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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