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


Memorandum by Chemical Industries Association (IT 46)

"A NEW DEAL FOR TRANSPORT:
BETTER FOR EVERYONE"

The Government's White Paper on the Future of Transport

INTRODUCTION

  1. In August 1998, following the publication of the Transport White Paper in July, the Chemical Industries Association (CIA) formed a small working group to look at the issues it raised. The purpose of this ad hoc group has been to seek an industry consensus on the main matters that affect the chemical industry in particular, so as not merely to duplicate, for example, the work of the CBI or Freight Transport Association.

  2. Participation in this group included representatives from the following range of British (or UK-based) chemical companies:

    BP Chemicals; Shell UK; AH Marks (Bradford): Solutia (Newport, Wales); Carless (Romford); Dow Chemical (Kings Lynn); Ciba Speciality Chemicals (Manchester).

  3. The CIA hopes that the Committee will find the following comments useful. It offers them on the basis of the policy set out in the White Paper itself, as, of the so-called daughter documents, only the roads reviews for England and Wales have so far been published.

THE CHEMICAL INDUSTRY IN THE UK

  4. The chemical industry is one of the UK's most successful manufacturing industries with:

    —  11.5 per cent of manufacturing output;

    —  2.5 per cent of GDP;

    —  an average, annual trade surplus of £4 billion;

    —  240,000 direct employees—and three times that number indirectly.

  5. The Chemical Industries Association is the predominant trade and employers' association for the industry, with 200 members operating from 700 sites nationwide. The CIA has close links with related organisations in the UK and co-operates extensively with the pan European chemical industry federation, CEFIC.

  6. To put our interest in transport into some perspective, in 1997, 80 per cent of our members' manufacturing sites reported distribution data to us, accounting for some 48 million tonnes of products distributed. In tonnage terms, 49 per cent of this was distributed by road, 25 per cent by pipeline, 23 per cent by sea, 3 per cent by rail and 0.06 per cent by air.

COMMENTS THAT MAY BE COMMON TO MANUFACTURING INDUSTRY AS A WHOLE

Road Congestion

  7. We support the urgent need to reduce traffic congestion, which would help industry by reducing delivery times, but urge that this be done by taking steps to increase the attractiveness of rail first, as an option for transporting freight, rather than simply by penalising commercial road users per se via motorway (and other road) tolls. Moreover, we believe that road charges should be framed in such a way as to encourage free use of the national road network at night, when it is currently under-utilised.

  8. The industry recognises and welcomes the importance of the emphasis placed by the White Paper on the role of local debate and influence on local transport plans. However, we are concerned by the degree of influence that local authorities will have over the management of so much of the national road network given the Government's substantial proposals for "detrunking" large parts of it. We believe this may give rise to some strange distortions in a country so relatively small as the UK. Broadly-speaking, strategic traffic management should be dealt with at national level.

Rail

  9. We welcome the requirement on the proposed Strategic Rail Authority to ensure that the railway meets the needs of freight customers, and that the role of rail freight be promoted. Although investment in rail facilities currently attracts grant assistance from the public purse, no allowance is made for operating costs. Rail operators need a certain critical level of volume before routes allow break-even operation. A critical start-up gap therefore exists.

  10. We support the development of Trans-European Networks where they further European and UK transport objectives and offer an additional incentive to transfer freight from road to rail. In particular, we endorse the concept of the Transport European Rail Freeways (TERF) as a means of facilitating freight movements around the EU.

  11. The industry notes that, however good the rail freight network, there is no getting away from the fact that where chemical plants are located some miles away from a railway that lorries will be required to at least ferry products between the plant and the rail head concerned. In addition, where the potential rail leg of any distribution system is relatively short, the economics of road haulage are always going to prove more attractive.

Ports

  12. The intention to integrate ports with wider transport networks makes good sense; it would make the choice to transfer more freight from road to rail more attractive. In the industry's experience, there are already good rail facilities at the likes of Immingham, Felixstowe, Teesport and Thamesport. On the other hand, facilities at Dartford, Purfleet, Tilbury, Harwich, Hull and Dover are far less advanced. Given the traditional concentration of the British chemical industry either side of the Pennines, better rail links from west to east and the ports on both sides could remove a considerable amount of traffic from the overburdened cross Pennines motorway, the M62.

Canals, Inland Waterways and Coastal Freight

  13. Generally, British inland waterways are too small to facilitate freight traffic and many chemical plants are physically a long way from the 200-year-old canal network. Nonetheless, there are some areas where customers and suppliers are linked by inland waterway and where use is already made of this facility. The industry urges the Government to consider extending its system of grants for rail freight facilities to the canal and inland waterway system. Ship fees and dock dues have long disadvantaged coastal freighters in favour of the ubiquitous lorry.

Fuel Costs

  14. The industry is extremely concerned by the ongoing increases in fuel duty, particularly on diesel, where costs are already higher than on continental Europe. These trends threaten to make the UK less competitive, especially as we are at the western edge of an trade area growing to the east. We therefore urge that Government give serious consideration to concessions for the commercial use of petrol and diesel fuel.

COMMENTS SPECIFIC TO THE BRITISH CHEMICAL INDUSTRY

Parking Charges

  15. The White Paper makes reference to the potential for parking restraint strategies, including a local authority levy on parking at the workplace. Such a move could have a serious impact on the chemical industry, many of whose sites are, by nature, located away from urban centres of population and include work forces drawn from a wide area, with a significant number of shift workers. These factors make chemical industry employees particularly dependent on their own, private transport. In this regard, the industry notes the exception already made for customer parking at out-of-town shopping centres.

Pipelines

  16. We can find no reference in the report to the potential of additional pipelines for the transport of bulk products, including chemicals. Has the Government considered this, particularly the possible provision of incentives to companies to construct pipelines as an alternative to road use?

Heavy Goods Vehicles

  17. The continuing delay in the introduction of 44 tonne HGVs is disappointing. We are sceptical, whatever the new and attractive VED incentive, that the industry will wish to move to six axle, 41 tonne vehicles, when they can currently retain five axle, 40 tonne equivalents. Although we understand the desire to see freight switched to rail, there is no need to do this at the expense of the volume of traffic that will inevitably remain road-based. In any case, the likely growth in the total freight market over the next decade is about the same as that segment aspired to by the rail freight operators.

  18. In addition, some chemical industry products are inevitably hazardous and, as such, debarred from transport through the Channel Tunnel. We believe that for the more efficient and safer transportation of such goods, a dispensation should be given for 44 tonne lorries carrying such cargo overseas to use roads throughout their journey, just as a dispensation already exists for their use in combined rail/road application.

CONCLUSIONS

  19. As the above comments indicate, the chemical industry is broadly supportive of the proposals set out in the Government's Transport White Paper. The industry's main transport goals might be summarised as cost effectiveness, timeliness and safety. In theory, the White Paper meets all those goals.

  20. In practice, what concerns us is the news that the legislation to implement some of these proposals may be delayed until 1999-2000. This risks increasing short to medium term congestion and upsetting the balance of the Government's aim to balance its broader social, environmental and economic objectives, bearing in mind that the former are absolutely dependent on the latter.

Political Office

Chemical Industries Association

24 September 1998


 
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