Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 239 - 259)




  239. Good morning gentlemen. Mr Hookham and Mr Dossetter.
  (Mr Hookham) Yes; indeed.

  240. Your submission has said that some companies may use foreign-based hauliers to avoid the UK's high road user taxes. The DETR has suggested that cabotage is around 0.06 per cent of UK haulage. Is this really more of a perceived than an actual threat to UK competitiveness?
  (Mr Hookham) The threat is very real. There is no doubt that the cost base of other European hauliers is measurably smaller than that of UK hauliers and that is a project we spent a lot of time developing in the Road Haulage Forum. One has to think of the situation of a UK haulier who is faced with the threat of a foreign haulier being able to offer a lower price. British entrepreneurship being what it is, you do not sit there and wait for your business to disappear, you try to match that price and try to hang onto that business. What has happened is that although very little business has actually transferred, British haulage rates have had to be pegged down to be able to match the threat of much lower rates being offered by foreign hauliers.

Mr Butterfill

  241. You put the difference in total operating costs between the UK and European operators at between five and ten per cent. What proportion of that is fuel costs?
  (Mr Hookham) Depending on the size of the fleet and the types of vehicle operated the proportion of total operating costs of a typical goods vehicle operator is between 30 and 35 per cent. That is second only to the employment costs of the driver.

  242. You have also suggested in your submission that there are instances of hauliers actually going over at the weekend and filling up their tanks and coming back. How much would it cost them for a typical 40-tonne lorry to go across the Channel on the ferry? What is the cost of a return trip?
  (Mr Hookham) That is a service which is actually provided quite openly by EuroTunnel as a service to hauliers, particularly in the South East of England where obviously access to the Channel Tunnel Terminal is easy.

  243. How much does it cost?
  (Mr Dossetter) About a couple of hundred pounds. You see a lot of it on a Saturday morning if you nip over yourself for the odd bottle of wine. You do see quite a number of UK tractors in operation going through the tunnel, down to Belgium, filling up with the low rates there and coming back.

  244. So they are paying around £200 for the round trip.
  (Mr Dossetter) As I understand it; something of that order.

  245. So if we do a quick calculation and the difference for 1,500 litres is a cost of between £300 and £400 depending on the country where they actually fill up, they can make about £200.
  (Mr Dossetter) Two or three hundred pounds.

  246. No, it would not be £300 would it? If it is £200 to go across and the maximum is about a £400 difference, the most they can make is £200.
  (Mr Dossetter) Talking in rough terms.

  247. They find it worth their while to spend their time taking a lorry over there and coming back for £200.
  (Mr Dossetter) It is obviously restricted to the sort of operators who are within a reasonable distance from the Kent coast. It is not viable to bring vehicles down from Birmingham or anything like that.

  248. Last weekend they would have been in dead trouble because they could not have got back.
  (Mr Dossetter) Indeed.


  249. How long does the journey take?
  (Mr Dossetter) Across the water?

  250. You obviously have labour costs. People are not going to give up a Saturday to do that for nothing.
  (Mr Dossetter) Sometimes they are willing to give up a Saturday as I understand it.

  251. The self-employed?
  (Mr Dossetter) Indeed the self-employed have no problem with that but even employed drivers in small fleet companies, five to ten vehicle companies, as I understand it the drivers are not averse to a day out in France.

Mr Butterfill

  252. And they buy some wine and tobacco while they are there.
  (Mr Dossetter) Indeed.

  253. Do you have any figures as to how prominent this is? Can you supply us with any evidence?
  (Mr Dossetter) No; I do not think so.

  254. I can imagine that a few people would do it but I am sure I would not want to give up my weekend.
  (Mr Dossetter) All I can say is that it is more than apocryphal; I have seen it myself. It does happen. It happens every weekend.

  255. But you do not know what the extent of it is?
  (Mr Dossetter) I am sorry; I do not.


  256. True stories do not necessarily make big statistics.
  (Mr Dossetter) No, but it does demonstrate the extent of the problem we have with such a vastly different level of taxation here in the UK and applicable in Europe. It does seem bizarre that a transport operator, a lorry operator, would go to the trouble of going across the water on a Saturday to fill his tank up.

Mr Butterfill

  257. I can see that it is much more of a problem between the Irish Republic and Northern Ireland. How much of the fall in sales in Northern Ireland in your opinion is down to the price differential as opposed to illegal importation?
  (Mr Hookham) We did make an estimate that the sales have fallen 40 per cent over the past few years as a result of that in Northern Ireland.

  258. How much of that is due to the price differential?
  (Mr Hookham) There are very few other factors to which it could be attributable. The structures are the same.

  259. Perhaps it is as much as 50 per cent.
  (Mr Hookham) There is very strong circumstantial evidence that at the only land border the UK has with the rest of the Single European Market you have this very important flow of fuel in one direction.

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