COMMITTEE FOR THE ENVIRONMENT

OFFICIAL REPORT

(Hansard)

Goods Vehicles (Licensing of Operators) Bill

02 December 2008

Members present for all or part of the proceedings:

Mr Cathal Boylan (Deputy Chairperson)
Mr Roy Beggs
Mr Trevor Clarke
Mr Ian McCrea
Mr Daithí McKay
Mr Alastair Ross
Mr Peter Weir

Witnesses:

Mr Donald Armstrong ) Department of the Environment
Mr John Brogan )

The Deputy Chairperson (Mr Cathal Boylan):

I welcome the Department’s Bill team to the meeting.

Mr Donald Armstrong (Department of the Environment):

Apologies for the absence of Gillian McIntyre. We had two appointments this morning and she has gone to the other one, while we have come here.

Mr T Clarke:

Which of you got the short straw? [Laughter.]

The Deputy Chairperson:

I advise you that this session is being recorded for Hansard. Will you explain the Department’s response to clause 4(4)?

Mr John Brogan (Department of the Environment):

Perhaps we should go over how we got to where we are today. I refer to a couple of letters that the Department has sent to the Committee. In the first letter, dated 13 November, we outlined the reasons why the Department included clause 4(4) in the Bill, including licensing and enforcement. The action that can be taken against a foreign vehicle is different and less effective than the action that can be taken against domestic vehicles.

We were also seeking parity with GB. In GB, to ensure fair trade, the operator licensing system requires all vehicles specified on a licence to be registered under the Vehicle Excise and Registration Act 1994 (VERA). An operator who has taxed a vehicle abroad will not have paid vehicle excise duty in the UK, which may give the operator a competitive advantage.

During the meeting on 13 November, the Committee asked for examples of how other member states in mainland Europe that share a land border address issues such as vehicle registration and excise policies. We followed up that request with a letter dated 18 November, in which we reported that research was ongoing and that we would provide an update at our meeting with the Committee on 20 November. However, at that meeting, the subject was not actually raised. Therefore, the update has now been provided in our most recent letter, dated 1 December.

In that letter, we acknowledge that it has been very difficult for us to get information about systems that operate in other member states, so we may not be able to give precise answers to the Committee’s questions. We have tried to get that information from many individuals in the Department for Transport in London and from colleagues in the Vehicle and Operator Services Agency. We even contacted staff from the Office of the First Minister and the deputy First Minister who are based in the European Commission in Brussels. However, we had limited success. What we have been able to do is to gain further understanding of a European Commission proposal to introduce what it calls the operator regulation. That is highlighted in our letter.

One aspect of that proposal relates to the issue about which we have been talking. From the papers that we have on the proposal, it appears that there are problems that cross member states about operators who have letterbox companies, whereby they become established in one state in name and address only, but essentially operate in another state, perhaps their real home state. Those operators generally have a poor compliance record and are likely to take advantage of less robust licensing and enforcement requirements in the state in which they are licensed. The Commission proposes to clamp down on that practice by making it a requirement that operators be “effectively and stably” established in a member state.

For that to happen, operators will have to demonstrate that they have an office and operating centre in the member state in which their vehicles are registered. Given that in the UK it is already a requirement for vehicles to be registered in a member state, the Government supported the proposal on the operator regulation.

I repeat what I said in my original letter of 13 November about the sequence of requirements and the linkages between the Goods Vehicles (Licensing of Operators) Bill and the Vehicle Excise and Registration Act 1994. In effect, the 1994 Act means that operators should already be using vehicles that are registered and taxed in the UK.

Mr T Clarke:

I have a small problem with that. I welcome your statement that vehicles should be registered in the same country as the operating centre. The only thing that worries me is in relation to enforcement. The second paragraph of your letter of 13 November states:

“When a vehicle is registered within another jurisdiction in the EU the vehicle is deemed by law to be a foreign vehicle.”

I accept that, but it goes on to say:

“The enforcement action that the Department can take against foreign registered vehicles and their drivers, when detected being non-compliant, is different and to a significant degree less effective”.

As I said at the outset, a system is again being introduced that will restrict the operation of businesses in Northern Ireland and, by your own admission, be less effective in relation to vehicles registered in other jurisdictions.

Mr D Armstrong:

As far as operator licensing is concerned, the provision is less effective in the sense that, if a Northern Ireland vehicle is found to be in default on the road, that has implications for the operator’s licence. The same cannot be said of a foreign vehicle that is in default because it is registered in another country.

However, apart from operator licensing, the Department will introduce before the end of next summer — and probably within six months — a graduated fixed-penalty and deposit scheme for road traffic and transport offences. That will entail foreign vehicles being penalised at the side of the road and being barred from moving until the penalty is paid, while vehicles from the United Kingdom will have the option of a fixed penalty and being processed through the courts.

Therefore, foreign-registered vehicles will not escape penalty, but the Department has no control over their operator licences because they are registered abroad; in that sense you are quite correct. However, foreign vehicles will not completely escape sanction, because they will be immobilised unless a deposit is paid in lieu of a fine.

Mr T Clarke:

I know that the Department is not responsible for that situation, and that our industry’s hands are tied in comparison to other foreign states, but what fines are being considered by way of on-the-spot penalties?

Mr D Armstrong:

The fines would be on a graduated scale for both foreign and UK vehicles. I believe that the maximum is £1,200. I can confirm that and the detail of the maximum deposit that would be taken.

Mr T Clarke:

My problem is that the approach is geared for enforcement officers to visit yards and check vehicles at operating centres. Although I welcome the road-safety measures, from the start our industry is at a disadvantage because it has operating centres here, whereas the poor enforcement regime in Northern Ireland means that the chance of detecting foreign vehicles is slim to none. Therefore, foreign vehicles that operate in the North are given an advantage.

Mr D Armstrong:

I hope that that will not be the case. I cannot comment on the level of enforcement, because that is a matter for the Driver and Vehicle Agency, which has already given evidence to the Committee. The agency will be increasing the level of enforcement year-on-year over the next three to four years. As far as the principle is concerned, I understand what Mr Clarke is saying. It is a fact that the Department has no sanction over foreign operators, but it has a sanction on foreign vehicles coming in and out of the country.

Mr Beggs:

The Traffic Commissioner told the Committee that Northern Ireland vehicles had a higher infringement rate. I got a sense that those vehicles were targeted because it was recognised that they were of a lower standard. When the Bill is enacted, will the Department have mechanisms to drive up vehicle standards in Northern Ireland? Does the Department envisage that, at that stage, vehicles from outside Northern Ireland may be more heavily scrutinised by enforcement officers because there will be tighter regulations covering Northern Ireland vehicles?

Mr T Clarke:

You would need to wake them up first.

Mr D Armstrong:

By virtue of the fact that Northern Ireland operators improve the standard of their vehicles and their compliance with road transport and traffic law they will, under the rating system, be less likely to be stopped. Therefore, by default, the enforcement exercise will be targeted more towards foreign vehicles.

Mr T Clarke:

Anybody who listened to the news last night will know that, even before the regulations are introduced, it is recognised that vehicles in the Republic of Ireland are not of the same standard as those in Northern Ireland. That was mentioned on the news last night. Therefore, our industry is being taken from its current higher level to an even higher one, leaving southern-registered vehicles further behind.

Mr Beggs:

We must pursue the issue of road safety — it should be discussed on a North/South basis and should be addressed by the politicians in the South of Ireland also.

The Deputy Chairperson:

Do members have any more comments? We agreed clause 4 on 20 November. Following this discussion, do members believe that there should be a further amendment, or are we happy to move on?

Mr Beggs:

To clarify, what is the latest proposal?

The Committee Clerk:

Clause 4 was agreed on 20 November. Unless members want to suggest further amendments, that decision stands.

The Deputy Chairperson:

Are members content to move on?

Members indicated assent.

The Deputy Chairperson:

The Committee will now consider clause 50 and schedule 4, which allow for consignment notes to be introduced for larger goods vehicles. Previously, the Committee questioned the need for those and was told by the Department that, as such provisions had not been invoked in GB and there was no policy rationale for their inclusion, the Department would consider removing them from the Bill. The Committee accepted that and, during the formal clause-by-clause analysis on 20 November, it was agreed to drop both clause 50 and schedule 4.

However, the Office of the Legislative Counsel (OLC) subsequently advised the Department that, from a legal perspective, it would be better to retain both provisions and make an amendment to schedule 4. Last week, the Committee was asked to consider that, but members felt that that they could not make a decision without further information from the Department. Therefore, I invite the Bill team to explain the situation, please.

Mr D Armstrong:

The Bill includes references to three types of vehicle: small goods vehicles; goods vehicles; and large goods vehicles. By and large, small goods vehicles are those weighing 3·5 tons or less. Those vehicles are outside the scope of the regulations; therefore, the Bill does not apply to small goods vehicles. Operator licensing applies to goods vehicles and large goods vehicles, and that is consistent throughout the whole Bill. All of the Bill’s provisions, with the exception of what I am going to talk about, apply to operator licensing for goods vehicles and large goods vehicles.

Therefore, the question that must be answered is why there is a separate reference to large goods vehicles. That is the point that was raised by Mr Clarke. At present, there is separate legislation requiring vehicles carrying, for example, animals or dangerous goods to carry consignment notes. That legislation is completely separate and has nothing whatsoever to do with operator licensing.

However, clauses 50, 38 and 39 and schedule 4 of the Bill make provision for the adding-in of a requirement for consignment notes for large goods vehicles of 16·2 tons and over. Mr Clarke queried that provision. Such a power already exists in GB; however, it has never been exercised, we are not aware of any plans to exercise it and consultations with our counterparts in GB have never turned up any indication that anyone is even considering exercising it. Therefore, although that was included in the Goods Vehicles (Licensing of Operators) Act 1995, it is now 2008 and there is absolutely no indication that that power will ever be exercised.

As the Chairman has said, when we last met the Committee, the view was that clause 50, schedule 4 and consequential references in clauses 38 and 39 could be removed. We also indicated that we might replace them with a power in clause 57 to legislate for the carrying of documents under regulations, should it be deemed necessary in the future — that was not picked up on. That is what we presented the last time that we met the Committee.

However, we have since received legal advice in relation to clause 57 informing us that it is not possible to do that, and that is where the difficulty lies. Therefore, we could remove clause 50 and schedule 4, as well as the consequential references in clauses 38 and 39, but there is no mechanism for including that power somewhere else in the Bill. That is our current position, which leaves us with two scenarios. The first scenario is to leave things as they were voted on, and the second is to re-insert the clause and the schedule, as was suggested by OLC at the last meeting that we were not at, and I understand that that is what generated unhappiness among Committee members. I will run through those two scenarios with the Committee.

The first scenario is to leave things as they are — that is, remove clause 50 and schedule 4. As far as the Bill is concerned, that is a much tidier option, because it would remove from the Bill something that may never be enacted. The Committee would need to agree to the consequential amendments to clauses 38 and 39, thus removing the references to schedule 4. Operator licensing would function perfectly normally without those clauses, as they are not about operator licensing per se. However, if Great Britain moved to enact consignment notes, as provided for in the Goods Vehicles (Licensing of Operators) Act 1995, the Committee would have to consider following suit and, if those clauses are removed from the Bill, that would have to be done through primary legislation.

Under the second scenario, clauses 38, 39 and 50 would remain in the Bill, and schedule 4 would perhaps be modified to take away the 16∙2 tons definition and leave it, for example, as set out in regulations, subject to affirmative resolution. Operator licensing would still function, just as it would if we took out the provision. If GB moved to enact consignment notes, we, in turn, could do so without primary legislation. However, that would mean that there would be a power in the Bill that we have no plans ever to use.

Those are the two options; take it out or keep it in. The Department has no strong preference and is quite happy for the Committee to choose whichever option it wants. One option is legislatively cleaner but reduces the options for the future, in that if consignment notes are ever brought in, it will have to be done through primary legislation. The other option is messier, in that the Bill will provide for a power which we have no plans to use, and, to be honest, may never use. If GB moved on consignment notes then we would have to consider following suit with further primary legislation.

I think that, last time, the Committee voted to remove it. I hope that did not sound too complicated.

Mr T Clarke:

I do not really care whether it stays in or out, but if it is in, I do not think that it should be restricted to large goods vehicles; it should just say “goods vehicles”. Any registered vehicle over 3∙5 tons would be classed as a goods vehicle.

Mr D Armstrong:

I will run over the implications of that. Currently, consignment notes are predominantly used in relation to animals and dangerous goods. In GB their use is good practice in freight, although there is no legal requirement to do it, and some people in Northern Ireland use them as well. However, is it fair to ask somebody who is carrying, for example, their own goods in a vehicle over 3∙5 tons, to provide consignment notes detailing what they are carrying, where it is from, where it is going, and what it weighs? To me that seems to be an excessive burden.

If consignment notes were brought in they would probably only be for the hire-for-reward sector. It seems to me rather burdensome to require every vehicle over 3∙5 tons to have one. It might well be that we would be looking only at large goods vehicles over 20 tons or 25 tons — whatever figure the Committee or the Assembly agreed on. I do not see it as ever being necessary for all vehicles over 3∙5 tons. I think that that would be totally unfair and the impact would be huge.

Mr T Clarke:

It should not be necessary for a vehicle of 3∙5 tons to have an operator license either. I am glad that you have said that it is unfair. The principle of the whole Bill is unfair.

Mr D Armstrong:

I did not say that. I am talking about the unfairness of consignment notes; I am not talking about that other issue.

Mr T Clarke:

In a previous life, long ago, I was involved with haulage. Mr Armstrong said that it is good practice to use consignment notes; in those days, vehicles of 7∙5 tons and over used consignment notes, not only for livestock but for dry goods in containers.

Mr D Armstrong:

It is a good practice.

Mr T Clarke:

If it is good practice, why, would it be introduced piecemeal rather than across the whole industry? It should be all or nothing.

Mr D Armstrong:

If we were go down that road, consultation would take place to find out what the public view is. If we were to try and bring it in for all vehicles over 3∙5 tons there would be an outcry.

Mr T Clarke:

It would show how big a nonsense it is to even have that 3∙5 ton figure to start with.

Mr D Armstrong:

That is a slightly different issue.

Mr Beggs:

The option is to keep schedule 4, or, alternatively, if things change at a European or GB level, to introduce primary legislation. What would be the timescale of the introduction of primary legislation? Could that, in itself, cause problems? There would have to be some consultation, and I am concerned that it might cause problems for the freight industry in Northern Ireland if GB regulations change.

Mr D Armstrong:

The figure of 16∙2 tons is contained in GB primary legislation, so if, for example, they were to decide to bring that in, they would have to make a change to that legislation anyway. That issue does not worry me unduly. If it is brought in at a European level — and there is no indication that there is anything on the European front in relation to that — it may well be brought in under section 2(2) of the European Communities Act 1972. That means that the primary legislation would be done that way, which is much quicker and much easier; that is not such a slow process.

Mr Weir:

I appreciate what you have said. However, it strikes me that, if primary legislation is needed at a later stage, it might be done through Europe. We would not have much of a choice about that, and it is a fast-track process anyway. Alternatively, we may bring ourselves back into line with GB. In either case, there will not be a great deal of room for manoeuvre. I think that leaving this power out of the Bill would be a neater solution. I would take the Department’s advice on that, and leave out clause 50 and schedule 4.

Mr D Armstrong:

You will have to vote on two consequential amendments to clauses 38 and 39.

Mr Weir:

OK. I propose that we do that.

Mr T Clarke:

I second that.

The Deputy Chairperson:

I advise members that schedule 4 is referred to three times in clauses 38 and 39, and having agreed to drop it —

Mr Weir:

Does that need to be put to a formal vote?

The Committee Clerk:

Both were dropped formally on 20 November. The question was whether they needed to be reintroduced.

The Deputy Chairperson:

I advise members that schedule 4 is referred to three times in clauses 38 and 39, and, having agreed to drop it, we must now agree the consequential amendments needed to remove reference to it in these clauses.

Is the Committee agreed that clause 38, as amended by the Department, be accepted?

Members indicated assent.

The Deputy Chairperson:

Is the Committee agreed that clause 39, as amended by the Department, be accepted?

Members indicated assent.

The Deputy Chairperson:

I advise members that they need to reconsider clause 57(9), which has been amended to take on board the recommendations of the Committee for secondary legislation relating to exemptions, clause 1(2)(d), and the introduction of a requirement for professional competence for restricted licenses, clause 12(12), to be subject to draft affirmative resolution. Are members content?

Members indicated assent.

The Deputy Chairperson:

Is the Committee agreed that clause 57, as amended by the Department, be accepted?

Members indicated assent.

The Deputy Chairperson:

I remind members that during the formal clause-by-clause analysis on 20 November, they agreed the proposed departmental amendment to drop schedule 1 and incorporate its contents into clause 1. Unfortunately, the wrong wording was used and members are asked to reconfirm that they are happy for schedule 1 to be dropped. Is the Committee agreed that schedule 1 be dropped?

Members indicated assent.

The Deputy Chairperson:

That concludes the formal clause-by-clause analysis. Members will receive the second draft of the Committee’s report at Thursday’s meeting, and any changes resulting from today’s meeting will be included.