I move : "That the Bill be now read a Second Time."
The Road Transport Act, 1933, imposed, through the system of merchandise licences, onerous restrictions on the private sector of the road freight haulage industry which remained practically unchanged until substantial measures of liberalisation were introduced under the Road Transport Act, 1971. The process of liberalisation initiated in 1971 entailed the removal of area and commodity restrictions and certain restrictions on vehicle weight from the main stock of general haulage licences but a final control on the number of vehicles operable by each licensee was retained. More than 500 general hauliers are confined to one vehicle; about 150 are allowed two and 70 or so have numbers ranging up to 22. These authorisations reflect in most cases the circumstances of the original undertakings involved in 1933. A number have, however, grown through the acquisition of other businesses, which has been the only means of growth open to them.
The measures in the 1971 Act were preceded over a few years by a rather less restrictive view of the then existing legislation than had been applied in earlier days. The change of approach got its impetus from the finding, following a special survey in 1964, that the overwhelming bulk of road freight transport was performed by the owners of goods using their own transport, or, by what is usually called transport on own account. Only 20 per cent in tonnage terms was carried by licensed hauliers; of this, CIE accounted for some eight percentage points and private licensed hauliers for the remaining 12. That finding, taken with the fact that the railway share of freight transport was virtually frozen to a few traffics especially suited to rail, demonstrated that the restrictive legislation maintained for over 30 years with the objective of securing freight traffic for the railways, or, road services operated by the railways, had totally failed in its purpose.
A situation where the road freight transport industry is virtually an "own account" industry and licensed hauliers carry only about 20 per cent of road freight tonnage compares very unfavourably with that in other countries for which some data is available. For example, in Germany, France and Belgium the corresponding figure is about 40 per cent; in the UK and Italy it is roughly 50 per cent and in the Netherlands a little over 60 per cent. Luxembourg is the only other EEC State where we know the figure to be as low as 20 per cent. Since the 1964 survey the situation in Ireland has changed to the detriment of licensed hauliers and it has been estimated in recent years that the tonnage of road freight carried by licensees may now be as low as 10 per cent—half the figure disclosed in the mid-sixties— which was then thought to be a startling indicator.
Too much own account transport, such as the figures suggest to exist in Ireland, must be regarded with concern because it is likely to be inefficient and to bring on to the roads an excessive number of vehicles, making it unduly costly in direct terms and in the indirect costs of wear and tear on the roads, time lost due to congestion and general detriment to the environment. We have that situation here while restrictive legislation prevents the development of an efficient and adequate professional transport fleet.
In essence, therefore, if we want to get our road freight transport into better shape the task that faces us is to get the professional industry on to a proper footing. This is the aim of the present measure and its ultimate objective is the creation of a cheaper and more efficient road freight transport system.
The ultimate objective of policy would be the creation of a haulage industry free from the frustrating quantitative controls which have given rise to so much inefficiency and regulated rather by the quality of performance required of its members. Taking account of the regulatory system that has existed until now, an unduly rapid transition towards that final objective would, in my view, prove disruptive. What we need before the eventual pattern can materialise is a period during which we can ease away old restrictions while experimenting, in so far as we can, as to the form and style of the flexible type of regulation now thought to be required.
To reflect these views, the Bill contains, as its principal measure, a proposal to ease substantially the remaining restriction on the numbers of vehicles operable on general haulage licences. The Bill proposes to permit, therefore, a minimum authorised number of six vehicles per licence in the case of the present one-vehicle firm and an absolute maximum of 80 vehicles as operable by any one licensee, whether on one licence or a number of licences held by him. The appropriate level will be settled in each case by multiplying the existing authorised number by six, subject to the over-riding maximum of 80. Section 3 of the Bill provides accordingly.
Under the new dispensation a man at present authorised to operate one truck may well be satisfied to continue his business exactly as before but under this measure he would be able to operate six vehicles if he so desired. The go-ahead enterprising haulier who has, say, four trucks will be free to operate 24 and to take his own decisions and actions in relation to the development of his business within that limit. The ceiling of 80 will be a safeguard against unrealistic investment or attempts to dominate the market while the minimum of six will ensure that no one is compelled by a legal restraint to operate a business which by being confined to one or two vehicles is, on his own calculation, incapable of giving him a fair reward for his enterprise, labour and investment. In general, I will be providing the industry with a new open framework within which I will be able to monitor its development and allow it to review its objectives.
As that process gets under way I will also be able to observe the effects of other provisions of the Bill which initiate new and more flexible techniques in the regulation of the road freight haulage industry. The most important of these arises with the creation, as is proposed in section 6, of new licensing areas to supersede the existing exempted areas, which are being abolished, and to grant licences, as of right, in those areas on the sole basis of the qualitative criteria in the EEC Access Directive which came into effect on 1 January 1978. People who were operating in those areas prior to that date will be entitled to their qualifications, in full or in part, under the directive but new entrants will have to fulfil all the necessary requirements. The radii of the new areas, based on the discontinued exempted areas at Dublin and Cork will be 20 miles as against 15 miles at present while the new areas based on those being eliminated at Waterford, Limerick and Galway will have 15 mile radii as against 10 mile radii as of now.
Review of the exempted areas is, of course, long overdue. The initial justification for them, which was to allow free transfers of goods between ships and the railway ceased to exist many years ago. If they are to be regarded as devices which ensure adequate road freight transport services in the major urban centres, they no longer reflect the expansion which has taken place over the years in those centres. The proposal in the Bill will make use of the exempted area concept under which there has been no restriction on entry to the haulage business as a basis for a type of pilot scheme in qualitative licensing.
A second experiment is intended to strengthen our position in the international haulage market. The liberal policy exercised in relation to the grant of merchandise licences for international refrigerated haulage and the outstanding performance of Irish hauliers in that field encourage me in the belief that past restrictions have kept out of haulage a vigorous force of operators who if given the necessary freedom could contribute enormously to the development of an Irish international haulage fleet. In section 4 of the Bill I am taking powers to grant licences for international haulage to Irish hauliers without being subject to the restrictive licensing provisions in the 1944 Act which at present inhibit, and would, indeed, permanently inhibit the development of any flexible licensing system. These licences would be the reciprocal of the import/export transport licences at present granted to foreign hauliers under the 1971 Act. The power to grant them may be used experimentally while the full potential of its use is being assessed.
I attach particular importance to this provision because we need to strengthen our position in international haulage and lessen our dependence on outsiders so as to reduce our vulnerability in the event of any serious difficulty arising in the international haulage market. It will not, of course, be possible to grant these licences to applicants who do not comply with the EEC Access Directive.
It is my basic aim to encourage the further development of the international sector of the Irish road haulage industry. The bulk of international road haulage is carried out under bilateral permits granted by the countries concerned and it is normal practice for countries to conclude bilateral road transport agreements with one another with a view to facilitating the operation and development of this traffic. The growth of international operation by Irish road hauliers in recent years has given rise to the need to conclude bilateral road transport agreements with the countries concerned.
With a view to facilitating Irish hauliers to obtain the necessary permits, which are sometimes required at short notice, my Department are currently negotiating such agreements with a number of European countries. Agreements with France, Belgium and the Federal Republic of Germany are already in operation. Under those agreements Irish hauliers can obtain, direct from my Department, the necessary permits to operate to, from or in transit through the countries concerned, instead of having to apply to the countries concerned for the appropriate permits.
Talks with the Italian authorities, which commenced in Rome on the conclusion of a bilateral agreement are to be resumed shortly. Draft agreements received from the UK and the Netherlands are being considered and discussions with the transport authorities of those countries are in hand. I will also consider the question of opening negotiations on similar agreements with other European countries as the need for such agreements arises for the facilitation of our hauliers.
As part of the liberalisation of international road transport, agreement is reached from time to time both in the EEC and the ECMT and also in the course of the negotiations of bilateral road transport agreements for the exemption from licensing control of certain international road freight or road passenger transport operations. While the necessary exemption in relation to EEC liberalisation measures can be made by way of Ministerial Order under the European Communities Act, 1972, there are at present no statutory provisions which would enable me to make similar exemptions in the other cases I have mentioned. The purpose of section 5 of the Bill is to remedy this deficiency.
A very important provision in section 2 of the Bill proposes the exemption from licensing controls of vehicles under 2.5 metric tons unladen weight subject to a maximum weight of six metric tons fully laden. This type of exemption is found in a number of Community enactments. I attach particular importance to it as a means by which many local rural transport problems in both commerce and agriculture may be solved. It has been very difficult to service rural areas on an efficient basis. Sometimes they have been served by large trucks which travel half-empty through the countryside to deliver very small consignments along the way. In some cases it has not even been possible to provide this kind of service. As well, there can be rural transport problems, which need a solution, in relation to the carriage of small quantities of produce of one kind or another.
After the passing of this measure a local man in an area now badly served will be free to offer transport services, in a small vehicle suitable to the local needs of the area, to his neighbours, local traders or local industry. Long hauls will be uneconomical except perhaps for the occasional express or special journey, but it will be the normal thing to serve local needs and, where appropriate, to run a groupage or a feeder service to link up with the railway or long distance transport concerns using heavy road vehicles. It is these heavy vehicles that represent major business in road freight transport and altogether, apart from the benefits which decontrol of small vehicles would offer in rural areas, I am satisfied that there is not now any justification for statutory control of haulage in the smaller units.
A further exemption for the carriage of wheat, oats and barley during the harvest period, is provided for in section 2. I am strongly opposed to commodity exemptions and would not have considered this one except that there had been for many years what amounted to an all-the-year-round exemption for the carriage of wheat which for technical reasons was discontinued following our entry into the EEC. Administrative arrangements to provide an assured supply of transport were made in succeeding years but amended legislation was clearly preferable. It was also clear that to make new statutory arrangements for the carriage of wheat without providing for barley and oats would be very difficult to justify. It would also be very difficult to justify an exemption for all cereals for the whole year. If all cereals were to be provided for then the better idea seemed to be to confine the exemptions categorically to the harvest period.
I feel sure that with their new freedom licensed hauliers in general will be able to offer a more comprehensive service to the farming community than they have done before and that the farming community will respond accordingly, resorting to the exemption only in exceptional circumstances.
I have considered representations from the licensed hauliers in relation to penalties for illegal haulage. The provisions of the 1933 Act and the Transport Act, 1958, are complicated in that they involve doubling and redoubling of fines for repeated offences up to a maximum of £320 and unrealistic in that they include forfeiture of the vehicle used. Considering the value of road haulage vehicles nowadays I think a penalty of this order would be impossible either to defend or impose, and I see no justification for retaining an enforcement provision which no one would contemplate invoking. Section 2 of the Bill proposes the simpler, more realistic fine of £250 for a first offence and £500 for second or subsequent offences. It is my belief that the need for severe fines will diminish as illegal haulage becomes less attractive through licensed hauliers being in a position to offer a better deal than they now can. Moreover, intending hauliers who have committed repeated offences will find themselves unable to comply with the EEC Access Directive and thus debarred from being granted licences even on transfer, while new licensees may find their licences invalidated if they commit excessive breaches of the law. I expect a changing picture in the enforcement field over the next few years and will keep the needs under review.
The holder of a merchandise licence is required by law to have a vehicle plate affixed to each vehicle authorised for operation and in use under his licence. Under existing legislation the plate has to be made of metal and be of uniform pattern irrespective of whether the relevant licence is restricted as to area or commodity or in any other such manner. There has been pressure particularly by the hauliers for a change which would require the use of a distinctive plate on a vehicle in use under a restricted licence. The case has been made that this would help the Garda in enforcing road transport legislation and thereby help to curb misuse of vehicle plates in some such cases where, it is claimed, they are being used illegally in connection with haulage which does not come within the scope of the licence held. I accept generally the validity of the argument made. The provision which I propose in section 7 would give me the necessary scope to prescribe different type plates for a particular type of carriage, for instance, or for use under a restricted licence.
Vehicle plates are issued by the Garda authorities. It seems desirable that they be given authority to present evidence in court by way of a certificate signed by a chief superintendent or a superintendent acting on his behalf as to the issue or non-issue of a vehicle plate in a particular case. This would obviate the need for the attendance in court of a member of the Garda to give such evidence and would be in line with a similar provision in existing road transport legislation for the presentation of such evidence as to the issue or non-issue of a merchandise licence to a particular person or company. Section 7 contains provisions accordingly.
The provision in section 9 of the Bill tackles a problem that has existed since 1956 when, in effect, it became illegal to use a hired vehicle to carry one's own goods. This measure was passed before leasing became common-place and we now have had, for many years, the serious anomaly that a businessman can lease all the premises, plant and equipment required for his business except the transport equipment. The barrier to vehicle leasing is also, I believe, unique in the EEC. Repeal of the 1956 Act could lead to an upsurge in own account transport which would run counter to the objective of the present measure. On the other hand, some easement may enable firms who have been committing capital to own account vehicles to diversify their approach and commence leasing as a stepping-stone to the increased use of professional transport. Change could also ensure the release of capital from transport investment to investment in manufacturing equipment and job creation.
I have concluded that a controlled change in the 1956 legislation is warranted. Accordingly, I have decided to provide for vehicle leasing within the framework of the merchandise licence system and to keep the position under review. The 1956 Act will remain in force but I will have power to regulate leasing outside the provisions of the Act by the attachment of conditions to merchandise licences. I might add that decontrol of vehicles up to 2.5 metric tons in weight as is proposed in section 2 effectively repeals the 1956 Act in regard to that category of vehicle.
In preparing these legislative proposals I have taken into account considerations based on a factor for which we must also have serious regard. It is that the structure and circumstances enforced on the road freight industry of Ireland have deprived able and hard-working members of the industry of any real opportunity to earn a just reward for skill, hard work, enterprise or investment. We owe to our hauliers an opportunity to demonstrate what they can do for the Irish economy before considering measures of liberalisation running beyond those contemplated in this Bill.
There is, however, more to this than a plea based on equity alone. The present position is that the enterprising haulier who wants to expand his business, say, from 2 vehicles to 3, can do so only by acquiring another business at very high cost. The measure now proposed will allow him to expand without having to undertake that financial burden so that a very substantial cost saving will have been achieved. If there were no change, the defects of the existing system would remain and increase. CIE and the other licensed hauliers would be fighting for a diminishing share of the market and own account transport, which represents the real competition for them, would continue to develop with all its adverse cost implications. The present measure offers a positive approach to current road freight transport problems. It seeks to achieve a better balance between own account and professional transport and to lay a foundation for a new regime less costly than it might otherwise be which would meet national road freight transport needs on an improved basis with corresponding benefits to the licensed hauliers, including CIE. This main objective will have beneficial side effects of several kinds including the prospect of avoiding an excessive increase in vehicle numbers on the roads and achieving a marked and rapid improvement in some sectors, notably in relation to rural transport.
The holders of the main stock of merchandise licences and the enterprising hauliers prepared to enter international transport will be direct beneficiaries under this Bill. In my opinion this is as it should be because the former are the backbone of the haulage industry and the latter are a bright hope for the future of the industry. It is up to them to take full advantage of the opportunities which the Bill affords. All transport users should greatly benefit also not only because of an improvement in the supply of professional transport but also from the greater efficiency and economy which the Bill should make possible in transport services. The freedom which the Bill offers for the use of light vehicles is potentially one of its greatest benefits and coupled with the other benefits already mentioned should lead rapidly to a new and welcome era in the development of the Irish transport industry. I am satisfied that the package is a good one. It offers progress on many fronts and it takes full account of existing difficulties without undue compromise.
I confidently commend this Bill to the House.
