Select Committee on Environmental Audit Second Report



Our principal conclusions and recommendations are:

(a)We broadly support the principles which have underpinned the Government's taxation policies towards the road haulage industry, although such policies should be applied in a sensible and pragmatic way (paragraph 50).
(b)We welcome the Government's decision to end the fuel duty escalator, particularly in light of rapidly rising oil prices. We also welcome the decision to ring-fence the revenue derived from future real increases in fuel duty for a fund for transport projects. Nevertheless, we are concerned that the Government's decision might discourage the carriage of goods by rail. We therefore recommend that a part of the new fund for transport be reserved for projects which will bolster the rail freight industry (paragraph 51).
(c)We recommend that the financial conditions which must be met before hauliers are granted an O-licence be increased substantially to ensure that new entrants to the industry are not financially unviable companies able consistently to undercut existing operators. It is important nonetheless that barriers to entry to the industry should not unduly deter smaller operators in favour of larger companies. The road haulage industry must remain a fully open and competitive one (paragraph 52).
(d)We do not support measures such as the Essential User Rebate, the designation of 'commercial diesel', or treating fuel as a tax-deductible expense for hauliers, or an across-the-board reduction in VED, which are designed to relieve the tax burden on haulage companies. It is our contention that the Government is broadly right to seek to ensure that the road haulage industry meets all of its social and environmental costs, and to attempt to alter the behaviour of haulage companies, through its taxation policies. It should not abandon such policies simply because the Governments of other European Union member states have not followed its example, although it should respond flexibly to changes in circumstances such as rapidly rising oil prices (paragraph 53).
(e)Although we recognise that there may be difficulties in administering the system, we recommend that the Government introduce a charge, or vignette, to be levied on all hauliers, including foreign operators entering the United Kingdom, in order that they should meet at least part of the cost of repairing the damage they cause to our roads and to our environment. We recommend that VED is reduced by an amount equivalent to the vignette. We note the Government's concern that European Union law limits the amount which can be charged for a vignette, and therefore that the income from the system might not cover the cost of administering it. In order to minimise the cost of administration, we suggest that vignettes should be made available for purchase at, amongst other places, ports, and should permit lorries to display a disk which in turn permits their use of the motorway network. Enforcement of the system should be the responsibility of the police and the Vehicle Inspectorate as part of their duties to inspect heavy goods vehicles. If, even so, the cost of administering the system remains higher than income from it, we recommend that the Government, if it believes that the cost of the vignette should be higher than the current maximum, urgently explore all avenues, including seeking changes to European law, which will make a higher charge possible (paragraph 54).
(f)We welcome the Government's decision to increase the penalties which can be applied to the operators of lorries that do not meet the requirements of the regulations governing their use, and particularly the introduction of legislation to permit the impounding of vehicles (paragraph 65).
(g)We welcome the steps already announced to improve the enforcement of regulations governing the road haulage industry. We recommend that the Government ensure that both the Vehicle Inspectorate and the police have adequate resources, used effectively, to enforce the regulations, and are encouraged to target 'cowboy' operators, rather than reputable companies. The Government should also ensure that foreign hauliers face their fair share of inspections (paragraph 68).
(h)We recommend that the Government examine closely the use of drivers from eastern Europe by certain foreign-based hauliers to ensure that they pose no risk to safety standards. The Government, the police and the Vehicle Inspectorate should act togther to oversee their activities, and particularly to make sure that the drivers concerned are adequately trained, and have sufficient understanding of road haulage and other traffic regulations in the United Kingdom (paragraph 70).
(i)We recommend that the Government seek to agree with the road haulage industry and its customers that incentive schemes which reward drivers for the number of deliveries they make, or the mileage that they cover, or which otherwise threaten road safety, should be ended. If voluntary agreement proves impossible, we recommend that the Government outlaw such schemes as soon as possible (paragraph 72).
(j)We strongly support the application of the Working Time Directive to the road haulage industry. However, although we assume that the exemption of self-employed drivers from the provisions of the Directive is intended to minimise the administrative burden on them, it is obvious that such drivers suffer as much from fatigue as others, and thus that they would equally benefit from reduced working hours. Moreover, if such an exemption is permitted, it seems certain that increasing numbers of drivers will become self-employed, thereby undermining the effectiveness of the Directive. We are also concerned that restrictions on night-working under the Directive will in turn restrict nighttime deliveries, and thus will reduce the industry's flexibility and increase congestion during the day. We recommend that the Government re-examine these aspects of the current proposals, to ensure that the application of the Working Time Directive to the road haulage industry is not counter-productive (paragraph 79).
(k)We recommend that, in order to achieve that objective of removing all older, more-polluting vehicles from our roads, the Government significantly increase the incentives to hauliers, particularly smaller companies, and owner-drivers, to buy new lorries, and upgrade and improve existing vehicles. In particular, we recommend that the Government draw up, in consultation with the road haulage industry, a scheme to scrap older lorries in return for a payment from the Government (paragraph 85).
(l)We recommend that the Government tighten the standards which govern the quality of Ultra Low Sulphur Diesel sold in the United Kingdom, to ensure that fuel consumption is not affected by the use of poor quality, low density, fuel (paragraph 88).
(m)We recommend that the Government establish or support facilities which enable haulage companies to cooperate with each other, and with their customers, to reduce empty running on return journeys by lorries (paragraph 90).
(n)We again recommend that consideration be given to the relaxation of restrictions on nighttime deliveries, and that the Government take the lead in formulating policies to facilitate nighttime deliveries. We reiterate, however, that such changes should be matched by the introduction by the freight industry of quieter and less polluting vehicles (paragraph 92).
(o)We recommend that 44 tonne lorries be permitted for general use only after the recommendations of the shadow Strategic Rail Authority relating to the protection and strengthening of rail freight have been implemented. The Government's objective should be to ensure that the introduction of the new 44 tonne limit does not result in the transfer of any freight from rail to road (paragraph 98).
(p)We urge the Government to review the ways in which operators can be encouraged to transfer smaller freight loads from road to rail. We recommend that the Government amend the freight facilities grant regime to permit rail terminal operators to invest in new equipment to transfer certain cargoes onto rail despite low levels of existing demand for such a service, and to be able to claim additional grants as increasing volumes of freight are transferred onto rail using that equipment (paragraph 100).
(q)We recommend that the Government, in consultation with the industry and with trades unions, introduce further measures to increase the number of Class 1 heavy goods vehicle drivers, and set up a working group with the industry and unions to oversee the matter (paragraph 102).
(r)We are broadly supportive of the provisions of the Asylum and Immigration Act 1999 as they relate to preventing illegal entrance to this country by stowing away on lorries. We believe that it is not unreasonable to expect drivers to examine their loads properly. It is also not unreasonable to seek to deter those few drivers who may accept money to smuggle illegal immigrants into the country (paragraph 105).
(s)We are concerned that situations may arise in which drivers pick up ostensibly sealed loads which are later found to contain illegal stowaways. Under those specific circumstances, we recommend that the Government make clear that neither the driver nor the haulage company involved will be liable to punishment under the Asylum and Immigration Act. Moreover, we recommend that the Government take action to reduce the problem of illegal immigration in addition to fining drivers under the Act, such as seeking to ensure that security arrangements at ports of embarkation to the United Kingdom are considerably improved, and re-investing money raised through fining hauliers into new security equipment to detect stowaways (paragraph 105).
(t)We have not accepted the principal argument advanced by our witnesses from the road haulage industry, that fuel prices and VED are too high, and should fall. We believe that in the past haulage rates have been unrealistically low, and have not reflected the true costs imposed by the road haulage industry on our society. The real increases in fuel duties, although imposed too rigidly in the face of rising oil prices, have gone some way to creating a sustainable market in road freight transport. If our objective is a safe and clean road haulage industry, which contributes less to pollution and congestion, and which employs well-trained drivers, and a sustainable transport market in which rail freight is able to compete fairly with road haulage, then haulage rates must rise to reflect the true costs of freight transport. The small rise in the end-price of goods (only one or two per cent of the total price) that results is a price that we should all be willing to pay (paragraph 109).

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