Transport Committee - Road Freight - Minutes of EvidenceHC 480-i

Written Evidence

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Transport Committee

Road Freight

Tuesday 3 July 2012

Jack Semple, Nigel Cook, Theo de Pencier and Karen Dee

Mike Penning MP

Evidence heard in Public Questions 1 - 72

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Oral Evidence

Taken before the Transport Committee

on Tuesday 3 July 2012

Members present:

Mrs Louise Ellman (Chair)

Steve Baker

Jim Dobbin

Julie Hilling

Kwasi Kwarteng

Mr John Leech

Paul Maynard

Iain Stewart

Graham Stringer

Julian Sturdy

________________

Examination of Witnesses

Witnesses: Jack Semple, Director of Policy, Road Haulage Association, Nigel Cook, Managing Director, Elddis Transport, Theo de Pencier, Chief Executive, Freight Transport Association, and Karen Dee, Director of Policy, Freight Transport Association, gave evidence.

Q1 Chair: Good morning and welcome to the Transport Select Committee. Could you give us your name and the organisation that you are representing to help our records?

Karen Dee: I am Karen Dee. I am Director of Policy at the Freight Transport Association.

Theo de Pencier: I am Theo de Pencier, Chief Executive of the Freight Transport Association.

Jack Semple: I am Jack Semple, Director of Policy, Road Haulage Association.

Nigel Cook: Nigel Cook from a company called Elddis Transport. I am also the Northern Regional Chairman of the Road Haulage Association.

Q2 Chair: How would you describe the current state of road freight transport? What do you think the main challenges are?

Theo de Pencier: In many ways, the level of activity in transport has always reflected what is happening in the economy generally to some degree, particularly in road transport, as pretty much 90% of everything that moves from a manufacturer or distribution centre into a retail outlet or manufacturing centre and so on goes by road. So it has been a difficult few years for the industry overall.

Those difficulties have been compounded by the fact that a lot of our input costs, particularly fuel of course, have been rising significantly faster than general inflation. That has been the case for many years. In difficult economic times it is very difficult to recoup those increased costs through passing on the cost to your customers. In essence, whether you are a large operator or, as many of our members are, own account operators-so they are not necessarily transport companies per se but they deliver and work on behalf of a manufacturing business or a retailer-they have had a lot of pressure on either the margins they make or the cost as a proportion of the selling price of goods in a retailer or whatever it may be.

Having got through a number of years, right at the moment I would say lack of confidence would be the strongest characteristic of my members, whether they are large retailers or more modest-sized businesses either in manufacturing or transport. That is seen in a reluctance still to invest, with a fair degree of uncertainty going forward. Also, probably, having got to this point and operating in many cases at a lower level of activity than they were back even in 2008-09-and we saw a number of liquidations and insolvencies, which are still a characteristic of the industry-my smaller members or the ones that have got to this point, if they operate in particular market sectors, will just reflect how that sector is faring. For example, construction is difficult at the moment; other sectors are perhaps slightly more buoyant.

There is one further characteristic I would mention. For me, a lot of our larger members, particularly retailers, are less confident and optimistic than they were certainly over the last few years. That is probably the biggest change. It is not just the smaller operators and members of FTA that are thinking they are in for a very long haul of tough times. We also see it with our larger members at the moment as well.

Q3 Chair: Does anyone disagree with any of that, or would any of you like to add any further points? I am looking particularly at the current challenges that you think the sector is facing.

Jack Semple: I would echo everything that has been said and perhaps just add one or two other points. We have a long-term pressure on the industry. We are seeing consolidation at every level in the industry. There is an expectation that that consolidation will continue. We are seeing that the investment issue has possibly been exacerbated by the change in capital allowances by the Government at the end of this last financial year. Driver wage increases, if they are getting any increase at all, are running well below the level of inflation. Costs, other than fuel, are also going up. There has been a very sharp increase since the start of the recession in vehicle prices.

We have seen several innovations from Government obviously. The longer semi-trailer trial has come through. We have a patchy picture for the driver CPC. Some operators are really getting to grips with it and making it benefit them; others are not because it is not seen as a good investment.

In terms of the Department’s particular key issues, with the pressures on operators, compliance is an issue of very strong concern to members. We would be keen to see the Department giving a clearer and different focus from what it has at the moment in that area.

Q4 Chair: Mr Semple, what do you mean exactly by that? You want the Department to give it a different focus.

Jack Semple: There are several areas where we would like to see more evidence of VOSA activity. In essence, it boils down to taking stronger, more effective and more visible action against those operators who are seriously non-compliant.

Q5 Mr Leech: I would like to ask a question about road safety. The Government are consulting on the possibility of increasing the speed limit to 80 mph on the motorways. Does the Road Haulage Association or the Freight Transport Association have any view on what impact that would have on safety on the motorways and safety for your drivers?

Karen Dee: We are still in the process of looking at what the precise impact would be. Clearly it is not a speed limit that would apply to most of our members, obviously, because we have a different speed limit. I suppose there is an issue with regard to the differential in the speeds and whether it will create more frustration between drivers and lorries, which will be moving that bit slower in comparison to the cars.

Q6 Mr Leech: Is there any attempt from the industry to argue the case for the speed limit to increase for hauliers to 70 mph so that there is the same differential?

Nigel Cook: If I can comment on that as an operator, first of all, to run a current HGV at 70 mph would have a significantly detrimental effect on fuel economy. In the industry now we are seeing a lot of operators that have gone the opposite way. Although we are basically limited to 56 mph, a lot of the industry is running at a lot less. We run our fleet at 52 mph because there is a significant fuel benefit, even over 56 mph.

Where there is potential to look at the speed limit on HGVs is on some of the A roads in the country. I come from the north-east of England. We are not really linked to the motorway network, unfortunately. The A1 north of Newcastle, for example, is a very good road, but our HGVs are limited to 40 mph. There is an argument whether they should be running at 45 or 50 mph, because you see a lot of accidents caused by car drivers getting frustrated and trying to get past HGVs. The speed limits are very historic to when the braking systems and technology in vehicles weren’t anywhere near as good as they are now.

Q7 Mr Leech: Are there a lot of operators that are putting speed restrictors on their vehicles to make sure that they are going below 60 mph?

Nigel Cook: All vehicles have to have speed restrictors by law, but, yes, we are seeing more and more.

Q8 Mr Leech: What sort of impact is that having on savings in fuel costs?

Nigel Cook: It can be quite significant. Within our own business it was in excess of a 5% saving on fuel.

Q9 Mr Leech: Is the requisite loss in time not seen as significant?

Nigel Cook: There are certain operations that we would have to look at doing slightly differently. The feedback from our drivers was that, initially, they were very negative towards it, but now they find it less stressful because they are not sitting there trying to get past that vehicle at 56 mph when they are also doing 56 mph. They find it a lot smoother and easier to drive and they are not braking as often. That is one of the issues.

Theo de Pencier: I would endorse the point that has been made. Most of the big retailers now run at below 56 mph, having maybe been at 56 mph for a spell as well. It is exactly the same as Mr Cook’s comments. Most Tesco vehicles, for example, are running at 50 mph at the moment. Sainsbury’s are very similar. Big fleets, by and large, are looking for that optimum level so that they can get as good fuel economy as they can, depending on the route and the type of work they are doing. They also feel it will enable reliable journey times. Journey time reliability is significantly more important than absolute speed.

Q10 Mr Leech: If a lot of hauliers are driving at 50 mph, do you think it is really safe for the Government to be considering a 30 mph speed differential between hauliers and cars?

Theo de Pencier: I don’t really have a strong view on that.

Q11 Chair: Does anyone have a view on that?

Jack Semple: I would make a brief point. At the moment trucks have to be regulated at no more than 56 mph. A lot of firms like to have the choice as to where to set their speed limits. 50 mph is at the low end; 52 or 53 mph is common. I do know some quite significant- sized firms that choose different speeds for different applications within an industry that is very tightly regulated on drivers’ hours. For some firms, 56 mph is important because they have to get the job done within the driving day.

Q12 Steve Baker: On this point, do any of you really-I will just try and phrase it in a more neutral way. Do any of you believe that the 70 mph speed limit is widely obeyed?

Karen Dee: For cars, probably not.

Q13 Steve Baker: No, it’s not, is it? On this conversation about speed differentials, are we talking in the abstract about what we would like to be true or is it reality? I think the truth is that cars are already doing 80 mph.

Theo de Pencier: Where it does impact on commercial operators is vans. Certainly most fleet-operated vans and so on are speed-limited as well. You could argue that if the speed limit was increased you could increase the limit level, but again the arguments that were made earlier about fuel economy, general safe driving techniques, eco-driving and so on, apply equally to van operations as they do to trucks.

Q14 Steve Baker: Bringing some of that together and particularly with Mr Cook’s remarks earlier about driver frustration, it sounds like operators would want their drivers to operate within certain constraints for the sake of efficient operation. You have also talked about driver frustration. I know one of the things that certainly frustrate me and others is when lorries are crawling past one another on the tolerance of their limiters. Do you think there is a case for a greater degree of freedom so that operators can get past one another but then drive at the speed that their particular haulage operator wants them to?

Nigel Cook: One of the things that my own operation found was that, because we were running slower than a lot of the vehicles on the road, we don’t have that frustration as much. Going back to the interesting point on the cars, we do not have many cars in the fleet but we have looked at whether to limit them. Again, there is a significant benefit in running the cars a bit slower. Running 5 mph slower on a journey can be more relaxing and there is also a significant benefit in fuel economy on most modern cars.

Q15 Steve Baker: You are saying that, given the choice, people do what is generally regarded as the right thing.

Chair: That is a slightly leading question.

Nigel Cook: I see a lot of driving. I travel quite a lot and I see a lot of variations in driving.

Chair: That’s a very diplomatic answer.

Nigel Cook: Personally, I think the older you get, the more sensibly you drive. I find now that to run at the speed limit of 70 mph is very relaxing and also very good for fuel economy.

Q16 Paul Maynard: Tempted as I am to wonder aloud whether the speed limit for car drivers on motorways is the biggest threat to your industry, I will perhaps leave that point hanging. Mr Semple, in your evidence you suggested that the M6 toll road was not a good example of how to bring private sector finance into road provision. Would you expand a bit more on that point as to why it has not worked in the way many had hoped it would and what lessons we should draw for other potential future road schemes that the Government are looking at?

Jack Semple: In brief it is not getting enough use. It is not doing enough to relieve the congestion on the other roads. Why would you build a great swathe of road through the countryside to relieve congestion when it is not doing that as well as it should be? That was the point, in essence. If we require additional road capacity, we should pay for it and we should, above all, ensure that it is used. One of the suggestions that we have had is that the Government introduce some sort of price-priming system to divert trucks off the M6 and on to the M6 toll. In essence, the key point is that this road has been built and it is not being used. We are in favour of an increase in road infrastructure but not if it is not going to be used.

Q17 Paul Maynard: Is your point that the business model currently is wrong-i.e. the pricing structure is not attracting your members on to it-or was the fundamental financing of the project in the first place that is driving the high costs of having to use it a problem?

Jack Semple: There seems to be a difficulty in the financing model. We have members who have looked very carefully at the price of the M6 toll on authenticated contracts. They have looked at it with their customers. There is no criticism of the road operator in this, but the current price just does not pay them to use it. My basic point is that we should not be building roads and then not making proper use of them.

Q18 Paul Maynard: Ms Dee, what is the lesson for the Government for the A14?

Karen Dee: The important thing from our perspective is about the pricing structure, the incentives and the contractual arrangements that you have with the concessionaire. The issue with the M6 toll, as Jack has said, is that it is not attractive to commercial vehicle operators because of the price. There was no incentive in the way that the contract was drawn up for the operator to make it attractive for heavy goods vehicles. Again, we are not opposed to using private finance or indeed some form of tolling, but the pricing structure needs to be realistic for our members and designed in a way that does not artificially deter heavy goods vehicles from using them.

Jack Semple: I would add on the pricing structure that it is very important that we focus on the need to reduce congestion for all sorts of reasons: economic, environmental benefits and so on. While the funding is important, it should not replace the debate on the need to reduce the congestion level. There is a feeling that, if we need the road, we should pay for it and not create an unnecessary additional cost for the users of that road in the future. We have seen some unfortunate consequences of PFI in other sectors. It is just a caveat. The important thing is the planning consent and Government willingness to create the conditions where a road can be built and the funding will then fall in place fairly simply.

Q19 Chair: What does congestion cost you across the industry?

Jack Semple: Many billions of pounds, depending on who you talk to and how you do the calculation. To give you one example, every time a lorry stops at the Dartford Tunnel Crossing to pay the toll, it costs an extra 50p just to accelerate. If you look at the congestion and the increased costs in terms of time, reduced productivity and the increased fuel consumption per mile, it is very substantial.

Q20 Chair: Do you have a figure, because there are different figures put forward?

Jack Semple: We could calculate one.

Theo de Pencier: Both the conclusions and the evidence in the Eddington Report in 2006 estimated that by 2025 there would be an additional £25 billion a year cost to the UK economy from congestion.

Q21 Chair: Are you agreeing with the costings there, because different figures have been put forward?

Theo de Pencier: Absolutely.

Q22 Graham Stringer: Is congestion reducing at the moment?

Theo de Pencier: Congestion is not getting worse as fast as it was before the economy started to contract.

Q23 Graham Stringer: So those Eddington projections will be out now by some way.

Theo de Pencier: The Eddington projections for the moment, yes, because of the reduction in traffic on the roads. I have to say that is mainly a motorist reduction rather than a goods vehicle reduction, but we still think the basic conclusions were pretty sound.

Chair: We are just trying to get a picture because different figures are put forward.

Q24 Jim Dobbin: I know this session is about road freight, but what is your relationship as road haulage with rail freight? Do you work together?

Theo de Pencier: Yes, we do. Our members consign something in the region of 90% of the rail freight that is currently carried. We work very closely with the Rail Freight Group, for example, who are focused on encouraging more use of rail freight. Fundamentally, road and rail should work hand in hand. You have a road leg at the beginning and at the end of virtually every rail journey.

The issues around rail freight and how much it is used or not used are fundamentally economic ones. It is still not as competitive as road freight for many types of operation. Having said that, access to rail freight is the other key issue and we feel as an organisation that, within the UK, there need to be significantly more rail freight interchanges to enable that transition to take place. We are well aware that, with the current planning system, our wishing for something and actually getting it in the places you need it is rather difficult.

We have seen an increase in the use of rail freight and also a significant switch from bulk loads-aggregates, steel or whatever it may be-to containerised traffic. That is where we see the future growth of rail freight coming from. Most of my members will use rail as and when appropriate. There are certain capacity pinch points, but, again, plans going forward do give confidence that more will switch to rail for appropriate types of operation.

Q25 Jim Dobbin: That is interesting. Two years ago I asked an innocent question in the Chamber about this, but I was hauled in before the road haulage organisation in the north-west and asked why I had asked that question. So that’s why I am asking you.

Theo de Pencier: Although I appreciate that this particular meeting is focused more on road freight, our view is that there are different modes and different strengths. Rail is appropriate in certain circumstances and water-borne freight is appropriate in certain circumstances. We have sent examples to members of the Committee where companies that are our members are using both of those modes alongside their road freight operations to the benefit of their efficiency, the environment and generally speaking the operation that has been chosen for that.

Q26 Jim Dobbin: On the issue of the interchanges, the Government have indicated that they may provide more. It is highlighting a lack of interchanges in the south-east. Why is that? I would have thought that in the midlands and in the north there was a greater demand.

Karen Dee: There is demand in the south-east; that is where a lot of the ports are. The problem has been, as you would expect, that some of the planning restrictions have in the past led to particular proposals simply being turned down. There is a difficulty about creating the additional capacity where it is needed. We do have a document that indicates it is not just in the south-east. There is a need for additional interchange capacity in a number of places across the country. It is not just the south-east but includes the south-east.

Theo de Pencier: It is mainly England, I have to say. Where they have been built successfully in the past-and this is a bit of a generalisation-it tends to have been on the assumption that you needed a fairly long rail leg to make the economics work. Places like Scotland and some of the other current locations were driven by that consideration, but there is a need for significantly more across the central core of GB at any rate.

Q27 Chair: Will the Government’s current plans meet the need?

Theo de Pencier: It all depends on whether you can get it through planning.

Q28 Chair: What is your assessment of that?

Theo de Pencier: It will be easier going forward, but more could be done, because we are still getting things thrown out and they are taking too long to come to fruition.

Q29 Paul Maynard: I want to ask about cabotage in particular and whether you could quantify the impact on your industry of the current levels of cabotage in the UK.

Karen Dee: It is not something that we have done on the current levels. Cabotage is still relatively extensive. There have been restrictions under the old directive and it is being enforced. There are moves in Europe, and we have just seen a high level group report about two weeks ago, where they are seeking further liberalisation, which would cause us some concern. I can probably get you some figures but it is not something we have done for this particular year.

Q30 Paul Maynard: I want to play devil’s advocate. I am something of a heretic on the Committee in that I actually believe in free trade and free movement of goods and people. Occasionally it is a problem. Clearly, in a European-wide context, can you explain to me what is wrong with other European operators and drivers having free access to the UK market to compete with your members, provided-and I know it is a big proviso-that VOSA is regulating their safety, what they do and that it is done in accordance with the rules? Are you trying to oppose the free market here?

Karen Dee: You are absolutely right and you would find within the haulage sector that they are free marketeers. It is not a matter of saying that they don’t want competition. If it were a completely level playing field, then UK operators would probably do very well from it. The problem that we have is that, although in theory it is a single standard across Europe for haulage operations, actually what we have in the UK-and we are very proud of it-is that our standards are significantly higher. We have our O licensing system, which we don’t want to see undermined in any way. We have a higher level of standard, and I think the statistics on safety checks bear that out. So there is a safety concern and there is also a cost concern, both for fuel and labour. It is a matter not of restricting access but of being able to compete fairly and making sure they are meeting the same access, the same costs and so on when they are here.

Q31 Paul Maynard: Why aren’t you in Poland competing for business with Polish firms?

Karen Dee: I am sure they probably are.

Jack Semple: I want to add a couple of points to that. There isn’t any obstacle to foreign firms competing in the UK. All they have to do is establish themselves in the UK and meet the UK operating licence requirements.

A point that is relevant to the cabotage debate is this. The liberalisers say it is all for improvement of freight efficiency. That case is greatly overstated. What happens in reality is that you get operators who are not necessarily running to the same safety standards and who are not paying the same level of duty in fuel; in fact they are paying half the duty level. In addition, they are dipping in and out of the market; so they are destabilising the UK established operator, who has a reasonably established traffic flow. If that traffic flow and his backload is destabilised because a foreign operator is dipping out for a month or two and going away again, then you are weakening the viability of an effective domestic haulage market.

Do we really want a situation where we have drivers away from base for extended periods of time? There is an element of social policy in this as well that cannot be completely ignored. Do you really want Polish drivers or any other kind of driver effectively camping here and not established here disrupting the domestic market? Those are issues that we would highlight.

Q32 Kwasi Kwarteng: Forgive me; I am going to drag you back. The debate ran away from me and I did not manage to get my question in about congestion. Clearly there is an issue with congestion. People-certainly in Government and other people in the political world-have been talking about road pricing. I want to know what your thoughts are about our attempts to deal with this problem.

Theo de Pencier: In essence, as an organisation we are broadly in favour of moving away from relying on fuel duty for road investment because we think it is a rather blunt instrument and inextricably links the commercial operator to the motorist, which we don’t think makes a lot of sense. We are, and have been for many years, happy to look at alternatives, if I can put it that way.

We think that there are a number of safeguards that would be needed on behalf of the industry, most of which as a general rule from our perspective revolve around it being a distance-based charge rather than some of the alternatives that are being looked at. On top of that, we feel that the overall tax take should be broadly neutral. We think the mechanism would work better.

Where we think it would have a significantly positive impact on congestion is often in providing incentives for other road users to operate at particular times and therefore have a beneficial effect on congestion. Also, although I accept it is a separate point, if we can widen the delivery window through things like quiet night-time delivery operations, many of which are going to be happening during the Olympics-and hopefully the lessons learned from that will enable them to do it more regularly-then we should be able, effectively, to get better usage of the existing infrastructure, forgetting for a moment additional infrastructure, and thereby run a more efficient operation.

Q33 Iain Stewart: I would like to return to the issue of interaction between rail freight and road haulage. Mr Dobbin touched on many of the questions I wanted to ask. I was not 100% clear on what you think are the main barriers to greater interoperation. Is it economic or practical in terms of capacity?

Nigel Cook: From an operator’s point of view, we do a very small amount of interaction with rail. It is probably down to the business that we cover. We cover consumer goods, which is delivering to supermarkets. The demand now is for very short lead times. Unfortunately, one of the constraints of the rail network is that they can’t react as quickly as we can by road. We have scenarios whereby customers order in the afternoon requiring deliveries early tomorrow morning. The rail networks run on timetables, as they always do, but they are very rigid, whereas road freight has more flexibility built in.

There are also certain products that are not efficient to run on rail. You need to have a certain value of product and it needs to be a weighty, bulky product. If you have a very lightweight, low-value product, then rail cannot compete as competitively as road. We have done quite a lot of work with a lot of customers in looking at lanes to try and move more on to rail from an environmental point of view and obviously in some ways a cost point of view. We have found a couple of routes that are cost neutral but we haven’t found any significant savings in moving to rail. We have moved some freight on to rail just from a break-even point of view, but we haven’t been able to find any significant savings.

Jack alluded to this earlier. A lot of it is distance-related. Yes, it works very well in Scotland and the Scottish freight operation has embraced rail. There are a lot of movements in and out of Scotland on rail. For the rest of the country, the shorter distance means it is very difficult to make it cost-effective. Road tends to be more competitive.

Theo de Pencier: I would add briefly to that. There are two issues, one of which Mr Cook has touched on. At the end of the day it will always boil down to economics on the degree of usage, if I can put it that way. Whilst rail freight has become significantly more competitive over the last 10 or 20 years, there are still some handicaps as well as the flexibility/adaptability argument, which will always go against rail. There are also capacity issues, particularly running out of the Haven ports and southern ports up to midlands distribution centres. Traffic flows are being addressed by the Government.

Secondly, the way rail generally works at the moment is that the passenger timetable has primacy throughout. You do still get a lot of rail freight activity delayed by the need to ensure that the passenger timetable is adhered to by the train operating companies.

Q34 Iain Stewart: Maybe I could ask my question in a slightly different way. If the Government did invest in increasing capacity or had greater priority for freight in the timetabling, is there potential for a significant shift to occur or are the points that Mr Cook made always going to prevail and act as an upper barrier on growth?

Theo de Pencier: A significant shift could occur. If you broadly assume that rail carries something in the region of 10% of freight movements at the moment in terms of tonne-kilometres, there is a trend to shift from bulk products to containerised, and that is where the growth is. Let’s assume capacity was not a constraint either in terms of size of containers, and that is a separate issue with larger containers coming in, which would, in many ways, be ideal for rail freight, but there are some capacity issues there on the network. Let’s assume all of that is dealt with, and most of it is in the process of being dealt with or deal-able with, then there could be a significant increase of up to an additional 50%, certainly in the short to medium term, in current rail freight traffic. It is still in comparison with broadly the 90% of movements that go on the road.

Jack Semple: I would add one or two points in terms of rail freight. We should not lose sight of the fact that interchanges do take up a lot of land. They will generate a great deal of local truck traffic and the environmental benefits may not be as great as are assumed, because in some cases you have to add miles at the beginning and end of the journey. Also, there is the question of the extent to which you subsidise rail freight. If you are trying to get the economy going again, in terms of carbon and other benefits, you would be likely to find that that public investment was better being put, for example, into generating more manufacturing and process or other industry in the UK, generating more wealth and reducing carbon as well if you are shipping less goods halfway round the world.

Q35 Julie Hilling: I want to ask some questions on traffic management. Are Freight Quality Partnerships still in operation? Do you think they are working? Does it mean that hauliers have a voice in the local management of roads?

Karen Dee: Yes, they are still in operation in some parts of the country. The changes to the structures of local government are impacting on some; so in some areas they no longer continue but in other areas they are still thriving. It is very difficult to say that they work as a general principle because they tend to be very different according to local needs. That is not a bad thing. Where they do work well, they encourage better dialogue between local authorities, businesses and freight operators locally. They can be a very useful vehicle.

Q36 Julie Hilling: One of my local hauliers said that he was concerned about traffic management schemes that were introduced creating pinch points at roundabouts and other things like that, which meant freight could then not go around those routes and it created more congestion sometimes because of those difficulties. Is that something you think you are not consulted about or is it something that could be done better?

Karen Dee: Freight Quality Partnerships are only one part of that because they create a dialogue. It really depends on what they are being used for. They are not always directly governed by the local authority, for example. Traffic management, restrictions on HGV movements and those types of issues can be a problem across the country because people don’t like lorries going into town centres. They will tend to not think through the consequences or have a knee-jerk reaction to what they are trying to achieve. We would always say that local authorities need to think through what it is they are trying to achieve with these restrictions because, often, they do not achieve what they think they are going to.

Nigel Cook: I sit on the Tyne and Wear Freight Partnership, which I have found very useful and it has been very beneficial. The disappointing thing is that I am one of two operators actually involved with it. As an industry the RHA and FTA have been represented, but as an industry of operators we have not embraced this opportunity to get involved with the Freight Partnerships. Although the north-east one has been very successful and award-winning, it could probably get more out of it if it could get more people engaged to be part of it.

Q37 Julie Hilling: My local haulier also said that lorries-or at least small lorries-should be allowed to travel in bus lanes. Do you have a view on that?

Nigel Cook: Unfortunately, as an industry nobody wants a truck in their back yard but they would still complain if the shelves weren’t full when they went to the supermarket. We are in a Catch 22 situation. There are certain places where it would be of benefit. In Newcastle, for example, which is my local city, we have no-car lanes. Trucks and buses can use the lanes. As opposed to having a bus lane, we have a no-car lane. The issue is that it is full of white vans at the moment; so they may have to differentiate that. Everybody who tried to save company car tax and bought a pick-up runs up and down the no-car lanes because they have a pick-up. Tyne and Wear has looked at that and it has been reasonably successful. It has to be very much specific to an individual requirement of the city.

Q38 Chair: Mr Semple, do you have a view? Please give us a quick answer as we want to get one or two other points in before we finish.

Jack Semple: Very briefly, the RHA coined the term "freight buses" for exactly this purpose. It does work in certain areas. South Gloucestershire had a statement of reason for letting trucks into the bus lanes on one of its bypasses. They said it works very well. It reduces the carbon output, greatly increases the efficiency of trucks and slightly improves the efficiency of cars. It has virtually no impact on the buses. So it works very well.

Q39 Julian Sturdy: We are looking at over two thirds of freight transported on our roads. We have already talked about the difficulties of shifting to rail. Although it is not impossible, we know there are some major infrastructural difficulties there. The Government are committed to reducing carbon emissions. Do you see a conflict between the two coming down the line? If so, do biofuels play a role in that?

Theo de Pencier: Basically, the much better bang for the buck-and I am not ruling out modal shift and so on as useless; it has a role to play-is roundly through efficiency improvements in being able to eliminate things like idling, empty running and a whole bunch of other issues that the road freight industry is continually working towards anyway. Fundamentally, if you can operate more efficiently you are reducing your costs, and we all know the issue around fuel being now about 40% of the operating cost of a large goods vehicle. There are plenty of other things that can be done that tend to produce a faster improvement or reduction in carbon or other emissions to help the Government meet targets.

One of the biggest improvements that could happen in urban environments would revolve around being able to extend the delivery window. This is the point I mentioned earlier in relation to the Olympics and trials that our members have been involved in with the Department for Transport, looking at quiet ways of delivering at night, which both takes trucks off the road and improves their operating efficiency. They are running at slightly higher speeds between drops so that reduces emissions. Idle time, either because of congestion or just because of poor operating standards, is among other significant improvements that can be made. There is a role to play for our industry in helping the Government meet their commitments, but it is equally about operating road freight more efficiently rather than just saying put everything on rail or go electric or hybrid, or whatever the heck it may be.

Q40 Julian Sturdy: You are saying there are going to be technical advancements, which we are seeing in motor cars, which are going to come into the road freight side of things as well.

Theo de Pencier: Road freight has been significantly ahead of the car for about the last 20 years. The improvements are in terms of reduction in carbon and other emissions and so on. Truck engines tend to be significantly more sophisticated than car engines because of the telematics involved and because operators will specify and run them in order to get that efficiency.

Jack Semple: If I can put it into context, the Government are concerned about carbon. If you take one lorry load, are we going to move it on diesel fuel, gas fuel or by train? If that lorry-load of goods is coming from China, it is doing the equivalent of 4,000 miles in a lorry. In terms of the investment return, our members would say that, if the Government really want to improve our carbon output, they should be generating more business and manufacturing process in the UK.

Q41 Julian Sturdy: Mr Semple, the Road Haulage Association has been quite critical of the Government’s biofuels policy. Is that where your criticism lies or do you have other concerns as well?

Jack Semple: That was a general point. In terms of biofuels, we are looking for a much clearer steer from the Government as to what it wants from alternative fuels. It has launched the Technology Strategy Board competition, which we think is not the best way of promoting fuels. There is no clear policy guidance behind that as to where it wants industry to go. I think it could have chosen a better vehicle for promoting alternative fuels. Going forward, the whole of Europe but certainly the UK struggles to get to grips with this issue. There has been cost involved in the past. There is uncertainty and a lack of confidence in the industry at the moment. We are looking for clearer guidance from Government. For example, if they want to promote natural gas, then there could be a clearer statement of reason for that and they could probably do it in better ways than the current route.

Q42 Steve Baker: I will be as brief as I can. A lot has been said about the economics. How high would fuel duty have to go before there was serious modal shift away from road freight?

Jack Semple: One risk is how much business you would drive out of the UK to other parts at the far end of Europe or China. If I could get back to the analogy of tinkering with the carbon output of one lorry-load of freight while you are bringing it 4,000 lorry miles-

Q43 Steve Baker: I am sorry, but that is not quite what I am getting at. On the economics, how much higher would fuel duty have to go before road transport became uneconomic and freight seriously started to move to rail?

Chair: Can you give a quick answer?

Theo de Pencier: The question is wrong. That is my quick answer. Basically you have road at either end of rail, with capacity constraints on rail-

Chair: The Minister will be here in a moment.

Theo de Pencier: -and, also, most motorists would have left the road long before you have priced trucks off, which would improve operating efficiencies far more than anything else.

Steve Baker: I am very happy with the answer that fuel duty interventions are absurd.

Jack Semple: The more expensive fuel duty becomes, the more you will see foreign trucks in the UK that have fuelled up abroad at a far lower cost.

Chair: On that note we will end. Thank you very much for coming and answering our questions.

Examination of Witness

Witness: Mike Penning MP, Parliamentary Under-Secretary, Department for Transport, gave evidence.

Q44 Chair: Good morning, Minister. Welcome to the Transport Select Committee. Could you tell us what role the Department has in relation to setting Government policy on fuel duty?

Mike Penning: None. It is a Treasury matter. However, I am sure the Committee is aware that we are doing whatever we can to make sure that our hauliers have a fair and level playing field with overseas operators when it comes to fuel. That is why we are going to introduce the lorry road user charging, which we have a commitment to bring in by the end of this Parliament. The reason for that is because, of course, fuel is substantially cheaper on the continent. Hauliers come over with underslung belly tanks and it is very difficult for our hauliers to compete with that. Admittedly, it is only about 5% of the industry that is physically affected by that, but we have felt for some time that we need to help the hauliers on that. We will bring in a charge that our hauliers can claim back, which will help level off the fuel charge differences.

Of course we have the cabotage rules. One of the things I am asking VOSA to do at the moment is to be much more involved and put more commitment in time and money into enforcement of that with the overseas hauliers. They are doing more of that.

Q45 Chair: The hauliers have told us that fuel duty is crippling. What else could your Department do to try and assist?

Mike Penning: Fuel duty is crippling if they are not all paying exactly the same on charges. For them it is very difficult to compete. They can compete against each other if they are all paying the same charge for fuel because you will get a level market there. Overseas hauliers are entitled to come over under the rules, but a huge percentage of our goods from our manufacturing base going out into Europe, which is something like 46%, is taken out by foreign-plated hauliers.

We have to be slightly careful because some of our own hauliers are registered abroad as well now. It is a balance, but we are doing everything we can to make sure there is a level playing field. However, and I am not passing the buck, it is a Treasury matter. The Treasury quite rightly see the income from fuel duty as an income that is spent in general terms; it is not hypothecated, but it does allow me, for instance, in the next three years to have £4.6 billion worth of road programmes, which have to be funded from somewhere. That is what the Treasury would say to you.

Q46 Paul Maynard: I did not get to ask the previous set of witnesses this question so I may be putting words in their mouth, but let’s go with it anyway. One of the unimplemented pieces of the 2006 Road Safety Act related to motorway rest areas and other rest areas on the strategic road network. Despite passing the legislation, the last Government failed to implement their recommendations or the law itself. Can you tell us a bit about what you are doing because, as I am sure you would agree, lorry driver tiredness is perhaps one of the key road dangers in this country?

Mike Penning: I don’t know if the Committee knows that I hold an HGV licence and have driven HGVs in my previous occupation-not the present one.

Chair: We thought you might have some spare time.

Mike Penning: Tiredness is a massive issue, whether it is for HGV drivers or any driver, to be fair. There are physical restrictions on the amount of time that a commercial driver can drive, and I think that is right and proper. There are some anomalies out there that we need to address. For instance, if you are working during the week in a completely different occupation, at the moment the directive would mean you would have problems driving a horse box to your daughter’s gymkhana at the weekend if she was likely to win a prize. I think that is ludicrous and we need to address that.

Going back to the point, one of the first things we did was to have an immediate review of rest areas to find out where the lorries could and could not park up. I am quite determined that not only do lorries need to park up and have their rest time but they need to park up in suitable places, which in my own constituency is not the first road off the motorway or the nearest lay-by. Sadly, lots of things are chucked into the bushes at the bottom of people’s gardens, which we don’t really want to talk about. We need to make sure that lorry parks are doing their job, as well as the service stations on the motorways.

One of the things we have looked at very carefully is to make sure that we have enough service stations where they are needed and there is a physical length of motorway between service stations. This is still within the legislation, but what we have looked at is whether or not we need more service stations and to make sure that they have the capabilities of looking after lorries as well as the rest of motorists. That work is going on. To be fair, the operators of the service stations have started to cater much better for the dual use that they need to have, which is getting lorries off the road at the right time. At the same time we need to make sure that we enforce the driver regulations through their tachos and that they are not being tampered with, because that is really important as well.

Q47 Julie Hilling: I want to follow up on the safety point. Sleep apnoea is a big issue. Is enough being done around fitness to drive for drivers across the piece, whether that concerns sight, sleep apnoea and so on?

Mike Penning: You and I have talked privately about sleep apnoea. I completely agree that it is a massive issue that we need to address, along with issues as to whether someone should be able to hold either a commercial or ordinary driving licence if they suffer diabetes, epileptic fits and things like that. One of the things I hope the Committee will be aware of is that I am very conscious that we should not take licences away from people just because they have an ailment. We should take their licence away from them because the clinicians say they are unsafe to drive. Those are two completely different things.

I have worked very closely with Diabetes UK and Baroness Young to make sure that people with diabetes, for instance, understand what we are trying to do, which is not to stop them from driving but making sure they are safe to do so. There was a big fear that lots of people were going to lose their licence with a change in the rules that the previous Administration were looking at. I have said that safety is the paramount thing, but freedom for someone to have a licence is also very important. We have come to an agreement with them on that. I think we are okay on that. We are working our way through epilepsy. Sleep apnoea is on the list. It is much more complicated and much less understood than the two other ailments which I have alluded to, but it is something we are working on.

Q48 Julie Hilling: Is it something like making the drivers have regular medicals, for instance? Is there something that should be done?

Mike Penning: HGV and PSV drivers already have to have a medical. One of the reasons I don’t physically hold my HGV licence at the moment is because I haven’t taken my medical. You have to have regular medicals.

For the UK driving test, if you wish to have a car licence, the practicalities of doing that would be onerous, to say the least, but it is the responsibility of the driver and also the people who medically advise them as to whether they should be able to drive. If you go and see an ophthalmologist and you have glaucoma, he will advise you that you should give up your licence. I warn the Committee that the medical practitioners are loth to be the source of information to us. They feel that that would be a breach of their confidence with their patients, which I think we can probably understand. On the other hand, we need to make sure that we get the message out on a regular basis that it is your responsibility as the driver, whether you are a commercial or a pleasure driver, to make sure that you are still capable of driving that vehicle.

Q49 Julie Hilling: I want to ask one more question about vehicle safety. One of the things that a local haulier raised with me was his concern around particularly foreign operators. If a British operator’s vehicle is found to be unsafe it is immediately taken off the road, but it is not so rigorously enforced for a foreign operator.

Mike Penning: I would argue that it is and would ask you for any evidence that it is not. There is a deposit system on fines operated for foreign drivers that is not operated for UK-registered drivers. We hold finances; we hold their money so that, for instance, if they are in breach and they do not pay their fines, we have their money. I was with VOSA on the side of the M62-maybe not right on the motorway but with them-when they were demonstrating the axle weight technology. A foreign vehicle went under the bridge. It came through on the radio that he was overweight on two of the axles. He was pulled in and prosecuted. They did it there and then. Cabotage is the other one that they get a lot.

There is something I would like to do, and I am open and honest about this. Free movement of vehicles through our ports is something that we agreed to under the EU regulations. We are in a situation where we might know that a foreign vehicle has a track record of being faulty and in a dangerous condition, but I can’t pull it over until it is on a British highway. That is something we are working on now to see whether or not I can have the powers, if necessary through VOSA, to hold that vehicle. I would much rather hold a vehicle if it is unsafe and have someone do that at Dover rather than let it go on a British highway and have an accident happen before I can get to it.

Q50 Julie Hilling: Are the cuts in VOSA, though, restricting their ability to do that?

Mike Penning: No, they are not. "The cuts in VOSA" is an interesting way of describing it. What I am trying to make VOSA concentrate on is enforcement and not testing. The private sector is doing more of the testing now for us with MOTs on lorries. There is a demand for that and that is happening. I am moving a lot more into the enforcement side, which is where we need them.

Q51 Jim Dobbin: Minister, I asked the road haulage panel this question and I am just wondering what the Department for Transport’s view is. It is about the relationship between rail freight and road haulage freight. Do you think it is working?

Mike Penning: There has been a dramatic change in the last five years. There are even bigger changes coming down the line, using a terrible pun. The reason for that is because the big suppliers-the Tescos and Asdas of this world-do not want huge distances of road bridging. They want the bridge in between the distribution centres and their stores to be shorter and shorter. There are lots of different reasons for that, not least because their clients are saying they don’t want the emissions and want to be environmentally friendly. The slots in timings of deliveries for them mean that, if they have shorter distances, they can be more exact in what they are doing.

If you look at the changes that are taking place within the logistics industry, you will see people like Eddie Stobarts having a rail hub inside their distribution centres in the north-west. You will see Asda at port side with a distribution centre and rail. If you look at Hutchison Ports, where most of our container boxes come in, that is by far the largest port we have operating at the moment. I opened the start of works on their third rail terminal in there. If you look at Gateway Port, which is being built just down the river from us here at the moment, it is an integrated hub/rail/road/seaport. That integration is happening and the hauliers realise that there are lots of changes afoot and that they have to address that and how the industry is moving on. It is moving quite fast to a much more integrated modal system.

Q52 Jim Dobbin: That brings me to interchanges, which you mentioned. What is the Government’s plan to develop and increase the number of interchanges across the country?

Mike Penning: Interestingly enough, at the moment there is an application in not far from our constituencies in St Albans, at Radlett, for a rail hub interchange. Quite a lot have recently opened. Certainly in any public inquiry to do with planning application gateways, it is absolutely intrinsic within their planning consent that the rail hub is part of it.

I have to admit, though, that there are issues to do with modal shift on to rail, particularly on the West Coast Main Line, because of the capacity issues. The East Coast is nowhere near the capacity that the West Coast is. If we push much more on the West Coast, we will really struggle. We want more to go on rail, which is why-I know the Committee has looked at it and I don’t do rail-HS2 is so vital to Birmingham and beyond because it will free up freight capacity, which is the bit I am interested in, on the West Coast Main Line, where we are struggling with capacity now.

Q53 Julian Sturdy: Minister, leading on from the questions from Mr Dobbin, where does freight fit into the Government’s view on the strategic road network?

Mike Penning: It fits in, in that when I became the Minister just over two years ago the portfolio was changed. I had the full logistics portfolio literally from the driving licence that the haulier is allowed to have, to the test, right the way through to the ships and the port at the other end of it. In the middle of that is the modal part between aviation, rail and, of course, the road network. No matter how much we move loads on to rail-and I would like a lot more by water, which is a separate discussion to be had-it will predominantly be on road and so the strategic road network is vital to us. That is why a lot of people were surprised at the sheer amount of money I got for new programmes, even in these difficult financial times. An upgrade infrastructure from the Treasury was ever so useful but ever so needed as well.

Q54 Julian Sturdy: Following on from that, the Government stated that they would work towards the introduction of a new system of HGV road user charging. Is that still the case and something you believe we should be pushing in the current economic climate?

Mike Penning: Yes. One of the things we promised was that we would bring in a better level playing field for the hauliers. I alluded to this earlier on in answer to the Chair. The hauliers, quite rightly, go on and on about the fact that they cannot compete with the foreign hauliers. We are one of the only countries in Europe that does not have a vignette system. If we bring in a vignette system at, say, £10, our hauliers will be able to reclaim that against their VED. There will be a fraction of them-about 6% of my hauliers-that will be fractionally worse off, but no more than £50 or £60. What we are going to do is work with them to probably re-register their vehicles in a slightly different VED scale so that literally hardly any of them will be worse off. That has been welcomed by the haulage industry. It is a promise we made and that we will fulfil in this Parliament. The Prime Minister is absolutely committed. I took a phone call from the Prime Minister only the other day on this particular subject. We are committed to doing it.

Q55 Chair: When can we expect to see something?

Mike Penning: I expect legislation in next year’s programme. I need primary legislation. If you look at the programme, we are in a five-year Parliament. This year I do not have it. Next year I have to have it because it will have to be in by the following year.

Q56 Chair: Will there be draft legislation that we can scrutinise?

Mike Penning: Yes, as soon as we have the draft legislation. These are really delicate negotiations between my Department and the Treasury, as you can imagine. There are cost implications to us of doing it and to the DVLA because people have to do it. It is so important to the industry that not only do we talk about being on their side but we actually are on their side when it comes to this.

Q57 Kwasi Kwarteng: Obviously there was the 2011 review on productivity in the logistics industry. Can you tell the Committee what progress has been made following that report?

Mike Penning: There has been, I hope, a sea change in relationships with the logistics industry. When I had my HGV it was never discussed in the logistics industry. It was a group of hauliers. The skills of the logistics were never really brought to the forefront. They have been now and quite rightly so.

What has also happened is that they have the confidence to be able to come forward early and say to Government, "We are worried about this." For instance, the haulage industry came to me 18 months ago and said they were very worried that Europe was going to legislate against the height of the four-metre trailers. That gave me a good opportunity to go back to Europe and say, "Why are you doing this?" Austria were the people pushing it because of the size of their tunnels. We have not only been able to say, "By the way, we won’t do this", but to negotiate to say, "We are very happy to do that."

The other one is probably semi-trailers. It had been discussed for years as to whether or not it would happen. I have no interest at all in increasing weight. What I am introducing is efficiency, emissions measures and so on. I think we are better, but we are also better in understanding the logjams on the network-where the pinch points are. We have to be really honest about what we can and can’t do. We know that the A14 is a massive pinch point for the haulage industry coming out of Felixstowe. We have to address that, but I don’t have £3 billion in my budget to be able to do one road programme.

Q58 Mr Leech: Can you update us on progress with the larger lorries trial?

Mike Penning: Yes; this is the longer semi-trailers. You are aware that we have a pilot going similar to what they have in Germany. We have 900 of the shorter trailers and 900 of the other, all of them oversubscribed. Interestingly enough, I did hear some rumours at the Commercial Motor Show recently that some people might be holding on to their allocation but not actually using it. I have written to the industry now and said, "If this is the case, I want you to hand it back because I have people who want to use it." It is very early days, but at the moment there have been no instances of some of the concerns to do with road safety as yet. We will keep a very close eye on that. The turning circles on them are much better than on a traditional trailer because of the turning bogeys. We know as a fact that we are getting more products moved with fewer vehicles simply because of that. Remember that each one of these trailers has had to go through our VOSA and VCA testing process; so it is an ongoing process. To be honest with you, I thought it would be quicker and that we would have more vehicles on the road than we have, but we need to do the testing and make sure that they are safe, and that is what we are doing.

Q59 Mr Leech: How will we measure success?

Mike Penning: In my opinion, the measure of success will be exactly the reason why we did it: more products moved with fewer vehicles, fewer emissions and safer. If we can hit those three targets, we will have done what we wanted to do.

Q60 Mr Leech: One of the potential criticisms with longer lorries is that it makes it less likely to transfer from road to rail. Will that be taken into consideration?

Mike Penning: I have heard this criticism and I do not necessarily think that the people arguing that understand what we are moving around in longer semi-trailers. This is not about containers, which are predominantly moved by rail, or loose products. This is predominantly lightweight cages that are going from depots or hubs into supermarkets. It has no effect at all on the length of a trailer that has containers on it and predominantly goes by rail.

Q61 Mr Leech: Is there any way of measuring whether congestion might be reduced or increased by longer lorries?

Mike Penning: Certainly once we get the full allocation out there we will have a much better idea. But remember it is exactly the same tractor unit pulling the longer semi-trailers as before. We accept that there will be an effect on fuel consumption, but it will be less than what it would be if we had two or three lorries out there.

Q62 Mr Leech: The trial is for 10 years.

Mike Penning: Yes.

Q63 Mr Leech: Is there going to be a constant appraisal of the scheme throughout the 10 years, or will we not know whether it has been a success until the end of those 10 years?

Mike Penning: There are two things going on there. I think a constant appraisal would be rather expensive, but we will appraise it as it goes through. I want all the trailers out there first and then we can start appraising them. Until I have them out there we can’t do a proper appraisal. However, I was in the European Parliament in Brussels only the other day talking to the Chair of the European Parliament Transport Committee. Interestingly enough, there is a document coming out from the Commission where, for the first time, they said they are not worried about the length of the trailers that I have gone to and there are some even longer than we have. That did surprise me because I was informed legally that the Commission might have a problem with what I was doing, but there is a document out there clearly saying that they are not. That indicates to me that perhaps Germany or one of the other countries is looking to go further. I am not interested in going further at the moment-certainly not until the end of the trials.

Q64 Chair: Thefts from trucks costs £52 million. What are the Government going to do about it now that TruckPol has gone?

Mike Penning: The best place to park a truck at night is inside a proper, legitimate truck stop; that is the safest place by far. Historically, a lot of truckers will, for want of a better word, pocket the overnight money and park in the lay-bys. That is the most dangerous place for them. We need to protect them and do everything we can. Only recently when I was on patrol with my own police in my own area we stopped at some of the lay-bys and talked to some of the truckers there, but the police don’t have the capacity to do that all over the country.

One of the things that I have been really pleased to hear-and it is to do with tiredness as well-is that some hauliers are now insisting that they book overnight accommodation for their hauliers in truck stops. I must not use the commercial name, but some of them are booking them into some of the small hotels inside some of the service stations. They realise that the safest place for their truck is inside with a working CCTV. That is one of the things we need to encourage, which is one of the reasons why we did the review of where trucks are and are not stopping. We are very conscious about where the hotspots are and we are trying to do everything we can with that as well.

Q65 Graham Stringer: Changing to the environment, what contribution do you expect from the freight sector towards the targeted reduced emissions of carbon dioxide by 80% by 2050?

Mike Penning: While we certainly want growth and everybody is also looking at growth, the one thing that the hauliers look at on a regular basis is the cost of their fuel. The more cost-effective they are with their trucks, as well as the people driving their trucks, that will be where they come from.

The other thing that is happening to my surprise-and I will be honest about that to the Committee-is that hybrids are coming through the chain now. If you had said to me two years ago that we would have an 18-tonne hybrid operating in the UK as a commercial venture, frankly I would probably have laughed. The cost differentials are still very expensive for hybrids but they are coming down. If any of you have the Olympic torch coming through your area, the Coca-Cola lorry is a hybrid. It is an Eddie Stobart lorry.

Q66 Graham Stringer: Do you think they are going to reduce the CO2 emissions by 80%?

Mike Penning: There are measures that are coming in. The industry understands better than anybody the cost of fuel and their emissions. That is one of the things I was commenting on earlier. The Tescos, Asdas, Sainsbury’s and Morrisons of this world are telling their people, "We want you to road bridges the least amount possible."

Q67 Graham Stringer: They were here as witnesses just before you came in. They put forward the argument that it would be better not to import so many goods from China, where there is a huge carbon dioxide footprint, rather than to try and stop goods travelling about our roads. What is your response to that point?

Mike Penning: The hauliers said that.

Q68 Graham Stringer: Yes; they are sat behind you now.

Mike Penning: I think their profit margins would be dramatically affected if we didn’t have that. To be honest, I would love to see my ports export just as much as they import, and I would love to make sure that we have the least amount of haulage traffic on the road affecting the environment. However, growth is an important thing and we have a desire to consume. A lot of these products do come in from China and other far east countries. We don’t produce most of those products.

Q69 Graham Stringer: That is really their point-that we should.

Mike Penning: You might need a BIS Minister sitting in front of you rather than a Transport Minister. My job is to make sure that what is hauled is hauled as efficiently and as safely as possible with the least amount of emissions. To be fair, the emissions criteria on a lot of the new trucks coming have completely changed. I know they are sitting behind me and they will nod at this. Their biggest interest is fuel. They want to make sure that their vehicles, and their drivers in particular, are as efficient as possible.

Q70 Chair: What about changes in European cabotage arrangements? Is there anything the Government can do to stop those?

Mike Penning: At the moment they are allowed three within the cabotage. If I am honest about this, would I like to limit that? Yes, of course I would, but there are also a lot of our hauliers that go abroad and do similar. However, what they would tend to do, if they are going abroad, is not go across with full tanks and fill up once they are over there and utilise that capacity. We have to fight our corner when it comes to the cabotage and make sure that what is being done now is not being abused, which we know at times it is. We need to make sure that we enforce cabotage strongly now. From my meeting last week in Europe I don’t think there is any appetite for Europe to move into restricted cabotage. They feel it is free movement of trade, but what I want is fair as well as free movement of trade.

Q71 Julie Hilling: We need to recognise that, whatever we do with freight, whether it is water, rail or whatever, the last few miles are going to be by road. Hauliers have said to me that they have real issues around, in particular, traffic management schemes. There are pinch points at roundabouts and redesigns of junctions that mean lorries can no longer use those routes. How can freight hauliers be more involved within the local community in terms of local traffic management solutions?

Mike Penning: The area around a pinch point isn’t just a local area thing. I have released another tranche of money to address pinch points in infrastructure that need to be changed. It is something I have been pushing with local authorities through my colleague Norman Baker, who does local authority road infrastructure. It is all well and good saying, "You want to put a weight limit down that road"; that’s fine, as long as you can get the lorries into your supermarkets at the time of the day when they need to be there. There is a lot of work being done about quieter night-time deliveries and so on. At the end of the day there are only a certain amount of lorries that can be parked outside your local supermarket and it probably needs 10 or 20 of those a day. We need to make sure that the infrastructure is there.

This is a local issue. It is something that we advise and help the local authorities with. At the same time the hauliers have to understand that they can blight a community if they take a short cut or a different sort of road that is not really suitable for them.

Q72 Julie Hilling: One of the concerns expressed to me was that it concerned roads that they had always used, but then they had the narrowings and all these other things that happen, which meant they became more dangerous and more congested. Should the local authorities be made to consult hauliers in some way before they make those changes?

Mike Penning: To be fair, I think they do. If you use the terminology, "We’ve always used that road so we always should be able to use that road", that is not right. If the hauliers are saying that to you, then I think we should all see common sense. If they are putting chicanes and that sort of infrastructure in, then the authority is trying to discourage you from going down there, but they must make sure that you have a way in and a way out that is suitable. Frankly, the engineers in local authorities are highly qualified people and they should know how to deal with that. If there are instances, then by all means tell me and I will ask my colleague Norman Baker to look at that.

Chair: Thank you very much, Minister, for coming and answering our questions.

Prepared 24th September 2012