Further supplementary memorandum submitted
by The Road Haulage Association Ltd
Further to the oral evidence that my colleagues,
Karen Leeming and Professor Doug McWilliams, Centre for Economic
and Business Research, University of Birmingham, and I gave on
Wednesday 1 November 2000, I wanted to write and submit this letter
as a further memorandum of evidence to the committee. I hope that
this serves to clarify a number of issues that arose in the oral
evidence session, and provides the data the committee was seeking.
DATA ON
BANKRUPTCIES
The table, entitled Total Insolvencies in England
and Wales and Scotland—Industrial Analysis shows all the
insolvencies that have occurred in the UK from 1992 to 1997. As
you will see from the Transport and Communication row, the total
number of insolvencies in this sector has increased from 1,588
in 1998 to 1,646 in 1999. Furthermore, the quarterly breakdown
for 1999 to 2000 for the last three-quarters shows an upward trend
from 372, to 380, to 415.
The ICC, the leading business and credit information
provider, has recently investigated insolvencies among hauliers
over the previous decade and discovered alarming information.
More haulage companies have failed in the last two years than
the rest of the 1990s put together. ICC's database shows that
since January 1998, 1,850 haulage companies have gone bankrupt
compared with 1,700 from 1990 to the end of 1997. [Information
to follow].
The second table, entitled Annual Sales of Trucks
and the Amount of Goods Transported, shows that fewer lorries
are carrying more goods and covering more mileage. This is proof,
if proof were needed, that the industry is constantly improving
its efficiency.
RHA CONCERNS OVER
FUEL COSTS
The RHA has made the point to Ministers that
one of the main problems faced by the haulage industry is the
crippling operational and cash flow challenge presented by fuel
costs. While other big cost items such as VED are planned for
and can be financed, drivers are often faced by the problem of
limited credit offered by the oil companies, perhaps only up to
20 or 30 days, which must be settled before they can purchase
more fuel. Meanwhile, any bills owing to them may be outstanding
by as much as 60 or 90 days. This represents a real cash flow
problem which is exacerbated by the increased costs in fuel or
fuel duty, as the credit actually buys less fuel, making it harder
for the haulier to operate effectively. The concept of offering
a deferred payment on fuel duty would offer real assistance (though
not in any actual savings) by gearing duty payments closer in
line with customer payments.
The Chancellor's pre-Budget statement will assist
in some measure through the reductions in fuel duty, but the revised
VED rates which were announced, whilst helpful, will not address
the core problems of high fuel prices and their funding.
9 November 2000
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