ROAD HAULAGE ASSOCIATION
POLICY BRIEFING
July15th, 2008
IN THIS BRIEFING:
MPs debate fuel duty as RHA goes to Treasury
Ask for faster VAT repayment to ease cash flow
Mixed views on longer semi-trailers
Outlook for economy is grim
RAC says Treasury plans tax assault on road users
VOSA to come to depots for annual tests
Spanish accord between hauliers and government
MPs debate fuel duty as RHA goes to Treasury
Fuel duty will be debated in the House of Commons tomorrow, Wednesday, thanks to the Conservatives. Members can lobby their MPs by email.
The Tories are expected to launch their version of the fuel duty regulator, which they call a stabiliser and Stephen Ladyman calls a moderator. The RHA has been promoting the concept now for more than two years.
By co-incidence, the RHA will be meeting Angela Eagle, Exchequer Secretary to the Treasury on Wednesday this week as part of a continuing dialogue with the Treasury. In addition to pressing on fuel taxes, we will be strongly urging that the decision against going ahead with a Eurovignette be re- considered as a matter of urgency, on the basis that if it is all that is in practice on offer for charging foreign trucks, it may be better than nothing.
Worryingly, a mild Early Day Motion in the Commons calling for the scrapping of the 2p increase in October due to high oil prices has received only 15 signatories and six of them were from nationalists and Ulster Unionists. The two Labour MPs to sign were Linda Riordan, Halifax, and Albert Owen, Ynys Mon. Eddie Stobart chief executive Andrew Tinkler has hardly helped, saying he sees no point is calling for the increase to be scrapped http://business.timesonline.co.uk/tol/business/industry _sectors/transport/article4143792.ece
The RHA's mass lobby of Parliament two weeks ago drew around 300 members to Westminster, to meet their MPs. Feedback from members who lobbied their MPs has been positive and we would be keen to hear of further specifics on policy@rha.net.
The RHA's website contains a range of fuel information, including the weekly fuel price survey, specimen clauses on fuel escalators and information on the RHA's campaign on fuel www.rha.net
Meanwhile, haulage trade associations from across Europe came together in an emergency meeting in Brussels after which a resolution was issued. Points agreed were that there should be a single duty rate for all commercial freight diesel - whether in trucks, planes, ships or trains. Also, the European Commission was urged to allow greater flexibility to vary the taxation rate for professional hauliers in order to reduce the diesel burden. Both these resolutions were proposed by the RHA. Details of the resolutions are on www.iru.org
Ask for faster VAT repayment to ease cash flow
One point on cash flow: we have been pressing the Treasury to look sympathetically on those firms which face cash flow problems linked to soaring costs. Treasury has responded that firms in such a situation should approach their VAT office and request repayment of VAT after one month rather than four months. Each case will be decided on its merits.
Mixed views on longer semi-trailers
Should we have a further incremental increase is semi-trailers? The Department for Transport has suggested that it might be worth further examination and will be seeking evidence as to whether hauliers and/or their customers would make use of them.
Eddie Stobart's chief executive, Andrew Tinkler has thrown his weight behind the idea. In a lengthy feature in The Times, Tinkler says: "I need to talk to the government about my plan to take 7 per cent of the trucks off the road ... I'm talking to the Department for Transport, but I want to see Gordon Brown himself. I understand the pressure he is under with these fuel protests and I think I can help him." This could be interpreted as meaning that he has come up against pro-rail, anti-haulage sentiment within the DfT and feels the need to enlist the boss.
The TRL report is thin on information as to what a longer semi-trailer would look like and the issue is undecided. But the trailers could carry up to six extra pallets and the axles could be all fixed or all steered or a combination of the two. The turn-in and out-swing would not necessarily be worse than the current standard artic, which is well within EU limits on both counts.
John Cartwright, joint-managing director of trailer manufacturer Cartwright Group, counters the Tinkler view. He doubts that a further modest increase in semi-trailer lengths would on balance benefit the UK transport industry.
"We would be better developing within existing dimensions, including double-and multi-deck semi- trailers with running heights of up 4.9 metres and drawbar combinations, which can also have double- decks and give up to 16.4 metre useable deck length. These combinations are well accepted and becoming increasingly popular across a range of applications.
"The longer semi-trailers would inevitably find their way into towns and cities and would be seen as inappropriate by the general public."
Many members would be very concerned by any move to lengthen semi-trailers at the expense of our ability to use tall trailers. In France, the government has proposed setting a height limit of 4 metres to benefit rail freight.
Meanwhile, the European Commission has just started a debate on a wholesale review of weights and dimensions. Options pressed from different quarters range from 44 tonnes on five axles to 25.25 metre combinations.
The RHA is seeking members views. Email policy@rha.net
Outlook for economy is grim
The outlook for the economy appears to be grim indeed, with Richard Branson saying the transport sector faces a "perfect storm" and one commentator advising client businesses to "batten down the hatches with medieval conviction". The RHA will continue to press customers to pay justified rate increases, while fully aware that many members are finding acceptable levels of increase impossible to achieve. We have had a positive initial response from several sectors, however, as hauliers take their trucks off the road rather than run at a loss. Colleagues in the bus sector tell us that scheduled services have been withdrawn, as operators send contracts back to councils unwilling or unable to pay fuel surcharges.
The truck industry has seen a dramatic reversal in fortunes, with dealers starting to stock unsold chassis; some members have taken trucks for which they now have no work.
Manufacturers will no doubt be seeking large price increases to compensate for the fall in the pound against the euro and the kroner and the surge in steel prices but face a customer base unwilling and often unable to pay more - if they are interested in buying trucks at all.
Driver pay has two strong and opposing currents. Rising levels of official and perceived inflation and the Shell tanker driver settlement of 14% over two years may become the target for drivers. The Shell settlement has been greeted with dismay by members who have been able to award only 2-3% awards at best. Members are also furious with the government for its role in the settlement - tanker drivers are surely no more special than other drivers.
On the other hand, drivers' jobs are at risk and supply and demand, coupled with strong resistance to rate increases from customers, is acting to cool wage pressures. Our members want to give their drivers reasonable increases but are struggling to do so - and the drivers know it.
RAC says Treasury plans tax assault on road users
The RAC Foundation has claimed that Treasury plans to raise over £2 billion from Britain's road users before 2011 would cost the road user four times more than would be saved by persuading the Chancellor to drop the 2p October fuel duty increase.
The charity has urged the Treasury to carry out a root and branch review of motoring taxation, which would take into account the impact of sustained high oil prices on family spending, and the impact of reduced mobility on the UK economy as a whole.
Stephen Glaister, its director stated: "The Chancellor may pull a populist rabbit out of the hat by scrapping the October 2p rise, but this will be a drop in the ocean compared to his plans to take an extra £2 billion from the road user's pockets by 2011."
VOSA to come to depots for annual tests
More annual tests by VOSA are to be carried out at operators' premises and at other service centres rather than VOSA test stations, logistics minister Jim Fitzpatrick has announced. Currently, 20% of tests are outside the test station network and there will be "fewer but better" VOSA sites in future.
The aim it to "improve quality of service and choice", with tests offered to minimise interruption of operating schedules. There will be benchmarking between test stations.
The announcement comes at the end of lengthy out- sourcing review. The RHA is meeting with VOSA and the DfT to discuss details.
Spanish accord between hauliers and government
European countries have recognised the particular burden on road hauliers. In Belgium a fuel regulator mechanism has reduced fuel duty to the EU minimum level, fractionally above 30 eurocents a litre. In the UK, we are paying 64 eurocents a litre, taking account for the recent decline in the value of the pound.
In France, a low duty rate is made additionally attractive by a rebate of more than 3 eurocents a litre. France has a new law that makes it an offence to fail to pay an escalator, even where a fixed-price contract is in operation. In Spain, there are small tax reductions and the offer of a deferment of National Insurance payments.
The accord between the Spanish government and trade associations last month sets out more than 50 points of agreement, a copy of which the RHA has had translated. Some points reflect distinctly un-British characteristics of Spanish regulation and practice, others will chime a chord with us in the UK. The strikers of last month, we are told, have been excluded from the agreement. Two were killed and more than 100 arrested.
Key points of agreement include:
Establishment of a rule to make customers to pay interest on charges due after 30 days.
Establishment of a contract price escalator linked to fuel prices.
Hourly demurrage charges compensation level updated.
Review of benefits for older persons leaving the profession, with new age limit of 58 years.
Elimination of need to employ set number of drivers for fleet size. Establishment of a rule that new entrants may not reduce fleet size below three trucks/60 tonnes payload in first three years. (The RHA wonders if this conflicts with EU rules.)
Ensure cabotage limitations are applied to the fullest extent allowed under EU rules.
Pursue change in EU drivers' hours rules (561/2006) to allow postponing of weekly rest period until the 12 day.
The need to protect within the EU the ability to set limits on cabotage transport, which may facilitate easier eradication of permanent establishment situations contrary to the law, in the context of the current debate on the future Regulation of access to the freight transport market.
Seek harmonisation of inspection regimes across the EU.
Support EU framework for eurovignette and infrastructure charging.
Review Spanish penalty system.
Produce quarterly review of road haulage costs.
Complete a plan for intermodal transport.
Improve roads infrastructure and increase the number of service and rest areas.
Increase number of weighbridges.
Infrastructure charging to apply to toll motorway concessions only.
Ensure funding of Transport and Training Foundation formed this year; review training subsidies.
Simplify administration on licensing, benefits for leaving the profession and processing training subsidies.
50% reduction of tax on business activity for 2008. The RHA understands that this will amount to around 1,500 euros per company.
Reduction of 75% on insurance premium tax for 2008 and for 2009.
Review of tax credits for transport companies, currently 300 million euros for 2008 and consideration of using these funds to re- finance working capital.
Monthly repayment of VAT for those who request it. (The UK Treasury has made this offer to companies at present.)
Resolve uncertainty on the taxation of night subsistence.
Protect within EU the right to set competitive fuel tax rates.
Undertaking to protect in the EU rebated diesel in amendment to Directive 2003/96.
Adopt measures to resolve uncertainties about load capacity index of vehicles, "ensuring at the same time proper treatment of containers".
The deduction of 1% for Income Tax can be deferred until the end of the year, rather than made quarterly.
Resolution of tax status of courier services.
Investigate unfair contracts, in particular in relation to roadside assistance.
Deferment, without interest payments, of NI contributions by transport operators for up to one year; payment made within 24 months following.
Reduction of NI of up to 4%, linked to accident and work-related illness.
Investigate the possibility of new benefits for self- employed exiting the sector near retirement age.
Streamlined NI payment.
Health and safety study to reduce accident and improve access to social security.
A review of legislation applying the Road Transport Directive on working time.
Creation of a professional development training programme satisfying the Driver CPC.
Update of transport management training, so that all who pass the course will achieve automatic Manager CPC.
Agreement on national guidelines for hgv route bans and other restrictions, in order to establish alternative routes.
Need to abolish 2-point driver licence penalty for parking on bus lanes etc, in view of the "limited impact on road safety and problems this causes for delivery of goods in towns".
Conclude interrupted White Paper on transport and include clauses on fuel escalator, demurrage and other commercial matters that may be agreed.
Stimulate use of alternative fuels and develop subsidies to use electric vehicles, hybrids, gas etc.
National courses run by trade associations on energy-efficient driving.
Set in motion a string of subsidies for investment in fleet management systems to reduce energy consumption.
Also proposed were fuel escalator formulae that set simple, rule of thumb percentages depending on the weight of vehicle: 30% for trucks above 20 tonnes except construction vehicles; 20% for 3.5 tonnes to 20 tonnes and all construction vehicles above 3.5 tonnes |
