Memorandum by The Federation of Small
Businesses (RH36)
1. PREAMBLE
1.1 Formed in 1974, the FSB is a non-Party political
campaigning pressure group that exists to promote and protect
the interests of all who manage or own small businesses. The FSB
is the UK's largest business organisation with over 150,000 members.
2. INTRODUCTION
2.1 Between 1984 and 1994 lorry traffic
in urban areas increased by 2.6 per cent. In overall terms, the
total lorry traffic has declined from 5.7 per cent to 4.9 per
cent of the entire urban traffic. In 1994 cars accounted for 83
per cent of all urban traffic with light vans (up to 3.5 tonnes)
accounting for nine per cent and lorries for 4.9 per cent. The
heaviest lorries, with three or more axles, only accounted for
1.4 per cent of the total.
2.2 In 1998 the Government reported that
the nation's roads were in their worst state of repair for 20
years, with nearly 7,000 miles of highway needing total replacement.
Highway engineers identified some153 miles of motorways, 586 miles
of trunk routes, 4,924 miles of principle roads and 1,239 miles
of local roads, in need of total rebuilding. For far too long,
too little money has been directed at a proper programme of road
maintenance in time to avoid major problems.
2.3 Motorists contribute no less than £32
billion a year to the Treasury; and yet under the Governments
comprehensive spending review in 1999, transport is to receive
only £22 million over the next three years.
2.4 There are many ways of improving the
existing road network, but whatever policies emerge there is a
powerful case for more development of the national trunk road
system, which is very important to the transport industry, commerce,
tourism and the leisure industry.
3. THE IMPORTANCE
OF ROAD
HAULAGE TO
THE UK ECONOMY
3.1 There are 420,000 commercial vehicles
operating in the United Kingdom today. Their function is the eventual
delivery of goods and services that enable the economy to operate
and provide the daily needs of industry and its customers. The
removal of road freight transport operations would, quite literally,
paralyse life in the UK.
3.2 Over 65,000 business operate commercial
vehicles over 3.5 tonnes gvw, and of these 26,000 companies are
hauliers who operate transport solely for "hire and reward".
Of these hauliers, some 17,000 operate five or fewer vehicles.
It is these hauliers who are particularly vulnerable to large
tax changes in an extremely competitive market. It is difficult
for them to compete with their overseas competitors who enjoy
lower fuel taxes and are not faced with the additional burden
of Vehicle Excise Duty. As a result, many larger hauliers are
registering their vehicles outside the UK in order to reduce their
tax liabilities. The majority of small operators cannot afford
to do this.
3.3 Lorries play an indispensable part in
the economy of our towns and cities. The lorry's unique ability
to move freight literally from door to door determines its pre-eminent
role in distributing goods and services to every part of the country:
— Deliveries to shops, restaurants,
public houses;
— Fuel to garage forecourts;
— Express delivery services and postal
services;
— Equipment and supplies to offices
and commercial premises;
— Raw material and finished goods to
manufacturers and wholesalers;
— Supplies to hospitals, schools and
public buildings;
— Refuse collections and disposal,
street cleaning and maintenance;
— Domestic deliveries and furniture
removals.
4. THE
EFFECTS OF
FUEL DUTY
ESCALATOR AND
VEHICLE EXCISE
DUTY (VED)
4.1 Fuel Duty Escalator
4.2 British hauliers are faced with the most
expensive fuel charges in the world and on every £40 of petrol,
£34 goes to the Government in petrol duty.
4.3 Seven years of the fuel duty escalator
have left a lasting legacy of high fuel taxes and uncompetitive
transport operations in the UK. All businesses in the UK using
transport are disadvantaged compared to their European competitors.
The UK's transport and distribution industry is the safest and
most efficient in the world yet it is disadvantaged in comparison
with their European counterparts shackled as they are by uncompetitive
taxation.
4.4 While the FSB welcomed the ending of
the fuel duty escalator, we believe that more needs to be done
to redress the balance. We, therefore, support both the Freight
Transport Association and the Road Haulage Association's demands
for a better deal for UK operators.
4.5 Diesel Tax—The Facts
— In the UK 85 per cent of the price
of diesel is taxation
— In the UK diesel duty has increased by
20p since 1993. It is now the highest in Europe—45 pence
per litre compared with the European average of 22 pence
— In the UK diesel duty remaining where
it is, is still two and a half times higher than the European
Union (EU) average, the Chancellor will still take £5 billion
in extra revenue each year out of the industry
— In the UK today a 1,000-litre tank
of diesel (excluding VAT) costs £640, in France £390
and Ireland £390
— In the UK this year the Treasury
will lose around £415 million in tax because many larger
hauliers are purchasing their fuel outside the UK where prices
are so much lower
4.6 Vehicle Excise Duty
4.7 UK haulage operators pay up to 12 times
more for their VED than in the rest of Europe. The Government
must be made to recognise that a major realignment in truck VED
is long overdue.
4.8 For example, the VED for a 40 tonne
five axle articulated vehicle cost £5,750 in the UK, £1,278
in Ireland and only £450 in France. Ultimately this rate
of taxation means that British hauliers cannot compete with foreign
operators. A French haulier's operating costs, when in the UK,
is 14 per cent lower than his British counterpart. Without some
urgent action to redress this imbalance, we will have job losses
in our declining transport industry.
5. OTHER CONSIDERATIONS:
5.1 Deliveries
5.2 With the absence of rear or off-street access
a high proportion of deliveries to retail outlets in high street
locations require direct kerb-side access to the shop frontage.
However, illegal parking, Red Routes, loading bans or waiting
restrictions in pedestrianised areas frequently make it impossible
for delivery drivers to secure direct access to shop frontages.
Delivery drivers are forced to either stop further away or double
part, thereby risk causing further obstruction to other road users.
5.3 While loading bans are sometimes essential
on traffic or safety grounds, for example at major road junctions,
their arbitrary use elsewhere can seriously impede the efficient
servicing of retail outlets. It has been estimated that every
household in Britain has to spend at least £5 per week more
than they need to in order to meet the costs imposed on the transport
industry in trying to deliver goods.
5.4 Many urban shopping centres have been
pedestrianised, with delivery vehicles banned throughout much
of the working day. The concept of totally traffic-free areas
for shoppers and pedestrians is clearly popular and many such
schemes are driven by a desire to improve the amenity and attractiveness
of urban centres. But the practical effect of all these measures
has been to reduce significantly the time available for deliveries.
The cumulative effect of applying such measures in successive
town centres is making it increasingly difficult to achieve daytime
deliveries.
5.5 A study commissioned by TecnEcon Ltd
in 1991 on behalf of the Transport & Road Research Laboratory
(TRRL) provides very useful information about the problems surrounding
loading and unloading in urban areas.
5.6 The movement of goods and industry's
reliance on the lorry and light vans for urban freight movements
will remain undiminished for the foreseeable future. If Government
policies to regenerate towns and cities are to succeed, the importance
of efficient and reliable access and movement for lorries must
not only be recognised, but also actively promoted. Policies which
help, rather than hinder, essential delivery access to towns and
cities will not only assist in the economic regeneration process
but they will also deliver environmental benefits by sustaining
the downward trend in lorry numbers.
5.7 What the industry needs is:
— Better provision for delivery vehicles
in servicing pedestrianised areas;
— Planned loading/unloading facilities,
consistent with traffic and safety requirements;
— Effective enforcement to ensure such
facilities work;
— Recognition of lorries and delivery
vehicles, along with buses, as essential components of urban
traffic with priority treatment wherever possible;
— Positive planning policies to facilitate
more effective use of the 24 hour day for deliveries;
— A clearly defined and well understood
national planning structure into which local planning policies
can fit;
— Good advisory traffic signing to
guide drivers to/from commercial/industrial areas.
— Good advisory traffic signing to
guide drivers around traffic congestion or accident trouble spots.
5.8 Environmental Issues
5.9 Environmental organisations have argued
that the urban environment needs protecting with the transferring
of goods at "edge-of-tow" transshipment depots to less
intrusive vehicles for urban delivery and collection. A new type
of environmentally friendly vehicle could then be used to deliver
goods in and around town or city centres. Whilst such a scheme
would be suitable for multi-drop parcel delivery service vehicles
it would not work for refrigerated, brewery, furniture and carpet,
etc vehicles etc.
5.10 Facilities are required for some long
haul freight vehicles to enter towns and cities to service the
business community and many businesses are trying to develop better
ways of making or taking their deliveries to reduce the effect
on the environment. The FSB therefore, whole heartily supports
the work being undertaken by the Freight Transport Association
in setting up Quality Freight Partnerships in towns and cities
throughout the country as a way of resolving many of these inherent
problems.
5.11 Over the last five to ten years pollution
from larger (environmentally friendly) vehicles has been drastically
reduced by 80 per cent as a result of statutory provisions imposed
on commercial vehicles. In some of our older towns and cities,
there is no easy or practical way of achieving this without consultation
by all concerned (the business community, residents and the Local
Authority) to find suitable arrangements acceptable to all.
5.12 Lorries are now quieter, safer, less
damaging, less polluting and less intrusive on the environment
than ever before, because:
— Engine noise has been reduced to
half the levels of ten years ago;
— Most new lorries now have air brake
silencers fitted as standard equipment;
— Impending European Union (EU) legislation
(1996) will reduce permitted compressed air noise levels even
further;
— Better brakes have improved safety;
— More sophisticated suspensions have
reduced road wear and coupled with better body design, lowered
body noise levels;
— Lorry exhausts emissions have been
radically reduced—and further improvements are in the pipeline;
— Vehicle manufacturers and operators
are continually striving to improve safety and reduce the environmental
impact of lorries.
5.13 Working Vehicles
5.14 Delivery and collection of goods to
and from retail and business premises located within town centres
is an essential part of commercial life—as are the customers
who trade with them.
5.15 The FSB perceives the need for a clear
definition of a "working vehicle". Small businesses,
retailers, parcel and courier organisations, the small builder
and the growing service industry supplying anything from office
stationery supplies to computers or the telephone engineer, depend
heavily on their cars or light vans to operate their business.
Despite their fundamental importance to the urban economic fabric,
little notice is taken of their problems and they provide easy
pickings for over zealous wardens and parking attendants.
5.16 Probably the most common cause of complaint
from drivers is when they are genuinely making a delivery or collection
and are away from their vehicle for 10 to 15 minutes. The parking
attendant seeing no activity issues a ticket. Understanding by
the traffic warden is the key to the problem.
5.17 For many self-employed in the service
industry their vehicle is a mobile toolbox. More often than not,
there is no provision for parking of their vehicles close to where
they are working. The introduction of a system (similar to the
disabled badge scheme) or vehicle permit (similar to the doctors
on call scheme) could be provided for all delivery and service
vehicles, which will be accepted by all local authorities, throughout
the UK using a "timed disc" in the windscreen.
5.18 The lack of proper provision makes
it impossible for delivery vehicles and service engineers to park
legally in most towns or cities. As a result, businesses provide
an almost guaranteed revenue stream for local authorities.
5.19 A realistic approach to the parking
needs of both large and small goods or service vehicles is required.
The Government and local authorities need to recognise the legitimate
and essential needs of drivers.
5.20 It is the FSB's view that the Government
is sending out mixed messages. On the one hand they are actively
encouraging people to take-up self-employment or start new businesses,
through the New Deal Scheme. Many of these new business people
will not be able to afford premises so they work from home and
conduct their business by visiting their clientele either by car
or van. If their business is going to have any chance of succeeding,
they have to be very mobile. Using public transport will reduce
their efficiency to a third and lessen their chances of succeeding
when you consider travelling by public transport take three times
as long as it would by car or van.
6. CONCLUSION
6.1 If the British road haulage industry
is to remain a competitive force within Europe, there needs to
be immediate relief from this oppressive tax burden as Britain's
road haulage industry is near to bankruptcy.
February 2000
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