Examination of witnesses (Questions 286
- 299)
WEDNESDAY 1 NOVEMBER 2000
MR D HANLEY,
MR P ASHLEY
AND MR
J PRATT
Chairman
286. Good morning gentlemen. I am sorry you
have had a bit of a wait. On occasions like this we sometimes
run over a bit. I realise that you are from two different organisations
this morning: Farmers for Action and the People's Fuel Lobby.
Perhaps you could identify yourselves, giving the organisation
from which you have come.
(Mr Hanley) My name is David Hanley, I am a dairy
farmer. I am Chairman, for some unknown reason, of both Farmers
for Action and the People's Fuel Lobby. To my left is John Pratt
who is a member and committee member of Farmers for Action and
a beef and sheep farmer from Brecon. On my right is Paul Ashley,
who is also a member of Farmers for Action and the People's Fuel
Lobby and is a farmer and forestry products operator in Cheshire.
287. Can you just give us an idea of the size
of your organisation? I realise there has been a mushroom growth
and there may well not be a secretarial backing but roughly how
many people would you say subscribe?
(Mr Hanley) Certainly from the Farmers for Action
point of view we are running from right up in Orkney where we
have a member, right down to South Cornwall, across to West Wales
and into Kent. It would be running into several thousand at this
precise moment. I do not have actual figures.
288. Would these be people who would otherwise
be in NFU or NFU Scotland?
(Mr Hanley) A lot of the members of Farmers for Action
are actually NFU and FFA members but a lot of NFU members are
tending to leave the NFU now and join Farmers for Action. The
People's Fuel Lobby has been quite short-lived and it is not on
a membership basis, it is just based on the fact that there is
a very large number of frustrated people throughout the whole
of the United Kingdom.
Mr Chope
289. Can I ask you to give us some specific
examples of how fuel taxes have been hitting farmers?
(Mr Hanley) Yes. Certainly from my own
point of view, I did submit some figures to you. As you will appreciate,
on the red diesel issue we know that the fuel taxation is low
but it needs to be made perfectly clear that the cost of that
fuel has doubled in the last 11 months. We can only use those
vehicles for actual agricultural work. The main problem we have
with either white diesel or petrol is running around with vehicles
moving our stock or our products around though most farms in the
UK rely on the haulage industry to deliver and take away products
from those units.
290. The haulage industry does not benefit from
red diesel.
(Mr Hanley) No, not at all.
291. They are passing on those extra fuel costs.
(Mr Hanley) Yes. We are in a situation now where in
my own business through the activities of Farmers for Action we
have just received a substantial increase in the price of our
raw material, milk. I have had a phone call this morning from
my farm that the transport cost of moving the milk from my farm
to the milk processors is now going to have to increase; they
can no longer sustain the prices they are having to pay and it
is having to be passed back to me. The words used were "A
substantial amount of what you have just received is now about
to be given away".
292. This has of course happened at a time when
your income from what you produce has been falling dramatically.
(Mr Hanley) My own personal income has dropped probably
50 per cent in the last three years. I have gone from a situation
of employing two people, one full, one part, and am now down to
running a business with just myself and my wife. In all probability
by the end of this year that business will cease.
293. How much of this is down to the fuel?
(Mr Hanley) Living in a rural area we certainly rely
on fuel for every movement we make, every product which comes
onto my farm and goes off is moved by the haulage industry. All
the increased bills which come with that are more pressure on
my business.
294. May I ask Mr Ashley specifically about
the impact on the timber business of fuel costs?
(Mr Ashley) I notice in our business now that there
is product coming in from Eastern Europe because it can be brought
in cheaper than it can be brought down from Scotland.
295. How is that?
(Mr Ashley) It just seems to be that the haulage rates
they get mean that the hauliers want to get into the UK. We have
had a situation that when we have done our process we employ hauliers
to take product to our customers. We work on a theory of about
£1.20 a loaded mile. We have just had one of our contracts
taken off us where the customer is still going to have us to do
the work but he is going to use a foreign haulier and I believe
he is running at about 60 pence per loaded mile. We have a small
haulage fleet of our own which is supplemented by haulage contractors
and in effect that means we shall probably dispose of our haulage
fleet.
Mr Morgan
296. Are you saying that the product is coming
from a different place or just the contractor?
(Mr Ashley) No, we are noticing now less and less
product coming from the forests of Scotland and more and more
product is coming from Eastern Europe.
297. A considerable amount of that must surely
be down to the basic price of the product, which is coming out,
say, of the Baltic States, exacerbated by the high rate of the
pound.
(Mr Ashley) I accept that but also when you look at
the haulage costs they seem to express that they can deliver product
from the Baltic States as cheaply as they can deliver from the
North of Scotland.
(Mr Hanley) One of the members of the People's Fuel
Lobby is a substantial haulier from northern Scotland. I met with
him about a week ago and he is actually moving forest products
out of Scotland to Manchester. He is very competitive with his
rates but he has just been told by the firm in Manchester that
the rates he is having to charge mean they are going to cease
using his business and they are actually going to pull from Scandinavia
into Manchester because the rates are cheaper. That is actual
comment from a haulier who is doing substantial business in northern
Scotland.
Chairman
298. Let us get this clear. When we are talking
about timber being transported, there is the fact that there are
now sources of timber which never existed before. Some of us were
in the Baltic States not long ago and certainly from the former
Soviet Union and areas like that on the Baltic vast amounts of
timber are coming in at dramatically lower prices. Then there
is also the question of the haulage industry. In my constituency
I have a major timber processor, CSE Timber Products. Some years
ago they ended their own fleet and made an arrangement with a
private haulier; they outsourced the transportation because they
said they were timber processors, not hauliers and these people
do it far more efficiently and more cheaply than we can do it.
Is this outsourcing not a trend? I realise that for someone like
yourself, who has had a vertically integrated business, maybe
you have been holding up against the flow of the tide as it were.
(Mr Ashley) I accept that. What I am saying is that
the trend is that the British hauliers we were using have been
replaced by foreign hauliers. The local British hauliers whom
we were outsourcing have been replaced by hauliers coming in from
Europe, bringing in a load and then working within the UK to move
the product out.
Mr Morgan
299. Are you saying the timber is being brought
in by road?
(Mr Ashley) Yes.
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