On June 23 2016, the United Kingdom went to the polls to answer a simple question; do they wish to remain part of the European Union?
The predications swayed for a win from one side and then the other, which perhaps accurately reflects the balance of views with the Leave campaign winning by just 51.89%. In relation to the transport industry, the polls indicated overwhelming support for leave with drivers and Operators consistently indicating that they intended to vote leave (FairFuelUK poll showed 69% of drivers preferring to vote leave up to 23 June).
In the immediate aftermath of the result, which shocked even the most committed leave campaigners, there was considerable speculation about what will happen next and we are now seeing David Cameron, George Osborne and the Governor of the Bank of England emerging to take back some control and try to give comfort to a very worried nation.
In order for the referendum decision to take effect, the United Kingdom must formally give notice to the EU under Article 50 of the Lisbon treaty. There is no timescale in which this must happen and it is likely to be decided by the next Prime Minister whom is predicted to be in place by September 2016. Once Notice is formally given there is a two year window to negotiate our exit from the EU. The two year window can only be extended if all member states agree and the same unanimity is needed for any terms of the exit.
Under the terms of exit, the level of freedom of movement of people and goods between the UK and EU will be decided. Both Switzerland and Norway, who were never part of the EU, have made concessions regarding immigration in order to have favourable trading terms with the EU (i.e. regarding quotas or taxation).
In the transport industry, the support to leave the UK seemed to come from a frustration with having so many rules and regulations imposed by the EU which affects their day to day business.
What may not have been clear to those voters, however, was that many EU rules and regulations are now entrenched into UK law and will not become ineffective when we leave the EU. For example, the rules on EU drivers’ hours were formerly contained in Regulation 3820/85/EEC and then came EC Regulation 561/2006. The 2006 Regulation was brought into force in the UK by the Drivers’ Hours and Recording Equipment Regulations 2007. Similarly the rules on use of tachographs were enshrined in UK legislation and also more recently the driver CPC rules, which is an unpopular regime in the industry – Driver CPC was implemented in the UK by The Vehicle Drivers (Certificate of Professional Competence) Regulations 2007. Furthermore, Driver CPC and drivers’ hours and tachograph rules are also covered by the snappily titled European Agreement concerning the Work of Crews of Vehicles Engaged in International Road Transport, or the AETR agreement – this is signed by the UK and other European countries outside of the EU and will no doubt remain to enable ongoing international trade.
Perhaps most controversial and unpopular of all has been drivers’ working time, Directive 2002/15/EC. This was implemented in the UK by the 2005 Road Transport (Working Time) Regulations, and under the Government’s Red Tape Challenge in 2014 the industry sought for this to be dis-applied, but to no avail. It protects workers rights and so again its provisions are unlikely to be over turned.
Now that these and other EU rules have become part of UK law, they will need to be specifically amended or repealed and replaced with alternative measures. In such a strictly regimented system of compliance, it will not be desirable to make any dramatic changes which will lead to confusion and non-compliance. The cost of re-training the entire industry so shortly after the introduction of the CPC could also be a bar to the government’s willingness to change in legislation. The government will wish to have a safe and reliable system to ensure that the public is not put at risk. One must also remember that, regardless of the deal which is struck, there will be demand for carriage of goods across the borders. Any trade deal on the part of the EU will attempt to protect the EU’s status as a competitive ‘state’ and ensure safety of those coming into the EU, which is a further justification for insisting that the implemented provisions continue to apply.
Clearly the UK will have a new freedom to be flexible and change the laws relating to vehicles, drivers and Operators in the coming years, but as with any other legislative change, it is not a quick or easy process. This can take years from consultation to coming into effect. Most MPs will be lobbied to discuss changes in a vast number of areas and there will only be so much time in Parliament and limited resources to see the process through. It will therefore be extremely important for those in the industry to get behind the trade associations and voice their opinions. Lobbying for change can then be prioritised from this platform.
We will start to see differences emerging in the EU versus the UK once these items are debated by UK Parliament in the years to come, but more particularly when the EU begins to implement new laws which won’t take effect in the UK. For instance, the EU is currently debating major changes to the Operator Licensing Regime, to include large vans of less than 3.5 tonnes. This would not automatically be incorporated in the UK but it may be forced upon us as a condition of any trade deal. The decision to leave the EU will then become somewhat ridiculous as we have the rules imposed without any influence over the way the legislation is drafted in the first instance. Operator licensing itself pre-dates the EU and was invented here so once more we are unlikely to see any major change.
On a practical and logistical level, we may see a number of other significant effects of Brexit. Immediately there was a drop in the value of the pound and therefore petrol prices rose. If the economy is unstable, the demand to move consumer goods or building materials could drop with a reduction in consumer spending and business investment over the coming months and years. These will all have a knock on effect for many hauliers in the industry.
For those who transport goods internationally, aside from any increased costs, there may be further delays at the borders with new controls and customs clearance etc., which will inevitably result in extra costs.
For now, we have no option but to wait and see what happens next, but at a time when everyone is seeking government assurances it is important that the road transport trade associations are centre stage and that the transport industry’s voice is heard loud and clear.
For help with the legal implications of Brexit for road transport please contact our road transport and employment law solicitors on 0115 910 6239