Haulage Permits and Trailer Registration Bill [HL]

Earl Attlee Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 13th March 2018 Grand Committee

[Lord Blencathra]

I thank the noble Baroness. Our report does say:

“The Bill is wholly skeletal, more of a mission statement than legislation”.


It goes on to say in paragraph 4 that:

“We appreciate that the position remains unclear for a variety of reasons”,


which explains why we think the Bill is skeletal. I hope my noble friend the Minister can give us a few examples of the sort of regulations that may be necessary.

On Amendments 6 and 11, the Government’s helpful Explanatory Memorandum says that:

“The power has been left to delegated legislation rather than included in the Bill because the terms of international road transport agreements are as yet unknown. The provisions put in place, if any provisions are needed at all, will reflect the terms agreed between the UK and the EU or other countries for the carriage of goods”.


The wording in the Explanatory Memorandum is almost identical on Clauses 1 and 3, to which these amendments relate. That is why we simply say in our committee’s report:

“Given that regulations under clause 1”—


and Clause 3—

“might prove to be unnecessary, we recommend that the Bill should contain a sunset provision, extendable if necessary, to remove the regulation-making power in clause 1 if it does in fact prove to be unnecessary”.

I congratulate the noble Lord, Lord Tunnicliffe, on tabling that amendment on behalf of my committee. I had been a bit negligent in putting it down myself, so I am grateful to him and I would be grateful if the Minister, in due course, could respond to the points made.

[Earl Attlee (Con)]

My Lords, regarding Amendment 1 in the name of the noble Lord, Lord Bassam, I do not think we should tie the hands of government. If we set something in stone in primary legislation, it will be to our disadvantage and our opponents’ advantage. However, I very much hope that the negotiations will result in the absolute minimum of friction, for the reasons so well explained by all noble Lords who have spoken so far. The noble Baroness, Lady Randerson, observed that there are no draft regulations in sight and that this is a framework Bill. That is not surprising, because we do not know what the negotiated agreement will look like. However, the Committee will be aware that if the Bill is passed, it will strengthen the Government’s negotiating hand.

The noble Lord, Lord Berkeley, raises an important point in his Amendment 7. I would like to see no restrictions on permits—more or less free issue—with one exception, which I am sure he will agree with. Is there any scope for denying permits to non-compliant operators if they are in trouble with the traffic commissioners or the Vehicle Inspectorate? I do not expect an answer from my noble friend the Minister this afternoon but perhaps she could write to me in due course. As I say, I am for no quantity restrictions but I do not think we should put this into the Bill because it would tie the hands of Ministers when they are negotiating Brexit.

[Lord Berkeley]

I understand the noble Earl’s comment in suggesting that Amendment 7 may not be a good thing to put into the Bill. But he will remember that when this was debated at Second Reading, there was much discussion of the allocation of permits. Does he not agree that there needs to be some wording to ensure that the allocation, if it has to happen—I share his views that it should not and that there should be enough for everyone—should be seen to be fair? Perhaps he has some other ideas to replace my proposed new clause in Amendment 7.

[Earl Attlee]

I assure the Committee that I will not be tabling amendments but I was alarmed by some of the history of permits that we looked at during Second Reading. That is something I do not want to see because it constrains the market and competition. I would much rather see permits issued more or less freely, with that one exception: that we could see it as an opportunity to make things more difficult for non-compliant operators.

[Lord Campbell-Savours (Lab)]

My Lords, I might be the only person in the Room who has run on one of these permits, which was some 50 years ago. I have some permit documentation, going back 30 years, in front of me now. I want to talk about what happened then and what we should avoid happening in the future.

We were carrying our own goods, exporting them and importing components. When we were exporting goods, we had to run on either non-quota or quota—non-quota was a defined group of products that we carried if we were going to an exhibition. For example, I remember going to a clock exhibition in Switzerland, and we had to get a non-quota to carry to Basle there. If we showed at the Paris Porte de Versailles in France, again we would run on non-quota permits but if we were running goods of our own manufacture, we would have to carry a permit. The undersupply of permits was a real problem.

The Minister sent us out a letter during the week in which she talked about electronic management of these systems. To some extent, that might work but I will come to a problem that might arise. The problem in the late 1960s and 1970s, when I was involved in this business, was that there were a lot of forgeries out there. Many truckers who could not get permits would forge them and, when they got to customs frontiers in Europe, bribe customs officers to get passage into another country. As I said at Second Reading, I saw this happen myself. I remember that the customs officer would almost wink and people would drop notes in an old jar standing on the counter. People knew what was going on and it was widespread. I never got involved in it myself, but I observed it. People used to get quite angry about the attitude of some customs officers. They would ask you to open the back of your truck to see what you were carrying, as if they were checking against the bills of lading—the document which indicated what goods you were carrying—as if they were to be given a tip for the pleasure of having your truck opened. It was examined, not properly but in a very curious way, with nods and winks. That went on a lot and I am worried about it.

That was one of the abuses. The next one—it was not even an abuse, as people just turned a blind eye to it—was the selling of permits. Some companies had more permits than they needed whereas others were starved of them. Someone told me on the phone the other day that the going rate, even in the 1980s, was something like £250 for a permit, depending on where you were. When they were carrying expensive goods that was a minor cost to pay, because it was transferred on to the people whose goods they were. If there is electronic control, the chances of abuse in that form are very remote.

We come back to the number of permits. If there is a shortage—and the French, the Dutch and the Belgians may argue for one—it will mean that when you load your truck in the UK you will have to drop your load at Antwerp, Amsterdam, Ostend, Zeebrugge, Calais or wherever. A French lorry will come and pick it up and get the business. At the moment, many British hauliers are able to carry right across Europe. If we do not have the permits to run in Europe, the Europeans will get the trade and all our lorries will be doing is running them across the channel, dropping them, then taking the tractor unit home. In the real world, there could be many problems. I know that this is a skeletal Bill and it may not even happen, but if it does there is going to be a lot of trouble and people are going to be angry.

--- Later in debate ---

[Lord Moynihan]

I pass swiftly on from the observation of the noble Lord, Lord Snape, but I am sad that I am not in Cheltenham today—and, indeed, that I will not be there tomorrow, because I will be speaking on matters sporting, and racing issues in particular, in the Brexit debate on the relevant amendment.

I support the comments that have been made by my chairman of the Delegated Powers and Regulatory Reform Committee in the context of Amendments 6 and 11. Bills that grant wide powers to Ministers on the basis of no clear policy are difficult to scrutinise, as the Constitution Committee highlighted, and therefore present a fundamental challenge to the balance of power between Parliament and the Executive. Much of the detail of how these regimes are to be put in place is left to secondary legislation. In the absence of policy detail or the illustrative regulations—examples that my noble friend mentioned earlier—it is not at all clear to me how these powers will be used or whether they will be used. That is what led to what I believe—I speak in a personal capacity—was a constructive comment when we said that it was,

“more of a mission statement than legislation”.

I therefore hope that where there are exceptional circumstances, which in this case require the creation of criminal offences by regulations, they should normally be subject to the affirmative procedure. What can support that specifically in the context of Amendments 6 and 11 is the inclusion of sunset clauses, which would mitigate the constitutional concerns raised by the broad powers in the Bill and the uncertainty about how they might be used. That is an important constitutional issue; it is interesting that that was covered in some detail both by the Constitution Committee and the committee on which I have the privilege to sit, both of which were at one. I ask the Minister to take those into account seriously as we progress through the Bill, to make sure that there is an appropriate balance between the Executive and the legislature so that we have the opportunity in the future to have a rather more detailed look, both through sunset clauses and the affirmative procedure, at some of the key aspects of the Bill.

[Earl Attlee]

Supposing that the Government lay some negative instruments to deal with the outcome of the negotiations, and that they are extremely disadvantageous to our road haulage industry, it would be open to the road haulage industry to get on to noble Lords like myself and the noble Lords, Lord Berkeley, Lord Snape and Lord Campbell-Savours, who could pray against the negative instrument in the first 40 days and say no to it.

[Lord Campbell-Savours]

My Lords, I want to correct the record on something. I said that we ran on quota permits but we ran on non-quota permits. I just checked my notes.

--- Later in debate ---

[Earl Attlee]

My Lords, the answer to the noble Lord’s question is that I imagine that the noble Lord, Lord Pannick, would have no difficulty at all in convincing the courts that the matter was set in stone.

[Lord Bassam of Brighton]

I am not here to listen to the noble Lord, Lord Pannick, in his absence. I am keen to hear the Minister give her explanation, which is what the Committee needs.

--- Later in debate ---

[Lord Tunnicliffe]

My Lords, I move Amendment 8 simply because I believe two things. First, we cannot contemplate a situation where there are not enough permits. If we have a permit system, we must negotiate a position where there are sufficient. That is the principal reason for my moving the amendment: to emphasise that point, to allow people to speak to it and for some of the passion of last night to come through on the back of it.

If there is a limit, it is unthinkable that it should be a matter of random allocation or “first come, first served”. How do you build the future of your business, which is to a degree capital intensive, while depending on employing staff to line up at some government office with sleeping bags to sleep overnight to be first in the queue as if it is Wimbledon, or plan your investments on the basis of how their names might come out of some hat? First, we should not contemplate a limit on the number of permits; secondly, I cannot believe that these words were put in a Bill, as it cannot be a serious suggestion to this extraordinarily important industry that it would be required to behave like that to carry on trading. I beg to move.

[Earl Attlee]

My Lords, I support the initial comments of the noble Lord, Lord Tunnicliffe. It would be a disaster if we had to regulate the issue of permits in the way provided for, but I hope that the Minister can reassure us that we will take all necessary steps to avoid such a situation. However, I think that it is a sensible provision in a Bill as a backstop, while recognising that it would be terrible in the way if we found ourselves in such a situation as the noble Lord described.

[Lord Bassam of Brighton]

My Lords, I support my noble friend Lord Tunnicliffe on this. Pretty much every year, I try to get tickets to go to Glastonbury. You go on the website at 9 am and are still there at 10.30 am, and you suddenly discover that your youngest daughter has got tickets but you have not. There is something clearly wrong about a system that does that in my family, let alone anywhere else. The notion that we might have some random process—first come, first served or whatever—is clearly something that we should not allow ourselves to sign up to.

I want to hear on the record some reassuring words from the Minister. This may be a vague Bill, a schematic Bill, a framework Bill and all the rest, but this matter needs some clarification.

--- Later in debate ---

[Baroness Sugg]

I certainly will. As I said, we currently use it in certain non-EU agreements, but this is obviously the first time we will be partially using it in an EU-UK agreement. Let us not forget that we are all hopeful that we will not need to include it, but if we do, it is incredibly important that we get it right in order that it is fair. I will take it away, discuss it further and see whether we can get across the same principle and ensure that we are not subject to legal challenge in a way that is more acceptable to noble Lords.

[Earl Attlee]

When my noble friend takes it away, can she also have a look at why we do not simply auction the permits? We auction all sorts of things: oil exploration rights, for instance. They are very valuable and they are auctioned. That seems a much more sensible way to allocate a scarce resource rather than first come, first served, which seems to have all sorts of difficulties alluded to by the noble Lord, Lord Campbell-Savours, although he shakes his head vigorously.

[Lord Berkeley]

The noble Earl would prefer to see a lorry load of caviar coming in rather than basic food.

[Earl Attlee]

I made it quite clear that I do not think we should go anywhere close to being short on permits. We are talking about disaster if we are short on permits. As we know perfectly well, the Bill’s provision is just a long-stop measure, but I am glad that my noble friend will be taking it away.

[Baroness Sugg]

Currently, the scoping document does not include a provision to auction. That is a new one on me, and I think there will be various views on it. We are of course discussing what criteria should be used and that is subject to consultation, so I shall be happy to feed in my noble friend’s thoughts.

As I said, I understand the issue. I will take it back to see whether there is anything that we can do. With that, I hope that the noble Lord will be able to withdraw his amendment.

--- Later in debate ---

[Baroness Randerson]

My Lords, I rise to speak specifically to Amendment 12, to which I added my name, but also to the group as a whole, because it covers the cost of all this to the haulage industry: the cost of UK-registered vehicles operating in the EU; the efficiency of haulage after Brexit; future arrangements for the international transport of goods; and the cost impact. I have a slight feeling of Groundhog Day. I will spare your Lordships much of the detail, but I have been through this once in the previous 24 hours, during the EU withdrawal Bill debate, when we covered some of the same territory. For the sake of variety, I will say a few different things because there are plenty of things to say.

A report came out today—hence it was not the topic of my speech last night—by Clifford Chance and Oliver Wyman. It estimates that the costs to business of Brexit in terms of customs arrangements, additional legal and bureaucratic requirements and haulage requirements in relation to customs arrangements for goods in transit will be £32.8 billion. I always measure things in relation to £350 million, for reasons that might be obvious to some noble Lords here; that figure comes out at roughly double £350 million a week. That is a very significant issue and I am delighted that the noble Lord, Lord Campbell-Savours, illustrated the situation so well with original documents. I recall that, a year ago, one of the haulage organisations—forgive me, I am delving into my memory and cannot remember which one—sent us a briefing about the costs to the haulage industry. It illustrated them by saying that, depending on the type of goods being carried, driving from the UK to Italy and back could require 64 different pieces of documentation. In this day and age, I am sure that would not be pieces of paper, but people have to fill in the forms online in just the same way. Anyone who spends as much time filling in forms online as I do will know that it is very easy to make one of the mistakes referred to by the noble Lord.

Last night, we talked about delays at the ports. Dover is a particularly stark example because of its geographical configuration and the built-up area around it. That all adds to the cost, and the issue of permits and other documentation is key to getting the lorries through Dover and all the other ports as quickly as possible.

The amendments address the impact of additional border controls and delays, the costs of which go well beyond the haulage industry. When we had Operation Stack—and Dover port is predicting worse queues than Operation Stack as a regular feature—it cost the police and council in Kent £1 million a day. All these other things add up, so it is so important that any permit system is simple, straightforward and as flexible as possible.

I also emphasised last night that we talk all the time about the cost to government, but businesses have to internalise and absorb those costs or pass them on to their customers. In the case of large companies, that might be quite reasonable over a period, but there are SMEs that have only ever exported to EU countries. They will never have dealt with custom systems before, and will not be familiar with the whole process. They will have to set up whole new departments and systems, which will be of significant cost to business and have significant impact on our industry. That applies across the board.

The Clifford Chance report picked out the impact on the car industry because car parts move across borders frequently during their production. The impact will be on car manufacturers not just in this country but in other countries bringing their cars and car parts to us.

I very much hope that the Minister will be able to assure us that the Government are doing some work on this and will soon be able to produce some hard figures. Reports have been published. They may be accurate or inaccurate, but the work has been done. Individual industries are doing that work. It would be very useful if we had some information on what the Government calculate will be the impact.

[Earl Attlee]

My Lords, I see merit in some of the amendments. Clearly, we need to know the outcome of the negotiation and what the impact will be. The noble Lord, Lord Campbell-Savours, mentioned demurrage, which is a good point. If you have a complex system, you can foul up. The problem for a small haulier is getting anyone to pay demurrage. It might be in the contract, but you try getting your customer to pay it for a small haulage business: you will struggle. It may be okay if you have a supertanker and your contract agreed on the Baltic Exchange, but for a little haulage deal? Forget it.

The Committee needs to consider the position of our EU partners. It is not in their interest to have a complex system either. We have the Hams Hall engine plant making BMW engines that have to go to Germany. We know perfectly well that automotive components go backwards and forwards several times, as the noble Baroness, Lady Randerson, said. It is in no one’s interest to have a complex system.

[Lord Campbell-Savours]

I am not sure that is the case. If you are required to give your load to someone else, because you do not have a permit to run in Germany, you lose the business. A German tractor unit will take over your load and take it to its destination.

[Earl Attlee]

I agree with the noble Lord that the Government will have to negotiate the UK’s position effectively, but it is in no one’s interest—neither ours nor that of the other EU states—to have a complex system that harks back 50 years. The noble Lord has illustrated the problem very well: if you have a complex system, it will be horrendously expensive, and we do much more cross-channel trade now than we ever used to. I cannot see the driver of having a complex system. We may legally have to have a permit system, but it is up to the Government to negotiate as simple a system as possible, which I am confident they will do.

[Lord Campbell-Savours]

I wonder whether I can speak again.

[Earl Attlee]

It is Committee.

[Lord Campbell-Savours]

I have just seen something in a non-quota document which might be of interest to Ministers. It is an Italian document stating that a permit is required for the transport of goods by means of an unaccompanied trailer or semi-trailer as well as by means of a motor vehicle with or without trailer or semi-trailer. It says that “articulated vehicle” means a tractor hauling of semi-trailer. If we really get into hard territory, we should be arguing on the gross tonnage of vehicles, because that might be a way of getting more permits. Our vehicles are 24 tonnes, 32 tonnes, 15 tonnes and 10 tonnes—I am not a transport expert; my noble friend Lord Berkeley will correct me. We may get an exemption for lower-tonnage vehicles in the event that we find ourselves in a corner on the allocation.

[Earl Attlee]

Of course, the noble Lord is thinking about a complex system. One might need a permit just to run vehicle registration number XYZ in Europe; it might be as simple as that; we simply do not know. The Minister will not give the indication because she is negotiating. It need not be horrendously complicated.

[Lord Tunnicliffe]

My Lords, this is the reports group of amendments; various reports are suggested. We have two amendments in the group, Amendments 13 and 14, but they all centre on the same issue: how is this critical, potentially catastrophic problem being solved and how much is it costing?

It is important to realise that this is not a second-order hard or soft Brexit debate; it has nothing to do with that. Whether it is a hard Brexit or a soft Brexit, if this problem is not solved, we starve. Last night, it was clear just how concerned the House is about the situation. There is an argument that, because it will cause them pain and cause us pain, the world will be rational. The trouble is that the negotiations are being led not by businessmen or exporters but by politicians. I hate to say it: in history, politicians have not always been rational. Our friends in Europe are feeling very bruised about Brexit. They should probably be cheering because they are getting rid of us, but they are not; they are upset. Their club is being challenged by our departure, so there is every possibility that they will not be rational.

The argument that the pain is the same from anything we get wrong, again, is not valid. If you put a border down the North Sea and down the channel so that nothing can cross it, the EU 27 will survive and we will not. This problem has to be solved. All that we are asking for in this group of amendments is to be told how it is happening. Whether we agree the amendment or not, I hope that the Minister will hear what we are saying, arrange one way or another to keep us informed of developments and convince us that the energy and effort that such an important issue requires are going into solving it.

--- Later in debate ---

[Lord Campbell-Savours]

My Lords, I want to ask a very simple question, which is slightly tangential to the amendment, about fuel dipping. Fuel dipping is where the authorities decide, for whatever reason, to test tanks to see how much diesel they are carrying. Of course, these trucks carry a lot of diesel. I do not know where I heard it, but I heard that some countries on the outer periphery of Europe fuel dip in truck tanks so they can charge duty on diesel coming into their country. During the negotiations, we should be aware of any possibility of fuel dipping by member states and make sure that it is excluded and prohibited.

[Earl Attlee]

The noble Lord, Lord Campbell-Savours, yet again makes an interesting and important point about fuel dipping. It is a burden on the industry. I have to confess that I made a suggestion to do with the problem of foreign trucks coming into the UK with very large tanks of fuel, running around the UK and then leaving with tanks that are practically empty so that the Treasury gets none of the benefit of the fuel. I suggested that every HGV, UK or foreign, should leave the UK with a nearly full tank of fuel, but that suggestion did not find favour because it was thought to be contrary to EU rules. However, the noble Lord, Lord Campbell-Savours, raises an important point.

The noble Baroness asked why we should charge. I come back to the point that we simply do not know what the negotiations are going to give us. We again hope for a simple system, but if we end up with a more complex system, naturally there will have to be charges—presumably cost recovery only, as it should not be seen as a profit centre. We need to remember that the cost of running a maximum-weight articulated vehicle is quite considerable—I do not know the current figures—so the cost of a permit in the overall cost of the operation will not be that significant. Whether it is an SME or a large operator, the cost per mile of an HGV is very high.

I have what might be a slightly tricky question for the Minister. We are cost recovering, but are we going to use the UK fees that we raise from our own hauliers to cover the cost of inspecting foreign trucks over here to make sure that they have a permit? If there is a 75%/25% split for contingency—where the 25% is the UK operators—25% of operators will be paying a small amount of money in but spending a lot of money on ensuring the compliance of foreign operators. Some people might have something to say about UK operators paying for the policing of foreign operators.

[Lord Berkeley]

My Lords, the idea is that a lot of foreign trucks are going to be inspected. It does not happen at the moment very much, and if it is going to happen in future, there will have to be a very large increase in the number of inspectors and locations for inspection. The profit margin of most of these operators is very low, so the cost of a permit, which, as the noble Baroness said, may be only £50 to £85, may be quite a lot to some people. I am more concerned that it appears that EU lorries coming into our country will not have to pay anything because they already have a permit from their own country. Are we giving them an £85 advantage just to come here? I assumed that we would be able to charge them to give them a permit, but, as the noble Baroness said earlier, they already have a permit. There is something out of balance here. I do not know what the solution is, but I hope that the Minister can look at this. Perhaps we should have our own permit scheme, or else it should be free for everybody. It does not seem fair at the moment.

--- Later in debate ---

[Lord Berkeley]

If a truck has to be checked statically in a car park somewhere, that will be quite expensive. The DVLA no longer has the system of excise duty licences on cars; that is checked by number plates. Is there a way of adopting a similar system for trucks—even for foreign ones? I know they have different number plates, but it would be much easier and would give a much more comprehensive range of checks.

[Earl Attlee]

What about the HGV levy system and the technology behind it? It uses ANPR to enforce it, so I should have thought that it would work automatically.

[Baroness Sugg]

The noble Lord and my noble friend make important points. Of course, we want to use IT systems whenever we can both to minimise the burden for hauliers and for Government to check on these things. The permit system may not be allocated to a specific truck; it could be allocated to a haulage company. That may be difficult, but we are exploring it. The current system is that the DVSA outside the port will pull over a truck and check it on the side of the road. That is one of the options that we are exploring. If there is a way to do it that is less expensive and more efficient, we will certainly do that.