The purpose of the Bill is to make provision for a further stage in the liberalisation of road freight transport.
Before dealing with the Bill itself I would like to dwell briefly on the events which led up to the proposals which it contains.
The merchandise licensing control restrictions which have seriously inhibited the development of the private sector of the haulage industry were introduced by the Road Transport Act, 1933 and have not been changed fundamentally since then. Because the control system was so seriously restrictive and because it remained almost unchanged for virtually 40 years it had not been possible, as yet, to dismantle it to any significant degree for fear of causing an upheaval in the haulage industry which could easily negative any well meaning but unduly hasty effort to make the necessary changes. The process of liberalisation which the 1971 Act initiated 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 specific 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 sizes 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.
For some years before the 1971 Act there was a change of approach in the adoption of a less restrictive view of the then existing legislation than had been applied in earlier times. 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. This is usually called own account transport. Only 20 per cent in tonnage terms was carried by licensed hauliers; of this, CIE accounted for some 8 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 the railway owned road services, had totally failed in its purpose.
These circumstances in which 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 favourably with the situation in other countries where data of the same type 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 one.
This can hardly be regarded as a healthy situation for the road haulage industry and it is one which must, in very large measure, be attributed to the restrictive legislation which has prevented that industry from providing an attractive alternative to the own account operator who so often must feel that in using his own vehicle he has no option but to accept the penalty of one-way only laden journeys and other significant under-utilisation of vehicles, not to mention the consequential unnecessary diversion of effort and resources which this entails. Apart altogether from the loss in potential business which unnecessary own account operation represents to the haulage industry such operation calls for the use of excessive numbers of vehicles since, in so many cases, it is necessary to have two to do the work of one. It also involves an unproductive diversion of scarce capital which is badly needed and should be left available for investment in manufacturing plant or job creation.
The immediate policy aim is, of course, to free the licensed haulier as far as possible from any unnecessary legislative restraint and to allow licensees sufficient scope to tailor service to demand with more efficient transport at economical rates. In this way the licensed haulage industry will have the same opportunity as the other private sectors in the economy to manage its own affairs in the manner which it considers best suited to the circumstances. I will be disappointed if hauliers do not take this opportunity and I will watch developments in that regard very closely.
The proposals in this Bill do not stand alone in attempting to promote conditions conducive to the emergence of a first-class haulage industry. The EEC Access Directive, which came into force on 1 January 1978 will ensure that newcomers to the haulage industry will be of good repute, have sufficient financial resources for the business and be professionally competent, and that those who entered the industry in recent years will also have to prove their professional competence. Two provisions in the Bill are directly related to this directive. In addition the vehicles used in the haulage industry will be made subject to quality requirements to be drawn up under EEC auspices. It can be seen, therefor, that there will be a new emphasis on quality both as regards the capability of the haulier and the standard of the vehicle he uses.
These in outline were the considerations which governed my approach to the framing of the proposals in the Bill. If the proposals are considered by some to go too far and by others not far enough this is inevitable when so many and to an extent conflicting interests are involved. Like all such proposals, if enacted, they depend for success on an adequate response from those whom they are intended to directly benefit. The measure of this success will depend on the degree of response. The hauliers, who hold the key to such success will, no doubt, be anxious to respond, both because of the opportunity which the Bill presents to the haulage industry and also because of the responsibility which the industry has to the rest of the community. The manner in which future policy is developed and the nature and pace of further amendments to road transport legislation will naturally be affected by the way in which the industry develops under the more favourable regime which the Bill will create.
In view of the foregoing considerations and of the emphasis which has been laid on the part of the haulage industry is expected to play, you will readily appreciate that the principal proposal in the Bill is one which is intended to give the necessary freedom to the haulage industry to play its full part.
Section 3 of the Bill proposes that the number of vehicles presently authorised for operation under each general haulage licence be multiplied by six but that any one licensee may not operate more than 80 vehicles. At the moment each licence specifies a certain number of vehicls which may be operated under the licence. In most cases that will be one vehicle so that the new permitted number will be six in those cases. What this means in practice is that the haulier will be able 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 the basis of his own assessment, 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 these developments get 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 licencs, as of right, in those areas on the sole basis of the qualitative criteria in the EEC access directive which I have already mentioned. People who were operating in those areas prior to 1 January 1978, will be entitled to their qualifications, in full or in part, under the EEC 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 ten mile radii as of now.
Review of the exempted area 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 areas they no longer reflect the expansion which has taken place over the years in those centres. For example, there has been pressure to allow hauliers in the exempted areas access to the building sites and industrial estates which are just outside or a few miles outside the exempted areas. Although a reasonable case has been established in favour of the grant of such an extension, it is not an acceptable proposition simply to extend the exempted areas to facilitate such hauliers and the appropriate alternative is to license them to operate in somewhat larger areas than the existing exempted areas. It is worth stressing, I think, that 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. This, I think, is an important step.
I will be able to experiment in another way in relation to 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 haulers in that field encourages me in the belief that past restrictions have kept out of haulage people of real energy and enterprise 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 propose to take powers to grant licences for international haulage to Irish hauliers without having to refer 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. I may exercise the power to grant these licences on a rather experimental basis 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 in the event of any significant changes occurring 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.
I am very impressed by the rate of progress being made by the international sector of the road haulage industry and I want to encourage the industry to develop further in that field. In this connection I attach great importance to the negotiation of bilateral road transport agreements with other countries. The bulk of international road haulage is carried out under bilateral permits 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.
My Department are currently negotiating a series of such agreements with a number of European countries. Agreements with France, Belgium and the Federal Republic of Germany are already in operation. The agreements enable Irish hauliers to obtain, direct from my Department, the necessary permits to operate to, from or in transit across the countries concerned, instead of having to apply to the transport authorities of those countries.
Work on the negotiation of further agreements is proceeding. Talks with the Italian authorities, which commenced last year, on the conclusion of a bilateral agreement are to be resumed very shortly. Draft agreements received from the UK and the Netherlands are being considered in my Department. As the need arises the question of opening negotiations on similar agreements with other European countries will be considered.
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. The necessary exemptions in relation to EEC liberalisation measures can be made by way of ministerial order under the European Communities Act, 1972, but there are at present no statutory provisions which would enable me to make similiar exemptions in the other cases I have mentioned. The purpose of section 5 is to remedy this deficiency.
There is a very important provision in section 2 which provides for 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 European Community enactments and is one which I am sure will solve many of the problems to which local transport needs give rise particularly in rural and especially in remote areas. The large truck favoured by the licensed hauliers has not been really suitable or capable of being economically used for such traffic because of the nature of the traffic and the short distances normally involved. After the passing of this measure it will be open to enterprising local men in each area to provide the light vehicle road freight services that may be needed locally. In doing so they will be able to get valuable experience which should be very useful if they subsequently wish to enter the haulage industry at national or international level. It would also give full freedom to those who wish to provide groupage or express services to do so within the terms of the proposed exemption. In fact, I also see the light vehicle service as a complement to and a feeder service for the heavy road vehicles which represent the major business in road freight transport and, indeed, for the railways as well. In all the circumstances I am satisfied that there is not now any justification for statutory control of haulage in the smaller units.
Section 2 proposes another exemption from licensing requirements to cover the carriage of wheat, oats and barley during the harvest period. I am opposed to commodity exemptions and would not have considered this one except that there had been for many years what amounted to an all year round exemption for the carriage of wheat. For technical reasons this was discontinued following our entry into the EEC and while administrative arrangements to provide an assured supply of transport were made in succeeding years 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 exemption 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.
The licensed hauliers have made representations to me 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. There are provisions for both minimum and maximum fines and the whole arrangement is difficult to interpret and administer. Considering the value of road haulage vehicles nowadays I think a penalty of forfeiture of vehicles 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.
I should add that 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.
Every licensed haulier is required by law to have a vehicle plate affixed to each vehicle in use under his licence. Under existing legislation the plate has to be made of metal and be of uniform pattern irrespective as to whether or not 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 cases where, it is claimed, vehicles 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 the use under a restricted licence.
I have decided that it is desirable that the Garda Síochána, who issue vehicle plates, 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 evidence in relation 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. The purpose of the 1956 Act was to prevent people who had no licences from using their vehicles for reward by hiring them out —a loophole which existed in the legislation of the time. This measure was passed before leasing as we know it today became commonplace 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 for transport equipment. The barrier to vehicle leasing is also, I believe, unique in the EEC.
Repeal of the 1956 Act would, of course, open again the loophole which it was intended to close in the first place and could also 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 commiting 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 manufacture and job creation.
Accordingly, I have decided to provide for vehicle leasing within the framework of the merchandise licence system by making it legal to lease out vehicles if the lessor holds a merchandise licence. 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 appropriate conditions to the 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. The situation in relation to leasing will be an evolving one and I will keep developments under close review.
In preparing these legislative proposals I have taken into account the consideration 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 and 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 will be an immediate cost saving for hauliers who want to extend their businesses. The present position is that the enterprising haulier who wants to expand say, from two vehicles to three, can do so only by acquiring another business at a 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.
Unless we have changes the defects of the existing system will remain and probably increase. CIE and the other licensed hauliers would be competing for a diminishing share of the market and own account transport, which represents the real competition for them, would continue to develop with 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 excessive increase in vehicle numbers on the roads and achieving a market and rapid improvement in some sectors, notably in relation to rural transport.
The Bill will be of direct benefit to the holders of the main stock of merchandise licenses and the enterprising hauliers who are prepared to enter international transport. This is only as it should be. The haulage business of to-day is based on the former; the latter represent the hopes for its future. It is up to them to take full advantage of the opportunities which the Bill affords. The matching purpose is to secure benefit for all transport users not only with an improvement in the supply of 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 a great benefit for rural areas and along with others 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 take full account of existing difficulties.
I confidently commend this Bill to the House.
