COMMITTEE FOR THE ENVIRONMENT

OFFICIAL REPORT

(Hansard)

Goods Vehicles (Licensing of Operators) Bill

7 February 2008

Members present for all or part of the proceedings:
Mr Patsy McGlone (Chairperson)
Mr Cathal Boylan (Deputy Chairperson)
Mr Billy Armstrong
Mr Trevor Clarke
Mr David Ford
Mr Tommy Gallagher
Mr Samuel Gardiner
Mr Ian McCrea
Mr Alastair Ross

Witnesses:
Mr Donald Armstrong ) Department of the Environment
Mr John Brogan )
Mrs Gillian McIntyre )

The Chairperson (Mr McGlone):
Officials from the Department of the Environment gave us an initial briefing on the Bill on 24 January. After we have heard evidence from the same officials today, we may wish to consider obtaining further evidence from key stakeholders. I welcome back to the Committee Donald Armstrong, Gillian McIntyre and John Brogan.

Mr Donald Armstrong (Department of the Environment):
At our previous evidence session, we covered the generality of our proposals for the Bill. We talked about the context of the proposed Bill, the commitments that have been made and the consultations and communications with various parties that have taken place. Today, we will discuss the current situation and examine the proposed Bill more closely and the requirements that it is seeking to place on operators.

The Bill will require all operators of goods vehicles that are over three and a half tons to have an operator’s licence. There are approximately 2,500 licensed operators in Northern Ireland who carry goods for hire and reward — that is, for other people. That sector is commonly known as the haulage industry. Our research has found that a further 13,300 operators who carry their own goods use vehicles that are over three and a half tons. Those operators are not included in the present regulatory regime, but we propose that they will be. The total Northern Ireland goods fleet is estimated at approximately 35,000 vehicles. That gives you an idea of the size of the market that we are trying to deal with.

The basic requirement for an operator’s licence is that all operators must have one. We are considering three types of licence, and each operator must have one of those types. First, we are considering a restricted licence, which is a licence for those who are restricted to carrying their own goods as part of their own business. Those operators will be newly regulated under the regime. Secondly, we are considering a standard licence, currently known as a national licence, for the hire-and-reward sector. That is for people who carry other people’s goods, but who can also carry their own. Thirdly, an international licence will be granted to operators who want to carry their own or other people’s goods across member-state boundaries, for example, into Ireland. Those operators will require — and will get, free of charge with the licence — a Community authorisation. That must be kept on the premises and a certified copy must be kept in every vehicle that crosses the boundaries between member states.

All operators will be required to satisfy standards of fitness, repute, financial standing, and professional competence in order to obtain certain groups of licences. The proposed Bill will not introduce any real changes for operators who are already licensed in the hire-for-reward sector, but it will result in some changes for those who will be coming into the regime, namely the own-account operators.

Standards of fitness and repute are based on any convictions that the operator may have for transport and traffic offences and on those of their partners, directors, transport managers, servants or agents — in other words, any employees. Any employee in an organisation could have an impact on the repute or fitness of an operator, thus affecting their ability to obtain a licence.

For those in the hire-for reward sector, that standard will widen to include convictions beyond those that have been handed out for transport and traffic offences. If a person has misbehaved in other aspects of criminal law, that will reflect on the repute of a hire-for-reward operator. The reason for widening the standard is that we are trying to ensure that operators who employ hauliers to carry their goods have some comfort in knowing that those people are of a certain standard of repute. Therefore, the rules will be more stringent for the hire-for-reward sector than for the own-account sector. There would not be so much difficulty if a driver were to carry his own goods. However, we are trying to provide some form of comfort to the hire-for-reward sector that its drivers are of sufficient repute.

Convictions include those that have been handed out when drivers are abroad, not just those obtained in Northern Ireland. If people have convictions in Ireland, GB or the rest of Europe, those will count toward the repute and fitness of an operator.

The Department must be satisfied that an operator has adequate resources to maintain vehicles in a fit and serviceable condition. Therefore, there is a requirement on operators to declare their financial standing. With regard to hire-for-reward operators, we will be looking for an indication that they have sufficient funds to ensure that they can run their businesses properly and that if they are going to take on business for other people, there is a guarantee that they will be able to do so.

Presently, EU regulations require hire-for-reward operators to have professional competence. That means that he or she must be a professionally competent person who will continuously and effectively manage their transport fleet.

All operators will be required to have a designated operating centre in Northern Ireland, although they may have more than one, depending on the size of their fleet. They must have a centre that is of a suitable size to accommodate their fleet of lorries and trailers; it must be in a suitable location; it must be available for drivers to enter and leave; it must be used for a suitable purpose; and it must adhere to road-safety access and egress.

All applicants will have to advertise in the local press their desire for a licence. That will give people who live in the vicinity of operating centres an opportunity to make representations to the Department about that centre on environmental grounds. In addition, other people will have a statutory right to object, and they will be able to object to a licence on more than environmental grounds: they will be able to object on grounds of repute, financial standing, competence, and road safety, etc. The system will therefore be much more open, and people will know what operators are applying for.

In addition to the applicant publishing a notice in the press, the Department will also regularly publish decisions and applications so that people will know what is happening with regard to the regulation of the industry.

Operators will be required to give certain undertakings as part of their licence granting. Those are: to observe all the laws regarding the driving and operation of vehicles under the licence; to show that they have systems in place to observe the rules in relation to driver’s hours and tachographs; to observe the rules of weights, overloading, and the speed limits that have been set for specific vehicles, as well as the national speed limits to which we are all subject; and to maintain vehicles and trailers in a fit and serviceable condition. The operators must also give undertakings that they will ask their drivers to inspect their vehicles daily, to record those inspections and to report faults. They will be required to keep those records for 15 months.

The operators will also be required to give undertakings that they will use the operating centre in the way in which it was authorised to be used and that it will not be misused. They will have to notify the Department of any convictions that they or their employees may have throughout the period of the licence — that will certainly be the case when they apply for the licence.

Operators will have to notify the Department of any change in the nature of their business in order that their licence can be reviewed.

Those are the requirements that the proposed legislation will specifically place on all operators. The legislation seeks to address the four key policy areas that we outlined at our previous meeting — road safety, fairer regulation, environmental conditions, and combating organised crime.

The Department will take on some key powers that are connected to operator licensing. First, it will have stronger enforcement powers through its ability to impound vehicles that are not properly licensed. Secondly, the Department will have the power to enter premises in order to inspect records, even those of third-party premises that are responsible for the maintenance of an operator’s vehicles. It will be much easier for enforcement staff to gain access to records and to the information that is necessary for sound enforcement.

Thirdly, the Department will have the power to hold public inquiries to consider the representations and objections that are made against an operator who wants to hold a licence. In disciplinary cases, operators who have not complied with the terms of their licence can also be brought before an inquiry. The Department will have the power to attach conditions to a licence with regard to the operating centre, including its terms and hours of operation, the number of vehicles that can be used and its parking arrangements.

The key difference between those new powers and those that are currently available to the Department is that the proposed provisions are more discretionary. At the moment, we can receive an application, examine an operator’s behaviour and grant or refuse a licence accordingly. The new regime will allow much more discretion, as they will enable the Department to understand the operator’s situation, talk to them and make it easier for them to comply. The Department will not merely say yes or no; it will work with operators so that we can help them to comply, rather than continuing with the current shall or shall not scenario.

The Chairperson:
Thank you.

Mr Boylan:
I missed your first presentation on the proposed Bill. I would like some clarity on some of the issues. You said that approximately 13,300 operators are not affiliated to key stakeholders. How many of them have you been in contact with? How will you consult with them? Will you advertise a consultation process? How will you address that issue?

Mr D Armstrong:
We will hold a series of industry briefings between 19 February and 18 March, and we will add others as necessary. This week, we will mail every registered keeper of a goods vehicle in Northern Ireland, informing them about the changes and about the industry briefings. We will tell them about the information that is on our website so that they can look at that if they are unable to attend the briefings. By the middle to the end of March, everyone who owns a goods vehicle will have been contacted, and everyone will be aware of the nature of the proposals.

Mr Boylan:
OK. Are the 2,500 licensed goods vehicles that you mentioned owned by the major road hauliers?

Mr D Armstrong:
It could be that a road haulier owns only one vehicle. As long as they are carrying goods for somebody else, they have to be licensed, but the consultation will include the major road hauliers.

Mr Boylan:
There are approximately 13,000 more operators who will be subject to the proposed new arrangements. What financial impact will the requirement for a licence have on them? Have you nailed that down yet?

Mr D Armstrong:
We have provided the Committee with information on the three different types of fees that will be charged. They will be based on operators who have one, three, or 10 vehicles. We talked a little bit at the previous meeting about the impact that that will have. Operators will no longer be able to park their vehicles on the roadside; those who park their vehicles on the street will have to find somewhere off-road. In many cases, they may find somewhere to park for free. In other cases, they may have to pay. The range of fees may be quite dramatic. In our series of seminars and when we talk to people, we will hope to tie down some idea of what that will mean; we do not currently have a ballpark figure of the potential impact that that will have.

Vehicles should be maintained anyway to keep them safe. We therefore do not look on maintenance costs as an extra cost to the industry.

Mr Boylan:
Do the operators that I am talking about currently pay anything?

Mr D Armstrong:
They are not paying anything to the Department; they are completely unregulated.

Mr T Clarke:
You presentation states that the overall purpose of the Bill will be that it:

“places a requirement on all operators of goods vehicles of weight over 3·5 Tonnes to have an operators licence for those vehicles.”

Is that smaller than a rigid lorry?

Mr D Armstrong:
It could include some rigid lorries.

Mr T Clarke:
Rigid lorries weigh seven tons.

Mr D Armstrong:
They weigh between seven tons and seven and a half tons.

Mr T Clarke:
Where does the three and a half ton weight start? I am concerned that a weight requirement of three and a half tons will allow regulation of large vans.

Mr D Armstrong:
The legislation would cover large vans. The Transit van and the Mercedes van, for example, weigh less three and a half tons. Large vans would be subject to the legislation.

Mr T Clarke:
Is the legislation for Transit vans the same in England and the Republic of Ireland?

Mr D Armstrong:
In the Republic of Ireland, only the hire-for-award sector is regulated, but that is done on the same weight basis. The same weight basis applies to the Republic of Ireland as it does to Northern Ireland and GB. The Republic of Ireland is similar to Northern Ireland in that it regulates only the hire-for-award sector, not the own-account sector.

Mr I McCrea:
The fee comparison table that you have provided to the Committee refers to a grant. Is that paid by the Department?

Mr D Armstrong:
A fee is paid when an application is made. When the licence is granted, the remainder of the fee is paid. The grant refers to the second part of the fee that operators pay on the granting of the licence. It is not a fee that the Department pays to the operator.

Mr I McCrea:
That clarifies what I was asking. The table shows that the grant is added to the total, and I was not able to see how that could have been a grant that was paid to the operators.

Mr Ford:
I want to follow up on Mr Clarke’s point. I run a small business in Lisnaskea, and I have a couple of lorries on the road, on my own account. I am about to open —

The Chairperson:
Is this a hypothetical situation?

Mr Ford:
It is entirely hypothetical. I am expanding my business by opening a shop in Clones, and I have decided to base my lorries there. Given that those lorries travel all over County Fermanagh, who will regulate me in the future?

Mr D Armstrong:
If you are based in Northern Ireland, you will be required to have an operator’s licence.

Mr Ford:
That was not the question. The question was: who will regulate me when my lorries are based in Clones?

Mr D Armstrong:
If you base those lorries in Clones, they will not be part of a Northern Ireland regulatory regime.

Mr Ford:
As I understand it, the Republic has no plans to regulate.

Mr D Armstrong:
That is correct.

Mr Ford:
Say that I run a business in Antrim, and I have decided to open a depot in Clones. What happens then?

Mr D Armstrong:
The same rules will apply.

Mr Ford:
What is the point of the regulation in that case?

Mr D Armstrong:
The point is to ensure that all goods vehicles in Northern Ireland are subject to an operator’s licence so that there is better compliance with road safety, fairness of industry and environmental centres in Northern Ireland. The only vehicles that will be on a Northern Ireland operator’s licence are those that are registered in the United Kingdom. Vehicles that are registered in Clones will not be on a Northern Ireland operator’s licence.

Mr Ford:
Given that we have seen that a large number of road-haulage vehicles are registered in the Republic, despite being run by firms that traditionally have been based in Northern Ireland, why should we assume that the same will not happen with people who operate on their own account and who can get the same financial benefits from a potentially bogus address in the Republic? Firms can operate across the border because of free trade in goods and services across the EU.

The Chairperson:
That is an interesting point. The legislation could lead to displacement of businesses, particularly in the border areas. I know that that has happened in other sectors.

If people perceive that there has been an increase in red tape, there will be a displacement of businesses and potential economic implications. Unless the policy is adopted in an all-island context, it will have implications.

Mr D Armstrong:
We met with our counterparts in Dublin last week, and we talked through our proposals with them. We asked them what their proposals are, and they have no plans to license the own-account sector of the industry.

Mr T Clarke:
To use your own word, can you demonstrate where the fairness is in that? You said that you are trying to introduce a fair system. At the previous meeting, I brought up the point that vehicles in the Republic of Ireland operate under a different system.

Mr D Armstrong:
The fairness applies to the industry in Northern Ireland. At the moment in Northern Ireland, one quarter of the industry is regulated and pays a regulatory fee. Three quarters of the industry is unregulated. The fairness comes in in that we must try to enforce over the whole industry the required standards of roadworthiness.

The Chairperson:
The big problem is that the economy is not sited purely in a Northern Ireland context. There are implications for business. Everybody in this room knows that businessmen or businesswomen make business decisions; many of us have encountered such decisions. If there is a perception of a difficulty, or of increased red tape — which does not exist two or three miles down the road — that will influence their decisions on where to locate their businesses.

Mr D Armstrong:
At the previous meeting, I pointed out that the licensing fees will not have what you might call a major impact. In that sense, if a business is in operation, the cost of fees to the Department should not have a significant impact on that business. That remains to be teased out in the impact assessments.

There may be an impact on what operators who currently park their vehicles at their houses or on the roadside have to pay, depending on whether they have to pay for an operating centre. Again, those fees might not have a great impact. In Northern Ireland there will be an impact on those who pay a licence fee and those who do not.

Mr Ford:
I applaud what you are trying to do. However, to take that last example, if a lorry that is parked in an Antrim housing estate has a Monaghan registration, there is nothing that the Department can do about it, as I understand it.

Mr Gallagher:
Most of them have such registrations.

The Chairperson:
Do you want to pick up on that point, Tommy?

Mr Gallagher:
That was the very point that I wanted to make.

Mr D Armstrong:
If an operator has a licence in Northern Ireland, his vehicle must be registered here. The Northern Ireland operators licence will not cover Southern vehicles. As I pointed out at the previous meeting, the vehicles must be registered in Northern Ireland or in Great Britain, under the Vehicle Excise and Registration Act 1994 (VERA). Vehicles from the Republic of Ireland are treated as foreign vehicles. If an operator wants to operate from a centre in the South, that is completely outwith the proposed legislation.

Mr Ford:
I would like to see what is being suggested. When we see the statistics — 40% of vehicles are not roadworthy and 18% have tachograph offences — we can all sympathise with the Department’s view that something must be done. However, unless measures are being taken in conjunction with the authorities in the Republic, their road-safety value will be minimal.

Mr T Clarke:
That applies to enforcement as well.

Mr Boylan:
Is Mr Ford calling for an all-island policy?

Mr Ford:
No. I am calling for co-ordination between the two jurisdictions.

Mr Boylan:
Coming from a border constituency, I would like to think that Mr Ford was suggesting —

Mr Ford:
I thought that even Trevor was calling for co-ordinated action between two separate jurisdictions.

Mr Boylan:
An all-island policy would be a very good idea.

Mr T Clarke:
I do not see any purpose to the whole legislation; its introduction will inhibit the entire freight business in Northern Ireland. If there were proper enforcement in Northern Ireland, the Department could detect more illegal operations and could penalise those who act illegally, as opposed to penalising all business, including legitimate ones.

Mr D Armstrong:
Do you want me to respond to that?

The Chairperson:
Yes, please do.

Mr D Armstrong:
The regulation of the industry is self-funding, so the funding that comes into the industry, through regulation, is used for enforcement. We take funding from only one quarter of the industry; therefore, it is hardly fair to try to regulate the roadworthiness standard of the whole of Northern Ireland freight industry by taking a fee from only one section of it. That is where fairness comes in. If we regulate the whole industry, it is obvious that there will be much more money for better enforcement. I am not here to defend the enforcement situation at the moment — that is not the issue — I am trying to demonstrate that, by regulating the whole industry, we will have much greater ability and more enforcement powers available to us to improve the industry in Northern Ireland.

Enforcement will apply to foreign vehicles, not just to Northern Ireland vehicles. Any vehicle that is on the road in Northern Ireland will be subject to our enforcement regime.

Mr T Clarke:
Are you saying that there is no money in the kitty to allow for proper enforcement in Northern Ireland? Are you saying that a self-funding licence is required to fund the operation to ascertain to what extent vehicles are breaking the law in Northern Ireland?

Mr D Armstrong:
What I am saying is that by implementing the proposed measures, we will have much more funding for enforcement.

Mr Ford:
Has the anticipated income that will result from the proposed new regulations been estimated? Furthermore, has the potential loss of income that will result if some people decide to register across the border been estimated?

Mr D Armstrong:
We have not estimated any potential loss of income if people register across the border.

Regarding the income that may result from the regulation of the industry, in the past week we have bottomed out the number of vehicles and operators. We will be able to calculate the income on the basis of the fees that we have presented. However, the breakdown of how those fees are used for administration, enforcement and so on has not yet been calculated. Such issues will be subject to assessment.

Mr I McCrea:
Will you clarify what you meant by farm vehicles?

Mr B Armstrong:
I thought that he said “foreign vehicles”.

Mr T Clarke:
To expand on that point, foreign contractors who work in the agriculture and environment sector have already been penalised. Will they be subject to the new regulations, or will they be treated differently because they work as contractors rather than for their own business purposes?

Mr D Armstrong:
The regulations do not include vehicles that are used in the agriculture sector; they are for people carrying out freight work. However, there will be a list of exemptions.

Mr T Clarke:
Can we expand on that? Those farm vehicles are now supposed to be running on clear diesel because they are carrying out contract work as opposed to agricultural work, even though it is contract work in the agriculture sector.

Mr D Armstrong:
If they are carrying out contract work they will be subject to the regulations. Tractors will be exempt.

Mr B Armstrong:
How do define a tractor?

The Chairperson:
Can you clarify which agricultural and/or farm vehicles will be exempted in the proposal?

Mr D Armstrong:
Our base document will be the exemptions that currently operate in GB. Tractors, including agricultural tractors, are currently exempt there. The definition is unclear. However, we may have our own variations.

Mr T Clarke:
What do contractors want? Agricultural contractors as opposed to —

Mr D Armstrong:
Are you referring to people who use freight vehicles?

Mr T Clarke:
I am referring to people who carry out contract work for various farmers using fast-track tractors that have dump trailers. For example, someone who cuts silage for 20 or 30 farmers as opposed to for himself.

The Chairperson:
Can we assume that tractors are completely exempt, irrespective of the context in which they are working?

Mr D Armstrong:
My mind is going round as to whether we are talking about size of tractors. Tractors are exempt.

The Chairperson:
Therefore, are tractors exempt for the purpose of agricultural contracting and other agricultural use?

Mr D Armstrong:
Yes.

Mr B Armstrong:
Tractors have two roles during the year. They can be used as agricultural tractors to work with silage or slurry at one time of the year, and they can then be used on a building site at another time of the year.

Mr D Armstrong:
That is a difficult issue. The current problem is that an agricultural tractor is a construction tractor. I will come back to you on that point, because it is not clear.

The Chairperson:
Perhaps you should; it deserves a bit more clarification.

Do any members wish to add anything?

Mr B Armstrong:
When you are clarifying what happens with tractors, please remember to include their trailers.

The Chairperson:
The Road Haulage Association and the Freight Transport Association, which are at the top of the list of key stakeholders that you provided, will be interested in the topic. The Department has said that there is a fair degree of agreement among some, if not all, the stakeholders. Would it be appropriate to invite those two stakeholders to discuss the proposed Bill? However, some of the issues that we have discussed today need to be teased out further.

I thank the witnesses for attending and for their presentation.

Mr T Clarke:
I ask that the Ulster Farmers’ Union be added to that list of stakeholders, in case it has a view on the matter. The Northern Ireland Agricultural Producers’ Association (NIAPA) should also be added; we could add it to the bottom of the list and rule it out if necessary.

Mr Ford:
The departmental officials may return and say that farmers are not at all affected. However, they seemed a little unclear about that.

Mr B Armstrong:
I should add that farmers’ machines are classified according to what they are doing.

Mr Boylan:
There are 13,300 unaffiliated operators. May we have a breakdown of that figure? I am sure that some firms have 10, 20 or 30 vehicles that may not be affiliated. That point should be researched.

The Chairperson:
Do you mean that they are not affiliated to the stakeholder organisations?

Mr Boylan:
Some 2,500 appear to be involved in major road haulage. There may be firms with 10, 12, 15 or 20 vehicles that may not be affiliated to those organisations. We need a breakdown of the statistics.

The Chairperson:
I am sure that the Department can establish that.

Mr T Clarke:
What I hear today is alarming. Large Transit vans, a man on his own who is on hire, for example, working for a parcel delivery service, will now be expected to have a licence. To refer to what was said at the previous meeting, he will also need a yard for keeping his vehicles. Many of those people run small, one-man businesses from their houses. Can we tie their hands by expecting them to buy yards?

The Committee Clerk:
Has the Committee agreed that those first two sets of witnesses be invited to begin with?

Members indicated assent.

Mr B Armstrong:
The only reason that this matter is policed is because a fee is charged. Had they not charged a fee in the first place, they would not now have to police it. There is no money to do it.

The Chairperson:
That is what I said. Many issues have arisen for consideration.

We have agreed a course of action for the next meeting.