Examination of Witnesses (Questions 380
- 399)
WEDNESDAY 22 MARCH 2000
MR DAVID
LOWE, MR
GRAHAM EWER,
MR MIKE
GIDLOW, MR
ANDREW IVES
AND MR
DAVID ATTON
380. So you do not have the figures on that?
(Mr Ewer) No.
381. May I ask the last question? You say that
Government should take prompt and positive action to harmonise
fuels and excise duties. By gosh, that is a political hot potato,
but nevertheless it is in your document. Presumably you mean reduce
them downwards, not upwards? Harmonise downwards, presumably.
But what about the damage that is done, or allegedly done, by
heavy goods vehicles to our environment and our roads and so on?
Is not the oft-quoted figures that suggest that the Government
get in £35 billion off vehicle taxation and only spends £6
billion and we are also advised that heavy goods vehicles only
contribute about 70 percent of their total costs in terms of the
environment and damage. Is it true therefore that heavy goods
vehicles are effectively camouflaged in terms of cost and benefit
and damage because of the contribution of the private car? Should
we not take away the private car contribution and just concentrate
on the costs and damage and benefits of heavy vehicles?
(Mr Ewer) I think, Mr Stevenson, I come back at that
in a slightly different way. It has been alluded to earlier on,
and that is the proportion of cars to goods vehicles. There are
420,000 goods vehicles or thereabouts versus 22 million cars and
one cannot therefore say, I would have thought, that the damage
and the wear and tear on roads is totally at the feet of the heavy
goods vehicle. Your question was a number of questions in one,
as I read it. What we were seeking here was to call for a level
playing field and perhaps you would like to come back at me again.
Chairman: Do not worry, Mr Ewer. I think he
has had his lot, actually. He can come back to you in due course.
Dr Ladyman?
Dr Ladyman
382. May we just start again from the first
question where you made this claim that the United Kingdom industry
was the most efficient? Was that based on a mean cost to a customer
of moving a tonne of goods over a kilometre? Was it that sort
of calculation that was done to make that assessment of efficiency?
(Mr Ewer) Mr Lowe, you might like to answer that?
(Mr Lowe) No, it was not based on that sort of cost.
It is really anecdotal evidence that the United Kingdom logistics
industry is renowned throughout Europe as being the most efficient,
the leader, in logistics operations here and in Europe, but we
do not have actual cost figures.
383. We do not have an assessment from customers
that the industry moves goods more cheaply? Do we have an environmental
impact assessment?
(Mr Lowe) No, we have not here and now; no.
384. Okay, so we do not have any environmental
information. We have just heard from Mr Stevenson that it has
been suggested to us that the industry does not meet the full
costs to society. It does not meet fully the cost of road repairs
or other considerations. Do you accept that as a notion?
(Mr Lowe) I do not accept it. We have heard the story;
it has been repeated often enough over the years, but I cannot
say that I have seen any clear-cut evidence to prove that case.
385. But you have not done an environmental
impact assessment?
(Mr Lowe) No, we have not.
386. So effectively there is no absolutely scientific
evidence whatsoever other than hearsay to back up this notion
that the United Kingdom industry is efficient in any respect?
(Mr Lowe) No there is not. I do not believe so, no.
387. In that case, how do you sustain the argument
that the industry is losing efficiency as a result of the road
fuel escalator?
(Mr Lowe) Again, we are reliant—because we are
not, as the Institution of Mechanical Engineers have said, they
do not operate vehicles, we do not operate vehicles or employ
drivers and so we have not had the facility to make those comparisons.
We are reliant upon the hearsay evidence, as you say, from our
members and individual members of our Institute and so we have
relied on that. We have not had the actual operating information
back from customers and compared them.
388. Let me come back then to feedback from
actual operators. I represent an East Kent constituency which
has a very large number of operators. They have argued with me
about the level of fuel duty and certainly I have seen some evidence
that one or two of them are doing an extra trip to France occasionally
to fill up their tanks, but I have seen no evidence of flagging
out to Europe, which was one of the suggestions that was being
made heavily last year. Now in the light of what you said, that
there is no scientific information to back up a claim of efficiency,
there is no evidence as far as I can see of flagging out having
actually occurred, would it not be a reasonable supposition for
us to make that the Government when it has argued, as it did at
the time of the debate on fuel duty escalators, that there were
other counter-balancing factors in the United Kingdom that benefited
the haulage industry and were not available to foreign competitors.
Would it not be reasonable from what we just discussed that they
were actually correct?
(Mr Lowe) It would be reasonable to assume that, but
based on the information we have and the advice we have had from
the road haulage industry through our membership, that is not
the case and the road haulage industry—
389. But none of that is scientific, none of
that is measured, you have no quantification for any of that?
(Mr Lowe) No, but have we had quantification that
the Government's figures were—that their figures, their
supposition that if you take social costs of employment in European
countries and so forth and of the excise duties and the fuel duties
that there was no benefit in flagging out.
390. Is not the proof of that pudding in the
eating, that this large scale flagging out has not occurred?
(Mr Lowe) Not necessarily, because I think the fact
that the large scale flagging out has not occurred is not anything
to do with the economic factors. It is much more to do with the
fact that legal problems have arisen over questions of goods vehicle
licensing and registration of British owned vehicles in European
countries, which meant that they were registered there to get
the reduced vehicle excise duty. Therefore, because they were
registered there they carried registration plates from those countries,
Holland and Belgium and Luxembourg, etc, and those vehicles then
appeared to be contravening United Kingdom operators' licensing
regulations by being specified on United Kingdom licences. That
has been further brought to light by the fact, as I understand—again
it is only anecdotal evidence—that the French authorities
are now very concerned and taking action against British owned
but foreign registered vehicles operating through their territory.
391. So what it sounds like to me that you have
just said is that the people who tried to flag out wanted to avoid
the social costs of operation across the channel in order to avoid
British fuel duty, but they wanted their cake and they wanted
to eat it?
(Mr Lowe) I would not necessarily say that they were
trying to avoid the social costs. I think they were trying to
escape the fuel duty and the vehicle excise duty costs that were
here—
392. And not to pick off the counter-balancing
costs that the Government always said were in place?
(Mr Lowe) But they were brought up short by the fact
that whereas initially when the whole idea was first mooted, they
thought that this was an easy way out, they were brought up short
when the full legal implications became apparent. I do not think
they were trying to escape the social costs.
Dr Ladyman: Just one final question, Madam Chairman,
and perhaps to the other witnesses this time. Given what we have
just heard which sounded to me like an inability to justify the
claim that increased fuel duties were a bad thing, do you think
that supports or not your contention that the Government should
look at increased duties as a way of encouraging environmental
efficiency?
Chairman
393. Mr Ives, are you going to draw the short
straw?
(Mr Atton) I have drawn the straw, Madam Chairman.
394. Right, Mr Atton.
(Mr Atton) I think the basic fact that I would suggest
is that for any operator that would then put into place an efficiency
measure on an engine, whether it be engine or power train, and
all the measures that would give efficiency, there would be real
return for that investment. He could see immediately that spending
X thousand pounds on this bit of technology—that, that and
that—is bringing him a distinct advantage on the reduction
in cost he is paying on his fuel. For those operators who come
in from abroad who do not have those spends on their vehicles
they will then pay the high duty, but they would then not get
the efficiency that the operator who has put investment in is
getting.
Dr Ladyman
395. That does then confirm one of the arguments
that was put to me during those debates last year by the United
Kingdom industry that the high levels of petrol duty were making
them take environmentally efficient measures with their vehicles,
but the French inefficient—from an environmental point of
view—vehicles and the Continental vehicles which had not
taken these measures were still being allowed to come into this
country and pollute the country at Continental duty prices which
counteracted the whole effect of what we were trying to achieve
in this country?
(Mr Atton) But provided—and one of the things
I think that we put in the short term policy side—that there
could be an emissions check on the vehicles to make sure that
they are clean to operate in the country before they operate in
the country. Whether you do that at the entry port or whatever
is up to legislation.
(Mr Ives) If I may, Madam Chairman, I think that is
a very good point, that whilst we see the benefits of policies
which incite operators to upgrade their technology, to use the
latest technology, be it power train engines or maybe even improvements
to suspension systems which will help to reduce damage to roads,
whilst we believe there are some benefits for encouraging that
and whatever technique you use, we do see a problem about the
foreign vehicles that are entering this country and you obviously
have to find a mechanism by which the benefits that our people
accrue are not offset by people who do not use the same technology.
That, I think, is a political problem, not a technical problem.
396. So the single market could be bad for the
United Kingdom?
(Mr Ives) The single market needs to be built in a
fashion where everyone is operating under the same rules and I
understand that is one of the objectives. In the short term, of
course, that is not always necessarily the case, but there are
definitely technical approaches which can be used to improve the
performance and safety and damage limitation of the vehicles and
I think if our industry is going to be asked to adopt those, they
should get incentives to do so.
Chairman: Well, that is a nice mythical description.
Mr Forsythe?
Mr Forsythe
397. Thank you. If I could just briefly go back
to what Dr Ladyman was talking about, flagging out. Would it not
be the case that if it was not too difficult to flag out and be
able to re-register vehicles across a land frontier and to get
the benefit of lower fuel costs, it would certainly not be anything
social; it would be to do with expense as they can do in Northern
Ireland going across and re-registering in the Republic of Ireland.
Would that not be the case?
(Mr Lowe) I think it would be the case. Sorry.
(Mr Ewer) Yes, as I think my colleague has said, the
driver behind this was, I think, fuel price as a driver rather
than anything to do with social issues. We were deliberately somewhat
guarded in our comment to you because there is a dearth of statistics
across this whole area which has been referred to by at least
two of your colleagues. But the principal driver, I think, has
been money and people trying to do it have found it far more complicated
than that and have therefore, I think, turned this into rather
a distracting issue now and I am not sure that flagging out is
quite as significant as it was first thought to be when there
was very high profile given to it in the press about six months
or more ago.
398. Do you have evidence of that?
(Mr Ewer) Well, I do not, because the only figures
that seem to be available are a figure of 300 which is quoted
in a number of sources but which seem to me to be related. However,
what we have gathered—again by collecting the views through
our membership and contacts in the Institute—is that whilst
a number of people have indeed flagged out because they find they
can do and it is suitable for their operation, most people have
come away from the idea and that flagging out is not a very significant
issue now.
399. It is more the inconvenience of course?
(Mr Ewer) No, I think it is the pure legal aspects
and the practical aspects of it.
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