Brexit: road, rail and maritime transport Contents

Summary of conclusions and recommendations

Road haulage

1.It is difficult to overstate the importance of future arrangements to preserve UK-EU market access for hauliers. The Political Declaration identifies “comparable market access” for freight road transport operators as a shared negotiating objective. We call on the Government to clarify the meaning of ‘comparable’ in this context. (Paragraph 41)

2.The continuation of the Community Licence system for UK hauliers would maintain the status quo. The published positions of the UK Government and the EU suggest that this is not a likely outcome. A UK-specific permit or licence system could provide a workable alternative. We consider that a system based on a limited number of permits should be avoided. (Paragraph 42)

3.Cabotage and cross-trade are types of international haulage operations performed by non-resident hauliers. Future cabotage and cross-trade arrangements will therefore have a bearing on the opportunities available to UK hauliers in the EU as well as on how EU hauliers can move goods to, from and within the UK. (Paragraph 43)

4.A significant proportion of international journeys by UK hauliers involve cabotage, cross-trade or both, but UK hauliers have a low share of total EU rates in terms of volumes transported and distance travelled. Cabotage by EU hauliers in the UK is more significant, but still relatively modest. Securing reciprocal cabotage rights may be politically difficult and we do not consider cabotage to be essential to the UK in a future UK-EU agreement on road haulage. We address the role of reciprocal cabotage on the island of Ireland in Chapter 8 of this report. (Paragraph 44)

5.While cross-trade performed by UK hauliers is also relatively low, witnesses told us that cross-trade rights have wider implications for certain sectors or operators. We call on the Government to provide more detailed information on the importance of cross-trade to the flow of goods in and out of the UK, including any significant sectoral implications. (Paragraph 45)

6.Where the UK and EU may have primary interests in different aspects of future cabotage and cross-trade arrangements, a trade-off between these interests in a future road haulage agreement could benefit both sides. We urge the Government to work closely with the road haulage industry to make clear its priorities for future cabotage and cross-trade arrangements with the EU. (Paragraph 46)

7.Negotiations on the EU’s ‘no deal’ measures for UK hauliers resulted in a limited, shared allocation for cabotage and cross-trade journeys. This might provide a model for future UK-EU arrangements—though such a system could be burdensome to enforce. (Paragraph 47)

8.There are a few areas where divergence from EU haulage standards would reduce the compliance burden for UK hauliers, particularly in relation to domestic-only operations. The Political Declaration suggests that the depth of market access under a future arrangement will be a function of the alignment between UK and EU rules in a number of policy areas, including social standards and conditions of employment. The limited benefits of regulatory divergence are unlikely to outweigh the opportunities of greater market access. (Paragraph 55)

9.The ECMT system facilitates road haulage in Europe and surrounding regions. In the absence of an agreement on road haulage, ECMT permits would allow some UK-EU journeys, but permits are limited in number, do not allow cabotage and present some restrictions on transit. The limited number of available permits appears to be the most significant limitation. The first-round allocation of available permits to UK hauliers demonstrated that the supply is vastly outstripped by demand. (Paragraph 66)

10.Bilateral agreements between the UK and individual Member States would also facilitate haulage in the absence of a comprehensive agreement with the EU. A number of historical bilateral agreements could be reinstated without major legislative work, although some would be more difficult to revive. We support the Government’s prioritisation of negotiations with the UK’s nearest neighbours and major trading partners. We note that EU-level arrangements, such as a basic agreement or contingency measures, may place restrictions on bilateral agreements with Member States. (Paragraph 67)

Bus and coach transport

11.Bus and coach transport provides consumers with a low-cost option for international travel, and an agreement to maintain UK-EU services would have clear reciprocal benefits for both markets. We note the objective set out in the Political Declaration to seek comparable market access arrangements for passenger transport operators as well as road hauliers. (Paragraph 79)

12.As for road haulage, the Political Declaration suggests that regulatory alignment will be a prerequisite to a liberalised market access arrangement for passenger transport. There may be some areas where it would be beneficial for UK operators to diverge from EU rules, though the benefits of divergence are unlikely to outweigh those brought by the maintenance of market access. (Paragraph 80)

13.The UK’s independent accession to the Interbus Agreement would assure cross-channel coach trips, whether or not there was a wider UK-EU agreement on bus and coach transport. The Interbus Agreement does not extend to Regular and Special Regular services. While this is a major limitation currently, steps are being taken to expand the Agreement to include these services. A further limitation is that the Interbus Agreement cannot be used to transit through the EU to reach non-contracting parties, such as Switzerland. (Paragraph 87)

14.We note that the Government has taken steps to ensure that the UK can accede to Interbus if the UK leaves the EU without a deal on 31 October 2019. (Paragraph 88)

Private motoring

15.The mutual recognition of driving licences and the establishment of the Green Card-free circulation area have brought substantial benefits to commercial drivers and private motorists. We encourage the Government to seek continuation of present arrangements as part of a future arrangement with the EU. (Paragraph 103)

16.The inconvenience and additional costs of International Driving Permits and Green Cards should not be underestimated. We find the present requirement for UK drivers to visit a Post Office to obtain an International Driving Permit unsatisfactory. We therefore urge the Government to improve accessibility, including the addition of an online option. (Paragraph 104)

Vehicle standards

17.The Secretary of State told us that the EU’s influence in global standard-setting was waning, but other witnesses suggested that the EU was hugely influential. If the latter is and remains true, the UK will have a continuing interest in the EU’s position on standards, which will be more difficult to influence after Brexit. Nevertheless, there may be opportunities, for example, in areas relating to newer technologies, for the UK to take a leading role in international standard-setting after Brexit. (Paragraph 111)

18.For vehicles to be registered, sold and enter into service, they must be type-approved by a recognised authority. Failure to reach a future arrangement on mutual recognition for type-approvals would mean that two separate approvals would be required for vehicles entering the UK and the EU. This would have cost implications for manufacturers. We support the Government’s intention to seek mutual recognition of type-approvals as a mutually beneficial arrangement. We note, however, that there is no exact precedent for such a regime. (Paragraph 118)

Rail transport

19.While the UK’s railway is largely domestic, the UK has strong interests in the wider EU rail industry. It must not be overlooked that UK and EU operators, manufacturers and drivers access each other’s markets, to mutual benefit. (Paragraph 142)

20.The Government has rejected the option of a rail agreement with the EU. Cross-border services, namely the Dublin-Belfast Enterprise Line and services through the Channel Tunnel, will instead be addressed through bilateral agreements. This approach has been agreed with the Commission and is reiterated in the Political Declaration. We believe that securing the continuation of these services as they operate now is in the interest of all sides and we encourage the swift conclusion of such agreements once the UK becomes a third country. (Paragraph 143)

21.While we accept that maintaining existing services is the most urgent priority, a more far-reaching set of bilateral agreements would provide greater certainty for long-distance freight services and support the future expansion of UK international freight and passenger services. We note that the wording of the relevant text in the Political Declaration does not preclude additional bilateral agreements. (Paragraph 144)

22.While bilateral agreements would ensure the continued operation of international rail services, such agreements would not support the recognition of UK operator or train driving licences in the EU generally nor UK certified components placed on the market in the EU. The extent to which the UK’s continuing obligations under the Convention concerning International Carriage by Rail (COTIF) could alleviate these effects, if at all, are unclear. The Government should provide clarity on this matter. (Paragraph 145)

23.Through its membership of the European Union Agency for Railways (ERA), the UK has been active in the development of a range of common standards for European rail networks. The Government has ruled out participation in the ERA after Brexit. Consequently, the UK will not enjoy the same level of influence on European rail standards and cooperation but will have greater freedom on domestic standards. (Paragraph 161)

24.The Government should clarify if it intends to seek arrangements for the mutual recognition of rail certifications and licences with the EU post-Brexit. (Paragraph 162)

25.Interoperability and harmonised standards have many benefits for cross-border services. There are, however, circumstances where divergence from EU standards would better suit local conditions on domestic routes. Such divergence should be approached with caution and on the basis of objective criteria. We call on the Government to work with the industry to bring forward more details on how this could be managed. (Paragraph 163)

26.Future divergence on standards must also be considered in the context of the wider rail industry. Rail manufacturers benefit from the economies of scale and export opportunities associated with standardised products. We agree with the weight of evidence that large-scale divergence would decrease the UK’s attractiveness as a base for overseas manufacturers. (Paragraph 164)

27.The separation of rail infrastructure and operations is a requirement under UK legislation (applied in Great Britain) and predates related EU legislation. We recognise that EU law has moved towards the GB model, but that it does not require complete separation. Indeed, some Member States have more closely connected infrastructure and operating services, which are compliant with EU law. We therefore conclude that membership of the EU has not substantially constrained GB’s ability to move away from complete separation. (Paragraph 165)

28.The Channel Tunnel plays a key role in UK-EU trade of goods and facilitates leisure and business travel for many millions of people each year. The Government has made clear its intention to secure a bilateral agreement with France to ensure the continued operation of Channel Tunnel services. We also recognise that the future of these services will be significantly affected by matters outside the Department for Transport’s remit, namely customs and immigration arrangements. (Paragraph 168)

29.We recognise the sizeable contribution made by EU workers to the UK’s rail industry, and note that concerns about future access to EU talent span many industries. We welcome initiatives to improve domestic training opportunities in the rail sector, which will be one part of maintaining the supply of skills post-Brexit. (Paragraph 170)

Maritime transport

30.Maritime transport is generally liberalised and underpinned by an extensive body of international law. Post-Brexit, UK and EU ship operators will in most respects be able to access each other’s ports as at present. Cabotage rights, however, are provided under EU law. Unlike the UK, some EU countries do not permit third country cabotage. Loss of cabotage rights would have negative implications for some UK operators. (Paragraph 189)

31.We consider that any future UK-EU maritime agreement must provide for mutual recognition of seafarer certificates. (Paragraph 190)

32.The UK flag has attracted a number of registrations from EU and EEA interests, as allowed under EU law. This has supported the growth of the UK Ship Register (UKSR) and strengthened its international reputation. Post-Brexit, the UK will be able to review registration rules and determine if the UKSR should become a national registry, remain open to EU and EEA interests, or open up internationally. (Paragraph 191)

33.EMSA programmes such as CleanSeaNet, SafeSeaNet and THETIS are important to the safety and security of maritime transport and to countering sea pollution caused by ships. Replicating the two former programmes will be less efficient than current arrangements. We welcome the Government’s aim of close cooperation with EMSA, including the exchange of information on maritime safety and security. We note, however, that no mention is made of cooperation on environmental matters. We encourage the Government to seek wide-ranging, deep cooperation arrangements with EMSA, including in the area of response to sea pollution. (Paragraph 199)

34.Divergence from EU rules could benefit the UK maritime industry in certain areas. A prominent example is the EU Port Services Regulation, which is generally agreed to be unfit for the structure and requirements of UK ports. But more broadly, the UK’s opportunities for divergence on port regulations are likely to be limited by the depth of maritime cooperation arrangements sought with EU. (Paragraph 210)

35.In seeking to support the UK’s maritime sector post-Brexit, the Government would remain bound by WTO anti-subsidy rules. Any deep and comprehensive trade agreement made with the EU would also contain State aid controls. Nonetheless, we encourage the Government to work with the devolved administrations to explore opportunities to promote growth in the sector, including the possibility of free ports. (Paragraph 211)

Northern Ireland–Ireland road and rail transport

36.The island of Ireland’s distinct social and economic ties place unique demands on its future transport arrangements. These conditions may not be best-served by broader negotiations on UK-EU transport arrangements. A solution may be found in an integrated bilateral approach to arrangements for passenger transport by rail and road. (Paragraph 229)

37.We note that the EU’s ‘no deal’ contingency measures made a special allowance for passenger transport around the Irish border, albeit on a temporary basis. (Paragraph 230)

38.In any case, the requirement for cabotage rights for passenger services on the island precludes any reliance on the Interbus Agreement or a future arrangement based thereon. It is therefore of vital importance that an agreement is reached to preserve Northern Ireland–Ireland bus services under any Brexit scenario. While there may be the will to achieve this on both sides, we warn against complacency and urge the Government to bring forward specific plans. (Paragraph 231)

39.Notwithstanding the modest benefit to the UK of GB–EU cabotage for goods transport, we note that the UK has a strong interest in the maintenance of cabotage rights on the island of Ireland. We call on the Government to confirm how this disparity will influence its approach to negotiations on market access for hauliers. (Paragraph 232)

Cross-modal matters

40.We commend DfT’s high level of engagement, as reported by industry stakeholder groups. However, we call on the Government to strengthen its communication with small and medium sized businesses in the sector. We also encourage DfT to improve the flow of information about relevant matters outside its remit to stakeholders in the transport sector. (Paragraph 237)

41.The UK has robust arrangements for transport passenger rights that are independent of its membership of the EU, and in some cases exceed those provided by EU law. We conclude that Brexit may present opportunities to simplify some EU measures on passenger rights in a manner that would better suit UK conditions. This should not entail any reduction in the rights of UK passengers compared to EU passengers. We further note the advantages of congruence of passenger rights on international services. (Paragraph 245)

42.We received no evidence to suggest that arrangements to re-route the North Sea Mediterranean Ten-T corridor would have a significant impact on the UK. We further note that the UK has received a lower proportion of funding for CEF transport projects compared to its budget contributions. (Paragraph 253)

43.EU support for UK transport infrastructure also arises from Structural and Investment funds. We acknowledge the Government’s commitment to underwriting the UK’s allocation for Structural and Investment funds until the end of 2020, and look forward to details of how the planned successor arrangement, the Shared Prosperity Fund, will be used to develop transport infrastructure. (Paragraph 254)

© Parliamentary copyright 2019