Memorandum by Stanford Distribution Ltd
(RH 08)
As the result of an invitation by your Committee
to submit views covering the road haulage industry, printed in
a recent trade publication, I wish to make the following contribution:
I do not intend dwelling on the details of facts
and figures, as I am sure these will be presented by our trade
organisations.
The present dire situation of the road haulage
industry can firstly be traced back to the change in regulations
(EEC rules) which altered the issuing of operator licences based
on the number of vehicles to the present system. Over the last
decade this has led to a situation where supply of capacity exceeds
demand and therefore rates have fallen in real terms. As an easily
understood example, the Committee should know that many owner-drivers
of articulated vehicles are currently being paid a lower mileage
rate than MPs.
The purpose of the first change was to increase
competition and reduce costs for industry.
The second reason for the current situation
is that previous and present governments have increased the amount
of taxation imposed on the industry.
The reason for this second change has yet to
be made clear:
1. If it is intended to force goods onto
the railways, then we need to ensure that there is sufficient
capacity and investment in the requisite equipment. There is also
a moral question as to whether relatively low paid workers in
one industry should be cross-subsidising higher paid workers in
another. Very few lorry drivers have the benefit of company pension
schemes, sick pay or promotion prospects. Many lorry drivers would
be earning less than the minimum wage if the TUC had had their
way.
2. If the intention is to reduce the overall
quantity of goods to be moved, then we should bear in mind that
as a society following a modern economic system, we need growth
in all sectors of the economy—if only to keep unemployment
levels low.
3. If the intention is to move goods more
fuel efficiently the Committee should understand this was already
being done when diesel was 25 per cent of overall costs and so
the increasing to 35 per cent was a pointless exercise.
4. If the intention is to collect taxes in
a politically "pain-free" way then it needs to be understood
that there will be repercussions further down the line. For example,
higher general inflation resulting in higher interest rates, a
reduction of investment in newer, environmentally friendly vehicles
and UK manufacturing industries becoming less competitive.
5. If the intention is to set an example
to the rest of the world, then we should be aware that the time
when the rest of the world looked to the UK for guidance has long
since past.
To expand point four above, my own customers
are in many cases unable to pass on my increasing costs as they
are already in danger of being undercut by foreign competition.
It should also be borne in mind that if it is our intention for
environmental reasons to export manufacturing jobs abroad, due
regard should be paid to the amount of fuel consumed and its impact
on global warming by importing the goods back into this country.
For example one 40 ft load requires approximately 1,000 gallons
of fuel to ship it from the Far East to the UK.
The Route to a Better Future for UK Inc
— The geographical area covering central,
south and south-eastern England, the north-eastern industrial
area of France, the Benelux countries and the industrial heart
of Germany contains 40 per cent of the EU population and 60 per
cent of its economic activity. Regions outside this area will
therefore always be at a commercial disadvantage: the higher we
make our own costs of transport, the greater the disadvantage
we create for our own "regions". This is reflected in
the uneven geographic spread of the UK unemployment figures. Its
high time politicians of all persuasions took on board this basic
fact of economic geography.
— As a nation we need to change our fundamental
attitude towards our road haulage industry. Provided we maximise
the use of the railway network, and wherever possible encourage
the use of coastal shipping and inland waterways, all other goods
must be moved by road. Once we recognise this simple fact we can
stop using the road haulage industry as a butt for all the nation's
problems. Some of the ways this can be achieved are:
(a) By harmonising taxation levels with the
rest of the EU, thus complying with the spirit and the letter
of the Treaty of Rome. In this way we would create a level playing
field for both our haulage and manufacturing industries. NB In
the road haulage industry 50 per cent of gross turnover is paid
into the Exchequer as taxes in one form or another.
(b) To subject claims made by various environmental
groups to independent audit. When using cost benefit analysis
in making their arguments against roads, social costs are often
double counted and social benefits dismissed as best suits their
case.
(c) To target investment in the rail network
to increase the height gauge so that road trailers can be carried
on the 'piggy-back' system.
(d) To investigate the potential for encouraging
coastal shipping and greater use of the inland waterways.
(e) To investigate how it is possible for
insurance companies to increase their premiums to the road haulage
industry by 25 per cent in the current year without exception.
(Is this not evidence of a cartel?)
(f) To encourage the larger distribution
centres, mainly operated by the supermarket chains to unload vehicles
promptly so that they can then be used to collect return loads.
I hope the above is of use to you.
Cliff Langford
Managing Director
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