Memorandum by Horley Motors Ltd (RH34)
Horley Motors Ltd has been established since
1971 and specialises in the UK Carriage of Containers, with the
close proximity of the Port of Felixstowe we are ideally located.
The Company operates fourteen vehicles and employs locally eighteen
staff and has a turnover in the excess of £1 million pounds.
Our Customer base includes some of the major Far East Shipping
Lines that operate from the Port, these lines customers are the
British manufacturing Industry. In 1998, we invested some £400,000
pounds in new Vehicles and Trailers to meet new legislation ie
44 ton. Unfortunately, we are unable to continue this investment
in newer vehicles, (which are more environmentally friendly ie
Euro 3) this is due to our increased operating costs. At the beginning
of this year, the Shipping lines were unable to obtain UK traction
due to the shortage of UK Hauliers, the result were delays in
delivering/collection cargo of cargo to major Manufacturers. We
are now faced with a financial position where we can not pass
any more increases on to our customers because they are unable
to pass these on to theirs. At present 33.54 per cent of our sales
is attributed to diesel costs this cost is still increasing weekly
and another 33.38 per cent is attributed to wages.
In recent years, we have seen several unfair
financial constraints placed upon this industry, the main one
being the continuing escalation in the cost of Fuel. The "Escalator"
introduced in 1993 was abolished in the Chancellors speech in
November 1999, but the Chancellor still retains a "Blank
cheque" scenario for any future duty increases on fuel. The
Government also indicated that we are ahead of our "Rio"
targets regarding the reduction in emissions, which is a good
thing in view that increased tonnage is being carried and there
is less Commercial vehicles on the road. The legacy of the "Fuel
escalator" is that we now have an industry that has been
decimated by this tax and warrants urgent re-investment by Government
and Industry alike.
As a Country, we now have the position where
we have the most expensive raw material in Europe, Fuel in Europe
is on average 50 per cent less. The cost of a 1,000 litre tank
of Diesel in this country is £640 where as in Ireland and
France it is only £390 per tank. Eighty Five per cent of
the cost of Fuel in this country goes to the Government in tax;
this is by far the highest rate of Fuel duty in the EU. The average
miles per gallon for Thirty eight tonne tractor unit is Eight,
in view of this one must accept that this one major source of
revenue to the treasury that they are extremely reluctant to let
go of. The logical solution is to offer the UK Haulier a duty
rebate on Fuel, this would then enable re investment in to new
machinery and the creation of more jobs and a better pay structure
for the drivers. A essential user rebate (duty rebate on fuel)
is already operational in France for the French haulier and I
believe that the Dutch Government operate a similar scheme, why
can't we? The Bus companies already receive the benefit of a duty
rebate on fuel, so the legislation is already in place and could
be adapted for the Haulage Industry.
The Government has placed great importance upon
the different types of Fuel ie LPG and ULSD, LPG is not a feasible
solution for container Haulage. The reason being is that the size
of the fuel tank would not provide a workable solution and these
vehicles would constitute an explosive threat whilst travelling
our highways. The only company that this would benefit from LPG
is the large Chemical companies (ie BOC) that have a light payload
and twenty-four hour access to a ready supply. Ultra Low Sulphur
Diesel is the result of a EEC directive but this country would
appear to be the only one that has made it legislation, other
countries seem reluctant to follow. The Government has made great
play on the lower duty tax that it attracts but Fuel Companies
have stated that some ten per cent more energy is required in
it's production. Also recent research shows that this Fuel makes
the vehicle less economical, where as our European partners are
allowed to continue unchecked using their original cheaper fuel.
European Hauliers receive a far more advantageous
level of Vehicle Excise Duty then we do in the UK. The excise
duty imposed on a standard European five axle 40 tonne vehicle
in this country is £5,750, in France the same vehicle pays
£486. Many Companies have been forced to "Flag out"
in the ever continuing battle for survival, a local company recently
reregistered his twenty vehicles to Holland saving £4,200
per vehicle. The Government lost £115,000 pounds per year
in VED in this one case, many more Hauliers are going abroad where
Governments are more friendly towards the Haulier. The Formula
for the calculation of VED in this Country is legacy of the second
World War, the Government needs to urgently review this and adopt
a more modern European approach to this area. UK vehicles travelling
to Europe are subject to a EU road tax which amounts to six ECU
per day, EU vehicles visiting this Country are not subject to
this tax. Also the EU vehicles do not contribute to the essential
up keep of our Emergency Services and roads but still continue
to pollute and congest our Highways. The European Haulier will
not buy fuel in this country because he can not afford to and
I know of one UK Haulier who regularly travels to Europe and has
made it a dismissal offence, if his UK driver buys fuel in the
UK.
With the recent abolition of cabotage in July
1998, many UK Hauliers are now unable to compete in the UK domestic
Haulage market, as a direct result UK Jobs are being lost. This
claim is further supported by Independent research conducted by
the Centre for Economics and Business Research, which shows a
loss of 53,000 Jobs by 2002 and a further loss of £2.1 billion
in revenue to the UK Government. The claim of a "Foreign
Haulage invasion" is further substantiated by recent DETR
figures that show 762,000 foreign vehicles visited this Country
in 1998-99.
Commecial Vehicles are not the primary cause
of Road congestion there is less than 500,000, where as there
is 24 million cars. The implementation of widening motorways to
three lanes would increase overall traffic capacity by 60 per
cent and reduce pollution and increase fuel consumption. Putting
everything on rails is not the solution either it has it's niche
but is unable to offer the reliability and flexibility that Road
offers. An Urgent review of the Government Policy is required,
a level playing field is what we seek.
February 2000
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