Thank you for your letter of 19 June 2007[36] requesting to be kept informed of progress on the negotiations on the Safety Directive. I am writing to bring you up-to-date with progress on all three documents and to let you know that the Portuguese Presidency is keen that the Council should reach a political agreement on the whole package at the Transport Council of 29-30 November. The Presidency and Commission have been working closely with the European Parliament and a first reading agreement has been reached between the institutions, allowing the reformed rules and procedures to enter into force in the near future.

  I am pleased to report that successful discussions at Working Group mean that we have secured a number of improvements to the Interoperability Directive which will benefit the UK rail industry. These include new provisions on Type Approval of Vehicles, which allows for Member States to authorise a `type of vehicle' enabling all further vehicles of the same `type' to be automatically authorised to be placed into service in that Member State. This could help to reduce costs and the administration burden of seeking further approval by UK railway undertakings and manufacturers. We believe that the revised Directive provides a step forward in removing unnecessary protectionist requirements, particularly as the Safety and Interoperability Directives have become more aligned to ensure that checks are kept to a minimum.

  The key changes that have been proposed in the Safety Directive are the inclusion of a new provision on a voluntary scheme for the maintenance of vehicles which is valid throughout the Community. This will help to prevent Member States requiring further checks of the maintenance regime for any vehicle that has been certified. We welcome the flexibility of making the scheme voluntary but with mandatory recognition across all Member States. This is important as the term `keeper' covers both freight and `passenger services'. The latter already have requirements in their safety management system on maintenance of vehicles. If a keeper does not participate in the scheme then the burden of proof is with them to provide evidence to a railway undertaking or National Safety Authority that their vehicle has been adequately maintained and is safe to operate. The European Railway Agency has been tasked with taking forward the scheme and analysing the relationships between the various players in order to provide the clarity that the sector requires. This is set out in the amended European Railway Agency Regulation which forms part of this package.

  To support the maintenance provision there are new definitions of "keeper" and "entity in charge of maintenance" in the Safety Directive. Whilst we were initially sceptical of the need for more than one definition, the Commission argued that two definitions were needed in order to allow for flexibility in the market and this was supported by Member States. The Commission have included a specific recital explaining the types of players that could be included within the definition of keeper. This provides the necessary clarity on who would come within the definition. We have also secured a number of small changes to the Safety Directive which removes unnecessary bureaucratic requirements on the Member States.

  The European Parliament (EP) Transport and Tourism (TRAN) Committee adopted its reports on the three Commission proposals on 26 September 2007. These will be voted on at the Parliament's Plenary of 28-29 November.

  Unfortunately this means it will not be possible for the Department to report the outcome of it to your Committee in advance of the Council, however we are confident that the plenary will support the amendments made at Committee stage.

  On Interoperability, as mentioned above, the EP and the Council have adopted very similar positions. Following a series of meetings between the representatives of the Council, Parliament and Commission, a text has been agreed that will now be put to the EP Plenary for adoption. This has cross-party support and we have no reason to believe that it will not be adopted. The same text will then be agreed as the Council's political agreement on 29 and 30 November at the Transport Council.

  On Safety and the Agency, the TRAN Committee and Council positions, and that of the Commission, are also very similar. It is unlikely that, on technical proposals such as these, that the EP Plenary will adopt an Opinion that is different, other than minimally, from that of the TRAN Committee.

  In the Safety Directive, Member States and the TRAN Committee agree on the most significant amendment to the Commission proposal: transferring Article 14 of the current Safety Directive, and Article 14a of the Commission proposal for a revision, to the Interoperability Directive. This brings together all the main provisions concerning the placing into service of railway vehicles: this example of legislative simplification has been welcomed by the rail industry. Otherwise, the TRAN Committee's amendments are largely technical rather than political in nature and do not, in most cases, present a serious obstacle to an agreement with Council. Amendments concern, for example: adding "improving the health and safety at work" to the Directive's objectives; revised definitions of "national safety rules", "essential requirements" and "keeper"; comitology; roles and responsibilities for vehicle maintenance; and the setting up of a mandatory certification system for keepers of vehicles. This last point is the most at odds with the Council position: Member States support the creation of a certification system for the "entity in charge of maintenance" but consider that it is unnecessary for this to be mandatory. This is to enable flexibility in the market as the provisions cover both freight and passenger vehicles. Whilst the freight sector is supportive of a mandatory scheme, the passenger operators and manufacturers are not. It is likely that this issue will not be included in the political agreement.

  The TRAN Committee adopted a relatively small number of amendments to the ERA Regulation proposal. These mainly relate to enhancing the roles of the Agency in relation to providing technical opinions and the management of rules relating to vehicles. These issues have been covered elsewhere in the Interoperability and Safety Directives.

  The one which Council had most concerns on was a proposal for the Agency to have a role in the future in issuing authorisations for the placing into service of railway vehicles. Member States and the Commission agree that it is too soon to consider such a step, particularly without any proper analysis of this possibility or any evidence that it would lead to an increase in efficiency or rail safety. This will not therefore be included in the political agreement of the Council and will need to be discussed further with MEPs.

  Throughout the negotiations, UK has played an eminent role and is now recognised by the Commission and other Member States not only as a key player on rail interoperability and safety issues but as being at the forefront of efforts to break down the remaining barriers to cross-acceptance of vehicles. Whilst we have not been able to make the strides forward that we and the UK industry would .ideally have liked, we are well-placed to work with the Commission, the industry at UK and EU level, and other Member States to press for the completion of this work in the coming years. We also believe that the final proposals are a positive result for the UK.

  A copy of the draft Impact Assessment is attached (not printed) and a full and detailed one will be be available during the implementation stage, when the department consults open proposals to amend existing legislation.

19 November 2007