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6.14 p.m.

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, I am grateful to my noble friend Lord Teviot for providing this opportunity to debate the important matter of the impact of European Union legislation on

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the United Kingdom coach industry and I am very glad that a small but resolute band of noble Lords has contributed a great deal to that debate this evening.

European legislation covers a wide range of matters affecting the coach industry. The construction of vehicles is harmonised to eliminate barriers to trade and to provide a single market in vehicle manufacture. Harmonisation should also promote high standards of safety and environmental performance. Entry to the profession of PSV operator is covered by directives relating to good repute, financial standing and professional competence. There are rules relating to competition on international services and, on issues of safety, European legislation covers such matters as drivers' hours and speed limiters. The general effect of these measures is to ensure that competition in the provision of vehicles and coach services is broadly harmonised, and that must be a good thing for the consumer and for the industry. I understand, however, some of the worries which have been expressed about the effect on coach operators of some aspects of the legislation and I shall attempt to address those concerns in my remarks.

My noble friend Lord Teviot expressed concern about the proposal to apply VAT on intra-Community bus and coach travel. The purpose of the draft proposal is to clarify the position of transport by road and inland waterway which passes through different member states. Taxation would be at a single place--the point of departure--thus avoiding the possibility of double, or, in the obverse case, no, taxation. Although the purpose may be clarity, we share the concerns expressed by my noble friend. For that reason we have consistently opposed the proposal on the grounds that it discriminates against certain modes of transport. We would much prefer to see an all-embracing directive encompassing all forms of passenger transport. As it is, I understand that there is limited support from other member states for the draft proposal and it is unlikely to be taken further forward in the very near future.

Nothing contained in the draft proposal would make the UK have to start charging VAT on passenger transport within the United Kingdom, which is, as noble Lords have remarked, currently zero-rated. The decision to impose VAT in our own domestic circumstances is a matter within our own jurisdiction. Any amendment to the EC law to make charging VAT mandatory would be subject to unanimous agreement from member states.

My noble friend Lord Lucas emphasised the question of taxation on fuel. Arrangements for excise duty on fuels used by the various modes of transport differ, but for a variety of reasons. It has, however, always been the case since the fuel duty rebate scheme was first introduced giving local buses a substantial rebate that the rebate was not available to coaches.

As a consequence of EC directive 92/6 and national legislation, buses and coaches will be limited to a top speed capability of 65 miles per hour from 1st January 1996. This point was picked up and commented on by a number of noble Lords, some in favour and some against. We did not favour requirements on set speed being included in the directive, but all other member states were in favour. The reduction in maximum speed

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has led to a concern that coaches limited to 65 miles per hour in the outside lane will lead to bunching of faster moving traffic behind and therefore possibly dangerous driving manoeuvres. The enabling regulations were the subject of consultation recently and a decision will be made in the near future.

The issue of weights was mentioned by my noble friend Lord Teviot and by the noble Earl, Lord Attlee. While I understand the desire to increase the weight limit from 17 to 18 tonnes, the United Kingdom is constrained by the axle weight limit of 10.5 tonnes. The axle weight cannot be raised until the bridge assessment/strengthening programme has been completed. When it is, in 1999, 18 tonne coaches to the same vehicle specification as the rest of the European Union can be fully utilised in the United Kingdom. It is technically possible to increase the permitted weights of UK coaches to 18 tonnes, keeping the 10.5 tonnes axle limit. However, this would require modifications to the design of coaches to ensure a sensible distribution of the load between the axles.

My noble friend Lord Teviot raised the question of vehicle lengths. Rigid vehicles are limited at present by United Kingdom construction and use regulations to 12 metres. The European directive also limits vehicles used in cross-border trade to 12 metres. Countries can allow longer vehicles for national use in their own territory. Some have used that provision to allow rigid vehicles of up to some 15 metres.

As regards the liberalisation of international passenger services, they have been liberalised throughout the European Union as a result of two main pieces of European legislation. The first allows all services except for regular services and certain other specialised services to run without the need for authorisation. Instead they are required to carry only a control document giving details of the service the operator is running.

The second piece of legislation concerns cabotage, which is the term used for a service carried out wholly within the territory of a member state. An operator may now undertake certain types of cabotage journeys without a registered office in the relevant country. At present this applies only to closed door tours and to special regular services such as the carriage of school children, but from the end of 1995 cabotage operations will be authorised for all non-regular services.

The noble Earl, Lord Attlee, mentioned the Vehicle Inspectorate. I can assure him and the House that the efficiencies being sought from the inspectorate will not in any way reduce its enforcement effort.

Turning to the question of drivers' hours--a matter raised by the noble Lord, Lord Clinton-Davis, among others--I share the view that enforcement of the regulations on drivers' hours is a key element in road safety, and it also helps to ensure fair competition. The Vehicle Inspectorate Executive Agency has set up a drivers' hours taskforce to target drivers' hours enforcement, and nearly 1.75 million lorry and coach tachograph charts were checked in Great Britain in 1993-94.

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But the output of the tachograph--that is, the daily paper charts--is relatively time-consuming to check and there is clearly a limit to the level of enforcement that can be carried out without a disproportionate use of resources. That is why the Commission has brought forward a proposal requiring the installation of an add-on device to the tachograph which would enable data to be stored digitally onto a driver-specific smart-card.

Although the Government accept in principle the need for an alternative form of recording equipment, we are not convinced that the use of an add-on device is the right approach and, in particular, we are concerned about the security of electronically recorded data. We believe that the Commission proposal has a long way to go yet, and, as usual, we shall bear in mind the views of the industry in our discussions, and indeed the views of your Lordships which have been put forward this evening.

Lord Clinton-Davis: My Lords, I thank the noble Viscount for giving way. In fact the situation does not change very much from the days to which I was referring. There are always reasons for not doing things and not arranging for evidence to be more easily available. What are the Government themselves proposing? What suggestions are they making to the European Commission? Surely they have had long enough to decide these matters. We have had many years since these unsatisfactory regulations were brought into effect by the decision of the member states in conflict with the Commission. Surely the Government have had ample time to consider how a system can be set up which is properly enforceable.

Viscount Goschen: My Lords, I believe that the noble Lord has put his finger on the very point, which is enforceability. But I should remind him, as I mentioned earlier, that through the Vehicle Inspectorate Executive Agency we have set up a drivers' hours taskforce to target drivers' hours enforcement. We see enforceability as being absolutely crucial. At the moment the written tachograph sheet does seem to give the best solution to the problem. However, I agree with the noble Lord that it is time-consuming and does not necessarily represent the best use of limited resources.

Both the noble Baroness, Lady Thomas, and the noble Lord, Lord Clinton-Davis, very properly addressed the issue of seat belts. That is something which we have discussed on a number of occasions before, particularly during the passage of the Deregulation and Contracting Out Act, as it now is. I believe that this is an incredibly important issue and I welcome this additional opportunity to discuss it and to put on record the Government's vigorous position.

Perhaps I may begin by re-emphasising that the United Kingdom has been pressing the Commission for some years to amend the directives on seat belts and anchorages to allow us to make a requirement for belts on all seats in these vehicles. There was never sufficient support from other member states to effect a change. This is of course a European Union matter because of the important role of vehicle standards in establishing the single market for the coach construction industry.

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Despite an earlier lack of response which I have detailed, in February 1994 the Commission, with the agreement of member states, announced its strategy for improving coach safety, including amending the directives to require belts to be fitted to all seats in new minibuses and coaches. We expect proposals from the Commission early next year. I should stress again--particularly to the noble Lord, Lord Clinton-Davis--that we simply cannot act nationally to require belts to be fitted to all minibuses and coaches. We would be required to allow any vehicle to be registered in the United Kingdom which met European Union standards; that is to say, with seat belts only on exposed seats.

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