies seeking approval, because they will have to do it twice over. They will have to seek approval in the EU and in the UK. Once again, I am really concerned that we are isolating ourselves on a security issue. We are voluntarily forfeiting access to information via EU systems. Obviously, on the balance of probabilities, we will be less secure as a result.
Lord Berkeley (Lab)
My Lords, this is a very interesting SI, in particular the issue of confidentiality. This has come up again and again in not just the secondary but also the primary legislation. I know for a fact that people in the industries that I am in touch with say, “We have signed non-disclosure agreements, so we can’t tell you anything”, which is fine because it means they have to do what the Government say; they have no other information and no means of questioning it. More importantly, I need to ask the Minister how long these NDAs are going to go on for. As the noble Baroness said, once you have “security” in there and everything is confidential, getting that removed is almost impossible because there will always be 25 reasons for not doing it. That applies to NDAs and, even more important, to this legislation. We might just as well sit back and say, “Well, you didn’t tell us about it. Of course we trust you; you’re the best security in the world until something goes wrong”. Whether we believe that is a different matter, but there is nothing we can do about it.
My second point concerns Regulation 16, which the noble Baroness mentioned, about removing the power of the Civil Aviation Authority to grant operating licences to UK-registered air carriers. Why can the CAA not continue to do this? After all, it is a UK government body with the expertise—probably unlike the Secretary of State and his Ministers. I would go one step further and say we can still leave the EU and not have any input into the decision-making processes that go on—if that is what is going to happen—but is there any reason why we should not have the back-to-back arrangements with member states on operating licences with the CAA on mutual recognition? What is wrong with that, apart from the fact that Ministers do not want to do it? The Minister shakes her head, but technically it would make life a great deal easier. It seems to me that it should be looked at. I do not think any noble Lords will oppose this SI tonight—it is a bit late now—but this is something we ought to be thinking about and challenging. On many of these SIs coming up, including railway ones next week, the decision has been made but actually has nothing to do with the basic principle of leaving the EU. It is somebody’s interpretation of it to suit their own political ends or whatever. It is worth reflecting on that. In the meantime, I look forward to hearing the Minister’s response
Air Traffic Management (Amendment etc.) (EU Exit) Regulations 2019
Baroness Randerson Excerpts(5 years, 2 months ago)
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The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)
My Lords, this draft instrument will be made using powers in the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union in March without a deal. It amends single European sky legislation, the four basic regulations which provide the framework for EU air traffic management regulation, and the implementing regulations which set out the more detailed requirements.
The implementing regulations cover air traffic management interoperability: the manner in which the UK works with other states to deliver air navigation services; the organisation of airspace; the safety and oversight of air navigation services; new technology and how it is to be used; and a system of performance and economic regulation for air navigation services. The single European sky legislation supports the EU initiative to improve the efficiency of air navigation services while maintaining safety within the European air traffic management system. The delivery of air navigation services is vital to ensure that congested airspace can be used safely and efficiently. The services regulated by the single European sky legislation support air traffic growth by ensuring the safe separation of aircraft. If these services are not provided in an efficient way, it can cause considerable delays, with resultant costs and disruption to airlines and passengers.
This draft instrument will ensure that the effective regulation of air traffic management arrangements in the UK continues in the event of no deal. It addresses areas where retained EU law will no longer function effectively after leaving the EU. It does this by removing governance and oversight roles of EU bodies that cannot be performed by the UK after exit and assigning them instead to the Secretary of State or the Civil Aviation Authority, and by removing regulatory tools where there is already satisfactory UK legislation. Where possible, roles currently undertaken by the European Commission and EU bodies are being transferred to the Secretary of State or the Civil Aviation Authority, but where they relate to pan-European functions, including air navigation services delivered by more than one state, they are being removed.
The instrument includes arrangements to recognise EU-based certifications and authorisations existing immediately before exit day. For example, EU air navigation service providers operating in the UK that have certificates issued prior to exit day will continue to have their certificates recognised by the CAA, which will allow them to continue to provide services in some parts of UK airspace. These certifications and authorisations will be preserved for a maximum two-year period, subject to any earlier expiry or termination, which will provide continuity until another agreement is reached with the EU on these issues.
The single European sky legislation includes a regulatory framework for the development and deployment of new technology and ways of using it: the Single European Sky Air Traffic Management Research programme, or SESAR. In the event of no deal, the UK will not be able to participate in or legislate for SESAR governance arrangements. We are, however, retaining requirements for the deployment of new technology arising from SESAR for the UK’s air navigation service provider, NATS, and some UK airports, to ensure that UK arrangements are modernised in line with those of the EU and that interoperability is retained.
The instrument also ensures that the UK can continue to comply with its international obligations, such as those set out under the Chicago convention, which governs international civil aviation. This is done by retaining regulations that currently dictate how we comply with the standards and recommended practices—SARPs—adopted by the International Civil Aviation Organization under that convention.
Again, the best outcome is for the UK to leave with a negotiated deal, and delivering that deal remains the Government’s top priority but, as a responsible Government, we must make all reasonable plans to prepare for a no-deal scenario. The instrument maintains the existing regulatory framework and technical requirements for air traffic management to ensure the continued provision of efficient, safe air navigation services and the effective regulation of the UK air traffic management system, as well as to maintain interoperability between the UK and the EU after the UK exits the EU. This instrument also ensures that in the event of a no-deal exit from the EU, the UK has effective regulatory arrangements for the UK’s air traffic management system and that the aviation industry—in particular, the CAA and NATS—has clarity about the regulatory framework which would be in place in that scenario. I beg to move.
Baroness Randerson (LD)
My Lords, no SI better epitomises the efforts of the Government to force us into splendid isolation. Anyone who has studied history at any time will remember that 19th-century concept of British diplomacy—which got us precisely nowhere in the end.
Modern air traffic management is based on a complex network of international treaties, organisations, protocols and rules that has built up over many years in the interests of safety, efficiency and limiting the environmental impact of aviation. I welcome the fact that just for once, under the section in the Explanatory Memorandum on consultation, there is reference to a specific view of stakeholders. It might have been a limited consultation, but we have a report that they want continuity of the regulatory framework—well, of course. Despite this, this SI is full of efforts to shoehorn the necessary changes into the existing approach. However much there are attempts to continue as normal, there will be significant changes.
There are several issues I want to raise. First, paragraph 7.3 of the Explanatory Memorandum states that some powers now held by the EU will come to the Secretary of State and some to the CAA, but air navigation services delivered by more than one state are simply being removed by this SI. Surely this will lead to a dangerous lack of co-ordination. Will the Minister explain what will happen in that yawning gap once the EU powers are removed?
Paragraph 7.9 states:
“The UK will remain a contracting State of Eurocontrol”.
Eurocontrol is an intergovernmental organisation regulated by the EU. I realise that membership of this organisation is essential for the interoperability of air navigation systems, but I was quite surprised to see that we are going to remain a member, given that the EU has powers over it. Has the Minister explained this to her colleagues who are in favour of leaving the EU? The compromise appears to be that we will accept the rules of Eurocontrol, but will be unable to participate in its governance. That seems a pretty poor deal, but I appreciate that we have no choice but to remain a member.
I have a question on functional airspace blocks, or FABs. They do not follow state boundaries, and we share an FAB with Ireland. My recollection is that a large proportion of Atlantic air traffic passes through that FAB. After Brexit, we will have no legal basis to participate in the FAB and in future, any involvement —so the Explanatory Memorandum states—will be discretionary. However, there is no word in the EM about what the Government would like to do. Is it their intention to try to remain a member of the joint functional airspace block with Ireland, and will leaving it be something they do only unwillingly, if forced? There is nothing in the Explanatory Memorandum about Ireland if we cease to participate. We are looking here at the splintering of the co-ordination on airspace functioning, and I believe that it would have a very serious impact on Ireland if we ceased to participate.
Maritime Transport Access to Trade and Cabotage (Revocation) (EU Exit) Regulations 2019
Baroness Randerson Excerpts(5 years, 2 months ago)
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Lord Rosser (Lab)
The amendment in the name of my noble friend Lord Adonis is not being moved because he is not here. He asked me to say that he unavoidably could not be in the House between 6.30 pm and 8 pm and therefore anticipated that he would not be able to move his amendment, as has proved to be the case.
Baroness Randerson (LD)
My Lords, I am grateful to the Minister for her explanation. She referred to the comments made by the Joint Committee on SIs. I agree with its criticism, as there are issues to be addressed in the clarity of the Explanatory Memorandum.
The Government claim that this SI will not have an impact on shipping operators. Nevertheless, whatever reassurances the Minister has sought to give us today, it removes cabotage rights. The Government’s defence is that the measure will put EU operators on the same basis as those from other countries—indeed, the Minister has just repeated that—but we are working to the lowest common denominator in these matters and one can never be sure.
Looking at such SIs always brings up some interesting piece of history. The history point from this one is that we will no longer be a member of the Rhine convention. Our membership of it goes back to the signing of the Treaty of Versailles, and the convention goes back even further, to the Congress of Vienna of 1815—so we are looking at something that we have been a member of for 100 years, while the convention itself is more than 200 years old. The problem we face is that we renounced our membership while we were members of the EU and we are members of it now only through our membership of the EU. It is interesting to think about the purpose of the Rhine convention. As the world’s oldest international organisation, the commission’s intention was remarkably modern; namely, to increase European prosperity by guaranteeing a high level of security for navigation of the Rhine. I do not think that the Government are suggesting that we rejoin the Rhine convention in our own right. I seek clarity from the Minister that this is the case.
The SI removes those EU regulations designed to prevent unfair practices, either between member states or between a member and a third country, and to enshrine rights to maritime cabotage. In a nutshell, the SI removes the right to cabotage for the remaining EU states which wish to operate in the UK because the Government fear that we will not be given reciprocal rights within the EU 27. At what stage are negotiations with the remaining 27 countries on cabotage? Is it a matter of ongoing consultation, or has it been shelved for the moment?
Once again, consultation has been very limited. My concern is that this SI relates to devolved issues. Do the Welsh and Scottish Governments remain satisfied? I cannot quite understand the amendment referred to in paragraph 6.12 of the Explanatory Memorandum—I am sure that it is my deficiency. I have read it a couple of times and it is not clear to me what amendment is referred to in relation to the Welsh and Scottish Governments.
The Government say that UK ships undertake relatively little cabotage in EU waters. I am happy to accept that, but can the Minister give us some clarity on the value of such cabotage, the volume of it and the percentage of ships undertaking it so that we can get some handle on the level of activity concerned?
The Government seem to have a nonsensical position on this issue. They say that they do not want to restrict cabotage but are acting to delete guaranteed rights. It is another example of an inconsistent approach in these SIs. Some of them simply smooth it over—it will be the same system after a no-deal Brexit as there was before; we are going to tolerate what may be an inconsistency between the attitude of the EU 27 and our approach to transport issues. However, in this SI, because we might not get cabotage rights in Europe, we will take them away from EU countries operating in the UK. The SI takes away basic international maritime rights and it does not set out with any clarity what the Government intend to replace them with.
Road Vehicles and Non-Road Mobile Machinery (Type-Approval) (Amendment) (EU Exit) Regulations 2019
Baroness Randerson Excerpts(5 years, 2 months ago)
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Baroness Randerson (LD)
My Lords, this SI relates to the type approval process and involves harmonised standards on safety and environmental protection, which are regularly updated. I understand and appreciate that action is needed to maintain standards in future, but I have concerns. Unlike other SIs, in respect of which it is agreed that we will continue as a nation to accept EU standards, in this case the UK will no longer accept EU approvals when vehicles are registered.
The SI establishes a UK system of approvals. There is an interim arrangement for a maximum of two years, after which there will be a comprehensive review and reworking of UK type-approval arrangements. The legislation is planned for the middle of this year. This came as a bit of a surprise when I read this because I was not aware that the Government were thinking of a whole new system. What do the Government have in mind? Clearly, ideas are pretty well developed, otherwise the Government would not be talking of bringing in legislation a few months.
There is the issue of uncertainty for manufacturers. There will be additional costs when working to two different standards. Surely, at the current moment of maximum uncertainty, it is not a good idea to add to that uncertainty. Changing the system undermines the assurance given to manufacturers of a smooth transition on standards. Even more surprising, the Government proposed originally that this SI should be dealt with through the negative procedure; it is here only because the Joint Committee on Statutory Instruments recommended that the affirmative procedure be used.
The EU type-approval frameworks affect passenger and goods vehicles, motorbikes, agricultural and forestry vehicles, and engines for non-road mobile machinery. That is a pretty comprehensive range of products. Paragraph 7.2 of the Explanatory Memorandum specifies that EU approvals will not be accepted in the UK without scrutiny and can be rejected. Perhaps the Minister can explain why we are not prepared to accept EU standards. EU standards on these issues are generally agreed to be the highest in the world and are being adopted by, for example, the Chinese as the exemplar of best practice. Why do we think there might be a problem with these standards?
The SI will give the VCA the power to act on evidence of compliance problems. Is the VCA not able to act in the current situation if it thinks there are compliance issues? Manufacturers that already have EU approval will be able to apply for provisional UK approval. While this will avoid double testing, it does not avoid double bureaucracy. The Minister may well say that all of this is to ensure higher standards. However, in paragraph 7.8 of the Explanatory Memorandum, reference is made to the National Small Series Type Approval, operated by the VCA, which allows the relaxation of standards for UK companies converting or building low numbers of vehicles. Paragraph 7.8 states that the scheme would be of limited use to manufacturers after Brexit because of limits on production. I cannot quite understand that. I read it several times but I could not understand why it would be unfair after Brexit but has been acceptable up to now. How has this situation changed? I was even more surprised by the Government’s response, which was to arbitrarily double the limits on production for this group of vehicles until the end of the year. Why? Why is it reasonable to double the number of vehicles this year but not next year? I cannot get any sense of the reasoning behind this. Although this is a small number of vehicles, they are being given an exemption from environmental limits, and there will therefore be an impact on emissions as a result.
Paragraph 7.10 of the Explanatory Memorandum makes the point that this SI will allow,
“new, full type approvals to continue to be issued”,
for motorbikes, agricultural vehicles and engines for machinery. We now have a difference in policy. In fact, we have three different policy approaches in this one SI. We have non-acceptance of EU approvals, so you have to get UK approval. Then, another section accepts EU approval, although it admits that it could be misleading in the short term. There is also a specific change of policy regarding manufacturers and operators that deal with small numbers of vehicles.
Even worse than having three different policies in one SI is the lack of formal consultation. The section dealing with impact says that more staff will have to be recruited to the VCA. How many and at what cost? It also says:
“Provisional UK type approval is being offered free of charge”.
I accept that that is very good for manufacturers, but can the Minister explain how much of a subsidy that will require from the Government?
Lord Adonis (Lab)
I am very grateful to the noble Baroness for giving way. She cited the fact that there would be no formal consultation on this SI, as indeed on any other SI that has come before the House. Did she note that paragraph 10.1 also said that,
“the intention is to ensure that, as far as possible, the status quo is maintained”?
The noble Baroness has done a very good job in the last 10 minutes of explaining why the status quo is not being maintained in key respects. There is a contradiction in paragraph 10.1 regarding the justification the Government have given for not consulting. According to that justification, they should have made no changes at all but continued with the existing type-approval regime. Given that the Government have made those changes, and given the statement that they themselves made in paragraph 10.1, there should surely have been consultation.
Baroness Randerson
I agree with the noble Lord that there should be consultation, because the Government themselves have admitted that there are aspects that could be misleading. That is what they say in the EM.
It is my understanding that gaining EU type approval is pretty expensive. It would be useful to know at least approximately how much it costs, so we can get some view of what the Government will have to undertake in future.
I turn now to the SI on emissions. These EU regulations establish mandatory fleet average CO2 emissions targets for all cars and vans in the EU, plus Iceland, Liechtenstein and Norway. They establish targets by which manufacturers must abide, based on a formula, and levy fines for non-compliance. EU states record and report new EU vehicle registrations to the EEA, which leads to the publication of emissions performance for individual manufacturers. Are we going to carry on with this system on a UK basis? Powers are being moved to the Secretary of State, but will the system of publication of performance continue? It is really important for public confidence. Small manufacturers can apply for derogations. In the SI, small manufacturers are defined as producing 300,000 cars and 22,000 vans. Are the Government going to divide that by 28 or something, to redefine a small manufacturer, or will the definition of a small manufacturer across the whole of the EU apply within the UK, in which context it will hardly be small?
Baroness Sugg
I am afraid that I do not have an answer on trade unions; I shall have to get back to the noble Lord on that.
The organisations we consulted do not wish for no deal—I should be very clear on that—but we are attempting a pragmatic approach to make sure that we continue trade with the EU should we have a no-deal exit. They are supportive of the proposals. The SMMT told the Lords Select Committee on the EU Internal Market that the department had put in place a system of temporary type approval, initially, which is probably as sensible as we can have during the interim period. The Motorcycle Industry Association confirmed that it had no immediate concern with the proposed text, which it expects to alleviate some of the short-term pressures on manufacturers and importers arising from the UK leaving the European Union without a deal. So I think that it is fair to say that industry does not want no deal but, in the event of no deal, it accepts that this interim measure is the right way forward. We published our technical notice of the changes to type approval last September.
On the question of the cost of type approval asked by the noble Baroness, Lady Randerson, the total cost to manufacturers of provisional approval is estimated to be around £800,000. That includes their internal administration costs and familiarisation costs. Normally, to obtain type approval for a single model costs at least £250,000, including the hire of test facilities, internal costs and fees to the VCA. It takes the VCA a couple of hours to prepare a UK approval following an application. As noble Lords would expect, the VCA has engaged extensively with industry and is well placed to issue provisional UK approvals. It has recruited additional temporary staff to manage the additional workload. So far, it has taken on 23 additional staff and is on target to have 40 in place by mid-March. The assessment found an estimated annual cost of the VCA of £800,000 per year, which would be recovered from manufacturers—so, combined with the administrative costs of using the scheme, the estimated total cost to business is £1.6 million per year.
Baroness Randerson
I thank the noble Baroness for those details, but I am still not clear about why the Government are suddenly so suspicious of EU type approvals. What grounds do they have to need to do this all over again rather than simply accepting, certainly for the first two years, that vehicles can come in with EU type approval, which we have trusted in the past and could trust for the next couple of years?
Baroness Sugg
Under no deal, EU-based manufacturers will also need to obtain UK approval from the VCA. That will be granted on the basis of a valid EU approval. The VCA retains the right to retest in the unlikely event that there are doubts about the authenticity of the EU approval. There are certainly no grounds for suspicion on that, but, if we leave the EU, it is only right that we have our own approval. We will no longer be a member of the EU, so we will no longer recognise its type approval.
On the VCA’s progress, as I said, engagement is continuing. It is actively working with customers and manufacturers on approvals from EU countries selling into the UK to ensure that they can deal with this. The VCA has already obtained approval data from manufacturers. Used cars and vans make up 99% of new registrations, and that engagement continues, so it is well placed.
The noble Baroness, Lady Randerson, also asked about the powers. The VCA currently has powers but, in the event of a no-deal exit, it will lose its powers as we will no longer be an EU member. That is what the SI brings in.
Several noble Lords asked about the national small series type-approval limits. They are being doubled for this year, and only for this year, because by next year we will have this new statutory instrument in place which will have our new type-approval process.
Baroness Randerson
Can the Minister explain why they are being doubled? On what grounds is their historic level now inappropriate?
Baroness Sugg
Before, it was for the whole of the EU. Now it will be for the UK only, so this is a temporary measure until the new type-approval statutory instrument comes in.
Drivers’ Hours and Tachographs (Amendment etc.) (EU Exit) Regulations 2019
Baroness Randerson Excerpts(5 years, 2 months ago)
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Baroness Sugg
I was just coming on to those new offences. The new criminal offences are all under the Transport Act. The first is the failure to install or use a tachograph in accordance with the AETR requirements for in-scope vehicles. The second, in Section 97ZB, is the supply of tachograph equipment that has not been or is no longer type-approved by the relevant authorities. The final new offence, in Section 97ZC, is the failure by a tachograph manufacturer to inform the Secretary of State of known security vulnerabilities in its product. As I said, in particular the provisions around the AETR agreement will be increasingly important as this international agreement takes the place of the existing EU regulations. In the course of the legal analysis work to prepare this EU exit SI, these were the new criminal offences identified as needed. It is particularly important to make sure that the AETR regulatory regime is fully functioning for exit day.
The necessary legal amendments do not modify the substantive regulatory obligations placed on drivers and operators subject to the rules. In the event of a deal, as set out in the draft political declaration, for road transport the UK and the EU intend to develop market access arrangements underpinned by appropriate common standards, including driving time limits. Obviously, that is where we hope to get to, but in the event of us leaving without a deal these regulations are needed. I beg to move.
Baroness Randerson (LD)
My Lords, these are really important regulations. They are vital for road safety and for driver welfare, because over the years there has been great concern about the way drivers have been expected to live when they are not driving along the motorways.
Up to now, drivers have been bound by the EU drivers’ hours regulation and the EU tachograph regulation. In future they will be bound by the AETR, which covers a much wider group of countries. From what the Minister has said, it appears that these two sets of regulations are very similar and essentially the same.
I had intended to ask about the three new offences and amendment of two existing ones, but the noble Lord, Lord Rosser, has already asked about that. It is important to find clarity on this.
The Secretary of State will be responsible in future for the approval of recording equipment. Currently, the Secretary of State is responsible only for checking and inspecting, but in future they will have responsibility for approval of the equipment. That is an important additional responsibility. Can the Minister explain who will have that responsibility in Northern Ireland? I realise that this SI does not apply to Northern Ireland, but clearly tachograph issues are very important in Northern Ireland, because drivers cross the border all the time and cross-border trade is so important. Can the Minister explain how it will work in Northern Ireland? Obviously, drivers from the Republic of Ireland will follow EU rules.
Motor Vehicles (Compulsory Insurance) (Amendment etc.) (EU Exit) Regulations 2019
Baroness Randerson Excerpts(5 years, 2 months ago)
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Baroness Randerson
At the end insert “but this House regrets that residents of the United Kingdom could be denied access to justice when injured abroad as they will have to make claims for compensation in the country in which the injury occurred rather than being able to appoint a claims representative in the United Kingdom”.
Baroness Randerson (LD)
My Lords, I have tabled this amendment because this SI does not simply cross out the term “EU” and replace it with “UK”; it does not preserve the status quo; and it does not recreate the advantages and systems that drivers and passengers can rely on at the moment when things go wrong when they are travelling abroad. I want to thank the Association of Personal Injury Lawyers, which helped to explain how the system works.
Every year, more than 2.6 million UK vehicles make the trip to the EU, whether for business or pleasure. Given the scale of that annual migration, it will come as no surprise that a significant number of them have accidents. Around 5,000 people a year make claims under a very useful EU scheme which provides that if a UK resident is injured in a road traffic accident in the EU and the injury was caused by the negligence of another person, the injured person can claim compensation in the UK. This has obvious benefits, because victims can do this in their own language, using their local solicitor. They do not have to travel anywhere to do this. The claim is made against a UK-based claims representative appointed by the foreign insurer. Occasionally, this excellent system does not work as it should, in which case the injured person has a backstop—if I can use that phrase—and can claim through the Motor Insurers’ Bureau. The MIB then takes responsibility for recouping costs from its counterpart agency in the country where the accident occurred.
Lord Adonis (Lab)
The noble Baroness is making a very powerful point in respect of compensation for accidents, but there is also a massive bureaucratic issue in respect of insurance here. It is understated in the Explanatory Memorandum. Paragraph 3.7 says:
“If there is no deal with the EU, UK motorists will also be required to carry a ‘Green Card’ which guarantees third-party insurance provision when driving in the EU. This may result in increased bureaucracy and costs for those drivers”.
That must be the understatement of the year: how can that not result in a massive increase in bureaucracy and inconvenience to drivers? Should the Government not be telling all the motorists proposing to leave the country in five weeks’ time that they are going to be required to have this green-card, third-party insurance provision which they do not have at the moment, and how they can secure it? I am a former Secretary of State for Transport, but I myself do not know what it is, so the population of Northern Ireland which, as the noble Baroness says, will be decamping over the next 12 months to the European Union, is going to have to be well informed about the green-card insurance system, about which it knows absolutely nothing at the moment.
Baroness Randerson
The noble Lord makes a powerful point and I will come on to the green card later. It did strike me, as I read the Explanatory Memorandum, that it was a masterpiece of understatement. It said some fairly amazing things without the slightest hint of a raised eyebrow.
The point I am making is that the Government’s proposal is totally inappropriate to modern life. The Joint Committee on Statutory Instruments points out that paragraph 3.6 of the Explanatory Memorandum says that the method of claiming will vary from country to country and that victims might have to pursue an uninsured person directly.
It also points out that no deal will lead to the issuing of green cards again. I am sure that noble Lords will remember green cards—but not with affection. The DfT has acknowledged that this will also apply to travel between Northern Ireland and the Republic of Ireland. Although it says that the SI has nothing to do with green cards, perhaps the Minister can update us on the situation with green cards, because the British Insurance Brokers’ Association is alerting us now to the urgency for a decision, because physical green cards will have to be produced in their millions in the next few weeks.
I sometimes think that Brexit is a giant conspiracy against the great British tradition of a holiday in the sun.
Lord Adonis
I did not pick up on this in my reading of the statutory instrument. Did I hear the noble Baroness correctly: that you will require a green card to cross the Irish border? Is that the point she was making? Is that not a breach of the Good Friday agreement?
Baroness Randerson
I am quoting the Joint Committee on Statutory Instruments. The noble Lord makes an interesting point. It quite possibly would be but I am not sufficiently expert on the Good Friday agreement to be definitive on that.
There is a conspiracy against our summer holidays. We will now be going off with an international driving permit, sometimes two, and a green card to wait in the queue at the Channel Tunnel or the port—unless we choose to go by air, with all the doubts about whether or not the plane will fly. It will cost more because of the changes in the exchange rate in the past two and a half years; the ATOL system will not have the guarantees that it once had; and now we hear that if you have an accident you will be left to fight for compensation on your own. What will we get in return? A shiny blue passport. The problem is that this takes us back to a cumbersome, bureaucratic system that goes back decades and does not fit the modern way of travel.
On the consultation outcome, paragraph 10.1 of the Explanatory Memorandum states:
“Given the EU Exit negotiation sensitivity of changes to the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003, formal public consultation was not considered appropriate”.
I have read that several times. Are the Government really saying that because this will upset motorists they are not going to tell them about it or consult them? That is how I read that sentence. If that is not accurate, will the Minister explain exactly what the Government were trying to say?
The paragraph goes on, almost incredibly, to say that the Motor Insurers’ Bureau, the insurance trade associations and the motoring trade associations have been consulted and are satisfied. Are they seriously satisfied with this? They cannot possibly be satisfied and I would like to know what they really think. They might take the opportunity after they have read Hansard to tell us. It cannot be possible in an industry as diverse as this that all those organisations are happy with these seriously problematic regulations.
Paragraph 12 refers to the impact. Astonishingly, it deals with the impact on the courts of an expected spike in the number of cases being pursued prior to Brexit to take advantage of the current system. It totally ignores the impact on private individuals who are victims and find that they have to go to another country to pursue their case. Justice is a right, not a privilege, and these regulations cut at the basis of that right. UK citizens injured abroad may effectively lose the right to compensation as a result of this. Indeed, it is likely that compensation will be available only to privileged, wealthy people who can afford expensive legal representation.
Lord Adonis
My Lords, it is important that the House does not lose its capacity to be shocked by the scale of the dislocation that may be imposed by the Government on the country in one month’s time if no deal Brexit proceeds.
In a succession of speeches, the noble Baroness, Lady Randerson, has laid out the impact of no deal on motor industry regulation and she did a good job of weaving together the changes in relation to insurance, accidents and international driving licences. The extraordinary thing about it is that, because we are going back to pre-1973 law, not only are many bureaucratic requirements being imposed but they are being imposed in a way that is entirely pre-digital.
Noble Lords will recall the green card but I am still of an age where I do not recall it—I do not think the Minister recalls the green card—which is a telling remark. You have to be—how can I put this delicately?—of a certain age to remember the green card. I certainly do not remember the international driving licence. However, as we go into this Alice in Wonderland world of disaster that the Government propose to inflict on the country, we now know that not only will you require an international driving licence and a green card but you will have to have them as physical constructs because the regulations under which they are imposed go back to the pre-digital era. You will have to get a physical international driver’s licence or licences—the Minister can intervene on me at any stage if she wishes—and a physical green card. Is that correct?
Baroness Sugg
I thank noble Lords for their consideration of these draft regulations. I start by saying that this is not a situation the Government want to be in. We do not want no deal; we are working very hard to achieve a deal. We do not want to be in a situation where visiting victims provisions are no longer available to UK residents injured in the EEA. That is why we are trying to achieve a deal with the European Union, which is something that I hope will happen very soon. The removal of the visiting victims obligation in respect of the Motor Insurers’ Bureau would be a sensible approach in the event of no deal. It will ensure that the insurance industry and, ultimately, people who pay for insurance documents are not hit with an extra cost—the burden would ultimately fall upon UK motorists.
In response to the specific questions raised, as I acknowledged in my opening speech, this SI was upgraded from negative to affirmative. It did not contain provisions falling within paragraph 1(2) of Schedule 7 to the withdrawal Act, requiring it to be made under the affirmative procedure, but we understand why the committee was concerned and we are happy to relay it in the affirmative procedure.
On consultation, I can confirm that, yes, we speak to the RAC, the AA, personal injury lawyers, the insurance industry, the Motor Insurers’ Bureau, the Financial Conduct Authority and consumer organisations. It may be helpful to reiterate that, in the event of no deal, the motor insurance directive, which facilitates the visiting victims scheme, will no longer apply. A decision therefore had to be made because that would mean that the MIB would continue to compensate UK residents injured in the EEA without the ability to claim reimbursement from its foreign counterparts.
Also, the MIB would have to pay for claims made by EU 27 visitors injured in the UK, without UK visitors to the EU benefiting from those same benefits. Ultimately, this could mean that UK motorists in insurance schemes are paying, without any reciprocity, for EU 27 visitors injured in the UK. As I said, we would like to continue being part of the reciprocal scheme but, by leaving the EU, we will no longer be part of the motor insurance directive and will not be able to do so. I reiterate that this does not mean that UK residents will not receive compensation. They will still be entitled to compensation, although, as the noble Baroness pointed out, this will have to be claimed in the country where the accident happened, which will lead to additional complexities and costs.
Baroness Randerson
Could the Minister please take on board the need for people to know about this? I hope that she will come to the issues of why there was no consultation and the sensitivity of consultation. In view of the fact that there has not been consultation, I note that I have not seen any media coverage at all of this issue. There will be people going on their holidays—over Easter, for example—blissfully unaware of the potential impact of these changes if there is no deal. The Government need to take responsibility for advertising this situation—putting something on the government website would be useful because insurance companies, when granting insurance, could give people a pointer to information on the government website.
Baroness Sugg
I agree with the noble Baroness that the Government have a responsibility to ensure that people are aware of this. A communications campaign was launched in February, which has notified citizens about how the changes to claims can be pursued. It advises that in the event of a no-deal exit, UK residents involved in a road accident while abroad would need to bring their claim in the country concerned. That campaign is live, with radio, digital and social media. The noble Lord, Lord Adonis, heard an advert on Spotify, as he mentioned in a previous debate. We are also directing stakeholders to an external site where they can download and share information with their clients; we will continue to do that.
This is an area where we continue to pursue agreements with other EU countries: we are pursuing bilateral agreements and the MIB is having those conversations with its EU equivalents. The nature of the conversations is sensitive, involving the reciprocal payments of insurance claims; that is why the specific detail has not been published. As I say, we acknowledge that this is not an ideal outcome for citizens. It is a sensible alternative, after weighing up the options, but achieving a deal remains our greatest priority.
The impact assessment lays out the five options that we considered, including a “do nothing” policy, but in each there would be a direct cost to victims of traffic accidents. People are still able to make claims, but they will have to do that in another country. I am not able to give a specific cost. The noble Baroness is correct to point out that this equates to 5,000 motorists a year. The additional costs incurred by a victim would depend on a number of factors and the complexity of the case.
On green cards, the noble Lord, Lord Adonis, quite rightly quoted the comments from the SLSC report, which were put in the new Explanatory Memorandum. The noble and learned Lord, Lord Hope, was quite right to point out that this SI does not equate to green cards, but I am happy to address it briefly. The Government want to remain part of the green card free-circulation area. We meet all the requirements needed to remain part of it when we leave the EU. That has not yet been agreed by the Commission; we very much hope that it agrees that soon. They can be obtained from insurers, free of charge. The noble Lord is quite right to point out that that could mean 2 million to 4 million green cards. We are working very closely with insurance companies to ensure that people are informed of this. My noble friend Lady Barran, our new Whip, received such a contact from the insurance industry very recently. However, this is something that we want to avoid and that is why we are very hopeful that the Commission will agree that the UK can remain part of the green card free-circulation area. Again, as the noble and learned Lord, Lord Hope, pointed out, this is not in our gift. We match the requirements that are needed, but need the EU to recognise that.
I think I have answered all the questions raised.
Baroness Sugg
On Northern Ireland and specifically the Good Friday agreement, which I think the noble Lord pointed to, the Commission and the UK have said that they will respect the Good Friday agreement, and currently—the noble Lord is right to point out—there would be a requirement to carry a green card. However, the implementing decision from the Commission to recognise the UK as part of a green card circulation area would remove the need for that green card. As I said previously, we meet all the requirements of that, and are working with the Commission to make that agreement.
I think I have answered all the questions; if I have not I will follow up in writing. I will end as I started: I recognise that this is not an ideal situation; it is not one that we want to be in. We think this is the right decision, given the implications of leaving the motor insurance directive—something that will happen if we leave the European Union without a deal—and that is why the Government are working to ensure that we achieve a deal with the European Union. I beg to move.
Baroness Randerson
In light of the Minister’s response, I am not minded to take this to a vote this evening. However, I do not want that to diminish the fact that this is a very regrettable direction in which the Government appear to be set. The only slight chink of light that I see is that the Minister tells us that the Government are engaged in bilateral discussions. That is what has persuaded me not to push this to a vote on this occasion.
Merchant Shipping (Marine Equipment) (Amendment etc.) (EU Exit) Regulations 2019
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Lord Mackay of Clashfern (Con)
My Lords, this amendment is dependent on the requirement of consultation and a document setting out the effect of the regulations. As far as I know, there is no requirement for either of these in any of the empowering statutory provisions. Therefore, this is by no means a basis for the amendment that the noble Lord, Lord Adonis, has signified. As I understand it, what is happening is that the regulations, which previously were all European regulations, will continue to apply in the same form, but with the expression of these regulations in the UK area of shipping.
Perhaps I should mention that I am an Elder Brother of Trinity House: what effect that has on this, I am not sure, but I will mention it just to be certain. I am certainly concerned with the safety of shipping and I believe that the instrument is, too, in that it preserves the existing standard of safety, both in Europe and when it passes from Europe to us here. It is the same standard and I cannot for the life of me see any reasonable basis on which this regulation could be set aside. It would be a drastic thing to set it aside and I ask the same question that I asked the last time I spoke on something like this: has the noble Lord, Lord Adonis, asked anybody who is affected by this whether they would like this regulation to be set aside?
Baroness Randerson (LD)
My Lords, it has already been said that this was originally listed for the negative procedure and has been upgraded to the affirmative procedure on the recommendation of the Joint Committee. I express my surprise that the Government thought it was appropriate for the negative procedure.
I understand the concept of continuity that is a thread within this SI. The regulations require marine equipment to be approved by a UK-approved body and will allow equipment approved by the EU-notified body to be accepted. There are currently 10 EU-notified bodies that assess and approve marine equipment. These 10 EU-notified bodies are going to become UK-approved bodies. What is the situation in relation to those bodies now? As I understand it, some of the larger bodies, at least, are preparing to move to the EU because, if they do not, they will not be able to provide EU assessments. That is clearly the bigger picture: they want work on the larger number of 27 countries, rather than concentrating only in the UK. It seems to me that if bodies move from the UK in order to retain their EU status, there will be job losses and jobs moving abroad, and as a result there will be fewer bodies to provide the approvals for the maritime sector that we are talking about. Can the Minister give us some more information on that? How many bodies are thinking of moving? How many are in the process of moving? How many jobs are involved? We can see then how many will be left.
At first, the UK will continue to accept EU-approved products but, as I read it in the Explanatory Memorandum, it is government policy to time limit this, although the Minister seemed not to say that in her introductory comments. I would be keen to have some confirmation as to whether it is government policy. Manufacturers have expressed concern that they may have to get two different conformity assessments in future and that will be twice the effort and twice the cost. I realise that the Department for Transport disputes this. Perhaps the Minister can make a definite statement on it to reassure the House.
Manufacturers will, of course, produce goods to a UK standard if they are based in the UK, but many of the ships in UK waters are EU ships and, presumably, they need replacement parts from time to time and that is a valuable market for UK manufacturers. Will UK manufacturers in future have to produce to two different sets of standards to fulfil orders for repairs to EU ships? EU ships will require EU standards, and UK ships will require UK ones.
Flybmi
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Baroness Sugg
I thank the noble Lord for his questions. On how we are dealing with airline insolvency in the future, we have commissioned an independent review led by Peter Bucks to review consumer protection in the event of an airline or travel company failure. It is looking at options including an orderly wind-down of an airline so that it is able to conduct and finance repatriation options without impact on the taxpayer. The review is also looking at the lessons learned from the collapse of Monarch, and will identify potential market reforms necessary to ensure that passengers are protected when an airline fails. This is a complex issue and it is an extensive report. We are expecting the report in the spring.
Initial estimates are that fewer than 1,000 affected UK-originating passengers are overseas. Many will have already made their way back; many will have been planning to stay abroad. We understand that about two-thirds of those booked to return were on code shares, and those bookings will be honoured.
On the PSO, the department and the CAA were not informed of the administration until very shortly before the directors agreed to it. To be clear, the contract for the PSO is directly with the city of Derry and Strabane council. They are the people who run that contract and it is they who will re-let it shortly.
Baroness Randerson (LD)
My Lords, I thank the Minister for her Statement. The company cited Brexit as one of the reasons for its problems. First, the fall in the value of the pound in the past two and a half years has obviously meant that people are finding it more difficult to afford holidays abroad. It mentioned the spike in fuel and carbon costs caused by our exclusion from full participation in the EU Emissions Trading Scheme—we have been suspended from that until the withdrawal agreement is in place. The company said that it was unable to secure valuable flying contracts in the EU because of Brexit uncertainty.
On Saturday, we had Flybmi; today, we have the very sad news about Honda in Swindon. The trickle of job losses has become a steady flow. Today as well, we have the UK Trade Policy Observatory estimating some 750,000 job losses—that is a conservative estimated—as a result of Brexit uncertainty. What plans do the Government have to retrain people who lose their job because of Brexit uncertainty? What plans do they have to find new jobs for them? Have they estimated the total cost to our economy of retraining people and providing them with benefits while they are unemployed?
Baroness Sugg
Both the UK and the EU have made it very clear that we want flights to continue after Brexit. We and the EU are taking the necessary actions to ensure that this will be the case in the event of no deal. This sad event is a commercial matter for the airline in a competitive industry. BMI has been exposed to wider pressures faced by the global aviation industry such as increasing fuel prices and intense competition. Other EU airlines have collapsed in recent years; for example, Germania, Primera Air, Air Berlin and flyvlm. This is not just a UK issue. I agree with the noble Baroness that businesses want certainty. I am afraid that that I do not have any figures on jobs and retraining, but I regularly hear requests for certainty from the aviation industry. That is why we are working to deliver a deal and the implementation period that comes with it. I hope that that will be agreed soon so that we can give businesses the certainty they need.