Transport and Politics: let the people choose
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ceiving the report of the AngloFrench Study Group shortly.
And we should be able to make an announcement next month.
I.S.: Is the Channel link, then, an essential part of our future transport system? Could the money not be devoted instead to projects which would aid areas other than South-east England? DM.: Not essential — it would have been built by now if it were. But whether it is worth having (and why) is exactly the issue considered by the Anglo-French Study Group commissioned by the Prime Minister and President Mitterand last September. As have said, it is the Government's view that a fixed link for its British half should be financed from private not public sector capital.
If a decision is taken to proceed with a fixed link on this basis, it would be for the market to be convinced that an adequate return could be secured for the investment, in competition with other calls on private investment funds. I think it is fair to say that a fixed link could bring considerable benefits to the country as a whole, not just the South-east, but I recognise that this is an issue which worries some regional interests.
I.S.: Can we now consider the recent Budget increases? Vehicle excise duty has been increased for British operators.
What about foreign drivers coming in to Britain who do not pay VED? Could they not pay a fuel surcharge, equivalent to VED?
D.H.: Foreign drivers do not pay VED, though they do, of course, pay fuel duty. Basically the principle is that vehicles are taxed in the country of registration, and this reciprocal exemption from taxation is well established.
It is sometimes suggested that we should make foreign vehicles visiting the UK pay more in taxes than they do at present. There are, however, strong reasons for not do.ng so. If we were to apply such measures, Community rules would require us to apply them to all our EEC partners, including the more liberal. This would in the long run result in worse conditions for UK operators if these more liberal countries then took retaliatory measures against us.
I.S.: Why not abolish VED and increase the duty on fuel instead?
D.H.: We looked at this possiblil ity very carefully in 1979 as part of a wide-ranging review of the operation of VED.
However, after studying all the arguments, we decided that the likely benefits were not sufficient to justify such a major change. We were particularly concerned that abolition of VED and its replacement by higher fuel duties would have placed too big a share of the motoring tax burden on high mileage, rural motorists and essential business users. It was estimated in 1979 that over £100m could have been added to business costs by such a change.
LS,: That seems a very high figure, but there would be compensating savings, surely? The arguments in favour of this method are a reduction in civil servants, one tax point, no tax dodging, payment of excise duty by foreign vehicles entering Britain, better maintained engines using less fuel, and fewer vehicles running empty.
D.H.: The Finance Bill, published on March 26, included provision for restructuring the basis of vehicle excise duty from an unladen to a gross weight basis of assessment, and on heavier groups the number of axles. The change will take effect from October and was foreshadowed by the Chancellor in his Budget statement. The framework for the change was set out in the 1981 Transport Act.
Restructuring will enable us to share the tax burden out more fairly between different kinds of vehicles. The change reflects the Government's determination to get to a position in which all groups pay their fair share of the costs of building and maintaining roads and to provide a tax incentive to use less damaging vehicles. The new rates of tax to apply from October are a long step towards achieving these objectives.
Having weighed up all the arguments for and against abolition in 1979, we concluded that the benefits did not justify such a major change. However, the review showed that the VED administration could be improved and we have achieved savings of over 1,000 staff by transferring more licensing work to Post Offices. On VED evasion, we have stepped up our enforcement effort and run a number of blitz campaigns with the cooperation of the police. These have proved very successful and I am determined to keep up our drive to crack down on tax dodgers.
I.S.: Distribution costs are reflected in retail prices. Any impediment to fast distribution pushes up the cost to the consumer. Lorry bans are such an impediment.
A ban can only be effective if a suitable alternative route is provided first. Should this not be a matter which requires Department of Transport sanction?
D.H.: As the people on the spot, local authorities are in the best position to decide on the measures needed to keep heavy lorries out of environmentally sensitive areas. I nevertheless accept that lorry controls need careful planning if they are not to result in simply shifting the environmental problem from one place to another, or adding excessively to industrial costs.
I shall shortly be issuing a circular to local authorities to help them make the most effective use of their powers to keep lorries away from unsuitable roads. They will also be asked to update the lorry plans for their areas so that all the controls can be seen collectively and their combined effect taken into account when new measures are considered.
I.S.: The use of transfer terminals, such as the Parisian Garonor, is considered by many as a more sensible answer to reducing the number of heavy vehicles in towns. Would the Government offer encouragement and assistance to private developers by way of interestfree loans to establish a network
of these depots throughoi Britain?
D.H.: There will always be a cc tam n amount of essential induE rial traffic in our cities. We neE a combination of policies to de with the problems it cause road building, traffic regulatio heavier lorries, these will all he to reduce heavy lorry traffic towns and cities.
There might be advantages trans-shipment arrangements ing more widely used in Britai On the other hand, trans-shipme can be expensive and mal. distribution less efficient ar could worsen the environmei by putting many more small lo ries on the roads.
Local authorities can have role in helping operators to fin or develop sites, since only loc. authorities have the loci knowledge necessary. Publ financial assistance should ce tainly not be required sinc freight terminals must be con mercial activities. National Ca riers' new trans-shipment servk .Transmode is an encouragin example of private enterprise i this field.
I.S.: Vehicle speeds are a majc factor in distribution and ther are increasing numbers a drawbar outfits on this type c work. What is the logic of 30mph speed limit for drawba outfits when artics of the sam or greater gross weight can d 40mph on non-motorway roads D.H.: There are various anoma lies in our present range c speed limits for different catE gories of vehicle. As I made clea in the White Paper Louie: People and the Environment, wi intend in particular to alter th, speed limit on unrestricted due carriageways from 40mph ti 50mph. But I am also looking a other anomalies.
I.S.: There is some disquiet ii the industry over Type Approve Are you aware of the considet able problems that will occu (notably related to companie which modify chassis) if thi
oods Vehicle Type Approval egulations as they stand are nforced?
.H.: Unlike the passenger car cheme, which requires aproyal of some 20 components nd vehicle systems, the goods ehicle scheme will be confined, t least for the present, to a cornaratively limited number of reui rements. These are power to might ratio; exhaust emissions; ioise and silencers; radio-inerference suppression; brakes; ind the determination of maxinum design and permitted veights.
The standards are those aleady prescribed in the Contruction and Use Regulations. 3ut, under the type approval reline, the standards will be hecked before first licensing inlead of at the end of the first rear of use.
The type approval scheme has )een designed to apply only to he primary stage of manufacure. It is intended to avoid the goblems which might arise vhere vehicles are manufacured in more than one stage. Vevertheless, the scheme inludes the requirement that if a ;econdary builder modifies a rehicle before first licensing in ;uch a way that if the number or origitudinal position of wheels )r axles is changed, it is neces.iary for him to notify the DepartTient so that the question of its ;ompliance with the type ap)roval requirements can be conklered.
Following discussions with :he trade associations of the nanufacturers, bodybuilders and converters, and having rade an assessment of the lumbers of conversions likely to 3e referred to the Department, it $ accepted that this notification rocedure could generate a good deal of work both for converters and for the Department. We therefore intend to propose a small amendment to the regulations and adjust the administrative procedures so as to reduce the work content of notifications, whilst still ensuring that modified new vehicles meet the type approval requirements.
The details of how this is to be achieved are still the subject of discussion with the manufacturers, bodybuilders and converters, but they will be such that conversions will still be possible when the goods vehicle type-approval scheme is introduced.
IS: I know you have been looking at some form of antispray device for hgvs. Are you considering making the use of anti-spray mud-flaps (such as Monsanto Clear Pass) compulsory on hgvs?
D.H.: Yes. I believe we can build on the research and development that has gone on in recent years. But before I can make regulations we need to set out in a technical standard the minimum performance characteristics for practical and effective anti-spray systems. I am looking urgently into how best to get this work done.
U.S.: There seems hardly to be a time when someone is not studying an aspect of transport for government. The subsequent reports are seldom implemented in total. For example, a few recommendations from the Foster Report have been adopted. Is the rest of that re-)ort now dead? D.H.: We announced action on about a third of the recommendations in August 1980 — for example, roadside checks at night and weekends; and a simplified Certificate of Professional Competence examination. Since then, we have given detailed consideration to many of the other recommendations. The operators' licensing provisions in the current Transport Bill stem from the Foster Report. Not all the recommendations called for action while others require a careful assessment of the implications for industry and for civil service manpower against the potential benefits. I will continue to keep the operators' licensing system under review.
I.S.: What do you consider to be the British Government's priorities in Europe?
Is there a need for a European transport policy as laid down in the Treaty of Rome, and, if so, what form should it take?
D.H.: Yes, the need for a common transport policy is clearly stated in the Treaty of Rome and this Government shares the view of the "founding fathers" that a common transport policy is an essential part of the European free market.
The form of the CTP is a more difficult issue. On a practical level Europe needs, and benefits from sensible harmonisation of things such as road signs, or basic safety standards. If the objectives of the European free market are ever to be fully achieved, distortions of the conditions of free competition in the transport market must be gradually removed. In the view of successive UK governments, a successful common transport policy must cover the two main strands that have emerged in the past 25 years — sensible harmonisation and progressive relaxation of artificial restraints on movement.
One of the principal reasons for the — often criticised — slow progress with the CTP is that these two strands have too frequently come into conflict. The Government shares the sense of disappointment about lack of progress. But by proceeding step by step more has been done than is sometimes recognised.
The UK's overall aim is the same as that for its domestic transport policies. We must work for a healthy, free transport market not hampered by unnecessary restrictions, in which free competition benefits the transport industries and users. I think this is the same overall aim as the transport provisions in the Rome Treaty.
On a more detailed level we continue to press hard for further liberalisation of road haulage. This means looking for the greatest possible increases in multi-lateral and bilateral quotas, and resisting attempts to constrain freedom of user choice. We do not always succeed to the extent we would wish. But the size of bilateral quotas has increased very significantly in the past 10 years, as has the EEC quota.
We managed to achieve only a five per cent increase in the latter last December, but there had been no increase at all in the previous two years. We shall continue to work towards more efficient European transport, not only for road haulage but for all modes.
U.S.: Can I ask you now to consider the passenger transport sector? Do you believe that deregulation of the bus industry, especially on long-distance coach routes, has undermined the strength of the rail trades unions, and, if so, was this intended when the 1980 Transport Act was framed?
D.H.: The Government's aim in deregulating long-distance coach services was to get rid of unnecessary controls, to widen the range of choice available to the travelling public and to revitalise the coach industry by encouraging competition and better marketing.
I think it is generally accepted that coach deregulation has been very successful in meeting these objectives.
It is for British Rail to consider how best to meet the increased competition posed by the improvements in coach services, and I trust that the need for them to compete effectively will not have been overlooked by the unions concerned.
I.S.: Deregulation also brought competition between separate road operators. National Bus Company subsidiary Cumberland Motor Services has withdrawn some rural bus services in reaction to new competition in Whitehaven town. It alleges that the competition has made crosssubsidisation of loss-making rural services from profit-making urban services impracticable. How do you view this NBC argument in relation to encouraging competition and value for money?
D.H.: The decision of my predecessor as Secretary of State to allow Yeowart's Coaches' appeal, which enabled them to operate the service in Whitehaven, is currently the subject of an application by Cumbria County Council for judicial review.
It is common practice for bus operators in this country — and not only NBC — to use the profits from more popular routes to make up for losses on others. I am sure that this policy has brought and can bring benefits to the travelling public, particularly in rural areas.
But it also has its dangers. It means keeping fares on heavily used routes above their economic level. It can encourage complacency on the part of the operator and a reluctance to adjust services to meet real demand.
It may sometimes be better for routes that cannot operate economically to be subsidised explicitly by a local authority rather than in a hidden way by other bus users. It may be sometimes that routes that one operator finds unviable could be provided more economically by another, or that less conventional means, such as community buses, shared taxis or social car schemes, could be found to provide the necessary mobility.
But these are difficult matters, and the right answer may differ from place to place. The 1980 Transport Act retailed road service licensing for stage carriage services, and it is always open to local authorities and established bus operators to attempt to persuade the Traffic Commissioners that to grant a licence is not in the interests of the public.
Road service licensing was retained in individual cases to be assessed in the light of all the circumstances, including crosssubsidisation. I am sure that the Traffic Commissioners will look at all cases on their merits, and I shall certainly do so on those which come to me on appeal. I.S.: The British bus manufacturing industry is facing severe problems owing to lack of demand for new urban buses resulting from the recession, the phasing out of bus grants and cuts in revenue support caused by public spending controls. Has the Government any plans that may stimulate demand for new buses and protect the bus-building industry?
D.H.: The whole commercial vehicle manufacturing industry is going through a very difficult period at the moment, due to the depressed demand for new vehicles. It is having to adjust production capacity. Of course, I want to see buses continuing to be produced in this country — it is an area of manufacture in which we have a great deal of experience. But I do not think an artificial stimulus to demand for buses, at the expense of the taxpayer or ratepayer, would be helpful for the long-term health of the industry. Nor would
protecting it from competition.
Rather the industry must strive to be competitive and produce good quality buses at prices which customers can afford. There are government schemes through which companies can be given assistance in the development of new products.
It was recognised that ending the new bus grant would have consequences for demand. This is why it is being phased out over four years. The grant was originally introduced to encourage greater labour productivity through one-personoperation and to modernise bus fleets. These aims have been achieved.
IS.: British coach operators have to pay road tolls on entering West Germany and their coaches have to be submitted to a "Tempo 100" inspection in that country before being allowed to travel at 100km/h on West German motorways.
As they are allowed to travel over 1 0 Okm/h on British motorways, why will the German authorities not accept this as qualification for their speed requirement?
D.H.: The Federal Republic of Germany has a very busy motorway system with much transit traffic. There are no speed limits for private cars, but in the interests of road safety coaches are restricted to 80 kilometres per hour. Where the coach has passed a quite severe safety and roadworthiness test it is permitted to travel at 100 kilometres per hour; the rules apply to all coaches whatever their nationality.
We have been pressing the Germans to simplify the machinery for the issue of the necessary "Tempo 100" certificate, thus enabling more British coaches to take advantage of the 100 kilometres per hour rule, but there is no prospect of the Germans amending their domestic legislation simply because in Britain — or indeed in other countries — coaches can travel faster than that.
The tax of 0.6 Pfennig/km paid by British coaches entering Germany is calculated by the Federal Minister for Finance to equate to the 13 per cent VAT rate paid by German coach operators on their services.
IS.: London Transport and some Passenger Transport Executives have become political footballs with policies dramatically changing with a change of political control of local authorities. Is there anything the Government can do to remove them from this political arena to allow proper long-term planning?
D.H.: No one deplores more than I the way in which the whole question of public transport finance has been thrust into the centre of poi-it'd-al contro---'versy as a result of the irresponsible policies pursued by the GLC and some Metropolitan Counties.
In the short term, it is for the GLC to get themselves out of the mess which they themselves have created.
But in the longer term I do not believe that it would be a practicable aim to remove these questions from politics. I have made it clear that the Government is in favour of a reasonable degree of subsidy and if local councils are to pay subsidies then they have a duty to ensure that their ratepayers get value for money. But I agree very strongly that proper long-term planning needs a stable framework without wild fluctuations of policy.
Whether that will, in the end, mean that there must be changes in organisation, is not clear. The House of Commons Select Committee has been looking at the organisation of transport in London and it will be interesting to see wheth they recommend any changes I.S.: And now back to privatit tion. Do you see any qui progress being made to pH\ tise the operations of tl National Bus Company?
D.H.: I do not see the intro& tion of private capital into t
Company as a race against tirr Our objective in enabling priva investment in NBC is to &lc developments to take plal which could not happen with the present constraints on pub expenditure.
The aim is to benefit tl travelling public and the Cor pany without causing a deteri ration in the services now pr vided. As I have said before, v see the best opportunities f private investment being tl Company's express coach ar holiday businesses and d velopment of its properties. will take a little time to establir the coaching businesses as s perately identifiable units NBC with proven track recon which can provide the basis for sale of shares to private inve tors.
A variety of institutional a rangements are possible fi furthering the development I the Company's property. The will be formulating scheme with the private sector in tt light of the specific opportunitia available.
I.S.: Transport is an essenti service requiring high capit investment. Rightly or wrongl many road operators belies that governments are too rE oriented when it comes to sigi ing cheques. To what extent ca you discount rail lobbying whe faced with investment decisior for competing road and rail prc jects?
D.H.: I am afraid that transport' a subject which attracts lobbier the pro-rail lobby is by no mean the only one.
We listen very carefully to th views of those who are cor cerned about transport issues. would be wrong not to do sc lobbies are a legitimate part c the system. But when one i contemplating spending larg sums of public money, one mw have hard evidence, not just at sertions. So my Departmer puts a lot of effort into apprait ing the likely returns from capita projects, both road and rail.
Generally speaking, road an rail projects are not alternative to one another, so it make sense to look.at the investmen requirements of each mode indi vidually. But where a majo investment in one mode is likeh to have a significant impact oi the other, we do take that int( account in our appraisal.