Select Committee on Transport Minutes of Evidence


Examination of Witnesses (Questions 260-279)

19 MAY 2004

MR SIMON CHAPMAN, MR CHRIS WELSH AND MR DAMIAN VICCARS

  Q260 Chairman: Anything else?

  Mr Chapman: Well, I think the previous people who gave evidence suggested there would be an increase in the number of drivers required in the industry and that would exacerbate the skills shortages that we are already facing.

  Q261 Miss McIntosh: What impact do you think the co-decision procedure between the Parliament and Council of Ministers has upon your decision making?

  Mr Welsh: Well, it has made it extremely complex and very, very long-winded. In earlier evidence you have heard there are some pieces of legislation that have literally taken 10 years to get through the sausage machine.

  Q262 Chairman: VAT took 18!

  Mr Welsh: Our experience now is that the additional legislative procedure of going through a co-decision is very time-consuming and very, very onus upon business and industry in terms of being able to influence that process. It is a relatively new learning experience for everybody but it is certainly leading to some unexpected circumstances where with proposals that we previously might have been having to do a deal with just through the European Commission suddenly common positions come out of the European Parliament. So we are often having to deal with differing amendments and pieces of legislation from the different institutions, which from an industry point of view where we are trying to present a case in terms of what is best for our members is often extremely difficult.

  Q263 Miss McIntosh: Would you not expect the European Parliament to be perhaps more receptive to the views of your organisation and other similar bodies across the European Union?

  Mr Welsh: Well, yes, we find the European Parliament receptive to our ideas and we can probably claim some success with elements of legislation that have gone through the Parliament.

  Q264 Chairman: So all elected representatives are not difficult, Mr Welsh, it is only some of them? Is that it?

  Mr Welsh: No, you are all very easy to get on with and deal with, madam Chairman.

  Chairman: A rapid recovery there!

  Q265 Miss McIntosh: I think you have got perhaps the posting of the UK representation in Brussels in mind. In your view, how widespread does the European Commission consult on road transport policy?

  Mr Welsh: Well, not as much as we would like. A classic example probably was with the whole evolution of the Working Time Directive, which when the social partners were presented with ideas by the Commission 10 years or so ago when it was first proposed both sides were very unhappy with the draft proposals that came out at that time. It is probably fair to say that both sides had very little impact in altering the Commission from that original concept that it had about how it was going to apply the Working Time Directive. So our experience is that in order to make that impact in Europe you have to be almost there before the Commission starts to publish the formal proposal if you are going to influence the type of policies that come out of the Commission. Equally, with the consultations the Commission organised in relation to the 1991 White Paper that we were talking about earlier the Commission called together a consultation of all industry interests. I took part in that particular consultation and it is fair to say that business as one across all different modes of transport said they were very unhappy with the shape of the policy the Commission was developing, but that was just ignored and the Commission, after nearly 18 months of internal deliberation, came forward with their White Paper.

  Mr Chapman: Another example, just to add to your collection, is the revisions to the drivers' hours rules, which are currently being considered by the Irish presidency and by the Commission. Again, the unions and the operators were dissatisfied with the social sector dialogue consultation from the Commission. The Commission's original draft published in October 2001 fell far short of the original aims to clarify, to simplify and to update the drivers' hours rules. More recently, the European Parliament has had its say. They have tabled 243 amendments reflecting the inadequacy of the original proposals. We have now got the situation where the Council is unable to reach any consensus, as it has been unable to do so for about two years, and the Irish presidency is desperate to push ahead with the dossier and it is now considering trying to get a vote going through the Transport Council in June, even though a lot of the mechanisms which really needed a lot of detailed ironing out are still not in place.

  Q266 Miss McIntosh: Do you think a lot of the problems could be resolved if organisations like yourselves were more proactive both with the Commission at the time of the initial draft and with our own home department, in this case the Department for Transport, through both the organisation here in the UK and representation in Brussels?

  Mr Welsh: Well, we think we do our job as best we can and we certainly have our office in Brussels to assist us to do that, but I think the perception we have is that the Commission had a preconceived idea in terms of the 1991 plan about what it wanted to do, and what it wanted to do in that case was to get the freight off the road and on to rail and promote rail, which we supported, but it had under-estimated the scope for rail to be able to solve the problems that the Commission—

  Q267 Chairman: Mr Welsh, I think it would be an entirely laudable point of view were it not for the fact that the Commission is directly responsible for the rail division between the infrastructure and the operating in this country, which is why it is such a mess, and there is frankly no indication that they are serious about doing any work on promoting it. They make these comments but they do not seem to have been doing very much about it and the Working Time Directive, certainly the drivers' hours, was being discussed not just in 1991 but when I was a Member of the European Parliament, I can assure you, and that is going back a bit. Are you really saying that what is happening is that the Commission is following a political agenda which is not that of the Council of Ministers?

  Mr Welsh: Well, as you know, the Commission itself has its own institutional powers to decide legislation and bring forward its own agenda and that is what the Commission has done. Business is dissatisfied with the current development of Community transport policy. Recently the Director-General of DG TREN, the transport directorate, has indicated that he will review that 10 year plan and has admitted that there are some shortcomings in the way the Commission has pursued it, or that there are some unexpected consequences which they had not anticipated. If that is the case, we welcome that because I think we do need to stand back.

  Q268 Chairman: Yes, but I want to be quite clear. You are actually saying the Commission is ignoring the view of the Council of Ministers, who cannot come to a consensus, it is embarrassed by the decisions taken by the elected Members of the European Parliament and has now accepted that at least there is something wrong? Is that what you are saying?

  Mr Welsh: Well, I think the Director-General has recognised that it is time to review his own 10 year plan and he has said recently to various industry stakeholders, "There are some problems with the existing plan and we want to review that." So we will want to take that up.

  Q269 Miss McIntosh: Just to pursue that line of thought, we heard from the previous witnesses that bizarrely the self-employed driver is excluded from one of the two directives, the Working Time Directive I think it is. If you take that as an example, have you put pressure on the Commission, the European Parliament and the Council of Ministers through our home ministers here to include self-employed drivers?

  Mr Welsh: The issue of self-employed drivers has not been very prominent amongst the concerns of our members. Our main concern has been to ensure that the UK Government adopts the most flexible approach to the application of the Working Time Directive. The recent announcement that ministers made has given some confidence that as it concludes it consultation it will give the required level of flexibility and that has been welcomed by all sides of industry, including the trades unions and employers.

  Q270 Mrs Ellman: Will the Working Time Directive improve safety?

  Mr Welsh: That is difficult to say because obviously it has not come into full force. In terms of the road freight industry, what is more relevant is the drivers' hours rules because they are the rules that actually have been designed specifically to look after the social and safety aspects of the actual driving itself. So we had under drivers' hours rules effectively a 45 hour week for some considerable time. So the main issue for employers is how we utilise that time that we have available for drivers and that is why we require the flexibility because of different types of logistics operations.

  Q271 Mrs Ellman: Do you accept that the restrictions on drivers' hours have improved safety?

  Mr Welsh: We support the existing drivers' hours regime, yes. I think it has been quite important in terms of ensuring standards of safety and that those standards are properly enforced. Yes, we would support that.

  Q272 Mrs Ellman: Will the restrictions have a greater impact on drivers in this country than in other European states?

  Mr Welsh: Again, it is too early to predict. I think the view is that provided we get the required level of flexibility for operations that I have referred to earlier and we have an appropriate light enforcement touch, again there have been indications that enforcement organisations will focus on those that are likely to exploit rather than those lawful operations; in other words it is targeting the use of enforcement.

  Q273 Mrs Ellman: What do you anticipate to be the impact of the expansion of the European Union on this issue?

  Mr Welsh: I cannot really answer that. It is just too difficult a question to tackle at this particular point.

  Q274 Chairman: You must have made some estimate because one of the constant complaints of your members is that they are undercut by drivers who are working for people able to take them on in what are now the new Member States at much lower rates of pay?

  Mr Welsh: Well, our members are not just pure road hauliers, they are own account operators and industry that uses all forms of transport. We would hope that in fact any benefit there is from enlargement would be that where we have serious skill shortages in this country, and clearly driving is one, maybe that could be an attractive career opportunity.

  Q275 Chairman: What you are really is that you have not chosen to inspect too closely some of the effects which might be deleterious to some of your members as well as the advantages of the entry of new states? You have done no estimate of the effect that would have on the terms and conditions of drivers?

  Mr Welsh: No, we have not.

  Q276 Mrs Ellman: You want to see the harmonisation of taxes and charges across the Union. Can you tell us why?

  Mr Welsh: I will ask Simon to deal with that.

  Mr Chapman: Yes, we do want to see the approximation of taxes and charges across the European Union. I think we feel that the current level of fuel duty that we have got in the UK is undermining the UK's road freight transport competitiveness and it is a thorn that has been in the industry's side for a long time and it is one which we are very pleased to be starting to address through the introduction of lorry road user charging. Whilst lorry load user charging in the form that is being considered by the UK Government is welcome, it does not get away from the fact that even though foreign hauliers will begin to pay something towards the cost of using the UK road network, the UK will continue to be a high-taxed environment in which to move freight. Effectively introducing lorry load user charging on a tax-neutral basis will just simply move a tax on fuel to a tax on road usage. So yes, we do welcome lorry road user charging but let us be absolutely clear, it is not going to reduce or improve the freight transport efficiency in terms of cost of the UK operators.

  Q277 Mrs Ellman: Do you really want harmonisation or is this all about having lower fuel duties?

  Mr Chapman: Well, I think there is a good case for having a level of taxation across Europe which more accurately reflects the costs that trucks impose on the road network. Now, in the UK we feel that we are over-taxed at the moment and when we are competing with operators on the Continent and operating in a single market then we feel that the level of tax that we face should be broadly comparable with the taxes that our competitors face.

  Q278 Mrs Ellman: What do you see as the current problems related to introducing lorry road user charging in the UK?

  Mr Chapman: I think the main ones are in terms of trust and getting the freight transport community, which is clearly a very practical industry and therefore a very sceptical industry, to buy into the idea of a road user charge. So there is the trust element and the Chancellor and the economic secretary have said that it is going to be tax-neutral. Fine, but it also needs to clearly minimise red tape. So there is the trust element, there is also a technology element and the need for the on-board units and the trucks to be able to integrate with the other telemetric applications in the vehicles. There is also the transparency argument and it is absolutely essential that the operators of trucks are able to make rational decisions about when and where they move freight in the UK.

  Chairman: I want to bring Mr Efford in before we finish.

  Q279 Clive Efford: Your members I think consign about 90% of freight which travels on rail. Are they saying to you that they would rather use the roads more? Is that the reason for your criticism of the Commission's policy?

  Mr Welsh: In fact our members have been using rail more and they want to continue to do so. In the UK the rail freight story has been one of relative success. We have seen a 15% increase in the uptake of rail freight.


 
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