Draft Motor Vehicles (International Circulation) (Amendment) Order 2013
The Committee consisted of the following Members:
† Burden, Richard (Birmingham, Northfield) (Lab)
Denham, Mr John (Southampton, Itchen) (Lab)
Dobson, Frank (Holborn and St Pancras) (Lab)
† Gillan, Mrs Cheryl (Chesham and Amersham) (Con)
† Goodwill, Mr Robert (Parliamentary Under-Secretary of State for Transport)
† Gyimah, Mr Sam (Lord Commissioner of Her Majesty's Treasury)
† Jones, Graham (Hyndburn) (Lab)
† Knight, Sir Greg (East Yorkshire) (Con)
† Leech, Mr John (Manchester, Withington) (LD)
Mactaggart, Fiona (Slough) (Lab)
† Newton, Sarah (Truro and Falmouth) (Con)
O'Donnell, Fiona (East Lothian) (Lab)
Qureshi, Yasmin (Bolton South East) (Lab)
Shannon, Jim (Strangford) (DUP)
† Spencer, Mr Mark (Sherwood) (Con)
† Stewart, Iain (Milton Keynes South) (Con)
† Sturdy, Julian (York Outer) (Con)
† Thornton, Mike (Eastleigh) (LD)
Margaret McKinnon, Committee Clerk
† attended the Committee
First Delegated Legislation Committee
Monday 25 November 2013
[Mr Joe Benton in the Chair]
Draft Motor Vehicles (International Circulation) (Amendment) Order 2013
4.30 pm
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill): I beg to move,
That the Committee has considered the draft Motor Vehicles (International Circulation) (Amendment) Order 2013.
It is a pleasure to serve under your chairmanship, Mr Benton. The order will allow car transporters to carry out unlimited cabotage operations in Great Britain during the peak registration periods. Road haulage cabotage is domestic goods operations carried out on a temporary basis by haulage operators registered in another EU member state. European Union regulation 1072/2009 revised the previous EU rules governing road haulage cabotage, with the intention of clarifying the minimum extent to which carrying out cabotage in another member state was allowed. Translated into domestic law, that results in non-UK goods vehicles being limited to carrying out no more than three cabotage operations in the seven-day period following the last delivery on the incoming international journey.
Sir Greg Knight (East Yorkshire) (Con): To clarify the position so that the Committee can fully appreciate the extent of the motion that my hon. Friend the Minister is moving, may I ask whether my understanding is correct? If a German owner of a car transporter seeks to bring German cars into Britain, he can do so already without needing to pay vehicle excise duty in the UK. The Minister’s motion allows, in my example, the German operator to bring his car transporter to the UK and, for a limited period, to move cars from point A to point B within the UK and not have to pay vehicle excise duty.
Mr Goodwill: I thank my right hon. Friend. He is absolutely correct to say that under the regulations that currently apply, a foreign-registered lorry can come in either laden with foreign cars or unladen and then carry out three cabotage operations in the UK during a seven-day period. The current situation is that those trucks can come in laden with cheap foreign diesel and operate in the UK. However, my right hon. Friend will be pleased to know that as of April next year, we will be charging a levy on lorries operating in the UK from abroad of £10 a day, or they can buy a season ticket for £1,000. That has addressed a situation that was unfair for many years.
Mrs Cheryl Gillan (Chesham and Amersham) (Con): Will my hon. Friend the Minister tell us whether UK freight operators have the same provisions in Germany, to use the example of my right hon. Friend the Member for East Yorkshire (Sir Greg Knight)?
Mr Goodwill: Yes, indeed; this cabotage arrangement is EU-wide. Following on from the point about paying road tax or vehicle excise duty, the Germans have a system called Lkw-Maut, which ensures that people pay to use the roads in Germany, and a number of other EU countries have similar rules in place. Indeed, the French motorway system is a system in which one pays tolls on the motorways. Introducing in April of next year the system to which I have referred, which is not actually the subject of this measure, will ensure that we have a more equal situation for UK operators operating in a number of EU countries.
Mrs Gillan: Does that mean that, currently, we will be operating under this new system, which will be set down for a time period, I believe, from 22 February to 31 March, and foreign operators will be able to come here and pay no excise duty? If our operators are in Germany during that time, they will in fact be paying extra.
Mr Goodwill: I thank my right hon. Friend for her point. That is indeed the case, which is why we have brought in and are ready to deliver in April the charges for foreign trucks. For the first period of this, the foreign trucks will be operating on UK roads, as they have operated for many years, without paying a contribution towards the cost, and indeed many of the lorries that come into the UK come with very large diesel tanks full of cheap fuel bought on the continent.
To continue what I was saying, once the limit has been reached, the vehicle must leave and re-enter with a new international load in order to undertake further cabotage. Generally, the clarity provided by the 2009 EU rules has been welcomed by industry in place of less certain application of the former rules on “temporary use”. However, the explicitness of the new rules has had an appreciable and restrictive impact on the ability to move sufficient motor vehicles in the new registration peak periods each March and September. Car transporting vehicles are highly specialised and are not suitable for general haulage. Whereas core demand outside the peak periods is satisfactorily met by UK vehicles operating domestically, at times of peak demand vehicles from other member states have traditionally been used to supplement the UK fleet.
Regulation 1072/2009 restricts the amount of work that non-UK hauliers may legally undertake on each visit. When there is a shortage of haulage capacity to move cars and vans, those cars and vans accumulate at factories and ports during peak periods. That lack of capacity in the supply chain becomes a bottleneck for UK manufacturers that distribute vehicles for domestic consumption and for export. My Department has considered various options to address the problem and concluded that relaxing the cabotage rules in peak periods through secondary legislation is the most viable option. We consulted on the proposals, and the majority of responses, especially from motor manufacturers and retailers, were very supportive.
The order, together with the related Goods Vehicles (Licensing of Operators) (Amendment) Regulations 2013, makes regulatory changes to allow vehicles, essentially car transporters, to carry out unlimited cabotage operations moving cars and vans during the peak registration periods. The order amends article 5 of the Motor Vehicles (International Circulation) Order 1975, which exempts from excise duty certain vehicles brought
temporarily into the UK. Relief from excise duty is already available to vehicles used in cabotage operations in the UK, in accordance with the limited EU Regulation 1072/2009. The order before the Committee additionally exempts vehicles used only for, or in connection with, the carriage of motor vehicles in Great Britain from excise duty when carrying out unlimited cabotage operations during the permitted peak periods.I draw the Committee’s attention to a minor slip in article 2(4). The correction slip makes it clear that additional definitions are inserted after the definition of the date of importation, not in the middle of it.
The excise duty exemption is separate from the new HGV levy charge, to which I have referred. From April 2014, operators will be liable to pay the new HGV levy charge for the period in which they are in the UK. They will pay £10 a day and £1,000 a year.
The related Goods Vehicles (Licensing of Operators) (Amendment) Regulations 2013 additionally exempt the users of goods vehicles from requiring an operator’s licence under the Goods Vehicles (Licensing of Operators) Act 1995. The regulations came into force on 15 August 2013.
The order is intended to assist UK car manufacturers and retailers by allowing unlimited cabotage operations by car transporters in peak periods, and I commend it to the Committee.
4.38 pm
Richard Burden (Birmingham, Northfield) (Lab): Like my opposite number, I welcome you to the Chair, Mr Benton. It is a pleasure to serve under your chairmanship.
I thank the Minister for explaining the order. When the order was discussed in the other place, Labour did not press it to a Division, but my noble Friend Lord Rosser raised a number of concerns about the proposed changes. I will go through a number of those concerns today, because I do not think we received entirely satisfactory answers.
I have noted the noble Baroness Kramer’s responses to the issues raised by my noble Friend Lord Rosser, but some concerns are still outstanding, which mainly focus on peak registration times, cost issues, safety concerns and monitoring and evaluation. I hope the Minister will be able to clarify the Department’s position on some of those issues today.
On peak times, the statutory instrument seems essentially to be a sticking plaster. It addresses the symptom of the problem, not the problem itself. The statutory instrument is not really about cabotage regulations in general. It is about the particular problem we have because there are two periods in the year when UK car sales shoot up and there is not the transportation to deal with that. It is a time problem rather than anything else. Those two periods are March and September.
The system in the UK creates significant peaks in car registration, with increases of between 150% and 200% over the levels for the rest of the year. The Government’s own impact assessment of the order states:
“The peak registration periods themselves are nothing to do with any regulations”.
I can see that to some extent but I would have thought that the peak periods were pretty fundamental, as they are the issue that the order is trying to address. Removing
the bottlenecks in March and September would help us to level demand throughout the year and, presumably, would lessen the impact of seasonal spikes for the haulage industry.I would appreciate hearing the Minister’s view on that. Questions have been raised before about the situation in other countries in Europe, which do not have to have these kinds of regulations because they do not have the same spikes in demand, since they do not have the same kind of registration system. No one wants to undermine in any way the continued and positive growth of the UK automotive sector, but it is worth while to pause and think whether those peaks in demand in March and September are causing more problems than they are worth, and whether it might be worth while to review the matter.
When the issue was raised with the Minister’s noble Friend in the other place, it was said that if such a review were to take place it would probably be a review by the Department for Business, Innovation and Skills. I can see the importance of that in terms of the motor industry, but nevertheless the issue of regulations about licensing, number plates and so on is a matter for the Minister’s Department. So my first question is one that my noble Friend Lord Rosser also asked in the other place, but I am still not entirely clear about the Government’s position. Are the Government going to review that question? Will the Minister talk to his colleagues in BIS and to representatives of the motor industry, to see whether having two registrations, one in March and one in September, is beneficial to the UK or whether it causes more problems?
The second issue is cost. I am concerned about the potential adverse economic impact that the change in the order could have on UK hauliers. That is not something to be dismissed. When responding to the Government’s consultation on the order, the traffic commissioners themselves said that domestic operators would be competing head to head with foreign hauliers who have a lower cost base. The reason the traffic commissioners gave for foreign hauliers having a lower cost base is because often the compliance cost for foreign hauliers is different from the compliance cost here.
My noble Friend Lord Rosser raised that issue in the other place, and I am seeking some clarification of the Government’s response, which I am not sure completely answered the point. On the one hand, the impact assessment states that the costs of non-UK hauliers would be greater. The Minister in the other place said that car transporters are “costly pieces of kit” to bring into the country. Her point was that even if the cost base for foreign hauliers generally would be lower than that for UK-based hauliers, when it comes to car transporters, that does not apply. However, if the order goes through, increasing the time that non-UK hauliers can spend in the country and the number and scale of their operations in this country, that raises the question of whether their costs will start to go down, undermining the position of UK hauliers. The Government say no, but I have yet to see any evidence that any investigations have been done into what the likely effect of such a situation would be. I would appreciate some clarification on that issue.
I am also somewhat sceptical of the Government’s argument that if the cabotage rules are not relaxed for these two periods, the costs arising out of that will be
passed on to the customer. In other words, if there are not enough transporters around, and extra premium rates have to be paid for those that are there at peak times, the costs will be passed on to the customer. That may be the case, but I have yet to see where the factual basis is in any of the consultations. As I understand it, the cabotage rules have already been temporarily relaxed between August and September, and that led to no reduction in costs. I would appreciate the Minister’s clarification of those points.On safety, we know that non-UK hauliers and non-UK goods vehicles operating in the UK are statistically more likely to be non-compliant than UK-based hauliers, and the traffic commissioners made that point in their response to the consultation. Random fleet-compliance surveys conducted by the Vehicle and Operator Services Agency showed that domestic hauliers had a mechanical defect rate of 10.4%, whereas the average for all foreign hauliers was more than double that, at 21.8%. In the other place, we heard that the Department for Transport does not seem to be concerned about that discrepancy. The Minister there stated:
“it is generally expected that these highly sophisticated pieces of kit will be less involved in collisions”.—[Official Report, House of Lords, 12 November 2013; Vol. 749, c. GC259.]
That may be so, but we are dealing with not just collisions, but compliance. Again, when the Minister sums up, I hope he can give us some actual evidence demonstrating that car transporters operated by non-UK haulage firms are no less roadworthy than domestic ones. If the evidence points the other way, that must be a matter of concern.
I am pleased—I think the Minister has confirmed this again today—that there will be no relaxation of other cabotage regulations, such as the rules on drivers’ hours. The matter was discussed in the other place, and I hope the Minister will, for the record, repeat what was said there. There are concerns, not least among hauliers and drivers themselves, that these provisions would be the thin end of the wedge, that other cabotage regulations could be relaxed and that the impact could be felt on not only people’s working conditions, but safety.
I hope the Minister will confirm there will be no relaxation of other regulations. Even if he does, however, I am still concerned about how relaxing cabotage regulations at peak times will impact on VOSA’s ability to enforce the current legislation. Will he therefore confirm that there will be no relaxation whatever of VOSA’s role in monitoring and checking vehicles during peak periods? Indeed, if the changes go through, that would imply that VOSA staff should have a strengthened presence and be more active on our roads at these times of increased risk—particularly over the August bank holiday weekend.
Today is not the time to cover VOSA’s enforcement powers, but the road safety of heavy goods vehicles is very much at the forefront of public concern, so we need to cover that in discussing the order. I therefore hope the Minister will confirm that VOSA will have the power and the resourcing to enforce adherence to cabotage rules in these peak periods.
That is particularly pertinent to VOSA’s next-generation operation model, which will provide greater flexibility of testing slots. As far as I can see, that is likely to put
resources at risk and divert attention from checks and enforcement on the road. That raises the question of monitoring and evaluation. In the light of concerns about costs and safety will the Minister explain why the Department’s proposed review date for the policy is 2018, four and a half years away. The Opposition did not press the order to a Division in the other place and I do not intend to do so today, but the Minister will see that our concerns need to be examined. The review date seems a very long time away.I am concerned about the fact that there has been no monitoring, as far as I can tell, of the economic or safety impacts when the Department relaxed cabotage rules between August and September on a temporary basis, so far. If there was monitoring, I hope we can see the results. I should like the Minister to commit to thorough monitoring of the policy’s impact on the economic aspect of the matter—the number of non-UK hauliers operating in the UK; competition; health and safety; and, particularly, the level of cabotage offences recorded by the Vehicle and Operator Services Agency.
Sir Greg Knight: May I take the hon. Gentleman back to his first point, when he invited the Minister to consider a review of the vehicle licensing system? Does anyone support him in that plea? I was not aware that the motor industry was not happy with the current arrangements.
Richard Burden: It is fair to say that I have not been asked to raise that point by the motor industry. There was long-standing concern about the registration peak when it came once a year, and it was a step forward when that changed from once to twice. Concerns were raised then about the possibility of problems in checking the age of vehicles. All sorts of concerns were raised, and as far as I am aware they were not well founded. I am simply asking, if a consequence of the situation is spikes in demand that do not happen in other countries, and given that we must review cabotage regulations on hauliers, causing a problem for the road haulage industry, whether it would be sensible at least to consider whether things could be done differently. I make no judgment about whether the conclusion of a review would be to stay with the current system or move to one such as other countries use. I simply ask, if the Government are to change the cabotage regulations, whether they should not at least consider the issue I have raised, in consultation with the Department for Business, Innovation and Skills.
In conclusion, will the Minister confirm the points I have made about safety, monitoring and evaluation? Will the change create any kind of precedent? There was some concern in the consultation response about whether, if we relax the aspect of the cabotage rules that we have been discussing, that could be expanded into other sectors. Traffic commissioners and others have pointed out the potential that the relaxation of the rules, albeit specific to particular times of the year, could encourage lobbying from other sectors for exemption from cabotage rules to deal with other issues. I hope that the Minister will deal with that point.
Many people would recognise that whatever the solution, peaks in demand mean that there is now a problem in shifting cars from one place to another during the two relevant periods of the year. There is concern that potential might be created for other things to happen in
the future. There is a need for proper monitoring and evaluation, and for certainty that the changes that are being made are the bottom line and not the first stage in a more general relaxation of the rules.4.54 pm
Mrs Gillan: I have several questions. It has been a long time since I sat on a Delegated Legislation Committee, but rather than making a speech, I assume that I may ask questions in turn for the Minister to answer.
I believe that today the Irish Minister for Transport, Tourism and Sport, Mr Leo Varadkar, has also relaxed the regulations that apply to car transporter vehicles. The regulations have been lifted in Ireland from today until Friday 28 February 2014 inclusive. Does the Minister know why the regulations have been lifted in Ireland? If the order is approved, is it true that a foreign operator will be able to go to Ireland and travel seamlessly into the United Kingdom without returning to his or her home country?
The Chair: I take it that there is a series of questions. Perhaps you should ask them all, and then the Minister can respond at the end.
Mrs Gillan: Forgive me, Mr Benton. It has been a long time since I sat on one of these Committees.
My next group of questions relates to the impact assessment. I notice that, among the benefits, the impact assessment describes and outlines the scale of key monetised benefits for the main affected groups, which shows a reduction in ferry costs of £0.9 million per annum, a reduction in time costs of £0.5 million per annum and a reduction in fuel costs of £0.1 million per annum. I assume that all those reductions are in the costs of foreign road hauliers and that there is absolutely no guarantee that the reductions will be passed on to our car manufacturing industry when the hauliers move its cars around. Has the Minister given any thought to that? What could be done? Are we just adding to the bottom line of foreign hauliers?
The impact assessment’s key assumptions, sensitivities and risks section states that the Department has assumed
“full employment of UK transporters, so there are no costs to UK haulage businesses.”
Will the Minister confirm whether that is the case and how those assumptions were reached? Likewise, it states:
“To comply with cabotage rules, foreign car transporters must make a return journey out of and back into GB every third operation—we assume 100% compliance in the absence of evidence to the contrary.”
Is there any evidence at all of foreign car transporters not complying with the rules as they currently stand?
It is for the devolved Northern Ireland Administration to introduce their own relaxation. Will the Minister tell me whether they have indicated that they intend to make that relaxation? If they do not, they will be out of step with Ireland, which has introduced a relaxation today, and the rest of the United Kingdom.
The hon. Member for Birmingham, Northfield, who speaks for the Opposition, raised the question of higher defects among foreign hauliers. Are there any up-to-date statistics on increased collision rates and non-compliance with roadworthiness by non-UK operators in this country at the moment?
I notice that there is an assumption that car transporters, being highly specialised and costly pieces of equipment, are less likely to be non-compliant with routine roadworthiness requirements. Have the new information exchange systems, which are being introduced throughout the EU, improved enforcement? What information is there about them? What is different about them that will make them likely to improve enforcement for vehicles visiting this country from other EU states?
Although the impact assessment states that the prime reason for introducing the order is to relax the cabotage rules for car transporters, I understand that the Department would like the legislation to be amended so that cabotage rules can be relaxed for other sectors should the need arise in the future. I have read around the subject, and it has always been a source of anxiety for the freight industry in the UK. Will the Minister give the Committee more details about which other sectors are being considered for relaxation, if any are? Why did the Department think it necessary to include in the impact assessment the desire to relax cabotage rules for those other sectors?
I then had a look at the response to the public consultation, from which a couple of questions pertaining to the costs of non-UK transporters arise. I understand from the analysis of responses that non-UK transporters have a lesser carrying capacity than UK transporters because of bridge heights in continental Europe and Ireland, and because they are designed to operate at a lower laden weight than their UK equivalents. Apparently, that will lead to reduced productivity and higher operating costs per vehicle delivered. Returning to one of my first questions, has the Minister calculated how that will affect the cost to car manufacturers in this country?
One of the consultation respondents said that
“many foreign car transporter drivers did not speak English and could not be used for dealer deliveries, only for point to point trunking operations.”
If that is true, does it mean that there is a danger that the hauliers who come over to take advantage of the lifting of these regulations can be used only for limited point-to-point trunking operations, rather than dealer deliveries? I get the impression from reading around this subject that that is what car manufacturers really want to happen.
There is rather a lot of documentation on this small, almost innocuous, piece of secondary legislation. One of the respondents feared that
“a relaxation would reduce their revenues, increase costs and ultimately would reduce the size of their operational transporter fleet and reduce their driver workforce.”
What work has the Minister asked his officials to do on that subject? UK freight operators will have to deal with increased competition from operators that may not operate to the high standards of our road haulage industry. I know the Department is not convinced, because in one of its responses it states that
“a selective relaxation will lead to foreign car transporters having an unfair advantage”.
I am not convinced either. The problem is that vehicles coming from other parts of Europe do not necessarily comply with UK requirements, and we are freely extending the period in which they can operate in the UK.
I have looked at the development and implementation of EU road cabotage. I have specifically looked at the case study for the United Kingdom, which shows that
in 2010 there were about 88,000 goods vehicle operator licences. That number has gradually been decreasing in the UK from a level of more than 100,000 in 2000. Will the Minister tell us how many companies operate in this specific area of car transportation, what effect the current cabotage regime has had on the number of our companies over the last few years and whether he expects the number of those companies to increase or decrease?Finally, one of the items pointed out in the summary on the development and implementation of cabotage in the EU is:
“In discussions with the enforcement agency it seems that the main cause of cabotage infringements is an inadequate understanding of the cabotage limitations”—
that is of the regime as it currently exists. It goes on to say:
“In particular, often the drivers of HGVs don’t know the limits of what they can do. In addition, there is much confusion between when and how cabotage and combined transport requirements can be applied, leading to some of these problems”
and creating great difficulty in the industry. Will the Minister share with us how he intends to ensure an adequate understanding of the changes to the regime, so that we do not continue with a situation that, according to review, appears to be an area of some concern?
In the summary of that document, it also states:
“The greater concern relates to ensuring that the vehicles that are entering United Kingdom are adhering to the appropriate safety standards.”
I think that that would concern all members of the Committee. I hope that the Minister will take the opportunity to set all of our minds at rest by saying that a strong enforcement regime will be in place and that we will not see, as a result of the relaxation of the cabotage rules, an increased number of vehicles coming from other countries in Europe that do not maintain the high standards that we do in our freight industry.
5.7 pm
Mr Goodwill: We have had a useful discussion. I will try to address some of the key points raised. The hon. Member for Birmingham, Northfield raised reasonable and sensible points that I will be pleased to respond to. He raised the issue also raised in another place about the peak registration time. As hon. Members will know, registration plates used to change once a year and that created a massive demand in one particular month. However, it would not be sensible to revisit that at this point. Indeed, many people find the plate changes helpful as that not only stimulates demand in the car market, which helps in the greening of the fleet as older, dirtier cars are replaced by newer cars, but creates transparency in the ability to identify the age of a car. Many people who buy second-hand cars appreciate the fact that they can determine age easily from the plate. I am not aware of any plans to review that and, if we did, I suspect that there would be great consternation among the industry and customers alike.
The demand for cars in September 2013 was 12.1% greater than in September 2012, so we see a healthy increase in the demand for cars in the UK market. However, sales in the continental market, which are spread out over the year more evenly, are much flatter
than here. There is no evidence that our system of two new-plate registrations a year does anything to flatten demand; in fact, it is quite the contrary.On compliance cost, hauliers who operate abroad and come into the UK under the cabotage rules have to pay the cost of registration in their own member state, the cost of their operator centres and so on. It has been demonstrated, however, that car transporters that come across from continental Europe to operate in the UK are more expensive for a number of reasons. As we have heard, the design of the motorways in other countries means that their transporters can carry only nine cars, as opposed to 11 in the UK. They are therefore more expensive to operate, so they will not undercut the domestic fleet. Indeed, we expect these vehicles to be utilised only when the domestic fleet is fully utilised.
It may interest the Committee to hear that, in 2010, demand for foreign lorries during these peak periods was about 100 vehicles, so we are not talking about large numbers of foreign vehicles coming to our shores. Indeed, a lot of vehicles from the rest of the EU already operate on our roads anyway.
The hon. Gentleman mentioned the cost to customers. The effect on customers buying cars of not introducing these measures would be a shortage of supply in car transportation, which could well push up the cost to customers. Indeed, it would increase costs to manufacturers, as they might need to introduce further parking at their factories and further storage areas at the ports where vehicles are imported.
The hon. Gentleman, very reasonably, raised the issue of safety.
Richard Burden: Will the Minister clarify the relationship between this change and the forthcoming levy? They are different issues, but is the intention that, once the levy has come in, the vehicles and hauliers affected by this relaxation would also be exempt from the levy for these two periods of the year? Concerns have been raised about that. I think I know the answer, but I would be grateful if the Minister could confirm it.
Mr Goodwill: No, the hon. Gentleman can be reassured that they will absolutely not be exempt from the levy. Vehicles from other EU states operating in the UK under existing cabotage rules and under the exemption we are talking about will be forced to pay their £10 a day for a typical five-axle, 38 tonne vehicle or lower fees for smaller vehicles. Therefore, any unfair advantage that may have existed in the past, or, indeed, that existed when the Labour Government were in power, is being addressed in the changes we are introducing.
Other measures that could have been introduced to address this issue would have raised safety problems, as the hon. Gentleman sensibly said. Introducing measures such as those we occasionally use in bad winter weather, when we relax the hours for drivers of gritters, would be much more hazardous than the changes we propose.
VOSA is always vigilant and determined to ensure that vehicles operating on our roads are safe. The evidence I have is that car transporters are no more or less likely to be involved in collisions on the roads. However, they are high-cost vehicles, so they are likely to be maintained to a high standard.
VOSA targets its roadside checks using a grading system based on previous experience of particular operators, and vehicles may be listed as amber or red. In the case of UK vehicles, that is based on previous roadside tests and inspections at test centres for the annual MOT. In the case of foreign trucks, operators and individual vehicles can be targeted. Any lorry for which there is no information will be listed as a grey vehicle, and it is more likely to be targeted by VOSA.
I reassure the hon. Gentleman that there will be no relaxation in VOSA’s activity. Indeed, the Department will liaise closely with VOSA to monitor car transporters more closely, especially during periods of relaxation. The police also have an important role to play, given the way they deal with the drivers of vehicles and the vehicles themselves.
I do not believe the changes to the VOSA testing regime will have any impact on roadside testing, so the hon. Gentleman’s points about that are not particularly relevant. He also raised the prospect of a review in 2018. I can tell him that there will be no review in 2018, so this measure will remain in place.
Richard Burden: Is the Minister saying that there will not be any review period for this relaxation at all? We understood from the debate in the other place that the Government themselves were proposing a time scale that included the review in 2018.
Mr Goodwill: The information I have from my officials is that 2018 is not a review date. As far as I am aware the measure will remain in place until amended by further regulation.
The hon. Gentleman also raised the issue of whether the order sets a precedent. The first point to be made is that the majority of haulage operations on our roads are carried out by multipurpose vehicles, whether they be bulk vehicles, curtain-side vehicles or container vehicles. I am not aware of any similar parallels in the case of car transporters. As far as I am aware, this is an isolated case in which we have peak demand for a particular type of specialist vehicle that does not lend itself to any other particular use.
My right hon. Friend the Member for Chesham and Amersham raised a number of points. She mentioned Ireland, where similar exemptions were in place in 2012 and 2013. Obviously the determination of those is a matter for Ireland, but it makes no difference which country in the EU the vehicle is coming from or how it got here: the cabotage rules allow relaxed use here during the six-week periods.
My right hon. Friend asked whether the savings will be passed on to consumers. The market is very competitive and car manufacturers are in a dominant position in terms of buying this type of transportation service so we do not envisage any problems with regard to the market functioning in this area. In relation to some of the consultation, she asked whether there would be unfair competition for UK operators. Foreign operators are likely to be running at a higher cost base, not only because they can carry nine as opposed to 11 vehicles, but because they will have the cost of operating in a country other than their own; we therefore assume that the UK fleet will be fully utilised before foreign vehicles are called into use.
On information exchange with other EU states, we already have good information at VOSA’s disposal. I have already referred to the red or amber categories that VOSA uses to try to target vehicles that are more likely to be non-compliant.
Mrs Gillan: My concern is that, given that the relaxation of the cabotage rules opens up possibilities for non-UK hauliers, when a company is looking for business it might come into the market using a loss leader or cost incentive. Will the Minister undertake to monitor this area to make sure that foreign hauliers do not come in during that period of time offering transport arrangements at a much lower price than UK hauliers to get that business from our car manufacturers? That would be to the detriment of our home-grown industry.
Mr Goodwill: It is important that markets function. A vibrant, functioning market is the best way of ensuring that consumers get the best value for money. Given the likelihood that fewer than roughly 100 vehicles will be operating in the UK and only for a limited period, my own view would be that if a foreign haulier was trying to get into a market using a loss leader, they would be better advised to look at other markets rather than one that is open to them for only two periods of five weeks a year.
We do not collect figures for accident rates separately to show accidents by type of HGV. I am therefore unable to give my right hon. Friend information on whether car transporters are more or less likely to be involved in accidents than other vehicles.
My right hon. Friend asked about other sectors where we might be looking to relax the rules, but there are no plans to do so in other sectors. The statutory instrument has been drafted to make legal drafting simpler if the need arose in future to add other types of vehicles, but there are no other types of vehicles that we are currently planning to address through regulations.
On the consultation, my right hon. Friend mentioned the issue of non-English-speaking drivers. May I politely suggest that that is an area we should not visit? My experience of foreign drivers is that the chance of them speaking English is much greater than the chance of a British driver working on the continent speaking the language in that particular country. Therefore, I do not believe that language is a problem.
Mrs Gillan: The respondent made the point that it limited the amount of car delivery work that foreign-based vehicles could undertake. That was the point being made by the respondent; I wondered whether the Minister had addressed it.
Mr Goodwill: I rather suspect that I could call that respondent’s comment grasping at straws. There are large numbers of foreign-registered vehicles operating on UK roads and large numbers of foreign people driving on British roads, as there are large numbers of English people who travel abroad and drive on the roads there. I do not see that as a major block to foreign operators coming to this country. As I have said, the language skills of people from continental Europe, much to our embarrassment, tend to be far superior to ours.
On the consultation and operators being against it, I point out that the Road Haulage Association, which represents the interests of road haulage operators in this country, is in favour of the change. My right hon. Friend discussed operators’ licences and the reduction in the number of applications for them. Like many other sectors in the economy, road haulage has experienced consolidation, with fewer large operators able to give more flexible types of service.
Finally, to respond to the point that there may be people who do not understand the cabotage rules, the current rules are very simple. One can operate for seven days and make three intermediate journeys. The rules seek to relax those tough cabotage regulations for the two periods in the year to which I have referred. Operators understand the compliance rules, and VOSA, the Department and the police are keen to ensure that all
regulations, including cabotage rules and rules on construction, use and operation and drivers’ hours, are complied with fully in our country.The legislation will help prevent a bottleneck in the supply chain during peak periods and enable UK car manufacturers and retailers to meet customer demand, including exports. I hope that I have addressed the key issues raised today, and that the Committee agrees that the order will help address the concerns raised by car manufacturers and retailers and boost the economy. I commend the order to the Committee.
That the Committee has considered the draft Motor Vehicles (International Circulation) (Amendment) Order 2013.