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


Memorandum by Lacey's Freight Services (RH 49)

  As a result of the Governments Fuel Duty Escalator Policy, British diesel costs excessively more than in any other European country. A comparison of current costs are:

    Britain—£0.68 per litre (pre VAT)

    Belgium—£0.38 per litre (pre VAT)

    Luxembourg—£0.34 per litre (pre VAT)

  Heavy Goods Vehicle Excise Duty is also very much more expensive in Britain than in any other European country. Comparisons for a 40 tonne articulated lorry (the European industry standard size) are:

    Britain—£3,950 per year

    Holland—£610 per year

    Luxembourg—£390 per year

  Because of the vast difference in both fuel and excise duty costs, British Hauliers are obviously at a very serious disadvantage.

  British Hauliers engaged on international work are disadvantaged because of the difference in Excise Duty. The Government argues that many foreign countries impose further road tolls on their own countries vehicles. This is true, but these tolls also apply to British vehicles using these roads, whilst foreign vehicles use our roads for free.

  In July 1998, cabotage restrictions ended, meaning foreign hauliers are now free to "muscle in" on our domestic haulage market, bringing their own cheaper diesel in high volume fuel tanks (enough for several days work in the UK). Paying less in road tax (none to the UK Treasury), they are able to drastically undercut our own Hauliers cost.

  Typically, a 40 tonne articulated lorry will consume on average one litre of diesel per two miles. Fuel costs per mile are therefore:

    British diesel—£0.34

    Belgian diesel—£0.19

    Luxembourg diesel—£0.17

  Shown below is a comparison of two identical 40 tonne lorries engaged on British domestic work, covering a typical 2,000 miles per week. One is a Dutch registered vehicle running on Belgian purchased fuel, the other a British vehicle fuelled by British purchased diesel.

Dutch truckBritish truck
VED Holland (£610 per annum)
£11.73 per week
VED Britain (£3,950 per annum)
£75.96 per week
Fuel cost (2,000 miles @ £0.19)
£380.00 per week
Fuel cost (2,000 miles @ £0.34)
£680.00 per week
Total £391.73 per weekTotal £755.96 per week


  This equates to a difference in operating costs of £364.23 per week! More than enough to wipe out any profit made by the British lorry.

  The Government has stated its plans to scrap the Fuel Duty Escalator Policy, which was introduced by the last Conservative Government, but dramatically increased by the present Labour Government to raise fuel duty by six per cent above inflation at each Budget. Gordon Brown has not said that there will be no further increase in fuel duty. In fact he may raise this by more than six per cent in his next Budget! Even if the level of duty remains the same, British Hauliers will still suffer the same uncompetitive disadvantage.

  The Fuel Duty Escalator, originally introduced in an attempt to reduce fuel usage to protect the environment, is now in fact causing more pollution! This is because Foreign and British vehicles entering the country, bring with them cheaper foreign fuel. This is not the low sulphur diesel readily available for purchase in the UK, but ordinary high sulphur diesel, the type we used to sell in this country. This foreign purchased fuel is obviously causing more sulphur and particulate pollution!

  If British diesel was cheaper than in Europe, Foreign and British Hauliers would purchase it, thus benefiting our own and Europe's environment and also the British Treasury.

  British Hauliers, as essential fuel users, could be granted an essential user rebate. A reimbursement of £0.30 per litre would make UK diesel comparable in price to Belgian diesel. This rebate could be claimed each quarter, similarly to the VAT system. Furthermore, if it could only be claimed by legally Licenced Operators, then this would make it impossible for "Cowboy Hauliers", trading without an Operators License to claim this rebate, rendering them uncompetitive.

  Vehicle Excise Duty should be reduced to a comparable European level. Foreign lorries using our roads should pay, as British lorries have to pay to use their roads. A tax of around £10.00 per day could be levied and collected prior to their vehicles leaving the ports upon entering our country.

  The Government reluctantly agreed last year to talk with Haulage Industry Representatives, and a Transport Forum was established. This, however, only happened as a result of months of pressure upon the Government in the form of peaceful demonstrations and protests, and continuous lobbying. Unfortunately, this Forum has not made the Government accept that the industry is in crisis. In fact, they continue to deny there is a problem at all and have now resorted to stalling tactics!

  By contrast, the Conservative Party has listened to the Haulage Industry. A positive, sympathetic response has been shown by many Conservative Members of Parliament and Prospective Parliamentary Candidates, who have made efforts to talk with their local Hauliers and understand their problems. Meetings with Shadow Cabinet Ministers such as Hon. Bernard Jenkin, MP, have been fruitful and a Shadow Forum has been established.

  If the Government fails to act on this situation, thousands more jobs will continue to be lost to foreign competition. Thousands of votes for Labour (many from traditional Labour voters) will be lost at the next General Election. Many thousands of jobs and votes have already been lost as a direct result of the Governments complacent indifference to the Road Transport Industries plight!

  The British Road Haulage Industry, widely respected as the best in Europe, is the backbone of British Industry. However, because of the crippling taxation forced upon us by the Labour Government, experienced people are leaving the industry in droves, and who can blame them? The Industry cannot afford to lose these skilled people.

  The Government must act now to halt this decline in our Industry. All we ask is for a fair environment in which to compete! Surely this is not too much to ask?

Ian Lacey

February 2000—Revised June 2000


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2000
Prepared 26 July 2000