Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Memorandum submitted by ERF (Holdings) plc

  I refer to your letter dated 24 July and would advise that as an active member of the SMMT, we are fully aware of the responses that they have made to you.

  We at ERF are, I believe, in a somewhat unique situation in that although we are foreign owned (part of the MAN Group), we have recently made a £44 million investment in a new factory and office block in the North West, specifically Middlewich, Cheshire, without any Government assistance and with little Government interest either!

  This, against a background of an economy led by a very strong point which, according to No. 10, does not give us, as a manufacturing operating, any grief. One of the main reasons we made this investment was to protect our existing workforce which we have developed over 60 years. It is not, therefore, the lack of financial assistance that concerns us it is more the lack of interest in a commercial vehicle manufacturer which has seen fit to make an investment in a country which is fast losing its manufacturing base for the reasons that your emergency enquiry regarding BMC, Rover and the Longbridge situation highlighted.

  Obviously, our employment base is much lower but we still think it is significant and we certainly look forward to the time when the pound and Euro relationship becomes more realistic so that we can see a return on our investment.

  On the whole, we believe we are a member of the commercial vehicle industry which is seen by the Government as a necessary evil to be put down whenever possible either by taxation or unique legislation unrelated to the rest of Europe. You will be aware, I am sure, of these issues but it is very difficult for the vehicle manufacturer to have a product programme that is meaningful and cost effective if the proposed legislation is not clarified or defined in a reasonable timeframe as well as having unique parameters for the UK only.

  The last Select Committee of the Government on Transport came up with a conclusion that the haulage industry was not unfairly taxed compared to Europe and that they were in a very competitive position Unfortunately, this conclusion does not appear to be justified by their balance sheets or their ability to invest in the product which, due to the legislation, is continually more complex and, therefore, increases our costs.

  I am sure I do not need to point out to you the need for vehicles or trucks to be on the road. Last week, I think, indicated very clearly that there is no true solution to the road haulage industry and even if we can double the freight on the railways we are unlikely to see any reduction in the growth on routed haulage requirements. What I would plead for is greater awareness, both from the manufacturing and user side of the business, more support to the UK industry since we believe that we are one of two remaining commercial vehicle manufacturers in the UK, better harmonisation of legislation within the European marketplace so that we can be truly competitive against our European neighbours and finally an admission that realistically there is no alternative to the use of the truck in our everyday life.

  We at ERF had made a major investment in alternative fuel and technology but the support that has been forthcoming from the Government in truly driving this technology forward has been spasmodic and if forever changing. This is an area where we believe an active participation in terms of taxation benefits and infrastructure support for fuels should be forthcoming from the Government in a positive form in order that these vehicles can be put into service to help the environment remembering, of course, the huge strides which have been made in diesel engine technology to ensure a clean environment.

  If I may summarise, despite our investment, the following is of major concern to us as to whether we can survive in the UK:

    1.  Strength of the pound in relation to the European Euro.

    2.  Penal tax and legislation costs in relation to the rest of Europe.

    3.  Lack of clarity and planning in the forward looking legislation.

    4.  Greater understanding from the Government of the commercial vehicle industries as opposed to car industry.

    5.  Real support for both the manufacturer and the user for alternative fuel technology.

18 September 2000

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