Appendix 1: Correspondence on the International Road Transport Permits (EU Exit) Regulations 2018
Letter from Mr Jesse Norman MP, Parliamentary Under Secretary of State at the Department for Transport, to Lord Trefgarne, Chairman of the Secondary Legislation Scrutiny Committee
Thank you for your letter of 16th October following my response on the 15th October,7 with a number of further questions on market access for UK hauliers when we leave the EU.
I should start by emphasising that there are strong mutual interests in reaching an ambitious agreement, one which maximises benefits for all our citizens and businesses. The Government is therefore still confident that it will secure a good deal and is working to secure this. A deal is in the interests of both the UK and the EU, but of course in the interim, the Government will continue to prepare for a range of potential outcomes including the possibility of no deal. Bilateral agreements with member states and issuance of permits to UK hauliers are part of these preparations.
You asked about historical bilateral agreements on international road transport. The UK has in the past concluded 26 such agreements with EU member states. Of those agreements, the Government considers that the agreements with 20 EU countries are extant and the other 6 have been terminated. Some of these would require permits though a number are liberalised. This would mean that the extant agreements will have effect once EU law ceases to apply, should the UK not reach an overall deal with the EU. The Government would expect to update these bilateral agreements and in practice it would also be important to ensure the other parties shared this view. The Department will work with the other parties to those agreements to ensure they are implemented and permits can be issued to hauliers, where the agreements require them.
The Government considers that the terminated agreements will need to be replaced and that at least some of the extant agreements would benefit from updating in various respects. The Department is exploring with the countries concerned how to provide continuity for the haulage industry after the UK leaves the EU, and is confident that arrangements can be put in place if there is no deal with the EU. Where permit requirements change as a result of bilateral agreements, these regulations will be amended and brought before Parliament.
You note that the regulations apply only to UK hauliers, that is, hauliers which are based in the UK and operating under a UK operator’s licence. You asked about the definition of EU hauliers and how legislation would apply to them. “EU hauliers” refers to hauliers who are based in other EU member states and who operate under an EU operator’s licence not issued in the UK. Therefore while EU hauliers may perform haulage to, from or through the UK, they do not operate from the UK. They will continue to be regulated as foreign vehicles. It is these EU hauliers that account for over 80% of road haulage between the UK and the continental EU.
The requirements on EU hauliers which haul goods to, from, or through the UK are linked to the progress of negotiations. The White Paper set out the Government’s intention for reciprocal arrangements for road haulage. The UK has the discretion to continue to recognise EU hauliers Community Licences or to require permits for EU hauliers. Under an agreement with the EU or a series of bilateral agreements which require permits, the permits for EU hauliers entering the UK would typically be allocated by the authorities in the respective member states to their hauliers. The UK would normally provide blank permits to the Commission or individual member states for them to then fill in and allocate to their hauliers.
You asked about the basis of the 80,000 figure in the impact assessment. This has used an upper estimate of the maximum number of applications for permits which could be made. This is based on the number of unique, UK-registered HGVs that can travel internationally each year. In practice, the number of applications is likely to be substantially lower as this number includes vehicles that hauliers may choose not to use abroad, and vehicles that would be exempt from permit requirements (under ECMT or bilateral agreements with member states). Moreover, it does not account for the ability for hauliers to share a permit between different vehicles. There are around 5,000 trips by UK hauliers to the mainland EU each week, many of these by the same hauliers. The number of 80,000 applications is presented as a maximum upper limit rather than the likely number of applications.
You asked about the progress of the IT system for permit allocation and how this would work. The permit IT system is being delivered by the Driver and Vehicle Standards Agency (DVSA). This is well developed and is undergoing final user testing before the system is due to be launched in late November. It is built on the existing Vehicle Operator Licensing IT system with which hauliers are already familiar.
When making an application, hauliers will be asked to provide details of their operations and the extent of their international business. The IT system will use this data to compare applications consistently and objectively. The Department will provide guidance for hauliers, and to peers before debating the regulations, which will provide more specific detail about how the criteria are being applied.
The criteria are designed to deliver the principles of obtaining the greatest economic benefit from the permits, protecting the interests of UK hauliers, and applying a fair and consistent process. They are included in the regulations in broad terms to ensure the Secretary of State will continue to consider the same relevant criteria. However, this approach also allows for minor, technical adjustments to be made to the allocation process. For example, the information required from hauliers to measure the frequency with which a permit will be used can be amended to ensure that hauliers which previously did not receive a permit are not disadvantaged relative to those who did.
The Department intends to review the criteria to ensure they operate effectively and deliver these principles. The guidance the Department will publish will make the application process clear to all hauliers.
I hope this provides the further information you needed.
22 October 2018
7 See earlier correspondence in Appendix 2 of our 1st Report Session 2017–19 (HL Paper 196).