Examination of Witnesses (Questions 423
- 439)
WEDNESDAY 22 MARCH 2000
MS DIANA
LINNETT, MS
TARA GARNETT,
MR ALLEN
MARSDEN AND
MR GEORGE
BOYLE
Chairman
423. Good afternoon to you, ladies and gentlemen.
First of all I apologise for keeping you waiting. I am sorry about
that. I wonder if we can ask you to identify yourselves for the
record and perhaps we can start down there, can we?
(Mr Boyle) George Boyle, Member of the Railway Development
Society, Freight Committee.
424. Thank you very much, Mr Boyle.
(Mr Marsden) Allen Marsden from English, Welsh and
Scottish Railway. I am the Manager for Regional and Local Government.
425. Thank you.
(Ms Garnett) Tara Garnett, Freight on Rail, campaigner.
(Ms Linnett) Diana Linnett, Rail Freight Group.
426. Thank you. Could I just remind you about
one or two things. The microphones in front of you record what
you say, but you are going to have to belt it out a bit in here
because it absorbs the noise in this room—which may be a
very useful function for the House of Commons Committee Rooms.
Do you have any general remarks you would like to make? Good.
I do not mean `good', I mean thank you very much for being so
clear. Do you agree that the British road haulage industry is
part of the most efficient logistics operation in the world?
(Ms Garnett) I think it is very efficient on its own
terms, but those terms do not take into account the social and
environmental costs that they are imposing on society at large.
Added to which, that very efficiency sometimes encourages cost-cutting
which itself generates additional costs on society in terms of
accidents and illegal operations and so on and so forth.
(Mr Boyle) I will second that. How do you measure
efficiency? An industry which has 65 percent of the market—not
90 percent as was said a few minutes ago; they actually have 65
percent of the market—could be deemed to be efficient. That
is, if you are only paying 70 percent of your costs, then you
can look efficient against the opposition. You must incorporate
all the costs. If the railways had had that sort of subsidy since
1948 I think they would be in a different position and that has
to be taken into account.
Chairman: Thank you very much. Mr Stevenson?
Mr Stevenson
427. May I ask a follow on question that I asked
to the previous witnesses about a situation that is intriguing
many of us and ask you for your views. Why is it, do you think,
that the costs of operating a heavy goods vehicle on the Continent,
particularly in terms of VED and fuel, are far less than they
are in the United Kingdom and yet there is at least three times
the amount of freight being moved by rail in the Continent than
there is in the United Kingdom? If you take the basic tenets of
market forces you would think the opposite would be the case.
(Mr Boyle) First of all, there is a lot more than
VED and fuel costs. A lot of Continental countries pay for the
motor ways by the kilometre; we do not. And if you attempt to
go to the countries that you do not pay by the kilometre you have
to buy a vignette to get over the border with your wagon. So you
will pay for that motorway one way or another. We get free use
of motorways—in this world nothing is free—so you
expect to pay for it in the cost of your fuel. Also the railways
on the Continent, I will not say that they are any more efficient
than ours, quite the reverse, but they have been continually subject
to a lot more subsidy. You can call it subsidy, you can call it
a grant for the social benefit that the railway gets you, but
one way or another they put a lot more money into the railways
on the Continent than they do in this country and when you look
at the figures for pollution and everything else you can see why
they do it.
(Ms Garnett) May I just add something.
There has been research carried out by Ernst & Young and also
by KPMG which looks at a variety of factors, not just fuel costs,
but it also looks at factors such as labour costs and road costs
and that comes to the conclusion that in fact it is pretty much
even between a country like France and a country like the United
Kingdom in terms of the overall costs of operating a lorry. So
the argument that it is actually a lot cheaper to operate a lorry
on the Continent we do not accept.
428. The Road Haulage Association have told
the Sub-Committee that technical annual operating costs for a
40 tonne lorry are £85, 738 in the United Kingdom, £83,2004
in Belgium (3 percent cheaper), £79,480 in The Netherlands
(7 percent cheaper) and £77,053 in France (10 percent cheaper).
You would challenge those figures presumably?
(Ms Garnett) Well, research for instance that KPMG
have done would suggest a different conclusion.
Chairman
429. Perhaps if we are going to quote research
we could have at least the conclusions?
(Ms Garnett) Sure.
Mr Stevenson: Yes, thank you.
Mr Forsythe
430. Where exactly would the distance-weight
taxation system operate?
(Ms Garnett) It has been undertaken so far in New
Zealand, in Oregon and it is underway now in Switzerland and will
be implemented I think next year. I cannot comment very much on
the sort of technicalities of how it is operating, but it was
up for review in Oregon a few years ago to see whether it was
actually the most efficient way of charging and it has been going
there since, I think, 1942, 1948—I am not entirely sure—and
they concluded that it was far more effective than other forms
of taxation, fuel duty, whatever.
431. How exactly does it operate?
(Ms Garnett) How does it operate? Well, it is based
on the capacity of the lorries and also the distance they travel,
so the heaviest lorries travelling furthest pay the most. So short,
light journeys do not pay as much.
Mr Bennett
432. May I just ask one question. It discriminates
very substantially against rural areas, does it not, particularly
rural areas where there is no rail?
(Mr Marsden) I think there is no comment I can make
to that. That may be fair comment, but the rail network, certainly
in Europe, is reasonably widespread and in the United Kingdom
the rail network reaches into relatively remote areas and where
it does not reach there tends not to be a great deal of industry.
Chairman
433. But in fact, what information do you have
about the Oregon scheme because in Oregon you would have such
enormous distances? It must be very important for them and if
it was the case that there was unfair discrimination against rural
areas, since two-thirds of Oregon is rural and also they are a
very lively and highly independent, not to say articulate, lot
whose motto is: "Please come and don't stay", I hardly
think it seems likely that this is the case. Do you have any evidence
of this at all?
(Ms Garnett) We have some information about the situation
in Oregon.
434. I think we ought to have some evidence
rather and I think if there is discrimination against the people
in rural areas I think we ought to know that too.
(Ms Garnett) It is perhaps people in rural areas who
perhaps live near small, vulnerable roads who are most plagued
by heavy lorries running up and down them.
Chairman: That does not, on the whole, compensate
for them when they pay the bills. Mr Forsythe?
Mr Forsythe
435. To what extent do you wish to see the limit
on lorries in the United Kingdom reduced rather than raised?
(Ms Garnett) I am sorry, I did not hear.
436. To what extent would you wish to see the
weight limit in the United Kingdom lowered rather than raised?
(Ms Garnett) Mr Marsden, would you like to answer
that?
(Mr Marsden) I do not think we have any views on the
lowering of standards of vehicle weight. We are and were very
concerned to see that the Government has announced an increase
in vehicle weight to 44 tonnes in the Budget, which we feel will
do a lot of damage to rail freight's prospects, but I do not think
we would seek to try and turn the clock back and reverse lorry
weights back down to whatever—38, 32 tonnes. We cannot turn
the clock back, but are concerned about the raising of the limit
to 44 tonnes, particularly as this coincides with measures to
lower vehicle excise duty and also not to levy any fuel duty escalator
and we feel those developments will do rail freight a lot of harm
and prevent rail freight from being a viable alternative to congested
roads for moving the United Kingdom's freight and serving UK PLC.
437. Given the constraints about the capacity
on the British rail system, what investment in the rail system
would be required if the suggestion was that they lower the limit
on roads.
(Ms Linnett) We do not have the detailed information
about the actual ultimate cost to enhance the rail network and
sufficiently to accommodate that because Railtrack is doing a
lot of work on the actual cost of accommodating that at the moment
and clearly they are working with the Shadow Strategic Rail Authority
to try and establish what the cost of enhancement would be. But
we have done a significant amount of work in actually looking
at how much freight we think can be shifted from road to rail
and our view is that there is a real opportunity to double the
market share that rail has at the moment.
Chairman
438. What are we talking about, 8 percent, 16
percent?
(Ms Linnett) To about 15, 16 percent, yes, within
a period of about 10 or 12 years. Clearly that will need infrastructure
investment, not only in the rail network itself, but it will need
new rail terminals, it will need new interchange points, it will
need new additional rolling stock from the fleets that already
exist. I do not actually have a number that I could put on it,
but the opportunity to make that shift and the environmental and
social benefit that could be gained from that, we believe from
some work that we are doing—and we are not really at a point
where I can actually talk about numbers yet—would well outweigh
the actual cost of doing it.
Dr Ladyman
439. Encouraging freight onto railways pre-supposes
that we accept that that is a good thing and that there is some
justification for that. I would like you to say a little bit more
about where you see the benefits coming for that shift? You mentioned
in your evidence that you would like to see what you call a level
playing field. You have argued that this level playing field should
be achieved by increasing duty on fuel, for example. What evidence
have you from the increases in duty on fuel that we have had over
the last few years that freight has actually gone onto the railways
as a result of that?
(Ms Garnett) Several. You have asked two questions
really I think. One is about the environmental benefits and other
social benefits of rail and rail produces about 80 percent less
CO2 per tonne carried than road. It also produces substantially
less in terms of nitrous oxide and other emissions. It is also
far safer than road. European research suggests that rail industry
in general is about 27 times safer than motor transportation.
Other benefits include less land take and on our increasingly
overcrowded island this is becoming quite an issue. Moving on
to the second question which was—would you mind repeating
it again?
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