Memorandum submitted by ERF (Holdings)
I refer to your letter dated 24 July and would
advise that as an active member of the SMMT, we are fully aware
of the responses that they have made to you.
We at ERF are, I believe, in a somewhat unique
situation in that although we are foreign owned (part of the MAN
Group), we have recently made a £44 million investment in
a new factory and office block in the North West, specifically
Middlewich, Cheshire, without any Government assistance and with
little Government interest either!
This, against a background of an economy led
by a very strong point which, according to No. 10, does not give
us, as a manufacturing operating, any grief. One of the main reasons
we made this investment was to protect our existing workforce
which we have developed over 60 years. It is not, therefore, the
lack of financial assistance that concerns us it is more the lack
of interest in a commercial vehicle manufacturer which has seen
fit to make an investment in a country which is fast losing its
manufacturing base for the reasons that your emergency enquiry
regarding BMC, Rover and the Longbridge situation highlighted.
Obviously, our employment base is much lower
but we still think it is significant and we certainly look forward
to the time when the pound and Euro relationship becomes more
realistic so that we can see a return on our investment.
On the whole, we believe we are a member of
the commercial vehicle industry which is seen by the Government
as a necessary evil to be put down whenever possible either by
taxation or unique legislation unrelated to the rest of Europe.
You will be aware, I am sure, of these issues but it is very difficult
for the vehicle manufacturer to have a product programme that
is meaningful and cost effective if the proposed legislation is
not clarified or defined in a reasonable timeframe as well as
having unique parameters for the UK only.
The last Select Committee of the Government
on Transport came up with a conclusion that the haulage industry
was not unfairly taxed compared to Europe and that they were in
a very competitive position Unfortunately, this conclusion does
not appear to be justified by their balance sheets or their ability
to invest in the product which, due to the legislation, is continually
more complex and, therefore, increases our costs.
I am sure I do not need to point out to you
the need for vehicles or trucks to be on the road. Last week,
I think, indicated very clearly that there is no true solution
to the road haulage industry and even if we can double the freight
on the railways we are unlikely to see any reduction in the growth
on routed haulage requirements. What I would plead for is greater
awareness, both from the manufacturing and user side of the business,
more support to the UK industry since we believe that we are one
of two remaining commercial vehicle manufacturers in the UK, better
harmonisation of legislation within the European marketplace so
that we can be truly competitive against our European neighbours
and finally an admission that realistically there is no alternative
to the use of the truck in our everyday life.
We at ERF had made a major investment in alternative
fuel and technology but the support that has been forthcoming
from the Government in truly driving this technology forward has
been spasmodic and if forever changing. This is an area where
we believe an active participation in terms of taxation benefits
and infrastructure support for fuels should be forthcoming from
the Government in a positive form in order that these vehicles
can be put into service to help the environment remembering, of
course, the huge strides which have been made in diesel engine
technology to ensure a clean environment.
If I may summarise, despite our investment,
the following is of major concern to us as to whether we can survive
in the UK:
1. Strength of the pound in relation to the
2. Penal tax and legislation costs in relation
to the rest of Europe.
3. Lack of clarity and planning in the forward
4. Greater understanding from the Government
of the commercial vehicle industries as opposed to car industry.
5. Real support for both the manufacturer
and the user for alternative fuel technology.
18 September 2000