What separates road haulage from any number of other aspects of the UK economy feeling the white heat of foreign competition? That's the critical question the industry must answer as efforts to win action against foreign competition enter a critical phase.
Sitting in the Treasury, why should politicians regard transport companies in any different light to textile companies, shipbuilders or, to take a more recent example, call centres that are lost from the UK to India and elsewhere? In
all these cases, low-cost competition has taken British jobs. In India, people who man call centres - or, increasingly, write IT software - are paid less and pay less tax. Just like haulage firms from Central Europe.
And Britain wins, doesn't it? Low-cost haulage keeps down the cost of imports. Allow the foreign trucks to run around the UK doing domestic haulage and prices in the internal UK market are lower, too.
These are the siren voices in the Treasury, and perhaps also the DfT, that are counselling ministers to do nothing to level the playing field, enforce strict cabotage regulations and save the UK haulage fleet. Yes it would be nice to get a bit of cash from cross-Channel trucks but let's not get too excited about it. Anyway, it's time that the UK fleet was culled a bit. The "long tail" of UK haulage is inefficient, illegal and adds little in the way of value, so the argument runs.
So, the reasons for the lack of action
are simple. Haulage is no different, in macro-economic terms, from a call-centre. Never mind that the foreign trucks are thundering along the same roads as their overly-taxed UK domestic counterparts, paying no road tax, no income tax and no NI while they are here. The industry is making a last, desperate pitch to government to overcome this complacency, which reached its breathtaking peak when the government casually scrapped the Lorry Road User Charge project last year. The LRUC was to deliver the level playing field promised by the Chancellor and would-be Prime Minister, Gordon Brown, in 2001.
After that, we had the fast-tracked Burns report and efforts have been going on behind closed doors through the Treasury-led Task Group. The first meaningful statements on progress came at the RHA conference in Malta. RHA chief executive Roger King said that the RHA and the FTA are collaborating to an unprecedented degree to present a united industry view on the threat to UK haulage. "We are trying to speak with a single political voice and it is one that I hope will reap very substantial rewards," King said.
"Four workable solutions" have been put to government for levelling the financial playing field and legal issues are being examined by top government lawyers, he said. Practical issues are also being investigated. It seems that efforts divide into two categories: enforcement issues, where the industry is pushing at what seems to be a relatively open door; and the financial level playing field, where difficulties may prove insurmountable.
On enforcement issues, a redefinition of cabotage should allow VOSA to clamp down on foreign contractors doing UK domestic haulage for customers on "a semi-permanent regular basis", King tells Motor Transport. But the tax and duty issues are less certain. He told the conference: "We are not too happy at the way progress is going in terms of financial solutions; we still have some way to go. We are trying to increase the pace of work and are having a further meeting in the next two or three weeks."
Stephen Fidler, who was appointed the civil servant responsible for haulage this February, warned the conference "the case for action [on fuel duty] has not yet been proven. It is far from certain that there will be policy changes". This sounds like the call centre issue; how depressing!
Yorkshire haulier Anne Preston challenged Fidler. She told him, in no uncertain terms, that the government pretends to listen to the industry, but doesn't. "Thank you for that," said Fidler, and managed to sound as if he meant it. He said the issues surrounding unfair competition "really are being looked at in a great deal of detail".
HBOS senior economist Adam Chester surprised delegates to the conference with his clear-cut, emphatic support for the industry's call for action by government. The relatively lax regulatory environment and low fuel duty levels give foreign hauliers an unfair advantage on the Continent, he said, and addressing these issues "is of central importance to the entire UK economy, not just the road haulage industry". It remains to be seen if the government can be won round to this view and what it decides it can do about it. But we shouldn't have to wait long. The crunch for the Task Group is just a few weeks away and we will hear what, if anything, has been decided.
Reed Business Information Limited.©2009
