House of Commons - Environment, Transport and Regional Affairs

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

Memorandum by Freight on Rail (RH 19)

A. FREIGHT ON RAIL

Freight on Rail welcomes this opportunity to submit evidence to the ETRA's transport sub-committee.

Freight on Rail is a new campaign working to get goods off roads and onto rail as an important step in developing a more sustainable distribution system.

Bringing together trade unions, the rail industry, the Rail Freight Group and the environmental transport campaign Transport 2000, Freight on Rail promotes the benefits of rail freight both nationally and locally, advocates policy changes that support the shift to rail, provides information and help on freight related issues, and campaigns more broadly for a distribution system that makes social and environmental as well as economic sense.

Details of the Freight by Rail working party are set out in D, below.

B. EVIDENCE

1. The role of the road haulage industry, the way in which it operates, its contribution to the economy of the United Kingdom, and its impact on the environment

Road haulage moves over 80 per cent of total goods lifted in the UK, and around two thirds of total freight kilometres travelled.[6] As such, and like many other countries, road transport is the mainstay of Britain's goods distribution system. Employing over a million workers[7] and worth around £55 billion, or nearly 4 per cent of gross output,[8] road haulage, on the face of it, makes a major contribution to the UK economy.

Nevertheless, the costs that vans and heavy goods vehicles impose upon society—in terms of CO₂ and other greenhouse gas emissions, local air pollution, countryside loss, noise, disruption to community life, road accidents, pollution related illnesses and intimidation—are heavy, and growing.

Vans and lorries make up 16 per cent of the vehicles on our roads, but they account for a quarter of all transport related CO₂ output.[9] Moreover, their contribution to greenhouse gas emissions is likely to increase if, as forecasts suggest, lorry and van traffic levels rise to 25 per cent and 44 per cent above present levels in the next 10 years.[10] Freight on Rail does not believe that the UK can afford such an increase.

The costs to our health of the road haulage industry are also serious. 24,000 people die prematurely each year from road-related pollution,[11] and with HGVs accounting for 40 per cent of cancer-causing particulates and a third of nitrous oxides,[12] our heavily road-dependent distribution system must take the blame for a sizeable number of these deaths. HGVs also contribute disproportionately to road accidents—comprising 7 per cent of the vehicles on our roads, they account, nevertheless, for around 17 per cent of casualties. In 1998 alone they killed 576 people.[13]

Children, cyclists and the elderly are among the most vulnerable road users, and the most likely to be injured or killed. Fear of road traffic in general, and heavy lorries in particular has reduced the quality of urban life and contributed to trends that cause additional damage to our health and that of the environment. Fear of traffic has, for instance, contributed to the doubling in the last 10 years of the number of children driven to school.[14] This in turn has increased congestion and further reduced opportunities for physical activity amongst an already dangerously sedentary population.

Although accidents involving HGVs usually harm other road users, rather than the lorry drivers themselves, research suggests that the road haulage industry is not a healthy one for employees either. Surveys into the health of professional drivers indicate that their work exposes them to disproportionately high risks of cancers, gastrointestinal and musculoskeletal disorders, fatigue and noise related physical and psychological illnesses.[15]

The social and environmental costs of an unsustainable goods transportation system are probably incalculable. But there are some costs that can be measured. Congestion, for instance, costs UK business around £20 billion a year.[16]

Clearly, fiscal measures such as VED have been designed in order to charge users for the damage they inflict. There are indications, however, that the current rate of taxation is highly inadequate, as government acknowledges.[17] One study suggests that once the environmental and social costs of road haulage have been taken into account, HGVs meet only around 69 percent of their full social, economic and environmental costs—or 59 per cent if interest payments on the capital value of the road network are included.[18] Add to these the gains made by cowboy operators flouting the law and the figure is reduced further to around 50 per cent of real costs.[19]

2. The impact on the industry of current and past rates of vehicle excise duty and levels of duty on fuel

i. Vehicle excise duty

It is increasingly recognised that VED is inadequate as a system of taxation as it does not charge lorries at point of use; in other works, low mileage road users are taxed to the same degree as high mileage road users. Nor does it address the problems of congestion, road accidents and other costs to society and the environment. An additional disadvantage is that VED does not tackle the problem of cost recovery for road use in a country other than the country of the vehicle's registration.

Freight on Rail argues that while it is vital to move away from VED towards a taxation system that more effectively penalises heavy road users at the point of use, such as weight distance taxation (see below), this would take some time to implement, particularly given the need to ensure interoperability across EU Member States. In the meantime, therefore, we suggest a modified VED which is graduated according to the emission standards that the engines are designed to meet. We endorse, for instance, the Royal Commission on Environmental Pollution's recommendations[20] for a restructured VED that charges:

— a reduced rate for vehicles with engines meeting planned new emission limits and which are in operation before the limits become mandatory;

— an increased rate for vehicles with engines that fail to meet current standards, unless fitted with a pollution-abatement device.

ii. Fuel duty

Fuel use is an effective means of penalising carbon dioxide emissions. Given its commitment to cut CO₂ to 20 per cent below 1990 levels by 2010, we are extremely disappointed by Government's decision to abandon the fuel duty escalator in the face of pressure from the road haulage industry. We would like to see a return to the previous rate of 6 per cent above inflation in the next Budget, with further increases in future Budgets.

We should also add that, notwithstanding complaints by the road haulage industry that VED and fuel prices are higher here than elsewhere in Europe, the costs of road haulage are nevertheless lower in the UK than in many other countries. While road tax and fuel prices are higher in France, for instance, British haulage companies do not have to pay the higher labour costs and motorway tolls of their French colleagues. Interestingly, at a time when road hauliers are complaining of unfair competition from overseas, Europe, the French and German road haulage industries are complaining of exactly the same thing.

We do however acknowledge that the road haulage industry's complaints of unfair competition by foreign hauliers operating in the UK are justified. We would support the development of a vignette system, similar to that implemented in Belgium, Denmark, Germany and elsewhere, payable by foreign hauliers, in order to level the playing field between them and UK operators.

3. The regulations which govern the industry, and their impact on the safety record and profitability of the industry

While the majority of road haulage companies operate within legal limits, there are a few that consistently—and it seems, successfully—flout the law. A random survey of HGVs carried out by the Vehicle Inspectorate in January 1999 revealed that some 25.4 per cent had significant faults which would warrant prohibition if repairs were not carried out, while 12 per cent had faults sufficiently serious to justify immediate prohibition.[21] Illegal operators artificially lower the costs of road transport, undercut and undermine lawful operators and reduce the comparative competitiveness of rail.

Freight on Rail welcomes government's moves to tighten enforcement of existing legislation and looks forward to seeing the extent to which it backs up its words with adequate funds. We are also particularly keen to see measures enabling inspectors to impound unlicensed, illegally operated, overweight or dangerous vehicles immediately, as well as measures to tighten lorry routing.

4. What changes to government policies affecting the road haulage industry are needed to benefit the economy and the environment?

The ETRA has itself summarised succinctly those range of measures needed to benefit the economy and the environment which will have an impact upon the road haulage industry. As stated in its ninth report on the Integrated Transport White Paper, these include "the more efficient distribution of goods carried by road; the switch of goods from road to less environmentally damaging modes of transport, in particular rail and water; and the reduction in the distance goods are taken from the point of production to the place of consumption, for example by purchasing more locally produced items."[22]

Freight on Rail supports all these objectives but will confine itself here to commenting on some of the measures required to encourage modal shift from road to rail. A relatively few number of lorries are responsible for a large proportion of overall mileage. Around 10 per cent of lorries account for about 20 per cent of the goods transported and nearly half of total tonne-kilometres.[23] Research suggests[24] that positive measures to encourage a shift from road to rail would cut total lorry mileage by up to 50 per cent. Some of the measures Freight on Rail would like to see adopted include:

i. Fairer taxation

Freight on Rail would like to see Government undertaking more research into distance-weight taxation, which has already been established in New Zealand, and will shortly be implemented in Switzerland. This system has the advantage of taxing road users at the point of use and taxing the heaviest users most heavily. Such a system, if implemented on a Europe wide basis, would also ensure that member states with the heaviest road traffic are compensated appropriately. It will, however, require Europe-wide investment in tracking technology.

A distance-weight system could be revenue-neutral at the outset, but Freight on Rail would like to see tax levels rising in time to reflect more accurately the environmental and social costs outlined in 1, above. Such a scheme would, we envisage, replace both VED and fuel duty.

ii. Higher rate of grant payment for rail

Freight on Rail supports the Rail Freight Group's proposals for an increased rate of grant[25] as follows:

	Existing	Proposed
Rural motorways and rural duel carriage ways: Uncongested	20p	25p
Congested	20p	£1.00
Urban dual, single carriageways and motorways	£1.50	£2.00
Rural single carriageway roads	£1.00	£1.25

iii. New Grants

Neither the DETR's Track Access Grant nor the Freight Facilities Grant covers the extra costs entailed in transhipping goods from one mode of transport to another. We support the Rail Freight Group's calls for a terminal grant to cover these costs, so enabling rail to compete on a level playing field with road, and encouraging co-ordination between different modes of transport.

iv. A halt on sales of British Rail land

To quote the Freight Transport Association: "We find the Government's position on this matter confusing. On the one hand industry is being encouraged to see rail freight as a viable long-term logistics solution, on the other policies are being implemented that will restrict industry's ability to use rail in the future."[26]

It is vitally important that Government act immediately to halt any further sales of land which are, or could be of strategic importance to rail. We of course acknowledge that there are many other pressures on brownfield sites, such as the need for new housing. Nevertheless, we do not believe that building sites which are so crucial to the development of a less fuel- and land-intensive distribution system, can possibly be a step in a more sustainable direction.

Government should a) allow the SRA to hold onto sites identified by the Rail Freight Group and others as having rail-strategic importance and b) strengthen planning guidance to require local authorities to identify and protect potential and existing railway sites and railway lines.

v. Network capacity

Freight on Rail would like to see more investment in the railway network capacity for the carrying of passengers and freight, with funding channelled through the SRA. We would also like to see the Regulator reminding Railtrack, in the strongest terms, of its obligations under the License Agreement, and requiring them to make adequate infrastructure investment both for passenger and for freight transport in the coming years.

vi. Changes to the planning system

Local Transport Plan guidance states that local authorities, while preparing their local transport plans should "take count of" the contribution of rail freight. Planning Policy Guidance Note 13 also makes mention of the value of rail. We welcome these positive acknowledgements of rail's role. But, while welcome as far as they go, these statements do not go far enough. In particular, since freight usually moves through regions and across district and county boundaries, there needs to be more emphasis on the importance of local authorities working in partnership to develop sustainable distribution strategies for the region as a whole and more guidance on how they might best achieve this.

Awareness of the importance of rail freight is extremely low among local authorities. In one recent survey of local authorities across England and Wales, 81.4 per cent respondents said they had disused/abandoned trackbeds in their authority area but only 30.5 per cent said they were protected for future rail use in a statutory plan.[27] We would like to see Government doing more to increase awareness of the importance of rail freight at the local and regional level.

C. CONCLUSION

Lorries are a necessary fact of life. At present, however, the damage they cause to UK society and the global environment as a whole, outweighs many of the positive contributions they make.

This need not be the case. Lorries can and must have a part to play in a sustainable distribution strategy. But this can only be a productive one if:

— Current health and environmental standards are enforced and extended.

— The taxation system is altered to reflect fully the social and environmental costs they impose.

— There is adequate support for alternative modes of distribution, particularly rail and water transport.

— Action is taken to reduce the unnecessary transportation of goods.

February 2000

6 Transport Statistics Great Britain, 1999 Edition, Department for the Environment, Transport and the Regions, 1999. Back

7 Road Haulage Association, February 2000. Back

8 Office for National Statistics in Sustainable Distribution: A Strategy, DETR, 1999. Back

9 Sustainable Distribution: A Strategy, DETR, 1999. Back

10 Sustainable Distribution: A Strategy, DETR, 1999. Back

11 Committee on the Medical Effects of Air Pollutants, The Quantification of the Effects of Air Pollution and Health in the United Kingdom, Stationery Office 1997. Back