Select Committee on Transport Second Special Report





1.  On 8 March 2002 the Transport, Local Government and the Regions Select Committee published a report on the European Transport Policy White Paper (HC 556).

2.  This document sets out the Government's response to the Committee's recommendations in the report and provides an update on recent developments.

Recent developments

3.  The White Paper was referred by the House of Commons European Scrutiny Committee for debate in Standing Committee A on 13 March 2002. The document was subsequently cleared following this debate. The House of Lords have also cleared the White Paper.

4.  Since the Committee's report there has been discussion on the White Paper at two Transport Councils (26 March and 17 June 2002). At the Council on 26 March, Ministers discussed the subject over lunch. The Spanish Presidency sought to agree Council Conclusions on the White Paper at the June Transport Council. However, a consensus on language was not reached by Member States, and subsequently the Presidency decided to adopt its own Conclusions.

5.  Several of the measures indicated in the White Paper have since been published as separate proposals by the Commission such as, the Second Rail Package; the proposal to revise the trans-European transport network guidelines; Marco Polo; the proposal to amend the existing Regulation 3820/85/EC on driver's hours; the proposal for a Regulation amending Regulation 295/91 establishing rules for a denied boarding compensation system in air transport; and the proposal for Community Accession to IMO and ICAO.

6.  The Second Rail Package was referred by the House of Commons European Scrutiny Committee for debate in Standing Committee A on 8 May and was subsequently cleared following this debate. The House of Lords have asked to see the results of the Government's consultation exercise, which closes on 23 August. The package was debated at the March Transport Council. The Danish Presidency wishes to make rapid progress on all elements of the package and is aiming for political agreement at the December 2002 Transport Council.

7.  The Commission published proposals to revise the 1996 trans-European transport network guidelines on 2 October 2001. The main focus of the proposals was to reduce the number of bottlenecks on the network by raising rail freight capacity and by encouraging short sea shipping and intermodal transport. It also aimed to make better use of the road network through use of traffic management and information systems. The Commission also suggested 6 additions to the list of priority projects. The proposal has cleared scrutiny in both Houses. The Presidency aims to secure political agreement at the October Transport Council. We believe this is achievable so far as the textual changes are concerned, but we are doubtful that agreement can be reached on the issue of new priority projects where a majority of Member States (including the UK) are against any change at present.

8.  The Marco Polo proposals were published by the Commission on 4 February 2002. They would offer Community financial support for modal shift projects, with a proposed budget of _85 million and various thresholds for different types of eligible project. The proposals have cleared scrutiny in both Houses. An important issue has been the budget for the programme where some Member States, including the UK have been arguing for a lower sum. Ministers were unable to reach agreement on the proposed Regulation at the June Transport Council. The European Parliament is expected to hold its first reading on the proposals in September 2002.

9.  On 12 October 2001 the Commission published its proposal to amend the existing Regulation 3820/85/EC on drivers' hours. The proposal is still awaiting UK parliamentary scrutiny clearance. There were several working groups held under the Spanish Presidency, however, no agreement was reached.

10.  Following publication in December 2001 of the Commission's proposal on denied boarding compensation, the Spanish Presidency held one Working Group meeting in February and the Danish Presidency has held two meetings to date. The main point of contention has been the high levels of compensation and the cost to airlines. The Commission is currently reflecting upon this. The UK and other Member States have also expressed concern about the inclusion within the proposal of inclusive tour passengers travelling on charter flights. The Presidency has said it aims to reach political agreement on the proposal at the October Transport Council. However, since no further Working Group meetings are scheduled before September we question whether this timetable is achievable.

11.  At the Transport Council on 17 June, the Commission introduced its proposal for Community membership of IMO and ICAO. There was no debate. The proposal was merely noted. The matter is now for discussion under the Danish Presidency, which has indicated that it will deal with the proposed Community membership of the two bodies separately, taking ICAO first. Informal soundings suggest that a large majority of the Member States share the Government's strong reservations.




Recommendation (a): The Minister should incorporate this Report's recommendations in representations to the Council.

The Government has already taken the recommendations in the Select Committee's Report into account when discussions on the White Paper have taken place in the Transport Council, and it will continue to do so should there be any further debate.


Recommendation (b): We are dismayed that the Commission does not aim to reduce the need for people and goods to travel long distances, merely to reduce the dependence on more environmentally damaging forms of transport. Decisive action is required now to reduce demand. The Commission has failed to formulate an implementable sustainable transport policy, which should include the integration of transport and land-use planning to reduce the need to travel. The Commission must reexamine its priorities and focus on reducing demand for transport and how transport policy would contribute to tackling social exclusion.

The Government agrees that the proper integration of transport and land use planning policies is an essential part of any long-term solution to tackling problems of congestion and pollution.

However, the Government does not believe that the European Community should have a significant role in land use planning. Indeed, in our view, the success of Community transport policies is to a significant extent dependent on Member States' pursuit of sustainable land use policies at the local level.

The Government published revised Planning Policy Guidance 13: Transport in March 2001 which has the objective of integrating planning and transport from national to local level. Planning Policy Guidance 13: Transport encourages local authorities to focus major generators of travel demand in city, town and district centres and near to major public transport interchanges. Furthermore, strategies in development plans and local transport plans should complement each other. And consideration of allocations in development plans and local transport investment and priorities should be closely linked.

The Government has also revised national planning policy guidance in relation to a number of other policy areas to ensure that we achieve more sustainable patterns of development. An example is the search sequence for new housing growth set out in Planning Policy Guidance 3: Housing (2000) which places priority on the re-use of previously-developed land and buildings within urban areas identified by the urban housing capacity study, then urban extensions, and finally new development around nodes in good public transport corridors.

The Government currently encourages all development and land use policies and proposals contained in local authority development plans to be subject to full environmental appraisal. Furthermore, planning permission for certain categories of development are subject to environmental assessment, even if they accord with a development plan that has been subject to environmental appraisal.

Under, our proposals for Local Development Frameworks, set out in the Planning Green Paper: Planning: delivering a fundamental change, published in December 2001, the Government proposes to strengthen policy in this area. In particular, the Government intends that all development plans will be subject to mandatory sustainability appraisal. The effect of a policy or proposal on the need to travel is likely to be a factor in this appraisal.


Recommendation (c): The Commission failed to include indicative costings for implementation of the interoperability Directives. The Department for Transport, Local Government and the Regions should assess them with care. The financial viability of some domestic rail services could be undermined by the strict application of the technical specifications for interoperability leading to traffic being transferred from rail to road. If subsidiarity is to be a reality those Directives are clearly an area in which it should be exercised.

The costs of implementation of the interoperability Directives cannot be estimated with any certainty. They depend on the specification of individual projects, whether derogations from the new European Technical Specifications for Interoperability (TSIs) are obtained, and the content of the specifications themselves. Drafting of these specifications is ongoing and UK industry is actively engaged in these processes. There are also considerable potential benefits to manufacturers and operators from the production and use of standard designs, which will be cheaper because of the larger production runs possible from their greater utilisation across the EU Member States and beyond.

As for subsidiarity, the purpose of this measure is to progress the single market in the rail sector, not only in railway operations, but also in equipment manufacture. These benefits would not be realised if the standards continued to be set exclusively at national, rather than international, levels. Specific national concerns are protected, and cost impacts minimised, through the close involvement of national industries in the development of the specifications, the inclusion of 'specific cases' for certain national parameters; the use of cost benefit analysis in the development of the specifications, and the scope for derogations on a case-by-case basis (for example where economic viability would otherwise be compromised).

The Commission has published a proposal to amend Council Directive 96/48/EC and Directive 2001/16/EC on the interoperability of the trans-European rail system as part of the Second Rail Package (COM(2002)22 Final). The Government supports the objectives of the Commission's proposal, which aims to reduce costs and facilitate market opening. However, the Government wants to see further information on the balance between costs and benefits from the proposal to extend interoperability requirements to the whole European rail network before reaching any final decisions.


Recommendation (d): While the exchanges of information and best practice techniques, especially concerning safety issues, between railway operators should be encouraged, existing organisations are capable of performing those tasks. The Agency, which we suspect may seek legislative powers in the future should not conflict or duplicate the work of relevant organisations already established in the individual Member States. In particular, we are concerned that the Commission's proposals will conflict with the establishment of the new rail industry safety body proposed in the United Kingdom.

The European Commission's Second Railways Package contains both a draft directive on railway safety (COM(2002)21 Final) and a draft Regulation to establish a European Railway Agency (COM(2002)23 Final).

The Government supports in principle the creation of the European Railway Agency (ERA) as a central source of technical expertise staffed by industry experts. A considerable amount of worthwhile work remains to be done to develop common standards, indicators etc. The Government also supports the proposal that the ERA will act solely in an advisory capacity to the Commission and will not have autonomous executive powers. There is, in fact, no basis in the Treaty for an Agency to be given legislative powers. There are, however, some detailed issues that need to be explored about its role (particularly in investigating the activities of other bodies) and its governance (in particular the composition of the administrative board).

There is no conflict with the establishment of a Rail Industry Safety Body (RISB) in Great Britain. The interoperability Directives and proposed Safety Directive recognise that, for some time at least, common European technical specifications for interoperability (TSIs) will not provide a complete reference system to ensure safe operation of the railways, and there will be a continuing role for national standards developed at national level. While the ERA would co-ordinate the development of the TSIs, the RISB's role will - amongst other things - be to bring forward proposals for new national standards.

Recommendation (e): The Commission has created proposals that achieve the convoluted result of being both too general and too detailed, while failing to reflect the commercial, environmental and economic needs of Member States. It is essential that the provision of additional runway capacity at congested European hub airports is reviewed.

It is for individual countries to decide whether to review capacity at congested hub airports.

In the UK we are undertaking a wide-ranging review of air transport policy with a view to the publication of an air transport White Paper early next year. The White Paper will set a clear policy framework for airports and aviation in the UK over the next 30 years - to ensure that they develop in a sustainable way, taking account of the economic, environmental and social impacts.

As part of this process a series of regional air services studies have been undertaken assessing options for developing air services and airports around the UK.

We hope to publish regional consultation documents based on the studies before the Summer recess, if at all possible. The consultation documents will look at a wide range of policy scenarios, set out options for the development of capacity at UK airports and associated surface access improvements, and report key economic social and environmental findings.


Recommendation (f): While the Committee welcomes the Commission's intentions to encourage greater use of water transport, assistance must be available to the inland waterways in the United Kingdom if this form of transport is to be an effective alternative to road haulage.

Under section 272 of the Transport Act 2000 Freight Facilities Grants (FFG), are available in the UK. These are aimed at encouraging the use of inland waterways freight and designed to equalise the cost of inland waterways transport where it would otherwise be more expensive than the road option.

The Government is taking steps to extend the FFG scheme and to this end has published a consultation paper seeking views on its proposals for a non-capital aid scheme. EU approval will be required for any extended scheme.

The United Kingdom, in common with All Member States is supportive of the principle of the Marco Polo programme, the main objective of which is to help shift the volume of freight corresponding to the anticipated growth of international road haulage (12 billion kilometre-tonnes), from road transport to rail, short sea, and inland waterway transport. This is intended to reduce road congestion and improve the environmental performance of the whole transport system.


Recommendation (g): Harmonisation of diesel tax would almost inevitably mean a lower level of tax in the United Kingdom. A reduction in the price of diesel would make road haulage more attractive and would undermine the Government's efforts to encourage the use of railways for freight and to reduce road congestion. The Government should strongly resist any attempt to harmonise fuel tax rates, unless the freedom to maintain rates above the standard rate is explicitly preserved.

The Government fully agrees with the Committee that it would be inappropriate to harmonise diesel tax rates and would resist any such proposals.


Recommendation (h): Road Safety is the single biggest transport issue in the European Union. We fail to understand why the Commission, having set a demanding target to reduce the numbers of fatalities on Europe's roads, has failed to propose any substantive, practical measures to achieve this target. The measures that it does propose - common road signs on the trans-European Network and the advertising of high-risk sites - will have minimal affect on casualty reduction. The hundreds of thousands of European citizens who will be victims of road accidents over the decade ahead deserve something more than yet another meaningless target.

We believe this to be unduly pessimistic. Member states that are having most success with road safety are those which have set targets and are working to implement them. Improvement in the overall EU road safety position will depend upon those Member States with poor records emulating the others. The Commission has an important role in promoting co-operation, sharing of expertise and good practice.

We agree with the Committee's view that the Commission's signing proposals will have little beneficial effect. But the Commission's 2nd Action Plan setting out priorities for road safety was adopted in 2000 and welcomed by the Transport Council and Parliament. The Commission is now working with Member States on a 3rd Action Programme. However, this was not sufficiently advanced to be covered in the White Paper.


Recommendation (i): We are very disappointed that the Commission has not shown its commitment to road safety in the one are in which it has direct competence. By refusing to bring forward the European Pedestrian Safety Directive, the Commission has shown a callous disregard for the lives of European citizens. The voluntary agreement which has been put in its place will be far less effective.

Pedestrian Safety is very important. A negotiated agreement with motor manufacturers was supported by a majority of Member States including the UK and in our view offered the quickest route to introducing worthwhile pedestrian protection into the design of new cars. The early introduction of the first phase (from 2005), coupled with the full benefits which will be achieved in the second phase (from 2010), represented a worthwhile package.

It was estimated that the first phase would deliver around 60% of the total casualty savings expected from the second phase (this is made up of around 30% for fatal injuries and 60% for serious injuries).

A traditional Directive would take much longer to negotiate and would also almost certainly have to be introduced in phases - very similar to the negotiated agreement. A delay would mean more people are killed and injured. A delay of 2 years in the first phase could mean an extra 2,300 people killed or seriously injured in the UK. This could rise to 3,800 if there was a corresponding delay in the second phase.

Responding to comments from the European Parliament, the Commission has now indicated that it intends to support the negotiated agreement with a legal framework. We now await this further proposal from the Commission, which is expected by the end of 2002.


Recommendation (j): There could be serious consequences if the Commission was successful in securing full membership of such organisations. The position of individual Member States could be completely undermined in negotiations that have direct consequences for the working conditions and economies of those States. It would be bizarre if Member States relinquished control of such important matters and the Community adopted the lowest common denominator view among Member States. The United Kingdom Government must resist the Commission's ambitions.

The Government agrees that Community membership of the International Maritime Organisation (IMO), the International Civil Aviation Organisation (ICAO) and the Rhine and Danube Commissions would serve no useful purpose.

But we support Community membership of Eurocontrol because we believe this would improve the efficiency of the Organisation.

The IMO is the UN body responsible for the global safety and environmental performance of shipping. EU Member States work collectively and effectively in the IMO. Community Membership of the IMO would not enhance effectiveness, would require a change in the IMO's constitution (which the membership is unlikely to vote for), and risks seriously damaging the competence of the Member States in maritime matters.

There are legal obstacles to the Community becoming a member of ICAO. ICAO's governing statute (the Chicago Convention of 1944) creates it as a body whose membership is limited to individual states, not to a grouping of states. Only an amendment to the Convention could permit membership by other than sovereign states. There would, in any case, be practical difficulties. Membership by regional groupings could change the nature of the organisation. And EU states would lose individual voting rights.

The Commission clearly has a legitimate role in ICAO matters. The key thing is to have reliable co-ordination procedures in place. The Commission could, for example, establish a permanent representation in Montreal (ICAO's base).

There is also the proposal that the Community should be a member of the Rhine and Danube Commissions. That would not be helpful. Technical standards for commercial vessels/crew using Community waterways should be a matter for the collective agreement of the Member States. Community membership of the two Commissions will not advance that objective.


Recommendation (k): The Commission envisages major changes throughout the transport sectors that would require very significant costs and yet has totally failed to provide an assessment of the overall costs to the European Union, or to reflect the funding plans already in place in Member States. This Committee fails to recognise how the White Paper's proposals would assist the tax payer, or deliver political or economic benefits to Member States.

All government departments in the UK are required to produce a regulatory impact assessment for proposals that are likely to have a direct or indirect impact (whether cost or benefit) on businesses, charities and the voluntary sector. In this way the full impacts of a proposals are identified and thought through and a range of possible options - including non-legislative routes - are examined.

Through its active participation in the "Mandelkern Group" on Better Regulation the UK has been working with other Member States and the Commission to ensure that similar methods for assessing the impact of new proposal are systematically used at the EU level.

The Commission has committed itself to improving the quality of regulation. We agree with the Committee that it would have been helpful if the Commission had provided some estimate of the costs of these proposals on this occasion.


Conclusion (l): The European Commission's White Paper is largely aspirational, but if its proposals were to be implemented, they would incur additional expenditure for little, if any, benefit and would have very serious consequences for transport policy in the United Kingdom.

The Government agrees with the Committee that the Commission's White Paper is largely aspirational. However, at this stage it is too early to determine what the costs and benefits of the 60 or so measures set out in the Paper might be. In many cases, it will be necessary to wait for the Commission's formal legislative proposals before reaching definitive conclusions.

As each of these proposals is published by the Commission we will carefully consider their implications. During negotiations in the Council and in our briefing of Members of the European Parliament we shall seek to ensure that any resulting legislation provides real benefits to our transport system and to our business community and citizens.


14 August 2002


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