So "Rail Freight Group is a lost cause" (Comment, CM
Page 23
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19-25 Mar). This is apparently because we dared to promote a Report by OX ERA, the respected Oxford Economic Research Association, which concluded that the heaviest road freight only contributes 70% of the total cost of the damage that it does to the roads and environment—or 60% if one includes an allowance for interest payments on the capital cost of building roads.
For those who have not seen the March issue of RFG News, the OXERA Report states that, in respect of HGVs, the "balance of evidence suggests that the inclusion of environmental and social costs can change from a position of over-recovery to one in which taxes are, on average, substantially below costs".
One of the suggestions in the report to redress the situation was to continue to increase fuel duty, at least until a more targeted means of reflecting the costs could be introduced, such as road pricing or city centre charging. Another was the Eurovignette scheme.
The exact figures can be debated, but the objective of this report was to demonstrate the cost of road transport calculated as far as possible on the same basis as rail-freight customers are charged.
Thus the Budget announcements have come as no surprise to us, and have generally been welcome as starting to redress the balance between road and rail. So why all the fuss? Governments of both main parties have followed policies to increase fuel duty each year, as a means of encouraging fuel conservation and a reduction in emissions. The year's increase should therefore have been no surprise.
A 6% increase in fuel costs probably adds about 1.5% to the overall costs of operating all trucks, so one might be forgiven for asking why operators did not include fuel escalation clauses in their customers' contracts. It would cause an imperceptible increase in the cost of goods to the consumer.
The second complaint is the difference in fuel costs between the UK and continental countries. It is similar to the difference in the cost of beers, which has caused a similar outcry from brewers in the South-East.
It is clear that continental freight traffic has the advantage of being able to fill up with cheaper fuel in Calais, but how useful is this if it means a special journey across the Channel? Only a tiny proportion of truck Journeys are cross-Channel.
The one justifiable cause for complaint from the road freight industry is the Government's apparent unwillingness to introduce vignettes for all HGVs operating in the UK, with the cost reimbursed for UK-registered vehicles. This would go some way towards compensating for the much higher VED in the UK: it is permitted under EU regulations and without it UK registered vehicles are clearly at a disadvantage.
We are told that the Treasury says it would cost too much to collect, but the Government is quite happy for airlines to act as tax collectors for the airport tax, and fuel companies to collect fuel duty and tax, so why not simply get ferry companies to issue vignettes and pass the revenue on to the Treasury?
The road-freight industry is very efficient in the UK, and margins are tight—too tight for the comfort of many. The whole industry will be affected equally by the Government's measures but we in the railfreight industry have a right to a reasoned debate on the issues raised.
We seek a level playing field between road and rail so both industries can work together and provide the services that each can do best. That needs competition, efficiency, profitability and environmentally friendly business.
If governments put up our charges or taxes, we have a right to express our opinion. But both modes, road and rail, are likely to suffer even more congestion in the future and, when it comes to conflicts with passenger traffic, be it cars or trains, we have an uphill struggle to convince the public that freight should have priority over passengers.
Until prices reflect costs, companies will always underuse rail and over-use road transport. A by-product of this is road congestion, environmental degradation and, by depressing rail freight volumes, it reduces rail's ability to offer competitive and attractive alternatives to industry.
In the long term these will undermine the UK's competitiveness within the European Union, to the detriment of the economy and individual prosperity—not to mention the environment and national health. Lord Berkeley,
Charmaa, Rail Freight Group. It's ironic that In the week Tony Berkley complains about the over-competitiveness of road freight Commercial Motor should highlight the undercompetitive nature of rail freight (see page 9, news analysis). Moreover, if road hauliers could pass on their fuel increases to customers and consumers, don't you think they'd be doing so already?—Ed.