On Friday (13 June) the Council of EU Transport Ministers, meeting in Luxembourg, will discuss the European Parliament proposals to liberalise the movement of lorries operating in the national territory of another country. If such a plan goes ahead then the UK can expect an invasion of foreign lorries able to offer far cheaper haulage rates due to the lower level of fuel duty for diesel which applies throughout Europe – an average of just 25p per litre compared with the UK's 50p per litre.
At present cabotage – the ability for a lorry to carry out work in a country not its own – is restricted to work picked up on the spot market following completion of a journey making an international delivery. The European Parliament is now proposing that such work can be by previously agreed contract starting with three jobs from 2009, seven jobs from 2011 and complete freedom after 2014. The substantial difference in diesel duty means that foreign lorries working in the UK can do so at an average of 8 per cent lower costs than can be achieved by the UK domestic industry, and for vehicles from Eastern Europe it can be up to 15 per cent lower.
The liberalisation of this market presents the real prospect of the establishment of depots in Calais, or elsewhere in northern France, with foreign vehicles coming into the UK on a Monday, carrying out work in the UK throughout the week, and then returning to France to refuel at the weekend. All without paying a penny to the UK exchequer in fuel duty or road charges and without the requirement to adhere to the UK's rigorous Operator Licensing regime, which has resulted in substantial advances in vehicle maintenance and road safety. A lorry with a 1,000 litre tank can travel for some 1,500 miles from Dover, allowing it to go as far north as Scotland, and work in the territory, before returning to the cheaper pumps of France without refuelling in the UK.
The UK Government is understood to be very concerned by this prospect and will be represented at the Council of Ministers by Transport Minister Rosie Winterton.
FTA Director of Policy, James Hookham said, 'Due to the cheaper operating costs enjoyed by overseas operators when in the UK as a result of lower fuel duty, we already see large numbers of foreign trucks on UK roads. However, unless the Government succeeds in resisting these new proposals then 'you ain't seen nothing yet'. Substantial buyers of road transport services in the UK are going to find it very hard to resist the sort of prices which will inevitably be offered by overseas hauliers, resulting in major problems for our own industry, which will simply be unable to compete in such an unfair and uneven market.
'Of course, the problem would evaporate if the UK Government was to cut diesel duty to levels comparative with the rest of Europe, allowing our domestic industry to compete on level terms. It is unacceptable that this situation exists as a result of UK tax policy – a total own-goal. For this and other reasons, common sense demands that the policy be changed without delay. However, no sign at present.
'FTA hopes that Ms Winterton will succeed in avoiding this potential catastrophe for the UK transport industry'.'