Haulage Permits and Trailer Registration Bill [Lords]

Sammy Wilson Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Monday 14th May 2018 Commons Chamber

[Chris Grayling]

My right hon. Friend is right. The fact that this morning, just to the east of London, I visited a £120 million investment in the future of the United Kingdom as a trading nation by a major United States-based company says that I am not alone in believing that trade will continue and flourish in the future, because it will.

There are two parts to the Bill, the first of which is all about the permits. It enables us to introduce a scheme that simply allows trucks to cross borders in a variety of scenarios—this is, basically, like a truck having its own international driving licence. In many circumstances, through a variety of international agreements, that is a necessity in order to carry goods from one nation to another. We are simply making sure that we put in place the legal framework for the Government to establish a system for issuing permits if, after we have concluded the negotiations, it proves necessary to do so. We have designed the legislation to be flexible in response to different circumstances. We do not want to place any undue regulatory or financial requirements on the industry.

Permits are a feature of almost all international road freight agreements outside free-trade areas. The UK already has several permit-based agreements with non-EU countries, including Belarus, Georgia, Kazakhstan, Morocco, Russia, Tunisia and Ukraine. The UK also has liberal, non-permit agreements with Albania and Turkey. The Bill will also cover non-EU agreements relating to permits, which means that there will be one simple, straightforward administration system that is designed to be as easy as possible for haulage firms to use.

[Sammy Wilson (East Antrim) (DUP)]

I, too, welcome the Bill. The Government are right to make it clear that in the event of no deal we will still have made preparations. The Bill makes a distinction between international permits with other EU countries, and permits and agreements with the Irish Republic. Why is such a distinction made?

[Chris Grayling]

We worked on this carefully. The important thing to say is that this is not in any way related to broader discussions about border matters. We are aware that some hauliers travel from Belfast to Dublin to Holyhead to deliver their goods within the UK—we are talking about a UK business delivering its produce within the UK—so this provision is simply designed to ensure that that will not be impeded in any way by the regulatory system. I will say a bit more about that later in my remarks, but we want to ensure that nothing can undermine the integrity of the UK and people who travel from point A to point B within it. That is very important to me.

The final details of the scheme will, of course, depend on the agreements that we reach, and the Bill allows for that. It creates flexibility and allows us to make regulations on the allocation of permits to best meet the needs of the economy. Guidance on the allocation process will be issued to hauliers.

This aspect of the Bill also allows the Government to charge fees in relation to applications for permits and the grant of permits. I stress that our aim is purely to set those fees on a cost-recovery basis so that we minimise the impact on hauliers; this is not designed to be a revenue-raising mechanism. The system is simply designed to cover its own costs, and the amounts involved will be relatively small for anyone seeking a permit. The fees will recover only the day-to-day cost of administering the scheme. The set-up costs of the scheme are being funded as part of a £75.8 million grant from the Treasury to the Department for Transport as part of our preparations for all the different Brexit scenarios.

The Bill provides for the first set of regulations made under clauses 1 and 2 to be subject to the affirmative procedure, which means that the House will be able to scrutinise the new permitting system fully and properly. The first regulations will set out the overarching framework that will be used for the provision of permits under any future agreements. As I have outlined, we are confident that we can maintain our existing liberalised access with the EU, but the Bill will help to cater for any possible future permit arrangement with the EU.

On timing, we plan to have the system for a permit scheme ready by the end of the year. It is important that we make sure that we are prepared for all eventualities. Any applications for permits after the relevant regulations are in force will be dealt with under this system. The first regulations made under clauses 1 and 2 will cover the permits required under existing international agreements, including provisions relating to Armenia and Ukraine. If we then agree a permit-based arrangement with the EU, we will make further changes to the regulations to cover the agreement reached. In the unlikely scenario that we end up with a restricted number of permits to the EU as part of a future relationship, we have committed to providing a report to Parliament. That report must assess the effects of such restrictions on the UK haulage industry during that year. That assessment is, of course, vital, but I reiterate that this is about a flow that is more inward than outward, both in goods terms and in haulage terms, so I remain confident that we will reach a sensible agreement for the future. The permit scheme is necessary to make sure that trucks have their equivalent of the international driving licence to cross borders. I will not allow us to get into a position in which the industry does not have the administrative basis to take its business forward in all eventualities.

Before I move on to part 2 of the Bill, let me touch briefly on the 1968 Vienna convention on road traffic, which the UK signed 50 years ago and which the Government have recently ratified. The convention will come into force here before 29 March 2019. It was introduced by the United Nations to enable international road travel and to increase safety by establishing common rules for roads around the world. It builds on the earlier 1949 Geneva convention on road traffic and, indeed, the 1926 Paris convention, which was the first in this policy area and which the UK has already ratified. Why does it matter? Because we need to make sure not only that trucks can come across borders, but that we are able to line up with the rules in other countries, such as Germany, on trailer registration.

The second part of the Bill gives the Government powers to establish a trailer registration scheme to meet the standards in the 1968 Vienna convention. Many EU countries have similar schemes. It will mean that UK operators will be able to register trailers before entering countries that require trailer registration for travel on their roads. By trailers, I mean not the trailer on the back of a car that carries a tent, but full HGV trailers that cross borders to carry goods from point A to point B. The Bill will allow us to set the scope of such a scheme’s coverage.

The detail will be set out in regulations, but our intention is to require only users travelling abroad to register their trailers. It is not UK-only, but purely about those travelling internationally. Only commercial trailers weighing more than 750 kg and all trailers weighing more than 3.5 tonnes will need to be registered. As was clearly set out in the other House, the duty to register will apply almost exclusively to international hauliers. Virtually all private-use trailers, such as caravans and horse trailers, will not fall within the scope of mandatory registration, because it is rare that trailers of that kind weigh more than 3.5 tonnes.

We will consult on the scope of the trailer registration scheme over the next few months, and we will try to make sure that we are in good shape later this year to put in place the right scheme, depending on the nature of our agreements and what is required to ensure the smooth flow of trade across borders. We plan to recover the costs of running the scheme by charging fees, which we expect to be lower than those currently set out for the registration of motor vehicles. It is of course important that the new arrangements are complied with; if they are not, we will apply existing penalties to those who transgress.

[Chris Grayling]

In all this, we will want the process to be as rapid as possible. There will inevitably be a surge at the start when hauliers look to register trailers that will be used internationally, but my hope is that once that initial surge is over, it will be possible to carry out the registration very quickly when there is a change of circumstance. We do not expect to have a system that is so expensive that it deters somebody who wants to register a trailer in case it is used internationally. We want to ensure that there is only a small cost to businesses. Many people will want to register their trailers in case what my right hon. Friend highlights happens.

We listened carefully to the debate in the other place and we are working on a report on trailer safety, which is a policy area in which proper analysis will be beneficial and will help safety on our roads. Off the back of the report, we will be able to offer a clear and comprehensive analysis of the complex issue of trailer safety and towing-related accidents. That was a constructive element that came out of the debate in the other place, and we will certainly engage with it.

On the question of the island of Ireland, the Bill covers the whole United Kingdom, other than two provisions that amend legislation in Great Britain and Northern Ireland respectively. Road haulage policy and trailer registration are devolved in Northern Ireland, but not in Scotland and Wales. We have been working with all the devolved Administrations as the Bill has developed. With regard to the Republic of Ireland and Northern Ireland, the Bill supports the commitments made in the December 2017 joint report to avoid a hard land border. This is an enabling Bill, and the Government will preserve the constitutional and economic integrity of the United Kingdom.

The Government are committed to ensuring that trade and everyday movements over the land border continue as they do now. The Bill does not create a permit regime in relation to the Republic of Ireland and Northern Ireland, nor does it create a hard border between them. It means that trailers travelling only between the UK and Ireland will not need to be registered. It also avoids the situation that I described earlier in which someone who chooses to go via Dublin to come over to the UK finds themselves needing a permit even if they are moving purely within the United Kingdom. I can confirm that the Bill will not impact on border arrangements and that there will not be, as a result, any new transport-related checks at our borders.

[Sammy Wilson]

Will the Secretary of State clarify whether there will have to be a separate agreement between the UK Government and the Irish Government covering people who are taking lorries across the border, whether through Ireland to the rest of GB, or simply carrying loads from Northern Ireland into the Irish Republic?

[Chris Grayling]

The right hon. Gentleman will understand that I cannot speak for the Irish Government. We are putting in place a mechanism that ensures that there is no issue on our part. The Irish Government, like any other Government, are of course perfectly able to put barriers in the way of trade, but we will not do that. We will not create a regime that affects those travelling into the Republic of Ireland or those travelling through the Republic of Ireland into the United Kingdom. I cannot give guarantees on behalf of the Republic of Ireland, but I cannot for a moment believe that people there will want to put in place administrative systems that we do not put in place.

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[Andy McDonald (Middlesbrough) (Lab)]

The Bill presents a long overdue opportunity to consider the importance of the transport and logistics industries to the United Kingdom and the commercial road haulage sector in particular. The industry employs more than 2.5 million people and is the fifth biggest sector of the economy contributing £124 billion.

One of the privileges of my job is to meet people from across the transport, freight and logistics sectors. In the course of those discussions around transitional and post-Brexit arrangements, I hear an increasing frustration and anger at the cavalier “it will be all right on the night” approach from this Government, and rightly so, because there is no evidence that economic self-interest will prevail.

As we debate the prospect of a permit system for the haulage industry in the event of a no-deal Brexit, it should be recalled that the UK has 600,000 goods vehicle driving licence holders. There are nearly half a million commercial vehicles over 3.5 tonnes registered in the UK, which are responsible for moving 98% of goods. This is a serious and vital industry and we meddle with it at our peril.

[Sammy Wilson]

Does the hon. Gentleman accept that the haulage industry is important to the United Kingdom, especially to Northern Ireland where almost all of our food and goods travel by road? Does he not accept that the whole purpose of the Bill is to ensure that, if there is a deal, we are prepared for it, and if there is no deal, we are also prepared for it, and that that should reassure the haulage industry?

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[Mr Goodwill]

As always, my right hon. Friend makes a valid point. It is not in the interests of the German motor industry, the French agriculture industry or industry right across Europe to cut off its nose to spite its face. If that were the case, I am sure that German motor manufacturers would be beating a track to Chancellor Merkel’s door to make that very point.

I have not seen one recently, but I remember following lorries down the road and reading a sticker saying, “If you’ve got it, it’s been on a truck”. Although progress has been made in switching freight to rail or short sea shipping, the last leg of any journey invariably involves a truck. We heard from the hon. Member for Middlesbrough about Dover. It had 2.6 million truck journeys last year, with 1.6 million trucks going on Le Shuttle, which is 11,500 per day. Dover represents 17% of all UK trade coming in, worth £122 billion last year.

It is not just on this side of the channel that people are making such a case; Calais chiefs have also stressed the necessity of a frictionless border. Jean-Marc Puissesseau, president and general manager of Port Boulogne Calais, has said that the port boarded 2 million lorries last year. Without an agreed system in place, we could face 30-mile queues on both sides of the channel—every day, not just when the French seamen go on strike. During such a strike, some UK motor manufacturers, and indeed BMW in Bavaria, were three days away from stopping production. As we have heard, Honda relies on 350 trucks a day on a one-hour just-in-time delivery schedule. It is in no one’s interest not to get a deal.

[Sammy Wilson]

The right hon. Gentleman is making his point very sharply and well. Does he accept that even the permanent secretary of Her Majesty’s Revenue and Customs has made it quite clear that the picture painted by the Opposition spokesman is very far from the truth? We can have a frictionless border at Dover, and not need have a lorry park on the M20 or the checks he described.

[Mr Goodwill]

I will come to that point as I expand my comments.

Turning to trucks and the importance of the road haulage industry, it is currently in vogue to demonise diesels, and Volkswagen must take some of the blame for that. However, if one looks at the trucks operating under the Euro 5 and Euro 6 regulations, one sees that heavy vehicles pretty much perform as expected. The reason for that is quite simple: although the analytical equipment that exposed Volkswagen was not previously small enough to go in a car boot, it has for a long time been small enough to go on the back of a truck, so trucks actually comply very well with the regulations. Indeed, industries have always stepped up to the mark when a higher level of regulation has been proposed, and there is no reason whatever why the regulations will be slackened once the UK leaves the European Union.

As one of the few Members, I suspect, who holds what used to be called a class 1 heavy goods vehicle licence, I spent many hours driving HGVs—transporting potatoes to make oven chips or, as part of the family business, transporting sulphuric acid. I have also driven 44-tonners in France, Belgium, Germany and Holland, so I know a bit about their haulage system—indeed, I wish we had motorway service stations as good as theirs. We rely on our haulage companies, our 320,000 drivers and our logistical organisations to literally keep the wheels of business turning, and they are equally important in cross-border trade.

The Bill could be described in part as a just-in-case Bill—a safety net in case the Brexit negotiations fall off the trapeze—although the permits will also be useful in how they apply to non-EU states. It is unlikely that we will not get a deal, because I think we all understand that it is in everyone’s interest to get a good deal in place for the other side of Brexit.

International trade relies on the capability of vehicles, as well as the goods they carry, to cross international borders. To ensure that vehicles minimise empty running, logistical operations need to be flexible. That is why we have cabotage rules in place, so that non-EU trucks can carry out work here before returning, hopefully loaded with exports, to their home country. When there are short-term capacity problems, the rules can be lifted temporarily, as was the case when a shortage of car transporters coincided with the new registration plate.

The single market for transport services is one baby that we must not throw out with the Brexit bathwater. Yes, we are leaving the single market, but we must keep the flexibilities, liberalisation and competitive elements that benefit trade and jobs. We have always promoted this mechanism, often in the teeth of opposition from member states such as France that see competition from eastern European hauliers as “social dumping” rather than as a competitive element that raises everyone’s game.

In the absence of an agreement, the Bill is our fall-back plan B. In a post-Brexit scenario, one expects the standards that our haulage industry has to comply with not to change radically. Vehicle safety and emissions standards will not be eroded when the UK leaves the EU. Innovations such as autonomous automatic braking, selective catalytic reduction and particulate traps apply to vehicles manufactured and used in Europe. I expect that the Euro 6 standards will be identical to the new UK 1 standards, as I guess they will be called, after Brexit. Similarly, it is in no one’s interest to start a race to the bottom on drivers’ hours.

So much for the vehicles. What about the goods they carry? Whether we have a customs partnership, a so-called max fac or some other custom-built customs solution, the system must operate electronically and without friction, and it must not delay vehicles passing through Dover, Holyhead or Newry, or indeed—this is probably our biggest challenge—goods passing from Spain to our loyal friends in Gibraltar.

I do not share the pessimism of some people who have been known as remoaners—incidentally, I was one of those who voted remain. As Shipping Minister, I visited Southampton and Felixstowe and saw the thousands of containers coming in from all over the world and moving seamlessly through the port. The last thing anyone wants to do is to start opening those containers. The same applies to our biggest port by value—surprisingly, not many people know that that is Heathrow, with the holds of long-haul flights laden with goods inbound and outbound to places all over the globe.

Perhaps the most impressive operation I have seen as part of the Industry and Parliament Trust involved Manchester Airports Group and UPS. The hub at East Midlands airport deals with thousands of parcels every night. Customs duty is collected by the shipper, who navigates a complex administrative system, without the parcel—whether from Beijing, Detroit or Tokyo—stopping for a moment, either on its journey to a UK destination or on its way to trans-shipment on a departing flight. Using the widely recognised “known shipper” arrangement enables truly global trade to function between dozens of jurisdictions and with myriad permutations. For example, some hydraulic components attract a different tariff depending on whether they are destined to be fitted to a tractor or an aircraft. East Midlands is impressive, but nothing compared with the operations in Cologne or Louisville, Kentucky. As I say, this system is already delivering frictionless trade every night. We do not need to reinvent the wheel—or indeed the hub.

I hope such arrangements can be put in place before the end of the transition period. I agree with James Hookham of the Freight Transport Association that the timetable is tight. Until this issue is resolved, however, it will not be possible to initiate free trade, or a freer trade arrangement, with our new global trading partners, so time is of the essence.

Turning to trailers, I note that the UK has now ratified the Vienna convention, which will come into force in March 2019. There have been problems with UK trailers and semi-trailers pulled by non-UK motive units on the continent. The proposals to register trailers will address that. I am pleased that that will not apply to the whole fleet—I must declare an interest in this respect—but only to existing trailers used internationally, and to new trailers as they are registered. I also note the need to facilitate trailer rental, and I am pleased by the reassurance I received from the Secretary of State earlier. We already have a registration system with the Driver and Vehicle Standards Agency, as trailers must pass an annual MOT test, so the Department for Transport will be well aware of the scale of the operation needed.

Belgium—I think uniquely—has a separate registration number for trailers, so the number on the front of a combination will not match the one on the back. Most countries, like us, however, have a plate in the cab that is fixed to whichever trailer is being pulled. The current plating certificate—affixed to the chassis bar of a trailer in most cases—is often hard to find and usually hard to read as well. Has the Minister considered whether the plate fitted to the trailer could have a number or barcode, as is used on shipping containers, that could be read by an automatic number plate recognition-type machine to further facilitate the free flow of vehicles between jurisdictions? I understand that the plate must be fixed to the vehicle, but is there a view on the best position for remote sensing?

In conclusion, I welcome the Bill, but I hope that progress in negotiations will render it superfluous. When we take out insurance, that does not mean that we expect our house to burn down. I think the Government are being prudent. Incidentally, I think the Bill also sends a clear message to EU negotiators that we will not accept a bad deal at all costs and that contingencies are being put in place.

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[Alan Brown]

That is a valid point. There have been mixed messages from the UK Government. The Trade Secretary says he will get a free trade deal with the United States. The Environment Secretary says we will get a deal but he assures us that there will be no chlorinated chicken or hormone beef. If we trade under World Trade Organisation rules, we cannot impose those welfare standards.

[Sammy Wilson]

I admire the hon. Gentleman’s ability to find a negative in every argument. He talks about the importance of food imports for the United Kingdom. Does he accept that those food imports come from farmers in Spain, Ireland, France and Italy? Does he think that they want transport to be disrupted to the point where their goods sit and rot in lorries? Is that not an incentive for their Governments to do the kind of deal that the Secretary of State is talking about?

[Alan Brown]

First, may I thank the right hon. Gentleman for saying I can find a negative in any argument? I can assure him that I have a wife who agrees wholeheartedly with that sentiment. He makes my point for me. There will be a whole raft of countries coming together, so the potential hit on them is much less than the potential hit on the UK. It is easier for them to play hardball. Government Members say that they will not play hardball, but why would they not? The UK is trying to play hardball with the EU, so it is quite clear that the EU is going to have to play hardball back.

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[Sammy Wilson (East Antrim) (DUP)]

I congratulate the hon. Member for Charnwood (Edward Argar) on his positive speech. I hope that mine will be equally as positive, because almost every time anything about Brexit or leaving the EU is mentioned in this House the naysayers and those who wish to overturn the referendum result will find any excuse to look for faults in what is being presented.

I welcome the fact that the Government are bringing forward this legislation, because it will provide a contingency if there is no deal. Despite what the hon. Member for Kilmarnock and Loudoun (Alan Brown) said about this legislation hardly having Mr Barnier quaking in his boots, an important message is sent out every time that the Government—whether in this Bill or in conversations, interviews or statements—indicate to those negotiating our exit from the EU that we have the option of walking away if they are not prepared to play ball. Regardless of how small this particular warning may be, it is nevertheless part of a picture that we need to present.

Having said that, I share Ministers’ optimism and the optimism of many other Members who have already spoken. There is every reason why the current arrangements —the Community licence and the standard international operator’s licence—should be made available as a result of the Brexit negotiations. As we have already seen, road transport is vital not just for this country, but for every country with which we trade in the EU.

[Alan Brown]

The Democratic Unionist party obviously has first-hand experience of how good the UK Government are at negotiating. Given the concessions the right hon. Gentleman’s party extracted from the Government, the whole EU saw how the DUP had the Tories dancing on the head of a pin. Does he really trust that lot to negotiate a good deal from the EU?

[Sammy Wilson]

The proof of the pudding will be in the eating. When the Government stuck their heels in with the EU in December 2017, the agreement was changed and the protocols were not insisted on in March 2018. The Prime Minister stuck her heels in when the Irish Government said June was a deadline. The UK Government made it clear that it might not be done by June, and we have now moved to October 2018. When the Government make it clear that they intend to be in the driving seat on these negotiations, I have every confidence that we can get a good outcome for the United Kingdom.

Of course, there is every reason for us to be confident. Road transport is important to every European nation that trades with us, and it is particularly important to Northern Ireland—over 90% of our trade is via road transport. Road transport is not only important to us. If we look at who actually transports the goods we export to other parts of the EU, we see that 85% of the goods that go from the UK to other EU countries are carried in vehicles owned by EU-based companies. That being the case, there is every incentive for nations with lorries, lorry drivers and transport companies to come to an arrangement with our Government to ensure that free movement can happen. Equally, many of those goods are perishable, and it is therefore important that there is as little disruption to road transport as possible, hence why I believe it will be possible to get the kind of deal the Government seek. Nevertheless, it is important that we have this fall-back position.

The second issue is Northern Ireland. Although I heard the Minister’s explanation, I am still not clear on why we need a separate provision in the Bill for agreements on transporting goods to, and on lorries driving through, the Irish Republic and why the international agreements referred to in clause 1 are not sufficient to cover the Irish Republic. I do not share the optimism of the right hon. Member for Clwyd West (Mr Jones) that the Irish Government are willing, because of our long-standing arrangements on transport issues, to ensure that a bilateral arrangement can be put in place.

The Irish Government have almost cut off their nose to spite their face on the issue of the border between the Republic of Ireland and Northern Ireland. They know their own head of Revenue Commissioners has made it clear that there are technological solutions that could ensure there is no hard border so that trade flows easily across the border. The previous Administration in Ireland even started down the route of considering the kind of technology that could be used but, since coming in, the current Irish Government have cut off all the negotiations on those solutions. Only this weekend, they insisted that they will have no cameras, drones or any kind of technology that could make the border a soft border when we leave.

[Mr David Jones]

Can the right hon. Gentleman say, from his experience of the island of Ireland, whether the Irish Government fully understand the importance to the Irish economy of maintaining free access to the United Kingdom for trade not only with this country but beyond?

[Sammy Wilson]

It seems that the current Irish Government do not understand. Six times more of their trade is with Great Britain than with Northern Ireland, and more of their trade is with Great Britain than with the whole of the rest of the EU, yet they seem to be willing to pursue a solution that will mean a border and barriers between the Irish Republic and its main market in order to have an open border with Northern Ireland. When it is suggested to the Irish Government that they can have both an open border with Northern Ireland and access to the GB market, they simply put their hands over their ears and say, “We don’t want to hear. Nah, nah, nah, nah.”

I am not as convinced as the right hon. Member for Clwyd West that it will be easy to get a transport arrangement with the Government of the Irish Republic, and I would appreciate further explanation from the Minister as to why the international arrangements covering other EU countries cannot simply apply to the Irish Republic. If lorries from Northern Ireland go through the Irish Republic, they are going through another country, so why would the international arrangements and agreements not apply? Why do we need a specific bilateral arrangement with the Irish Government who, unfortunately, at present seem to be in a temper tantrum and are not willing to listen to too much logic, even if not doing so damages their own economy?

[Alan Brown]

While the right hon. Gentleman is castigating the Irish Government—he says they have said there will be no cameras and no technology—will he explain what technology he proposes? The UK Government have said that there will be no infrastructure and no cameras, or anything like that, at the border, so what is this magic technology that will rely on no infrastructure whatsoever?

[Sammy Wilson]

When people talk about infrastructure, they think of red and white posts on the roads across the border. The one thing we know—I do not want to digress too much—is that during the troubles 50,000 troops could not seal the Irish border. If we think we will seal the Irish border to trade with a couple of barber’s poles across a road, we are barking up the wrong tree. That shows a total misunderstanding.

The infrastructure that would be involved is used elsewhere and has been proven, whether it is GPS, telephones, early notification or electronic notification that trade is moving. There are a whole range of things that do not require a physical presence on the border, and that technology could also be used at Dover to avoid the kinds of problems highlighted by the hon. Member for Middlesbrough (Andy McDonald). It is not just a solution for the island of Ireland but a solution between the United Kingdom and the EU when we leave.

[Karin Smyth]

I fail to understand why there is no co-operation, when 5.2 million tonnes of trade is going north-south and 3.4 million tonnes of trade is going south-north—I think that is the right way round. The movement of freight across the island of Ireland is clearly critical to both economies. It might help the right hon. Gentleman if we had the results of the mapping exercise mentioned in paragraph 47 of the joint report on phase 1 of the negotiations. There are 140 areas of agreement across the border, but the Government are refusing to let us see the results of that mapping exercise so that we can really understand the true impact across the whole island.

[Sammy Wilson]

The hon. Lady also has to understand that, although there may be 5.2 million tonnes of trade across the Northern Ireland-Irish Republic border, there is six times more trade between the Irish Republic and Great Britain. Yet that does not seem to exercise the minds of those in the Government of the Irish Republic even a little bit, and none of us can understand that. The big prize lies in finding a solution that allows that east-west trade, as well as that north-south trade without any impediments. I believe we have the technology and ability to do that, but the political willingness is not there.

I want to welcome a second thing in relation to Northern Ireland. In the absence of the Northern Ireland Assembly, the Government have, in clause 12, taken it upon themselves to amend the legislation; many of these issues are devolved to the Assembly, which is not functioning at present. I suspect it will not function for many a long month or perhaps a year, because of the way in which Sinn Féin has now used its veto to prevent the Assembly being reformed. The Minister mentioned that a legislative consent motion would be sought. In the absence of an LCM, I take it that these powers will simply be taken by the Government.

Many Members have made this next point already, but it is worth noting. In the absence of knowing exactly where negotiations are going, and given the nature of some of the information that is required, I would not expect the detail of the scheme to be set out in the Bill. However, it is important that, at the earliest possible stage, people in the haulage industry know how many licences are going to be available, how they can apply for them, how they are going to be allocated and what is going to be paid for them. If some detail can be spelt out, even though it may not be in the Bill, that would give some certainty to the haulage firms that operate in my constituency.

I shall now turn to the part of the Bill that refers to trailers. We have heard some passionate speeches on that subject—from two Members in particular. As a result of personal tragedies in their constituency, they are concerned about the registration of trailers. The Bill is fairly ambiguous on this matter, simply talking about the registration of trailers, full stop, and not dealing with weight restriction, size or anything else. Despite personal tragedies that people may have faced, legislation must always be proportionate. I would like an assurance from the Minister that the ordinary guy who has a trailer that he uses to take stuff to the dump or uses to collect a few bits and pieces will not be required to go through the process of having the trailer registered and inspected on a yearly basis, with all the cost involved, especially as many of these trailers are used on only an occasional basis. Trailers over 3.5 tonnes, which are used commercially, are probably used more regularly and there is a case for having registration there, but I do not believe that there is a proportionate case for registration for ordinary domestic trailers, which would be affected if we extended this across all trailers.

I welcome the Bill. I welcome the fact that the Government are sending out a signal that, if Barnier and co. decide to dig in their heels, we are prepared to go our own way and that we have made preparations for it. At the same time, we believe that there is a strong case for continuing the current system of Community licensing so that firms that operate a vital part of our economy can continue to provide the service that they do now.

Airport Capacity

Sammy Wilson Excerpts

Tuesday 25th October 2016 Commons Chamber

[Chris Grayling]

The Government decided very clearly today on their recommendation, which will have to be validated in the statutory process. It must be voted on and confirmed by the House, and that is what will happen. However, we are not entering the process with a view to changing our minds

[Sammy Wilson (East Antrim) (DUP)]

If the vote took place tomorrow, the Democratic Unionist party would give the Government their support, because we believe that this is good for Northern Ireland. We welcome the Secretary of State’s assurances about extra slots, extra routes, and a place in the procurement process for firms from Northern Ireland. In the meantime, however, will he tell us whether slots that are currently available for airports in Northern Ireland will be safeguarded at Heathrow, and also whether there are any Barnett consequentials for the Northern Ireland Executive?

[Chris Grayling]

I hope that the right hon. Member for Belfast North (Mr Dodds) will forgive me: I forgot to answer his earlier question about Barnett consequentials.

This project is funded by the private sector, and there are no Barnett consequentials in a private project. There are Barnett consequentials when we invest in our infrastructure in the public sector, but I fear that there will not be any as a result of spending by Heathrow airport shareholders. As for the question of slots in the meantime, we always want to protect connectivity with Northern Ireland—indeed, we have just done so in the case of the route from Londonderry to Stansted—and we would be extremely concerned if routes to Belfast were in any jeopardy.

Regional Airports

Sammy Wilson Excerpts

Tuesday 2nd February 2016 Westminster Hall

[Catherine McKinnell]

My hon. Friend excellently makes my argument for me. I want to talk about the most important decision on the desk of the Secretary of State for Transport at the moment: airport capacity and expansion. Having pledged to cancel the Labour Government’s plans for a third runway at Heathrow, the coalition Government set up the independent Airports Commission in 2012, chaired by Sir Howard Davies, to assess and to report on long-term aviation capacity options by summer 2015. The commission did exactly what it was asked. Having considered a plethora of options, it decided in its interim report in 2013 to narrow these down to just three, all of which were in the south-east. In July 2015, it produced a thorough and comprehensive report assessing each of these in turn.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Lady agree that it is important not only that airport capacity is increased in the south-east so that regional airports can feed into it but that slots are guaranteed for flights from regional airports? Otherwise, as capacity diminishes because airlines use more and more flights across the world, regional airports will be squeezed again.

[Catherine McKinnell]

Indeed. The commission looked at that issue and its decision was unequivocal: a third runway at Heathrow presents the clearest case and the greatest strategic and economic benefits to the UK. That view was shared unanimously by its members. For the benefit of hon. Members, it is worth revisiting what some of those benefits are.

The commission estimates that by 2050, GDP would be boosted by £129 billion; 78,000 new jobs would be created; productivity would be boosted by £69 billion; and 12 new long-haul routes would be available to UK passengers with 16 million extra long-haul seats. Those benefits far outweigh those that would be provided by an expanded Gatwick. Perhaps most important, the commission said that an expanded Heathrow would

“provide a stimulus to economic growth throughout the UK.”

It estimates that £70 billion to £80 billion of economic benefits would spread across the regions of the UK by 2050.

I recognise the many concerns, both local and national, about an expanded Heathrow, particularly local air quality, noise and other community impacts, not to mention whether an expanded Heathrow is even possible in line with our climate change commitments. The Airports Commission also recognised those challenges and set out a package of measures to meet them. Let us remember that the commission did not simply give an unlimited green light to expanding Heathrow. It recommended that any new runway must be accompanied by a ban on night flights, which is possible only with expansion anyway; a legally binding noise envelope so that noise levels do not exceed current limits; a new aviation noise levy on airport users to fund a mitigation package for local residents; a £1 billion commitment from Heathrow for community compensation; a legal commitment that expansion will happen only if it does not delay local surrounding areas complying with EU limits on air quality; and compensation for homes lost at full market value plus 25% available immediately. That would provide the framework within which to approach the challenges posed by an enlarged Heathrow.

Why is airport expansion in the south-east so important to other regions such as the north-east? The trend in recent years has been towards a hub-and-spoke model of aviation, whereby airlines have routed all operations through a hub airport and joined with other airlines, creating alliances, to provide customers with hundreds of destinations, all accessible through a single hub. We can look all over the world and see that the hub-and-spoke model is key, from the likes of Schiphol, Charles de Gaulle and Frankfurt in Europe to the rise of the increasingly dominant middle eastern hubs in Dubai, Qatar and Abu Dhabi, not to mention the well-established far eastern hubs such as Singapore and Hong Kong. Of course, Heathrow stands alongside those, accounting for 70% of the UK’s scheduled long-haul flights and serving 75 unique destinations.

That is not to say that long-haul routes are neither valuable nor viable from regional airports. As I mentioned, the daily Emirates service from Newcastle to Dubai has been transformational, facilitating millions of pounds in exports from the north-east to the middle east, but it has been so successful because it is operating to another hub airport, from which those goods and passengers can travel on, throughout the middle east, to Australasia and beyond. I hope that we will see more of those links developing in the future. Regional airports play a significant role in providing their own direct connections worldwide, in conjunction with connections through a hub such as Heathrow.

--- Later in debate ---

[Catherine McKinnell]

A number of options are being mooted and discussed as part of the solution. What I want to see from the Government is some certainty about what they will actually do to ensure that regional airports are not disadvantaged by some of these changes. All options need to be considered and taken seriously. Indeed, analysis by Her Majesty’s Revenue and Customs of the impact of devolving APD to Scotland found that Newcastle would be the most acutely affected, at least immediately, with an initial 10% reduction in passenger numbers. That is the Government’s own analysis. In particular, HMRC’s review forecast that the savings to medium and long-haul passengers from reduced APD in Scotland would outweigh the cost of travelling further.

[Sammy Wilson]

Does the hon. Lady accept that we do not even have to rely on modelling done by HMRC? We have only to look at the example of Northern Ireland. Passengers are being sucked out of Northern Ireland to an airport 100 miles down the road, where there is no APD at all. The same would happen if we had an uneven playing field in the rest of the United Kingdom.

[Catherine McKinnell]

The hon. Gentleman makes a very important point. It is a very clear illustration of the impact that such a move can have.

Oral Answers to Questions

Sammy Wilson Excerpts

Thursday 29th October 2015 Commons Chamber

[Andrew Jones]

I will certainly look at the approach taken by PROCAT, and I would like to visit, because it is vital that colleges and universities work in partnership with employers to ensure that young people get the skills the industry needs. Skills are particularly crucial within the transport sector, as more and more skilled people are required. I will also highlight the work of PROCAT to Sir Terry Morgan as he develops our skills strategy.

[Sammy Wilson (East Antrim) (DUP)]

The road haulage industry is an important element of the transport infrastructure, as it contributes to the smooth running of the economy and helps the Government to drive up exports. This week, it reported a recruitment shortage of 54,000 drivers, which is likely to increase because of the ageing population. What discussions has the Minister had with the Business Secretary to ensure that young people are encouraged to take up the opportunities available within the transport road haulage industry?

[Andrew Jones]

The industry has a responsibility to bring new people in, but I am aware of the recruitment challenges it faces. There is also a retention issue. I have met with the industry several times and will continue to do so. It is most important that this critical industry brings people into it. Without our logistics industry performing at a high level, our country would grind to a halt in a couple of days.

Oral Answers to Questions

Sammy Wilson Excerpts

Thursday 16th July 2015 Commons Chamber

[Jake Berry (Rossendale and Darwen) (Con)]

rose—

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Mr Speaker]

No, no. Rossendale and Darwen and Antrim are a very long way from Worcestershire. This question is about Worcestershire. We will move on.

--- Later in debate ---

[Mr Goodwill]

Our position is quite clear: competition between ports is the best way to ensure efficient operation within them. I am pleased that the general approach is better than the Commission’s original proposal. We have the competitive market exemption and more discretion on issues such as pilotage. I would certainly be happy to meet the hon. Gentleman to discuss particular issues affecting Port Talbot, which is one of our most important ports.

[Sammy Wilson (East Antrim) (DUP)]

What discussions has the Minister had with the Department for Regional Development in Northern Ireland and what representations has he had from Northern Ireland ports about these regulations? Can he give an assurance that ports will be prevented from having to disclose the commercial information that these regulations will require so that the commercial operations can remain?

[Mr Goodwill]

I had unanimous support for our position that this is designed to fix a problem that we do not have in the United Kingdom. However, there are problems in other European ports, and cross-channel business and business across other seaways is important to the UK as an exporting nation. It is important to get a reasonable conclusion to these discussions, which I expect to happen under the Dutch presidency next year.

Budget Resolutions and Economic Situation

Sammy Wilson Excerpts

Wednesday 18th March 2015 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

Let me begin by making it clear that my party has no political axe to grind when it comes to whether one party performs better than the other, although the hon. Member for Reigate (Crispin Blunt) has been on local radio in Northern Ireland telling people to vote for anyone but the DUP. We will not hold that against the Conservative party. We want the United Kingdom to succeed, and we want its economy to succeed. I think it is in the interests of all my constituents that the Government of the day—whoever they happen to be—get the policy right, because that means that people will have jobs, a good standard of living, and good public services.

The Chancellor began his speech today by saying that Britain was now walking tall, and he quoted some impressive figures. We had better growth than the rest of Europe and the other G7 countries, we had lower unemployment, we had rising living standards, and we were selling shares in banks that were bankrupt six years ago. However, while we may be walking tall in some respects, there are still people in the United Kingdom economy who are not walking tall, but are stooped under the burden of parts of the economy which are ailing. The growth that the Chancellor has talked about has not been universal. He cited impressive rates of growth in northern areas, although I note that he did not mention Northern Ireland. As I often used to say to economics students, “Look at the base from which you are starting.” Which areas were hit most by the recession? It was the northern areas, including the north-east and the north-west.

[Mr Redwood]

What Northern Ireland clearly needs is more private sector industry and activity. Does the hon. Gentleman not think that a good way of promoting that would be a much lower rate of corporation tax, which is just what the Government are giving him?

[Sammy Wilson]

I shall come to that point. I am not suggesting that everything that the Chancellor has done is wrong. What I am trying to do is paint a picture of a country in which not every region and not every individual is walking tall. Not only some regions, but some groups of people, are still suffering and stooped under the burden of an ailing economy. Young people in my constituency are suffering as a result of youth unemployment; other people are in the lower wage brackets, or are in jobs in which there is uncertainty or the effect of the economic downturn has depressed wages the most. Those people are not experiencing the improved living standards that the Chancellor has described today.

I welcome the fact that, as of the last year, 542 fewer people are on the dole or on welfare in my constituency. Nearly every week, however, people come and talk to me about the effects of the recession and the way in which it has changed employment practices, Many are uncertain about their incomes. Some are earning the minimum wage, some have jobs that are insecure, and some are not always paid because of the nature of their contracts. The Chancellor has said today that the minimum wage will be lifted and that some people will be lifted out of taxation; nevertheless, that has to be set against the fact that, for many people, those gains by Government action are depressed by employment practices that are becoming more prevalent in parts of the economy. Banks may be selling shares, but some of that growth and improvement—this is certainly the case in Northern Ireland—is being achieved by banks quickly foreclosing on those to whom they recklessly lent and by suppressing businesses instead of giving them the chance to grow.

Although the economy may be walking tall in the Chancellor’s eyes, there are many obstacles along the road that could cause us yet to stumble. I hope we avoid them, but let us look at some of the information even in the Red Book. Productivity growth is weak, which of course makes it difficult for real living standards to increase—if productivity does not increase, there is not the same chance for wage increases. Exports have not been growing in the way that the Government anticipated; indeed, the fact that the balance of payments deficit is 6% of GDP will have a deflating impact on the economy. Despite what the Chancellor has said, his own figures show that he is still dependent for future growth primarily on consumer spending. In other words, we are still dependent on people taking on the very debt that we have said brought about some of the problems we are now experiencing.

At the same time, growth in investment is weak. Growth in private sector investment is going to go up. That is quite right; however, according to the OBR forecasts, over the period of the next Budget, public sector infrastructure investment will be reduced by 17% as a percentage of GDP. That is one of the problems I have with the current policy. While I understand and, in fact, probably have more sympathy with the arguments put by Government Members—about getting the deficit down and making sure that we do not have huge debt interest, that we have confidence in money markets and that we do not have to pay more for the debt we undertake—there are ways that the Government can stimulate the economy. One way that can be done is through infrastructure investment.

I cannot understand why the money markets are more confident about lending us money to pay for welfare benefits than they are about lending it to pay for infrastructure development. There have been infrastructure developments in my constituency, such as the new road from Carrickfergus to Belfast. The improved travel times have led to investment by companies already in the town, which was isolated because of the difficult roads. The return to the Northern Ireland economy from the Titanic project in Belfast, with £90 million of investment and the return in tourist numbers—nearly 1 million in the first year and a half, with the impact that has on local pubs, hotels, restaurants and so on—has been terrific. At a time when we need to stimulate the economy, I cannot understand why the Government are planning to reduce infrastructure investment, which could produce real returns.

[Jim Shannon (Strangford) (DUP)]

One way of helping, which was announced by the Chancellor today, is the plan for farmers to spread their profits and losses over five years. As my hon. Friend will know, in Northern Ireland the dairy industry in particular is having a difficult time. It had to reinvest because of the EU regulations on slurry retention and disposal and also deal with a clear problem with the price of milk. The Chancellor’s announcement will enable the farming industry at least to balance its books over a five-year period. Does my hon. Friend welcome that as a way forward for the farming industry in Northern Ireland and for those in my constituency and, indeed, his own?

[Sammy Wilson]

I do not want to be churlish about this Budget, because there are a number of things—my hon. Friend has led me on to them—that I welcome. Given the way that farming income changes, it is important that farmers should have the ability to look at their income and spread their profits and losses, and the tax they pay on them, over a five-year period rather than a two-year period. I welcome the announcement of a requirement to have a universal service obligation for broadband, although I see that there is no timing for it, so maybe the Minister can give us some indication of that. I know that in my constituency smaller businesses that want to set up in rural areas are held back because they do not have that easy means of communication.

[Ms Margaret Ritchie (South Down) (SDLP)]

The hon. Gentleman is making a compelling argument about the need for investment in infrastructure, part of which is this whole area of investment in broadband. Does he agree not only that the time scale to be specified is an important consideration, but that we have to see geographical locations? He, like me, will have talked to constituents, particularly those in rural areas, who cannot get access for topographical reasons.

[Sammy Wilson]

Hopefully, a universal service obligation will mean exactly that and the investment in the infrastructure will include all parts, regardless of how difficult they are—I notice that one of the things that will help is satellite broadband where fixed line broadband cannot be used.

I also welcome the Government’s promise to improve incentives for people to save for the deposit for their first home—especially given the number of young people who come to me looking for ways to get their first home—and to give additional support of up to 20% for those savings. As one who supports the fair fuel campaign and represents a rural constituency where many people do not have the opportunity of using public transport, I also welcome today’s announcements on fuel duty.

I suppose the fears we have for the future, especially in Northern Ireland, are these. I welcome the fact that the Government have made available to us the devolution of corporation tax and the impact that I believe it can have on our economy. Nevertheless, as we seek to rebalance the economy, that must not be counterbalanced by serious public sector expenditure cuts, especially for an area that is still dependent on the public sector. It must not be offset by huge cuts in infrastructure. We have already suffered a 40% reduction in public infrastructure investment in Northern Ireland, with devastating effects on the ability to deliver on many of the things that we wanted to deliver on. I hope that the optimism that the Chancellor has expressed today comes to fruition, but I believe there are obstacles. They are highlighted in the Red Book and in the speech today. Some of them are in the Government’s control and some are outside it. I hope we will walk tall and not find that there are many people and many areas of the United Kingdom still stooped under an economic policy that is not doing its best for Britain.

Driver and Vehicle Agency (Northern Ireland)

Sammy Wilson Excerpts

Tuesday 15th October 2013 Westminster Hall

[Sammy Wilson (East Antrim) (DUP)]

I am happy, Mrs Riordan, to take part in this debate. I recognise that this situation is not unique to Northern Ireland, because, of course, 1,200 jobs across the United Kingdom will be lost in 39 regional offices. However, the difference is that one quarter of those jobs are located in Northern Ireland, and one sixth of them are in one town. Our case is that there will be a disproportionate impact on one area, which has already suffered significantly from job losses.

I want to consider three areas this morning. First, will the new system be better than what we have at present? The Minister will argue that it will make available to people in Northern Ireland services that are currently not available. However, surveys show that not many people are looking for those services. Indeed, many have said that they do not wish to use such services. Some 60% of customers and 90% of dealers say that the services that are being withdrawn are the ones that they wish to use. The proposal, therefore, is not a response to what the public, who are paying for vehicle licensing, say that they want.

The people who will be affected include small dealers. Some 20,000 new registrations every year come through small dealers, who mostly use local DVA offices because they do not necessarily have the computer back-up for online services. Then there are the complex cases. Indeed, the Department’s own estimate is that 2,000 or 3,000 complex cases will have to be dealt with by post, so people will have to deal with Swansea, rather than having face-to-face encounters at local DVA offices. That will inevitably lead to difficulties. The fact that a case is complex suggests that a person needs to talk to someone.

By the Department’s own estimate, some 3,000 people will find that they are less well off. The Minister has cited the matter of refunds and given us some figures, but if wants to ask some questions of his officials, perhaps he should ask not just about refunds but about first registrations, changes to registrations and the average wait at offices. On all those matters, Swansea’s performance is poorer than that of the DVA offices in Northern Ireland. Service will be reduced to a wide range of customers and on a wide range of issues.

On fraud—I can see my colleagues laughing here—we have a rigorous system in place for those in Northern Ireland who do not pay their road tax. Indeed, I have been a victim of it. No allowances are ever accepted. I got caught taking my motorbike to the garage to get it prepared for an MOT. Even though I could prove that, officials said that it was on the road without tax, so I got fined and received a lot of publicity. Because of such rigorous enforcement, we have the lowest rate of evasion of anywhere in the United Kingdom. If that goes up—only seven prosecutors will be left and no arrangements have been made with local agencies—there will be a loss to the Exchequer.

On whether the service will be better, the answer has to be no, it will not. Will it save money? We already know that one reason behind the centralisation is the huge capital costs involved in the new IT system.

[Mr Campbell]

My hon. Friend alluded to whether the service will get better. As a number of Members have said, it appears that it will get worse. Does he agree that the service in Northern Ireland will not only suffer? Given the figures on the centralised process in Swansea, which a number of us have outlined, the service in the rest of the United Kingdom will also suffer because of the additional work load that Swansea will have to deal with if centralisation goes ahead.

[Sammy Wilson]

That is the point that I want to make in relation to cost. The hon. Member for Ealing North (Stephen Pound) said that as a result of centralisation and the additional work load, even some of the savings that had been anticipated have not been realised because overtime payments have gone up.

Of course, the additional work load that will result from the Northern Ireland move will put further pressure on the system. I suspect that the 400 new jobs that will be created in Swansea will not be sufficient to deal with the work load, so some of the savings anticipated in the proposal will not be realised. We must look at what the customers want and what is feasible for the Treasury. The additional costs must also be considered.

We do not get much cross-departmental thinking, but we are talking about an area with high unemployment. I supported the restructuring of the Northern Ireland economy, and I would love to think that all the people who will be displaced as a result of the DVA decision will easily move into jobs in the private sector, but when there have already been significant job losses in the private sector in towns such as Coleraine, the only place that they will move to is the dole queue. That in itself adds additional costs to the public purse, so I do not believe that there is an economic case for this change either.

I do not want simply to say to the Minister, “Look, we don’t like this, so don’t do it,” but a number of options have been proposed, and the “do nothing” option is one of them. The IT costs, which have already been sunk, will be lost. The Department wishes to give additional services to people in Northern Ireland, even though the majority of them do not want those services. Indeed, I point out to the Minister that even after 10 years in Great Britain 50% of people still do not use online services, so we are not unique in Northern Ireland in that respect. As I say, the “do nothing” option has been proposed. Choosing it would not cost anything, but of course the costs of the IT system have already been sunk.

I ask the Minister to give serious consideration to one suggestion that has been made. Yes, there will be a transition; there is resistance to the changes. There is quite clear evidence that people still want to use the DVA services. If the new system were put in place, those who wish to use the new services and the new methods of delivering them could do so, and those who did not wish to use them—that residual group of people—could still use the full DVA services. That would probably mean that 100 jobs would be lost immediately, but the rest of the jobs would be retained. Three offices would remain, but the rest would have to close. That is the estimate that has been made in Northern Ireland. Over time, that situation might change as people get used to the new services, but at least this option would avoid the big bang of sudden job losses—all the jobs going—and there would be no gap for people who need, or want, to use the face-to-face services.

Choosing that option would also produce considerable savings. The savings on the running costs would be £4.5 million—a 36% reduction in running costs in Northern Ireland and twice the savings that the Driver and Vehicle Licensing Agency anticipate will result from the change to the integrated system. So the Minister could make the case for choosing that option on the basis that savings would still be available.

Choosing that option would also mean that DVA staff in Northern Ireland would be trained on the new system. Bearing in mind what has already been said about the pressures that exist on the Swansea system at present, choosing that option would provide a contingency for DVLA to fall back on—a contingency of trained staff in Northern Ireland, in a place where, as has already been pointed out, productivity is far greater than elsewhere. So choosing that option has a number of benefits. It is one way to retain a significant number of jobs in Northern Ireland and avoid the proposal’s high economic impact on one part of the United Kingdom. The impact would be disproportionate, but I will not go through all the figures that other Members have already mentioned.

There are, of course, other options, including transferring blocks of services, but I do not think that the Minister can simply say, “Look, we have decided that all these services will be withdrawn, and there will be this huge gap left in the job market in Northern Ireland.” To me, saying that would not be good for customers, the Exchequer or the Northern Ireland economy, and it would not make sensible use of the skills that already exist in Northern Ireland and that will be abandoned if this change is made.

High Speed Rail (Preparation) Bill

Sammy Wilson Excerpts

Wednesday 26th June 2013 Commons Chamber

[Mr McLoughlin]

I find the hon. Lady’s position on the issue strange. I should have thought that the Green party would welcome such investment in public railway systems. [Interruption.] I think I had better answer the hon. Lady. HS2 brings a great increase in capacity and I want to say more about that a little later. That is one of the important issues that lies behind the need for HS2. Also, as I point out to colleagues, going from St Pancras station to Canterbury, the first part of the route from St Pancras to Ashford on a high-speed train is a fantastic fast journey, then one hits the Victorian railway network to Canterbury and the journey slows down completely. I want the rest of the country to get the benefit of high-speed rail, not just the area in the south which already has a high-speed service.

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Mr McLoughlin]

I am not sure I can extend the service to Northern Ireland.

[Sammy Wilson]

And I have no idea how the Minister would extend it to Northern Ireland, but Northern Ireland does not benefit from the Barnett consequentials of this spend, either. Because there is a construction interest, can he give an assurance that when it comes to procurement, there will be no repetition of the mistakes that were made in the past whereby UK-based companies did not benefit from some of the high-spend capital projects, and there will be opportunities for construction firms from Northern Ireland?

[Mr McLoughlin]

I am more than happy to do that and I shall say more about that later. Crossrail has set a good example. About 97% of Crossrail goods are serviced by British companies, and the Mayor of London is in the process of purchasing a huge infrastructure project, the new London buses, from Northern Ireland. That is very much in my mind with regard to the way I will be dealing with HS2 and talking to the management of HS2.

--- Later in debate ---

[Mr McLoughlin]

I will say a little more about compensation in a moment. I accept and appreciate the hon. Gentleman’s point about the impact of naming the route. At the time of HS1 several routes were announced and there was potentially more widespread blight. In HS2 we have tried to be more specific about the routes so that we avoid widespread blight. However, I also say to the hon. Gentleman, who is well versed in how these things work, that we will be going out to consultation on phase 2—I will be announcing that in the very near future—and that will enable his constituents and those of the hon. Member for North East Derbyshire to make their points, find out more information, and possibly propose alternative suggestions and ideas.

[Sammy Wilson (East Antrim) (DUP)]

The Secretary of State said that there is a contingency provision of nearly 40% in this project. Is that typical of a project of this size, or does it indicate a higher degree of risk than would usually be associated with such a project?

[Mr McLoughlin]

It is a normal level of contingency that would be put into a scheme of this sort, and it is built in on an internationally based calculation.

This is the right way to plan for the project. In addition, with or without HS2, new rolling stock will be needed on the key inter-city routes linking London and the north over the next 20 years. I hope that deals with the point raised by my hon. Friend the Member for North West Leicestershire (Andrew Bridgen). We are therefore budgeting £7.5 billion for HS2 rolling stock. To put that in perspective, the current inter-city express programme to replace trains on the east coast and Great Western lines, which is creating jobs in the north east, will cost £4.9 billion. The money that I have just announced for the rolling stock for HS2 also includes a contingency of some £1.5 billion.

Good infrastructure is an investment in economic growth. We are investing £14.5 billion to build Crossrail, while £11 billion has been invested in new infrastructure at Heathrow since 2003. Over the period of construction, the cost of HS2 will be less than 0.15% of GDP—I repeat, less than 0.15% of GDP. This is an investment that the country can sustain and needs. That is why tomorrow the Chief Secretary will set out the detailed HS2 funding allocations for the six-year period until 2020-21.

Before I finish, I want to explain what we are doing for those affected by the line. As I said earlier and have tried to make clear throughout this Second Reading speech, I do not dismiss those with objections as irrelevant. We do indeed need to design HS2 carefully, consult properly and compensate fairly. I hope that I can reassure people about why it is right to go ahead. Some have concerns about the impact of HS2 on the landscape. While I cannot deny that a project of this scale will have an effect, I believe that the positive experience of our first high-speed line in Kent shows that the consequences can be managed without wrecking the countryside. For instance, while not a single mile of the M1 is in-tunnel, about 40 miles of HS2 will be in-tunnel. Of the 12.4 miles that crosses the Chilterns area of outstanding natural beauty, 5.8 miles will be in-tunnel and 3.5 miles will be in deep cuttings. No part of phase 2 of the route crosses any national parks or areas of outstanding natural beauty.

It is also important to ensure that proper compensation is made to those affected by HS2. That is why we have introduced the exceptional hardship scheme although there was no statutory requirement to do so. We believe that home owners already affected with a pressing need to move should have recourse to compensation, but without the authority of Parliament to incur expenditure to continue with this compensation, I would need to consider carefully what other mechanisms, if any, we could use. Very soon, we will start a new consultation on compensation.

Rail Investment

Sammy Wilson Excerpts

Monday 16th July 2012 Commons Chamber

[Justine Greening]

The hon. Gentleman will see improvements in services and capacity over the coming years. Many of the improvements that we are announcing on the network today can improve his area, too—not least through the potential to improve stations and see Access for All stations brought to his area. There is also investment in safety at level crossings and the general pots that we put in place to improve passenger experience and the strategic freight network. There is a huge number of different aspects to the investment, and I am sure that many of them will relate to the hon. Gentleman’s community.

[Sammy Wilson (East Antrim) (DUP)]

Will today’s announcement have any budgetary implications for devolved Administrations through the Barnett formula? What practical measures has the Secretary of State put in the procurement provisions to ensure that her aspiration of jobs for British industry and the UK supply chain is realised by this investment?

[Justine Greening]

On the hon. Gentleman’s point about jobs and growth, I should say that absolutely I have looked not only at what we need on our network and the investment profile but at getting a really clear understanding of how the measures can help support jobs and growth, particularly in the railway industry.

The hon. Gentleman knows that I am keen to make sure that the money that we are spending as a Government benefits not just passengers but the industry, in creating more jobs. We will continue to look at how we can make sure that our procurement processes work effectively and I certainly hope that we can do more to support our industry than the last Government.

Cost of Motor Insurance

Sammy Wilson Excerpts

Tuesday 8th November 2011 Commons Chamber

[Mr Ward]

Absolutely. When the fines are so much lower than the premiums, there are bound to be people who take the risk of getting caught, and it completely undermines the public’s confidence in the system and, indeed, the police. If fines are to be a proper deterrent, surely they should at least reflect the amount that the driver would have had to pay had they not avoided paying insurance.

[Sammy Wilson (East Antrim) (DUP)]

Given that the fine system is clearly not working, does the hon. Gentleman agree that one way we could deal with the issue would be to ensure that when someone purchases a car, whether from an auction, a dealer or wherever, they need to have proof of insurance before they can leave the premises? In that way we would have someone checking before the car ever got on to the road.

[Mr Ward]

Absolutely. I mentioned all the survey returns that we received, and we asked for people’s suggestions on how they would improve things. Several respondents suggested a gibbet in the centre of Bradford, but the hon. Gentleman’s point is useful, because there is no shortage of suggested solutions. I am not aware of the processes and protocols of the House, but, rather than relying all the time on the Transport Committee to resurrect and pursue the issue, we could establish a small all-party working group to consider many of the ideas that are coming forward and constantly keep up the pressure. For a number of years, there has been a spiral of ever-increasing insurance premiums, and we need to reverse that. We need to keep constant pressure on the system until we bring premiums down.

We considered the issue of road accidents. Our initial, intuitive position was that there are a lot more accidents and that that explains the situation; but of course the opposite is true. Road safety experts revealed that the number of car accidents had fallen dramatically. Driving instructors called for more stringent testing—I suppose they would—and, indeed, for post-test tests to take place perhaps a year or six months after the original test to deal with some of the issues involving young drivers. However, that did not seem to offer a solution to the murky world of personal injury claims that became apparent. There is an increasing number of claims and the cost per claim emerged through discussions with brokers, who candidly told us that £3,000 was the going rate for a personal injury claim. It is widely known in the community that insurance companies are willing to pay out because it is a quicker and less costly course of action than challenging claims, even when they suspect claims of being opportunistic and fraudulent.

One driving instructor was full of genuine, deep sympathy for young drivers. He said that many good drivers simply cannot afford vehicles. There is a problem when a young driver passes their test and cannot afford to drive for probably a year or 18 months but they then jump into a car. Putting that to one side, the driving instructor was sympathetic to young drivers who had passed their test, but who were unable to afford insurance. However, he then said, “I did it, you know.” I said, “Well, what exactly do you mean?” He said that he was giving a driving lesson to a young woman and that they were involved in an accident that was not their fault. There was minor vehicle damage and no personal damage at all—or so he thought.

The next day, the woman returned after a discussion with family members who were clearly more streetwise than her. She told the instructor that, over night, she had developed a neck pain. They both ended up claiming and received more than £2,000 each plus £3,000 for the car repairs—simple as that. I went to see the police and said, “Well, surely you can do something about the matter.” The police said that it is very difficult to prove fraud in such cases. In fact, they had managed to catch only one person who was guilty of fraud. That case involved an accident after which somebody had immediately jumped out of the car, lain on the floor and called for an ambulance. The person then realised that they were not insured, so they rang their brother and got him to lie on the floor. That fraud was, in fact, detected, but that example shows the difficulties.

People talk about the compensation culture, but what is interesting—I am fascinated by this—is the immoral stance taken by many people who are otherwise good and honest. They would never drop a sweet wrapper or let their dog foul the pavement, and yet they get involved in this world of fraud. Many people believe that they should not have been asked to pay so much for their insurance in the first place and that it is not wrong to try to get some of that money back through a fraudulent claim. It is almost as if people feel they are getting back something they are entitled to. Good people are, sadly, doing bad things.

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[Sammy Wilson]

The hon. Gentleman is right: there is that culture, which is encouraged by people’s experiences, their friends’ experiences and sometimes the advice they are given by their legal advisers, solicitors and so on. However, does not the fact that insurance companies almost appear to roll over if a personal injury claim is set below a certain level encourage people to make such a claim? The hon. Gentleman is right to point out that fraud is sometimes hard to prove, but one thing insurance companies perhaps ought to be doing is to fight more of these cases, so that if people want to get this money, they have to put up some evidence in court. That might deter some of these applications.

[Mr Ward]

That is absolutely right; we need someone to take on and challenge the system. Over the years it has clearly become easier just to recoup the money by doing the same to someone else. That is what has happened in the system. Insurance companies have been guilty of such an approach and they have had to respond to what other companies have done. Those other companies have then also had to do it, and so the cycle goes on.

We considered the various component parts of the matter: whiplash injuries, referral fees, personal injury lawyers’ costs and many of the things that have been covered in great detail by other speakers and the Transport Committee. The overall conclusion was that there was not a simple solution to the problem of unaffordable car insurance and that, in fact, it is a complex and deeply flawed system. None of the component parts can be removed: they all fit together to create the system and they all need to be dealt with individually. We need a batch of measures, each one designed to deal with the component parts of what has become a crazy, crazy system.

Our work over the summer generated a number of case studies, some of which would be funny if they were not so serious. I was contacted in January by a teenager who had been quoted £26,000 for third party insurance on a 1.1 litre Citroen Saxo. When I raised that with the local paper, I was contacted by other young people who had received even more ridiculous quotes. One young woman was quoted a figure of £53,000, which was the record. I think we can take it that the insurance company did not want to insure that person. Clearly such premiums are unaffordable for anyone, even those with an extremely high disposable income.

The young seem to be particularly affected, but they are not the only ones experiencing problems. The hon. Member for Lewisham West and Penge (Jim Dowd) mentioned an incident concerning an elderly gentleman, which shows that the issue affects everyone. During the summer, I was visited by various reporters and journalists as part of my investigation. The comical thing was that invariably, after the interview or the filming, the journalist or the cameraman or woman gave me their story or that of their nephew, niece, son or daughter. They all had a tale to tell and were of the opinion that something had to be done.

A recent case study is worth considering because it is about an ordinary person. A gentleman and his wife owned a 2007 Vauxhall Corsa that was in decent condition. He had held his licence for 17 years and had had no accidents, and his wife had held her licence for five years and had had no accidents or claims. He had a nine-year no-claims bonus. In 2009-10, he paid £600, the next year he paid £800 and the next year £6,200—no accidents, no claims, no difference. Another sad thing about that case is that the gentleman has recently become unemployed, and because of that his insurance premium has gone up. How does that make sense?

That case study reveals the impact of the postcode lottery, which is an issue that has not been raised because it is difficult to do so. I mentioned that my very first meeting was in a mosque. There is a huge community cohesion issue because people say, “The reason we are paying a lot is because of those people over there.” That is why I was so keen to get involved in this campaign at the beginning. The young men I met were living in an area with ridiculously high insurance premiums.

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[Ms Margaret Ritchie (South Down) (SDLP)]

I congratulate my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) on tabling this motion for debate. As the hon. Member for Strangford (Jim Shannon) said, some two weeks ago I had an Adjournment debate on the cost of motor insurance in Northern Ireland. A Minister from the Treasury responded on that occasion, and I found that useful, but many issues are involved in the rising cost of insurance premiums in Northern Ireland.

Drivers in Northern Ireland are subject to excessively high insurance costs that are rapidly rising year on year. I appreciate that the problems are not unique to Northern Ireland, but they are particularly striking in our case. We have found in our research that consumers in Northern Ireland have less choice of insurance providers, with three times fewer companies offering car insurance. In August, as the hon. Member for Strangford stated, the Consumer Council for Northern Ireland launched a campaign to highlight the cost of car insurance, and I fully support that. The Minister is no doubt aware that the Office of Fair Trading subsequently agreed to undertake an investigation into the car insurance market with a specific focus on Northern Ireland. We must robustly establish why premiums have increased by a reported 40% in the 12 months to March 2011 and why insurance costs are significantly higher in Northern Ireland than in comparable regions of Britain. Indeed, we must not only assess that but redress it. The findings from the OFT must be robustly addressed and the resulting measures must have teeth.

Some of the evidence produced has suggested that car insurance premiums in Northern Ireland have increased by almost 73% in the past two years. The situation is even worse for younger drivers, whose premiums, according to research, have increased by 112%. Young people face severe difficulties in entering the job market, and the prohibitively high cost of motor insurance is yet another barrier to their finding work. Only yesterday, I received a letter from a constituent who highlighted a problem he had encountered with his son. He said that approximately three weeks ago he received a quote to renew his insurance with his 18-year-old son on the policy, and to say that he was shocked at the price would be a gross understatement. The price quoted was £2,488.92, which he simply could not afford. He rang a number of insurance companies and was quoted between £2,800 and £4,000 to cover his son. The first company told him that it would drop the price to £2,200, but it was still beyond his means to pay such an amount.

My constituent said that the sad part of the situation is that his son has now been forced off the road due to the exorbitant price of car insurance in Northern Ireland. He will not be able to stay on in his part-time job, as his father’s working schedule does not allow him the time to leave and collect him when he requires transport. My constituent feels strongly that something needs to be done to help young drivers to stay on the road and travel to their jobs, even if they are part-time, or even if they are students pursuing their studies, and thereby do their bit to help get the economy in that part of the world up and running again. He says that it was tough to have to sit his son down and tell him that as from 15 November he will not be able to allow him to drive. That young boy not only showed remarkable courage but is a very sensible young adult, and he is being penalised by insurance companies for the actions of others. It has been suggested that those companies are quick to label some young drivers as boy racers, and that needs to be addressed.

All these problems are compounded by the restricted range of companies offering premiums in Northern Ireland, which limits competition and drives up prices. I urge the Minister to address and where possible, working with others, to remove any barriers to companies that wish to enter the market, particularly those in Northern Ireland. Obviously, that means working with Ministers in the Northern Ireland Executive.

Two fundamental arguments are put forward to justify the high costs of motor insurance in Northern Ireland: first, that Northern Ireland is a case apart because its demographics and road layouts bring an increased risk of incidents on our roads; and secondly, that Northern Ireland’s legal system places a higher burden on insurers. The evidence that Northern Ireland has a very young population is greatly exaggerated; indeed, we have a proportion of young people similar to that found in many regions in Britain. Likewise, a lack of motorway coverage has been cited as a reason for increased premiums, because statistically motorways are the safest road type. However, maps show that Northern Ireland has a relatively consistent motorway density compared with regions in Britain and in Europe. Moreover, some of the fundamental actuarial evidence regarding the number of accidents, claims and casualties on our highways weighs against any of the debatable factors regarding demographics or road layout. Those facts must be kept at the forefront of our minds when considering the claimed justification for the increased cost of premiums, which are rising at a time when we in Northern Ireland are experiencing a decline in the number of road traffic accidents. The numbers available for the latest year, 2010, show the lowest number of road deaths since records began in 1931. Naturally, every death on our roads is a tragedy, but we must commend the work done to improve safety.

There are some basic facts that are hard to reconcile with rising insurance costs. The number of road traffic accidents reported to the police service has dropped over the past decade from nearly 40,000 per year in 2000 to about 30,000 per year in 2009. The number of compensation claims is decreasing, whereas in England and Wales the numbers are rising. More specifically, according to a National Audit Office report published at the beginning of the year, the number of claims reported to the compensation recovery unit fell by 23% in the decade up to 2009.

In short, the trend is clear: although accidents and claims are decreasing, the cost of insurance is increasing. I ask the Minister again to give detailed consideration to this fundamental point. All these facts weigh heavily against the argument that the demographic or topographical factors in Northern Ireland justify the increasing cost of insurance. Those factors are difficult to relate to the draconian rise in the cost of insurance premiums.

[Sammy Wilson]

The hon. Lady has done some impressive research into the fall in accidents. It is clear from the statistics on road accidents and deaths that there has been a dramatic improvement even since four or five years ago. For that reason, we should agree that this issue is not about the number of accidents, the demography or the level of claims, but about the lack of competition in the market. It therefore needs to be addressed by the Department for Business, Innovation and Skills and the Office of Fair Trading. They must find out whether collusion between the insurance companies has increased the price of insurance in Northern Ireland.

[Ms Ritchie]

I thank the hon. Gentleman for that helpful intervention. I agree that the research shows clearly that the lack of competition in Northern Ireland has driven up the cost of insurance premiums. That is an area that the Office of Fair Trading should focus on in its investigation. It should drill down on the nature and cost of insurance premiums in Northern Ireland. We, as Members of Parliament for Northern Ireland, will look at that. The hon. Gentleman, wearing his other hat as a member of the Northern Ireland Executive, is no doubt working with Ministers in Whitehall to address those issues. The hon. Member for Strangford has highlighted the legal issue, so I do not need to elaborate on that.

Many people living on low incomes or in rural areas can simply no longer afford to keep a car on the road. As I have said, many young people and their parents in my constituency have told me of their struggle to secure affordable insurance. They are understandably concerned about the discrepancy in insurance prices between Northern Ireland and other regions in Britain. Households feel that by having to pay excessive insurance fees, they are being unduly discriminated against. That unfair practice has been in place for too long. It adversely affects the young and the old who depend on their cars for work, particularly in areas where public transport provision is limited. Essentially, that means rural communities. There are, shall we say, certain locational issues.

The broader context is that the economy is suffering, with record numbers of young people out of work. That is exacerbated by people’s use of motor vehicles being restricted. At this time of economic recession, we need a dynamic, mobile work force. Car insurance being so expensive puts up a barrier to economic success, especially for the young. The unemployment rate among young people is estimated to be 18%—almost one in five cannot find a job. That compares with an overall unemployment rate in Northern Ireland of 7.6%. Excessive insurance premiums adversely affect young people and prevent them from offering the skill of driving to potential employers. In these extremely challenging times, I ask the Minister to consider any measures that would make insurance more affordable for young people, particularly when driving relates to their employment.

In conclusion, insurance costs have a real impact on people, both young and old, who need to be mobile for social and economic reasons. I hope that my short contribution has made clear the scale of the problem faced by motorists. I hope that I have given examples that illustrate that parents are suffering from the undue burden of being quoted high insurance costs for their sons and daughters. They are not able to pay those costs because of the limited financial means that they now have. I believe that the insurance industry must stabilise its premiums so that hard-pressed motorists get a fair deal when they purchase their motor vehicle insurance. I seek assurances from the Minister that he recognises the problem and will act on a cross-departmental basis, as the motion suggests. Supplementary to that, in the case of Northern Ireland, I ask him to work directly with Ministers in the Northern Ireland Executive to address its particular problems in light of any recommendations that come from the Office of Fair Trading report later this year.

[John McDonnell (Hayes and Harlington) (Lab)]

I will be as brief as I can be, because my right hon. Friend the Member for Leicester East (Keith Vaz) is clearly keen to speak early and at length on the subject of his Adjournment debate, and because everything has been said. Anybody reading this debate in Hansard will be impressed by the amount of work and time that individual Members have spent performing research in their constituencies. This subject is close to many of our hearts.

I wanted to speak because when constituents approach us, particularly young constituents, we have a duty to ensure that their voice is heard in this Chamber. I was approached by a young man called Joshua Deacon, who lives in the London borough of Hillingdon. He has experienced high insurance costs. He did a mini survey and a petition on the internet because he thought that the same must be happening to his friends. He found costs ranging from £2,000 up to about £20,000, which is ludicrous. His survey showed that a number of young people, particularly in my area, which is quite a geographical expanse, used their cars for work or to seek work, but that such costs were preventing them from travelling and driving them off the road.

The other concern that emerged, which has been expressed by other Members, is that the higher the cost, the more people there are who just do not insure themselves. Like the hon. Member for Bradford East (Mr Ward), I went out with my local police, and the first arrest was of an uninsured young person. He was not driving particularly dangerously, but it was obvious from his driving that he was young. When he was pulled over, he was found to have no insurance. The worry, given what is happening in my constituency, is that as unemployment increases and incomes decrease, more and more people will be unable to pay their insurance costs. As a result, there will be an increase in criminality.

As a result of my young constituent’s efforts, a number of months ago I put down an early-day motion on this subject. The responses that I received from the insurance companies were exactly as have been reported here. With regard to Northern Ireland, I think that there is a cartel in operation. One particular area of the country is being exploited as a result of the insurance companies working together to produce higher rates. In fact, I believe that is happening more broadly as well.

I have received the same responses from insurance companies as are mentioned in the report. They say that the figures are based on actuarial valuations and on the high level of accidents involving young people. We all understand that completely, but we cannot understand why the situation has not changed despite the fact that we have been knocking the subject around for so long in the House. I pay tribute to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who has persisted with it through the Transport Committee. Time and again, we have come up with a list of suggestions, many of which the hon. Member for Brecon and Radnorshire (Roger Williams) listed. We have suggested graduated licences, restrictions in use, curfew arrangements, limits on the number of passengers and where they are located, and alcohol restrictions. In addition, we raised some time ago the idea of black boxes and speed limiters being inserted into cars.

[Sammy Wilson]

I can fully understand the hon. Gentleman’s point about the cost of insurance premiums for young people, but does he not feel that imposing restrictions on freedom such as curfews on top of high insurance premiums would be unfair, even if it were enforceable? For many young people, getting their driving licence is their ticket to freedom. To tell them that they cannot go out at night or have their friends in the car is not fair, especially when most young people drive responsibly and do not race around the roads causing accidents.