Examination of Witnesses (Questions 239
WEDNESDAY 1 NOVEMBER 2000
MR J HOOKHAM
239. Good morning gentlemen. Mr Hookham and
(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.
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
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.
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
255. But you do not know what the extent of
(Mr Dossetter) I am sorry; I do not.
256. True stories do not necessarily make big
(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.
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