I move: "That the Bill be now read a Second Time".
The main purpose of the Bill is to eliminate the quantitative restrictions on the carriage of merchandise for reward which were imposed by the Road Transport Act, 1933, and so facilitate the development of an efficient road haulage industry which would be subject only to qualitative control.
Liberalisation of the industry has been in progress for some time. It was initiated with the enactment of the Road Transport Act, 1971, which removed from licensing control the carriage of cattle, sheep and pigs; abolished the weight restrictions on vehicles operated under merchandise licences thus enabling operators to use the size of vehicle most suited to their business; and removed the restrictions on area of operation and on commodities carried resulting in an increase from 100 to 841 in the number of licences authorising the carriage of general merchandise throughout the State.
That Act also provided for the grant of restricted road freight licences to foreign hauliers to enable them to transport goods to or from the State.
Further liberalisation measures were introduced under the Road Transport Act, 1978, which increased sixfold the vehicle capacity on existing carrier merchandise licences subject to a maximum of 80 vehicles for any one business. Prior to that more than 500 licences authorised the use of one vehicle only while about 150 licences authorised the use of two vehicles. In order to encourage the development of the Irish international road haulage industry and to lessen the country's dependence on foreign hauliers, the Act also extended to Irish hauliers the facility to get licences for international haulage provided they satisfied the EC requirements of good repute, sound financial standing and professional competence in accordance with the European Communities (Merchandise Road Transport) Regulations, 1977. Furthermore, the 1978 Act exempted from licensing control haulage in vehicles not exceeding 2.5 tonnes unladen weight and haulage of grain in the harvesting season.
Those measures were intended to give the existing licensed hauliers, who had hitherto been impeded by the restrictive nature of the legislation, an opportunity to expand their business and to prepare themselves before the industry was opened to new entrants. It was made clear during the passage of the Bill through the Houses of the Oireachtas that the ultimate objective was the complete removal of quantitative restrictions on haulage for reward. The phasing of the final step, which is the substitution of qualitative for quantitative controls with the effect of admitting new entrants to the market subject to a specific system of quality control, was considered in depth by the Transport Consultative Commission established by the then Minister for Transport in 1978. In their report of July, 1981, which was laid before this House, the Commission outlined the following course:
—A first phase restructuring of the existing licensing arrangements in a way which would permit existing hauliers entitled to operate under the Road Transport Acts to compete on equal terms as regards the area of operation and type of goods to be carried—this restructuring to take place during a two-year transition period commencing on acceptance by the Government of the Commission's recommendation.
—In the second phase, at the end of the transition period, general haulage licences to be made freely available to all applicants including own-account operators who satisfy the EC requirements for access to the profession of road haulage operator.
The frequent changes of Government following publication of the report have had the effect of deferring adoption of these measures and prolonging the existing restrictive regime, which is really of benefit to no one, least of all in my view the licensed haulier.
The decision of the Government was that the liberalisation measures should be implemented but with the modification, in response to representations from the Irish Road Haulage Association, representing the existing licensed hauliers, that the total abolition of quantitative control would begin two years after the beginning of phase 1 and not two years after the date of the Government decision, as recommended by the Transport Consultative Commission.
The developments within the industry such as employment growth as a result of the gradual easing of restrictions are a fair indication that the industry has had, and used, in its more businesslike sector, the opportunity presented to prepare for complete liberalisation. I believe that the further liberalisation measures we are now proposing will enable hauliers to develop their services in line with users' requirements. At the same time, the operation of quality controls will serve to raise the standards of safety and efficiency throughout the industry.
In the discharge of my responsibility in relation to road freight transport, I must do what I can to ensure that users of the service have the best professional transport industry that can be provided. I must also strive to ensure that, overall, national transport operates as efficiently as possible. In my view, one essential requirement for this is an increase in the amount of traffic carried by the professional hauliers and a fall in the own-account element. I am satisfied the liberalisation to date has improved the share of traffic handled by the professionals. Based on a survey carried out in 1964, the Central Statistics Office estimated that the licensed haulage industry, including CIE, accounted for only about 17 per cent of ton miles in that year. The next full survey was for 1980 when the estimated licensed haulage share had more than doubled to about 35 per cent. There was a further increase to over 38.5 per cent for 1984.
Nonetheless. I believe that professional hauliers have yet to reap the full potential of the market so as to reach the stage reached in several other EC countries where professional hauliers have, typically, a share of the order of 60 per cent of the traffic. The thinking of the Transport Consultative Commission was in line with this view. The commission observed that own-account transport was becoming more complex and costly to operate and that the willingness of own-account operators to reduce the level of their own commitment to transport offered an opportunity for the enterprising professional haulier. The intensely strict regulatory provisions which came into force over 50 years ago have been an impediment to the development of the professional haulage industry; the removal of those restrictions as provided for in the Bill should foster growth and improve efficiency and so enable the hauliers to achieve a much greater share of the traffic.
I have a responsibility too, to those hauliers who over all the years have served faithfully and in some cases with outstanding efficiency under a system which was so restrictive as to be almost punitive in effect. The livelihood of these carriers is something we have to take into account. I do not accept the argument that liberalisation will destroy that livelihood. The hauliers of long standing have an edge in the market. They are the people who have been in the business for years. They are on the ground floor. They have the contacts and they have the expertise. They have a head start on all potential new entrants and they must win out.
The livelihood of long established hauliers will not be protected by unthinking opposition to change on the part of either Government or the industry. Entrenched opposition to change in the past has resulted not alone in an unduly high share of the market for own-account hauliers but also in the growth of illegal operators. Their very existence is a symptom of the failure of the legislative system to keep up with market needs. Sad to say, licensed hauliers themselves have offered most resistance to the adaptation of the legislation to the conditions of today.
The licensing restrictions imposed by the Road Transport Act, 1933, are designed to protect the railways. They did not succeed in this and the road vehicle has long since replaced the railway as the favoured mode of conveyance for most goods. The trend towards greater use of road vehicles for such transport is not an exclusively Irish development; the same can be said of most European countries. We have to face the fact that the principle of quantitative control on licensed road haulage dates from the incredibly different world of over half a century ago. It has ceased for years to be relevant to our needs.
This Bill gives effect to the Government decision to implement the recommendations of the Transport Consultative Commission. Section 3 provides for placing all existing holders of haulage licences and all hauliers lawfully operating in the areas now exempted from licence control on an equal competitive footing with each other by standardising licences. It also contains the provision which after about two years will open access to haulage for reward to all qualified condidates. The purpose of the phased approach even in this final stage of the liberalisation programme is to give all existing lawful operators a further period to strengthen their operations. Furthermore, there would be an element of inequity in putting hauliers, who up to now may have been running illegally, on the exact same footing from the start of the new regime, as operators who have respected the law over the years.
There are three categories of licensee all of which will be entitled to get the new standardised licences, called road freight carrier's licences, immediately the licensing provision becomes operative, namely (1) holders of merchandise licences covering haulage of general merchandise throughout the State; (2) holders of merchandise licences restricted by area or type of operation, for example, Achill Island, car conveyors and (3) holders of licences restricted to international operations. Hauliers operating in the exempted areas, that is areas within a specified radius of the principal post office in Dublin, Cork, Waterford, Limerick and Galway, who when the Act becomes operative hold, as required by law, a current road freight certificate, being evidence that they have satisfied the EC requirements of good repute, sound financial standing and professional competence, will also be eligible for the new general standardised licences in the first phase.
The standardised licences will be classified as national or international licences. Both classes of licence will authorise holders to engage in carriage for reward within the State without restriction as to the type of merchandise carried or number of vehicles used. The international licence will be valid for international and home operations subject of course to compliance with the laws of any other State concerned. International licences will be granted only to applicants who satisfy the more stringent EC criteria for international operations.
Two years after the new licensing system commences any person or firm whose principal place of business is in the State will be able to get the standardised road freight carrier's licence subject only to meeting the qualifications laid down in the EC directive on admission to the occupation of road haulage operator. One of the consequences of this will be that suitable qualified own-account operators will be eligible for a licence to carry for reward. There is some apprehension on the part of the existing licensed haulage industry that this development would result in unfair competition. I do not think the licensed hauliers need have any fears in this respect: the present licensing system does not preclude own-account operators from holding licences to carry for reward but they have not availed of that facility to any great extent. In Britain, where own-account people have had for quite a long time now the facility to be licensed for reward, the swing by own account operators to professional haulage has been very limited.
The indications in Ireland as I have said and, indeed, as I read every day, are for a swing away from own account operation. In any case to exclude own-account operators from carriage for reward would run counter to the whole idea of full liberalisation of the haulage industry which is designed to achieve a more competitive, economic and flexible transport system. The existing high level of empty running of vehicles increases cost. While it will not always be feasible or desirable, back or forward loading for reward on journeys which are going to be unladen in one direction or the other, would help to reduce costs and improve competitiveness. Many own-account operators would find it utterly impractical to carry for reward of course. Nevertheless there is a lot of unladen mileage, for want of forward or back loads, in the own-account sector and the facility to put that mileage to use ought to be available to all involved as is proposed in this Bill.
In addition to restructuring the licensing system, the Bill contains a provision in section 9 whereby own-account operators would be able to use hired vehicles for carrying their own goods; this would enable them to avail, inter alia, of financial leasing arrangements from which they are excluded by current legislation. This facility to use hired vehicles will apply only where the vehicle is hired without a driver; where vehicles with a driver are to be engaged carriage for reward would be involved and the licensing requirements would apply.
Leasing arrangements for premises, plant and equipment are commonplace in all sectors of the economy. It is anomalous that they should not be allowed for vehicles. Leasing arrangements give the operator flexibility in settling the level of his own commitment to transport and relieve him of the need to have capital invested in spare vehicles to meet any short term upturns in business or emergencies. Long term leasing under contract has the further attraction that the leasing company relieves the operator of many of the operational problems associated with running a fleet of vehicles. I hope that this new facility will enable many firms in the industrial and commercial sectors who must for one reason or another have their own fleets, to release capital for productive investment rather than have it locked up in vehicles.
Under the new arrangements, where after about two years any applicant complying with the EC requirements will be entitled to get a general haulage licence, there will not be a need for transfer of existing licences and the existing transfer provisions are therefore being repealed. Special arrangements are, however, being made under section 12 to enable family businesses to be carried on where the holder of a licence dies or becomes incapacitated. In such cases a new licence may be granted to a relative of the licence holder or the husband or wife of such a relative, who has had three years experience in the conduct of the business and who meets the EC good repute requirement. Where even these requirements cannot be met by a relative and in other cases where a licensee, or the manager of a licensed business who is designated as the person who meets the professional competence requirement, dies or becomes incapacitated I may, if necessary to avoid hardship, grant permission to enable a business to be carried on for a maximum period of 18 months. This will allow for disposal of a business or give a relative or manager time to obtain a certificate of competence.
The Transport Consultative Commission recommended that penalties for offences relating to road haulage should be increased and that the question of introducing on the spot fines should be examined. The licensed haulage industry has also been critical of the penalties under the Road Transport Acts many of which have not been changed since they were introduced in 1933 and can no longer be regarded as penalties. Provision is made in section 14 of the Bill to increase penalties to a more realistic level and in the case of the most serious offences a maximum of £5,000 is proposed compared with £500 at present. I hope that these increases, combined with the recently increased penalties introduced by the Minister for the Environment for road traffic offences, will be a deterrent to serious breaches of the legislation and contribute to a safe and more efficient haulage industry. There is power under section 13 to introduce on-the-spot fines for certain offences to be prescribed by regulation. They would not, of course, be the major offences but rather those of minor character which could be established on the spot.
Section 7 is for the purpose of continuing in operation provision for the licensing of foreign hauliers who conduct part of an international haulage operation in the State. The existing provision relates also to Irish hauliers engaged in similar haulage operations. Such Irish hauliers will, under the new licensing provision subject to meeting the relevant qualifications, be eligible for the general haulage licence which will also entitle them to engage in point to point haulage in the State and therefore will not need the special restricted licence for international operation.
The repeals being provided for in section 15 are mainly consequential on the other provisions of the Bill. They relate to such matters as abolition of the exempted areas which are now being subjected to licence control, termination of the licence transfer arrangements because qualified applicants will be eligible for new general licences, termination of renewal arrangements because the new licence will expire after three years and will not be renewable and removal of the restriction on use of hired or leased vehicles by own-account operators.
To allay any fears that the proposals in the Bill will impose restrictions which do not now apply I with to explain that no existing doors to lawful haulage operations are being closed. Thus, in the two years after the new licensing code is introduced, restricted road freight licences will continue to be issued to persons wishing to engage in international operations and, also, persons wishing to commence haulage operations in the exempted areas may still do so subject as now to compliance in both cases with the EC requirements. This will be achieved by deferring the repeal of the relevant existing provisions until after the end of that two year period.
The Minister of Communications has said on a number of occasions that in parallel with the liberalisation of the road haulage industry there must be significant improvement in the enforcement of the law in that area. The need for more effective enforcement has been the subject of representations from public representatives and interested parties.
In the course of the debate on the Bill in the Seanad many Senators referred to the widescale disregard for the law in relation to haulage operations and the low level of enforcement. The Transport Consultative Commission had found also that the level of observance of the law was quite poor and said that there was an urgent need for a greater commitment to enforcement, particularly in relation to safety. The commission recommended an interdepartmental committee on enforcement to co-ordinate the activities of the various enforcement authorities. The Minister felt that an interdepartmental committee might not be the most effective instrument to achieve the level of enforcement required in line with the liberalisation programme. He has now got Government approval for the establishment of a multipurpose inspectorate in his Department and the appointment of multipurpose inspectors with powers to undertake enforcement of a range of legislative measures relating to the haulage industry and to bus transport. Enforcement teams comprising gardaí and multipurpose inspectors operating at roadside checkpoints will be the principal means of enforcement. Technical experts from other Departments, for example, Department of Labour inspectors in relation to the carriage of dangerous substances, will also be able to participate in the enforcement teams. Liaison with other Departments will form an integral part of the enforcement programme. Suitable provision, accordingly, will be made in the Bill by way of Committee Stage amendment and it is hoped that the enforcement arrangements, which, of course, will be additional to and not in substitution for the existing powers of the Garda and other agencies, will be operative well before the quantitative licensing restrictions end.
There is no doubt that this Bill is long overdue. It completes the process of liberalisation initiated 15 years ago. I believe it will be welcomed by people both inside and outside the road transport industry. I am confident that efficient and enterprising operators have nothing to fear and indeed much to gain from the removal of unrealistic and harmful restrictions which prevented efficient development of their businesses. I firmly believe that a more competitive haulage industry will develop, as a result of the proposed measures, to the benefit of the national economy. I commend the Bill to the House.