§ 7.23 p.m.
§ Earl Howe rose to move, That the draft order laid before the House on 20th June be approved [23rd Report from the Joint Committee].1281
§ The noble Earl said: My Lords, I beg to move that the draft Motor Vehicles (International Circulation) (Amendment) (No. 2) Order 1991 be approved.
§ The amendment is necessary because the Motor Vehicles (International Circulation Order) 1975, as amended, at present conflicts with a Community regulation which has direct effect. Council Regulation 4059/89/EEC, agreed at the EC Transport Council in December 1989, provides for a transitional scheme allowing cabotage to take place within member states under a limited quota of cabotage authorisations. Cabotage may be defined as the carrying out of domestic transport operations by non-resident hauliers. The scheme, which represented a significant breakthrough for the United Kingdom, came into force on 1st July 1990 and will last until December 1992, when it is to be replaced by a definitive cabotage regime. Freedom to carry out cabotage is an important element in the liberalised single market that the UK wants to see in place by 1st January 1993.
§ The regulation lays down five specific areas where the performance of cabotage operations is subject to the laws and regulations of the host member state. These are as follows: rates and conditions governing the sport contract; weights and dimensions of vehicles; requirements relating to the carriage of certain categories of goods; driving and rest time; and VAT on transport services. In all other areas the laws of the member state where the vehicle is registered apply.
§ Thus with the exception of VAT on transport services, an operator carrying out cabotage is free of vehicle tax, vehicle excise duty or any other tax upon the use of a goods vehicle as long as he is operating under a cabotage authorisation in pursuance of the regulation.
§ Under the Motor Vehicles (International Circulation Order) 1975, however, visiting foreign hauliers in the United Kingdom are exempt from paying vehicle excise duty for a maximum of three months. If they stay any longer than three months, even if they are operating under one of the new cabotage authorisations, the order provides that they become liable to pay duty.
§ The provisions of the 1975 order are overridden to the extent that they are inconsistent with the directly applicable EC cabotage regulation, which, as from 1st July last year, has been part of UK law. However, it is a treaty obligation to ensure that there are no discrepancies between Community law and domestic legislation. An amendment therefore needs to be made to the order so that explicit mention is made of transport operations which are excluded from paying vehicle excise duty by virtue of being covered by a valid cabotage authorisation.
§ I trust your Lordships will agree to this minor amendment. It is needed to remove the inconsistency from the present legislation and to make it clear to the reader that foreign hauliers, temporarily operating under a cabotage authorisation in this country, are not liable to pay vehicle excise duty. I commend the order to the House.1282
§ Moved, That the draft order laid before the House on 20th June be approved [23rd Report from the Joint Committee].—(Earl Howe.)
§ Lord Underhill
My Lords, I thank the noble Earl for his explanation of this order, without which it would have seemed a little confusing to the layman. He said that the regulations took direct effect from 1st July last year. Will he confirm that they have been fully implemented in the United Kingdom from that date? The order was dated 21st December 1989. Perhaps he can explain why it has taken 18 months to introduce an amendment to the 1975 order into this Parliament.
§ Lord Shepherd
My Lords, perhaps I may ask a very short question. Following my noble friend's point that the order was dated 1989 and we are only now implementing it, can the noble Earl tell us whether other countries within the Community are yet to fulfil the obligations of the agreement of 1989 or whether we are the last to bring about ratification?
My Lords, I thank both noble Lords who have spoken. The provisions of the new order were implemented in full by the United Kingdom and other countries in the EC with effect from 1st July last year. It is quite true that it would have been tidier and strictly more correct to have brought this order before Parliament somewhat sooner than this. Part of the delay is attributable to the need to obtain precise clarification from Customs and Excise about the force of the temporary importation regulations 1961, on which the regulations contained in the 1975 order partially depend.
Whatever degree of promptness may be desirable in a perfect world, the central point here is that the law as it applies to EC hauliers is not in the least affected by the order that we are considering. The law has been firmly in place since 1st July 1990. The need for the order arises solely because a piece of current UK legislation makes no allowance for an EC Council regulation which partially overrides it. If discrepancies of this kind arise, it is necessary to eliminate them and make our rule book completely clear. In that sense what we are discussing is a technical amendment.
§ On Question, Motion agreed to.
§ Baroness Hooper
My Lords, I beg to move that the House do now adjourn during pleasure until five minutes past eight.
§ Moved accordingly, and, on Question, Motion agreed to.
§ [The Sitting was suspended from 7.29 to 8.5 p.m.]