Examination of Witnesses (Questions 249-259)
19 MAY 2004
MR SIMON
CHAPMAN, MR
CHRIS WELSH
AND MR
DAMIAN VICCARS
Q249 Chairman: Good afternoon, gentlemen.
I apologise for keeping you waiting. Would you please identify
yourselves.
Mr Welsh: Thank you, madam Chairman.
My name is Chris Welsh. I am head of campaigns for the FTA. On
my right is Simon Chapman, who is our chief economist, and on
my left is Damian Viccars, who is our manager of our Brussels
operation.
Q250 Chairman: Thank you. Mr Welsh, did
you have anything briefly that you wanted to say?
Mr Welsh: Yes. I will try and
keep it as brief as possible, madam Chairman. Firstly, we very
much welcome the opportunity of submitting evidence today to your
Committee. We have been heavily involved in the development and
evolution of European transport policy over the last 15 or 20
years or so. That is demonstrated by the fact that we have our
own Brussels office, where Damian resides.
Q251 Chairman: I am sure he has done
something to deserve it!
Mr Welsh: As a result of that,
we estimate that some 60% of legislation affecting the UK transport
industry emanates from Brussels. So we have been heavily involved
as the Commission has developed its transport policy. The only
thing we probably would say is that one of the key benefits of
developing common transport policy has been that enacting the
Treaty of Rome it has enabled the Community to take some positive
steps to liberalise transport over the last 10 to 15 years or
so, moving away from national protection of markets.
Q252 Chairman: Is there any particular
piece you would identify?
Mr Welsh: One example is clearly
the major modes of transport, including road transport where previously
we had a quota system for vehicles coming into and out of each
particular Member State. Air transport policy is probably a classic
example where we have stripped away the bilateral system within
Europe, where we now have a much more open and competitive air
transport system. So most modes of transport that are predicated
on national lines within Europe are now competing within a single
market and that has been of great benefit to the Community in
terms of promoting and driving European trade. So we welcome that
broad framework of moving from a highly regulated and often restricted
transport industry to a much more liberal and competitive broad
transport industry. That has been fine up until probably the beginning
of this decade, where the Commission, having adopted the common
transport policy aimed at liberalising Community transport, appears
to be shifting towards turning the clock back, to try to apply
a more regulated approach to dealing with some transport problems.
Q253 Chairman: What makes you think that?
Mr Welsh: Well, the Commission
published in 1991 the equivalent of its 10 year transport plan.
Within that it sought to execute a modal shift, moving freight
from road onto rail and sought to make better use of other modes
of transport including short sea shipping and so on. We have no
particular problem there. Our members use all modes of transport
and we are very keen to have a very efficient and effective railway
system and better use of short sea shipping and all modes of transport.
The problem has been that the Commission's method of doing that
has been to penalise one particular mode of transport and that
is road freight transport, which by and large is the one that
is delivering the vast majority of goods and services to industry
right across the Community. That is having some negative impacts
in terms of performance within the economy.
Q254 Chairman: Yes. I think I am going
to stop you there, Mr Welsh, because otherwise you are going to
do the same thing; you are going to ask and answer the questions
and that is cheating! To what extent do you think the Commission's
ambitions conflict with the UK Government's intentions and our
interests?
Mr Welsh: Well, of course the
UK Government has the voice of 1 in 25 now and has been heavily
involved in the development of Community transport, so I do not
necessarily see it as a sort of competition between what is the
Community's interest and what is the national interest.
Q255 Chairman: Yet you have genuinely
said, in fact your colleagues have said the same thing, that you
believe the Commission has a specific bias towards the rail industry?
Mr Welsh: Well, that is self-evident
from the Commission's White Paper itself.
Q256 Chairman: Yes, but that was 1991.
What would you say they have done since 1991 that has led you
to believe that they actually meant more than an expression of
goodwill and candy for everyone?
Mr Chapman: I think the concern
is that since 1991 the Commission has almost turned the clock
back, as Chris has said, and the 2001 White Paper, which is the
current 10 year plan which we are working to, has said, "Hold
on, you know the liberalisation of transport markets and in particular
the liberalisation of road has been almost too successful and
rail freight and other modes of transport need to be nurtured
as well." What we have got is the brakes having been put
on a market-driven progression towards the development of road
freight transport.
Q257 Chairman: In exactly what specific
way have they put the brakes on the development of a commercially
successful road industry?
Mr Chapman: Two specific items
are firstly the introduction of the Working Time Directive from
March 2005—
Q258 Chairman: Even though it appears
to be something which can be interpreted flexibly between states?
Mr Chapman: Well, even with those
derogations in place there will be a cost penalty to the UK logistics
sector.
Q259 Chairman: What percentage?
Mr Chapman: Well, we believe the
cost of the Working Time Directive to be in the region of about
£1 billion per annum to the logistics sector.
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