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Compromise on cabotage

13th September 2007
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Page 40, 13th September 2007 — Compromise on cabotage
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Which of the following most accurately describes the problem?

Will a new proposal on cabotage satisfy the requirements of free trade without favouring foreign hauliers over highly taxed domestic

operators? Adam Hill reports. Cabotage rules,under which foreign hauliers can legally pick up domestic work in another country, are widely deemed to be a good thing. In theory they cut down empty running which, in these green times, makes sense both environmentally and economically.

But there's a catch. Under European Regulation 3118/93/EEC the system is meant to provide for "temporary" work only; a word that is loose enough to be open to abuse. Earlier this year Davidson & Wilson lost its appeal against the impounding of three vehicles and three trailers at a public inquiry in Edinburgh (CM 28 June, *No return of vehicles used in illegal cabotage operations").

Following a four-month investigation by Vosa's northern investigations team,the operator was found to be involved in regular work within the UK, despite not holding a UK 0-licence. Vehicles were running regularly on contracts within the UK on a Dutch licence.

It may be such cases that have led the European Commission to propose a further refinement to the cabotage regulations. Its main proposal is to allow international hauliers to carry out no more than three domestic j fobs in another member state within seven days, after which they must go home, To qualify they would have had to deliver a load on their way into that member state. This would be different to the current "ad hoc,casual and circumstantial" arrangement that is deemed to exist at present, which in effect means no contract of any kind can exist between the haulier and the customer and regular work cannot be undertaken.

International contracts

As things stand, if a tbreign-based operator has some form of standing contract for road-freight operations within the UK, repeatedly performs cabotage operations for the same company or industry, and has its own premises in the UK, it may be illegal. Yet the new proposal could even open the way for hauliers to do contract work.

"We asked for an additional condition to be put in last year," says Chris Yarsley, EU affairs manager at the Freight Transport Association (ETA). The FTA wanted to stipulate that a final delivery would have to he made on a haulier's route home — in other words, that third job would not be to drop off in Inverness before you made your way empty toFelixstowe.

woul e fine if rates of VED an fue u were

It sounds a sensible idea, but doesn't seem to have made the cut.

But why have these restrictions in the first place? The EU is meant to be a free-trade zone, as any number of UK homeowners benefiting from the services of cheap, efficient builders from Eastern Europe would no doubt attest. For UK companies, the reason for the restrictions can be summed up in a single word: tax.

They know only too well that if a third of the cost for big artics is fuel, and if diesel duty in the UK is 48p/lit against a European average of 23p, then a truck with a 1.500-litre tank operated by a foreign firm should be able to offer a cheaper rate for a UK domestic job. Around 15% of the heaviest vehicles on UK roads are thought to be foreign-registered. Lower labour rates give the accession states a further advantage.

Member states are required to assist one another in enforcing the cabotage rules and the UK can report breaches of the rules to the relevant authority in the operator's home country by which time the offender will have gone home.

Unfettered cabotage would be fine if rates of VED and fuel d my were harmonised across the EU and there was the same degree of enforcement for foreign vehicles on their own soil as there is for UK hauliers in the UK, says the FTA. But none of this looks particularly likely.

A spokesman sums it up neatly:-We'd accept a cabotage free-for-all if there was a level playing field... but there isn't."

A split in Europe

So what happens next? In Europe there seems to he a split.with Holland and Belgium broadly in favour of greater liberalisation of cabotage while France and Austria are against.

The UK Department for Transport, which is thought to be occupying the middle ground in this debate, is expected to issue a consultation paper this month to see what UK hauliers think.

The Council of Ministers and European Parliament, which both legislate, are themselves preparing separate reports on cabotage. The first reading a crucial stepping stone on the path to enacting legislation could take place before the end of the year. So one way or the other, the cabotage rules look set to change. a


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