Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence


Memorandum by the Road Haulage Association Ltd (IT 17)

THE INTEGRATED TRANSPORT WHITE PAPER

INTRODUCTION

  The Road Haulage Association (RHA) was formed in 1945 to look after the interests of haulage contractors in various areas of the country, in effect, amalgamating local organisations that had been established. The Association has subsequently developed to become the primary trade association representing the hire-or-reward sector of the road transport industry. There are now some 10,000 companies in membership varying from major companies with over 5,000 vehicles down to owner-drivers.

BACKGROUND

  The RHA welcomed the Government's announcement that, following an extensive consultation exercise, it intended to produce an "Integrated Transport White Paper". The Association considered this to be an extremely valuable opportunity for the Government to draw together and expand upon the policies that had developed under the previous administration and to set the policy framework for the next 20 or so years. As such the exercise presented an ideal opportunity for interested parties, such as ourselves, to submit their views on the full range of issues. A copy of the summary of the RHA's response to the consultation is attached for reference.

THE WHITE PAPEROVERALL IMPRESSION

  There is much in the White Paper that the RHA welcomes: indeed many of the new commitments mirror the recommendations the Association made in its response to the consultation. For example, the greater emphasis on road maintenance and making better use of existing infrastructure, the introduction of impounding for illegally operated goods vehicles, and giving priority to certain types of traffic in specific locations.

  Despite this, however, the RHA remains concerned that ultimately the White Paper will not live up to expectations and may prove to be little more than "fine words and good intentions". The primary reason behind this view is the apparent lack of new resources for spending on transport. At the time of the Comprehensive Spending Review (CSR) there was much debate within the transport world about whether or not the revised plans did actually result in any increase in resources available for investment in transport. In reality, it seems that there is actually very little new money, most of the increase coming from a reduction in the funds drawn by rail operators. DETR is however to be allowed to keep the revenue raised from the various privatisation initiatives—that in itself is a welcome development. But overall the RHA believes this situation will mean that the transport budget is far short of being able to fund the infrastructure projects and other measures that will be necessary to develop a truly integrated system capable of accommodating the transport needs of the UK for the coming years.

  In addition to the comments on investment, the RHA has been concerned by recent suggestions in the media that legislation to enact the policies outlined in the White Paper has been put on hold for the foreseeable future. Obviously there are a number of measures that can be developed relatively easily without the need for legislation. However, the policies which are expected to have the greatest impact on transport use—for example powers to introduce road user charges, the establishment of a Single Rail Authority—do indeed require new legislation. Whilst the smaller scale policies may have a positive impact, the true benefits of the White Paper can only be brought about by a combination of a number of new policy measures. Without legislation therefore, the demand for and use of the transport system within the UK is unlikely to be influenced to any great extent. Thus the White Paper will have changed the transport situation within the UK very little.

THE WHITE PAPERSPECIFIC ISSUES

Roads

  The key achievement of the White Paper in this area was the final abandonment of the "predict and provide" approach to road transport which had been pursued since the Department of Transport was first established and which reached its zenith with Cecil Parkinson's "Roads to Prosperity" wish list in 1990. Policies are now focussed much more on managing demand and making better use of existing infrastructure—an approach which is welcomed by the RHA.

  We are concerned however that at a more detailed level, the Government's approach leaves some issues unaddressed and that problems will arise when the policies are put into practice. For example, it is entirely sensible that we should not automatically assume that congestion problems should always be solved by provision of new road infrastructure and that other solutions (e.g., public transport alternatives) should be considered at the same time. Therefore we understand the Government's decision (as outlined in "A New Deal For Trunk Roads in England") to accept 37 road schemes but to reject a large number of the others on the basis that local authorities should consider alternative solutions. This decision carried with it the added benefit to Government of allowing a reduction in the financial resources allocated within the DETR budget.

  However, the RHA believes that there is a fatal flaw in the approach. It has been assumed that because certain road schemes have been removed from the roads programme, the funds can be taken out of DETR's spending commitments. But simply dropping a road project does not obviate the need for a solution—the problem does not simply disappear. The local authorities that are required to re-examine the problems will inevitably need resources to fund whatever alternative solution they identify as being most suitable. In some cases, an alternative non road-based solution may well be identified, although we suspect that in many cases the result will be the reinstatement of a road scheme. But in either situation, the solution will require additional financial resources. In the absence of funds from central Government, such solutions are unlikely to be brought forward very quickly. The result will be worsening congestion in areas already identified as having a significant problem.

Road Pricing

  The RHA has taken the view that some form of road user charging is perhaps the only policy tool with the potential to discourage "unnecessary" road journeys to any significant extent. Since the RHA believes that ultimately it will be necessary to ration road space (giving priority to essential users) we are disappointed that the decisions in this area seem to have been pushed into the next Parliament.

  In the White Paper, the Government clearly re-stated its commitment to pricing and announced that it would issue a consultation document with proposals for how road user charging schemes should operate; introduce legislation to give powers to local authorities to develop schemes for their areas; and develop pilot schemes for monitoring purposes. No timetable was given for the consultation and legislation appears now to be some considerable time away. With a much smaller road building programme and the prospect of few alternative solutions coming on line (due to lack of funds as outlined above) congestion will inevitably increase across the country. This carries serious implications both for the UK economy and the environment and is a major cause of concern for the RHA and its members.

Lorry Weights

  The RHA is pleased that the Government avoided the many pitfalls associated with allowing a maximum weight of 40 tonnes on five axles only for vehicles involved in international journeys. Such a decision would have been impossible to enforce effectively and would have put UK operators at a distinct disadvantage compared to EU operators.

  We were however, disappointed that the Government decided only to allow 41 tonnes on six axles rather than 44 tonnes. Whilst we understand the Government's rationale for the decision, the RHA believes that the case for 44 tonnes is very strong. It is important to recognise that it is not the haulage industry that determines the volumes of goods that are carried—industry and consumers decide. Therefore we do not believe that increasing the maximum weight would lead to an increase in lorry journeys as some have suggested. Indeed, it is likely to be quite the opposite. For bulk carriers (e.g., grains, aggregates, waste, liquids, etc.) which "weigh out" before they "bulk out", the introduction of 44 tonnes on six axles with road friendly suspensions would allow them to carry more goods per journey. Less lorry journeys therefore would be needed and because the vehicle would be no bigger and would have road friendly suspension, the impact on the environment would be less than if the same amount of goods were carried in 38 tonne (or 40 tonne) vehicles with five axles. In view of this, the RHA believes that not allowing 44 tonnes makes no sense in environmental terms. We are pleased therefore that the issue will be considered further by the newly created Commission for Integrated Transport.

  However, equally as important to our members as the decision on maximum weights, is the Vehicle Excise Duty (VED) rates that will apply to the new categories. RHA members have been waiting for some time for these decisions to be taken—the original consultation concerning maximum lorry weights was conducted prior to the General Election. In the absence of a decision, many hauliers have simply put their purchasing decisions on hold. The Government's announcement in the White Paper goes some way towards solving the hauliers' dilemma, but until the VED rates have been announced our members are still unable to take decisions about which vehicles will make the most commercial sense.

  In the White Paper the Government stated clearly that it wished to encourage the use of six axled vehicles (based on the argument that they are more environmentally friendly) and would set VED rates to reflect this position. If rates for the new categories are calculated using the current system (based on axle loadings) this implies that the rate for a 40 tonne vehicle on five axles will be extremely high. Estimates have ranged from £7,500 to £9,500 per annum—some 10 to 12 times the rates that apply in many other EU countries.

  The prospect of such uncompetitive rates in addition to by far the highest diesel duty rates in the EU is alarming UK hauliers. Their concern is at such a level that many are considering "Flagging out"—i.e., registering their vehicles abroad whilst operating within the UK under cabotage arrangements—to enable them to take advantage of lower costs. In response to members' concerns, the RHA is actively researching the practicalities/legalities of "flagging out" and although our inquiries are at a relatively early stage, we do believe that it will be a practical proposition for certain operators. Such action is likely to be most attractive to companies whose operations attract costs that are significantly higher in the UK than would be the case elsewhere in the EU (for example companies operating 40 tonne, five axled vehicles). Clearly if this were to occur on a large scale, the implications for the UK businesses and the economy as a whole would be very significant.

CONCLUSION

  As outlined at the beginning of this Memorandum, the RHA welcomes the fact that the Government has produced the first Transport White Paper for nearly 20 years. We believe also that the exercise has been very valuable in encouraging interested parties to think more broadly about the transport problems and solutions within the UK. The resulting document should be commended for many things, including the fact that finally we have a comprehensive statement of the Government's views on various policies and measures set out in a straightforward manner.

  However, the RHA cannot help but feel that overall, a great opportunity has been missed. We share the view of many other organisations in believing that in order to bring about a real improvement to the transport situation in the UK, or to exert significant influence on the ever increasing demand for travel, a truly radical approach would be required. Sadly, we do not believe that "A New Deal For Transport: Better For Everyone" delivered such an approach.

September 1998





 
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