Cabotage Good news from Luxembourg but fight not over yet

The Freight Transport Association has given a cautious welcome to the agreement reached at the EU Council of Transport Ministers in Luxembourg last Friday (13 June) which proposes to allow member states to protect the interests of their domestic transport industry by permitting them to 'introduce protective measures in case of serious disturbances of the national transport market'. In effect this would enable the UK to introduce legislation which would prohibit contract work from being carried out by visiting foreign lorries.

FTA had been concerned that the large differential in diesel duty between the UK and the rest of the EU would provide foreign vehicles with an unfair competitive advantage over the domestic fleet. Duty on diesel in the UK is 50p per litre (ppl) – twice the European average of 25ppl.

FTA Director of Policy, James Hookham said, 'Transport minister Rosie Winterton and her team from the Department for Transport are to be congratulated on what they were able to achieve at the Council of Ministers meeting. This outcome is much better than expected and a credit to fine British diplomacy. Had plans gone ahead for a complete liberalisation of the EU haulage market then we would have seen substantial and increased competition from the rest of Europe based on their lower operating costs, notably cheaper fuel due to lower diesel duty. This would undoubtedly have severely damaged the domestic haulage industry in the UK. However, the problem is not yet resolved as the European Parliament still needs to agree to this change.

'If all goes well we now hope to see the Department for Transport introducing enforceable legislation in the UK limiting the extent of the work which foreign vehicles can do – probably very similar to the spot work they do at present. But the 25ppl differential in diesel prices between the UK and the rest of Europe remains in itself a major concern to the transport industry.

'The potential future problem has been postponed rather than eliminated, since it is clear that the European Parliament wants to see full liberalisation. As such, the long-term solution must be for the UK to make progress towards bringing diesel duty levels more in line with the EU average. To this end FTA recently submitted to the Treasury proposals formulated by PricewaterhouseCoopers which are designed to achieve this.'

Friday's meeting also agreed to create an exchange of information on vehicles coming into foreign territory, including those coming into the UK. The Commission will issue guidelines on the data which will have to be entered in the national electronic register, including details of registration marks. FTA has for some time called for a pan-European database of information on international movements of lorries in order to improve security and to aid enforcement of road safety regulations.