Select Committee on Transport Minutes of Evidence


Examination of Witnesses (Questions 280-288)

19 MAY 2004

MR SIMON CHAPMAN, MR CHRIS WELSH AND MR DAMIAN VICCARS

  Q280 Clive Efford: So that would suggest the Commission is moving in the right direction?

  Mr Welsh: Well, whereas it has been a success in the UK in terms of making services attractive to customers where there is a much more customer-focused approach, on the Continent they just have not got the same ethos in terms of customer focus. As a result of that, in fact industry on the Continent has been moving away from rail freight because the service just does not work and the latest figures that came out from the European Commission showed a 1% drop in rail freight despite the liberalisation measures that are taking place. It may be due to the fact that many of the traditional railway operators on the Continent are very slow to adapt to this new changing market opportunity.

  Q281 Clive Efford: You saying that there are concerns about the level playing field and the impact on the road haulage industry in this country, but do they not carry still the vast majority of the tonnage that travels by road in this country and is not most of the reduction actually due to an expansion in the market on roads?

  Mr Welsh: Yes, I would agree with that, although there is evidence that some businesses are moving to rail because they now see it as part of their logistics operations and because we have on our major motorways high levels of congestion for many businesses that are moving over long distances. Rail freight is often now, and indeed increasingly short sea shipping, a by-pass for the congestion that we have on our major roads. So yes, there has been some growth there but most of the new business has come from new opportunities and the new entrepreneurial spirit that prevails in the railway sector.

  Q282 Clive Efford: The assertion has been made here on several occasions now that UK hauliers operate at a disadvantage because of the tax regime and because of fuel duty, but actually the evidence of the proportion of the market share that they still hold and where the growth in the market has been does not actually bear that out, does it? For instance, the balance of trade is that there is more coming from the Continent to the UK, which positions those companies on the Continent in a better position to pick up that freight?

  Mr Welsh: That assumption would be right if it was all predicated on price or on cost. A lot of choices are made on the basis of does it work and is it efficient, and so on. The perception still for many operators, many shippers, is that rail is not providing the degree of service and the quality of service that is required. It is still unreliable, it is not measured, and so on. So there is a major perception problem that people have with rail freight. I do not know if Simon wanted to come in on that.

  Q283 Chairman: Just very briefly, Mr Chapman. We are pushing our time.

  Mr Chapman: Thank you. Just one point of clarification on the trade issue. Clearly, foreign trucks are coming into the UK because they take advantage of their lower cost base, but the issue is as much about the exchange rate against the euro that the pound has as anything else and because we are so strong as a currency against the euro at the moment we are sucking in an awful lot of imports from the Continent and that is doing wonders for foreign-based international hauliers coming into the UK.

  Q284 Clive Efford: Do we need an EU charging arrangement before we bring in the UK lorry road user charging scheme?

  Mr Chapman: The answer is yes, we need some sort of framework in which a UK charging regime is based in that it makes no sense at all for operators to be having to deal with one set of criteria, one set of technology and one set of charging administration in one country and then having to do something else in a different Member State. We have got to have consistency of approach across the EU 25.

  Q285 Chairman: Finally, is there anything we ought to know about the change in the tachograph regime, any lessons to be learned, briefly?

  Mr Welsh: Briefly, madam Chairman, yes. There has been a debacle right from the very beginning. As your previous witnesses made clear, the fact is that the Commission has introduced the directive to come into force from August this year, when the manufacturers of the equipment have not been able to produce the digital tachograph, which basically means that legally UK operators and indeed Continental operators in their country and this country are not in a position to comply with the law. We have urged the European Commission to resolve that problem by amending the directive to set a new date for the introduction of the digital tachograph. They are duty bound to do that under the directive and they have not done that. We have taken some preliminary legal steps to hold the Commission liable for any additional costs the UK industry may bear as a result of that and we are still awaiting a reply from the Commission. Whilst the UK Government has made clear what its enforcement regime is going to be, and that is welcomed, the Commission has announced a moratorium for a year on the introduction. The problem for UK industry, particularly those operators who operate outside of the UK, is that you are likely to have different enforcement interpretations of that gentleman's agreement.

  Q286 Chairman: This argument has been used several times and you will forgive me, but as a businessman you operate in different countries irrespective of the European Union. Do you not have to comply with the rules that apply within that country? If you were, for example, to be selling to the sub-Continent, would you then not have to comply with Indian or with Pakistani law?

  Mr Welsh: Well, you would, but I think when you are operating potentially across three or four Member States making one delivery it is very difficult—

  Q287 Chairman: Yes. Do businessmen not have considerations where they have to have different rules for a different country?

  Mr Viccars: We are in a single market, madam Chairman—

  Q288 Chairman: Oh, Mr Viccars, who told you that?

  Mr Viccars: We would like to add that it would be better within a single market to have as smooth an operation across the Continent as possible and that is the benefit of it.

  Chairman: Well, all I can say to you, gentlemen, is thank you very much for coming and bonne chance!





 
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