Road Vehicles and Non-Road Mobile Machinery (Type-Approval) (Amendment) (EU Exit) Regulations 2019 — House of Lords, 2019-02-20
Topic: Foreign Trade
Andrew Adonis (Labour, Centre-left): My Lords, the House is indebted to the noble Baroness, Lady Randerson, for doing an excellent, forensic job of exposing the issues in this statutory instrument. These entirely substantiate her point about the failure to consult, given the potentially far-reaching nature of the changes. Her last, broader point about the impact of Brexit on the motor industry is, of course, extremely well made If we were not in the midst of a very deep Brexit crisis, Parliament and the Government would be overwhelmed at the moment by the controversy and issues raised by the closure of the Swindon plant by Honda. This, together with Nissan’s decision to massively scale back production in Sunderland, amounts to a wholesale disinvestment by Japanese companies now taking place in this country. Indeed, one can join up the dots with Hitachi, a company I know well because I played a big part in persuading it to come here and start manufacturing trains 10 years ago. It has now pulled out of nuclear reactor manufacture at the plant in north Wales because of uncertainty in the decision-making process directly related to Brexit. It is deeply unhappy about what might happen in the European rail market at the moment. I am not absolutely sure that it will be staying in the UK for the long term either. We might be on the verge of seeing the reversal of 30 years of industrial policy in this country, all caused by Brexit, and this unravelling could have a lot further to go if the Brexit process proceeds The broader context of Brexit is dire for the motor industry, but the point narrowly focused on these regulations, made by the noble Baroness, Lady Randerson, is that we should not be doing anything with the regulatory framework that discourages the import and export of cars. I should have thought that the Minister, for whom I have a high regard, would accept that as a starting principle. I know that she, like me, is unhappy about the whole Brexit process and I am not expecting her to justify it in her reply to this debate: I suspect we would be in a large measure of agreement. If she accepts the starting point that there should be no change to the regulatory environment—certainly none imposed by the United Kingdom, because that would be an act of self-mutilation—can she explain more fully the two paragraphs that the noble Baroness, Lady Randerson, highlighted? These also struck me as I read them; they are paragraph 7.8 and paragraph 2.4. I have nothing to add to the noble Baroness’s remarks about paragraph 7.8. Like her, I simply do not understand it. If the doubling of the production limits referred to is necessary to ensure the continuation of trading conditions until the end of 2019, why is it not necessary beyond the end of 2019? That seems a straightforward question The point about paragraph 2.4 is that I simply do not understand the policy, because it is a policy change. I shall read the paragraph, because there are so many great minds in the House that they might be able to help the House before the noble Baroness replies. It concerns type approvals, a critical issue for the registration of cars, and it reads as follows: "The UK will no longer accept EU-27 approvals when motor vehicles are registered, other than for motor vehicles that are in the UK prior to Exit day. A process will be established to issue UK approvals for holders of EU-27 approvals. Existing EU approvals issued by the UK’s VCA will remain valid. All of this is an interim arrangement valid for a maximum of two years, pending a comprehensive review and re-working of the UK’s type approval arrangements (with legislation planned for mid-2019)" As I read that, the implications seemed profound and I have some questions about it. If the aim is to have continuity, the obvious question is: why make any change at all? A golden rule in my experience of government, though it is being repudiated by the present Government all the time, is, "Where it is not necessary to change, it is necessary not to change". Indeed, I always thought that was a cardinal Tory rule—it is Edmund Burke. So if the aim is to maintain the status quo, which is surely in the interest of the United Kingdom because we have such a large car manufacturing hub, why make any changes at all? Why not simply say that the United Kingdom will accept EU 27 type approvals hereafter Secondly, unless I have misunderstood it, paragraph 2.4 seems to envisage a kind of zombie land for vehicles. It says that the UK will no longer accept EU 27 type approvals for vehicles that are in the UK, registered after exit day—that is my understanding—and a process will be established to decide what the regime will be after two years, which stands to reason because it would take two years to decide what that process is. Therefore, it is my understanding that that could lead to retrospective action because there will still be vehicles coming into the UK with those type approvals in that two-year period. However, it says that the UK will no longer accept those approvals, other than for motor vehicles that are in the UK prior to exit. If the United Kingdom chooses to change the rules, it might create a category of vehicles that have perfectly legally received type approval after exit day but which the Government retrospectively decide no longer meet the approvals. On my reading of paragraph 2.4, that must be a possibility. If that is not the case, why does it not say that the UK will accept EU 27 approvals until the new regime comes into force, which will be after the comprehensive review? Is the Minister following my point? I do not understand what looks to be a zombie period between the completion of the review and exit day Thirdly, why is the planned legislation necessary unless the United Kingdom is planning to set up a wholly new and separate type-approval regime? Surely, the only reason for setting up such a regime is that we envisage that our type-approval regime and standards might be different—potentially radically different—from those on the continent This leads to my fourth question, which is the big industrial policy question underlying all this: if we diverge from the EU 27 type-approval regime, as appears to be envisaged by paragraph 2.4, will that not, in itself, create a significant impediment to trade? Is that not profoundly against the interests of the United Kingdom, given that we are a massive exporter of cars to the European Union? It may be that all this is redundant because the devastation that Brexit causes to our car industry—just to extrapolate from the events of the last month—is so great that we no longer export large numbers of cars to the EU. It may be that by destroying this great industry we do not have the problem of continuing to mimic EU 27 type approvals However, many of us in the House hope that we will continue to have a car manufacturing base in this country after Brexit. Surely, it is in our interests that we do not erect new barriers to trade in cars and that we maintain the status quo as far as possible? In which case, paragraph 2.4 appears to act contrary to that policy, unless the noble Baroness can reassure me in her reply that my concerns are entirely misconceived.