The UK road haulage industry has been dealt a potential death blow from Brussels after MEPs voted last week to introduce unrestricted cabotage in just six years' time. At present, cabotage is restricted to casual or ad-hoc work, but under proposals put forward by the European Commission (EC), contract work would be possible under cabotage, albeit restricted to a maximum of three journeys in seven days.
However, the European Parliament went further last week by voting for the EC's proposals to be fast-tracked through to commence from 1 January 2009, then gradually lifted to allow a maximum of seven journeys in seven days from 2011, with full liberalisation from 1 January 2014. James Hookham, the FTA's director of policy, says: "Whether the proposals get diluted slightly, we can only hope, but if they go through as they stand, the UK road haulage sector will cease to exist.
"Under the proposals, high-taxed UK hauliers will be exposed to the full force of foreign carriers using low-cost fuel purchased on the Continent. UK carriers simply cannot compete against such a price advantage." The FTA calculates that foreign hauliers running on cheap fuel have an 8% cost advantage compared to a UK haulier. The association is therefore calling on the government to halve UK diesel duty to match EU average levels, ahead of the relaxing of the cabotage rules from 2009.
"If full liberalisation goes through, the government will lose control of road haulage in the UK because it won't be able to regulate or control the industry, as foreign hauliers won't pay any fuel tax or VED, or operate with a British O-licence," adds Hookham. However, the RHA's head of international affairs, Peter Cullum, feels that full liberalisation might not happen as it will be "difficult to push through".
He adds: "People are right to be worried about it, but we think the proposals will change, there might be some sort of compromise." Meanwhile, DfT figures show the number of foreign trucks entering the UK on international journeys reached an all-time high of 1.7 million in 2007, up 7% from 2006.