Official Report 264KB pdf
Our second panel of the afternoon is on a different subject—freight transport. From the Office of Rail Regulation, I welcome Michael Beswick, who is the director of rail policy, and Sarah Straight, who is the director of rail markets, passengers and freight.
The Office of Rail Regulation is the independent regulator of Great Britain's rail industry. It might be useful to summarise our key jobs. From 1 April, when we merge with the Health and Safety Executive's rail division, we will be the health and safety regulator for the GB rail industry. That will add to our existing economic regulation function. Much of our work in that regard relates to Network Rail. We set Network Rail's charges and outputs—we now do that separately for Scotland—monitor delivery of those outputs and ensure that Network Rail meets the requirements of customers, including freight customers. We set the terms of key relationships, particularly those that involve access to Network Rail's network. We also have other relevant functions. We are the competition authority for the rail industry and we look after many other industrial relationships and operator licensing.
Your submission says:
On the Government's public performance measure, GB performance as a whole for passenger services is running at about 85.5 per cent. First ScotRail's performance is still running at a little less than that. Given the operational conditions in Scotland, performance probably ought to be a little better. Overall, railway performance in Scotland is a bit disappointing. We have asked the industry to produce plans to address that and we will have a session with the industry in the next few days to find out how it is doing that. We are reasonably confident that the industry has in place a number of management actions to address the situation. That partly involves freight train performance and working with freight operators to address any problems that freight is causing or is being caused, which the committee discussed with Mr Hogg the other week.
I am tempted to ask lots about passenger services, but the inquiry is about freight. To what extent has that underperformance affected how we shift freight by rail? Is it more to do with passengers, as you said?
It is very much to do with passengers. Clearly, there are issues around the coal traffic and ensuring that that operates reliably. There were also issues that led unfortunately, as I think one of your witnesses told you, to a loss of container traffic to England. The mess that the railway got into after the Hatfield derailment meant that rail lost that container traffic for good. That demonstrates the importance of addressing performance issues for freight where they arise.
On the issue of conflicts, the claim from the passenger side in the case of the Forth rail bridge is that the freight end is not as flexible as it could be with its passports—for want of a better term, although it may be the right one—for using the rail bridge in order to allow more passengers across. Will the advent of the Stirling-Alloa-Kincardine rail line improve that position? What powers do you, or anyone else, have to encourage freight trains, if they cannot bring new business to bear, to give up passport time on the rail bridge?
Sarah Straight will comment in detail on the issues around access, but it is clear that the Stirling-Alloa-Longannet route will have the advantage of providing an alternative route to the Forth rail bridge. I think that that is important.
That is a different issue from their giving up their passports, though.
A key issue in freight rights, as opposed to passenger rights, is that they are generally much more flexible. The way in which the industry parties are talking to each other and with Network Rail means that there is the flexibility for freight to move around the passenger slots. Between them, I think that they will come up with the best use of capacity to suit all of them. Of course, there will never be a perfect situation, but the way in which the industry parties are beginning to co-operate with each other will make the situation much better.
Thanks, that is useful; "best use of capacity" is a great term. However, what happens if there is no coming together? Who makes the final decision about who will have rights where? I genuinely do not know.
The ultimate determiner of capacity and its allocation is the Office of Rail Regulation. We consider applications for access rights from freight operators and passenger operators. We consult the parties affected—Network Rail and the train operators—and we reach a decision in the light of various criteria. We do not particularly give freight the advantage over passengers or the other way round. In determining the rights, we consider the allocation of capacity as a whole.
I need to think about that for a little while, convener. I might come back in.
Your written submission talks about capacity and pinch points. The more I read it, the more I wondered whether there was any spare capacity in the Scottish rail network for additional freight. Is there?
There is a lot of spare capacity, but there will always be pinch points. There are particular issues around the routes to England for coal. As your colleague said, there are also particular issues around the Forth rail bridge, which the Stirling-Alloa-Longannet route should help with. Of course, that will cause issues to arise in the Glasgow area. It is a question of looking for sensible timetabling solutions. Much of our experience, and that of the industry, is that it is often a question of identifying better planning and better ways of utilising the capacity and better timetabling. I think that that will be the focus of the work that Network Rail is doing this year in its reutilisation strategy for Scotland. That is very much about identifying pinch points and identifying whether there are timetabling solutions and whether infrastructure solutions are needed.
This might be a general question, but do you think that it might be possible for freight transport to increase by 20, 50 or 100 per cent, given better timetabling and better use of lines?
It depends. We must look at specific locations before we can be sure. Some routes have plenty of capacity, but on others pinch points will be hit very early in the game. It is important that all concerned engage with the re-utilisation strategy that Network Rail is developing. The strategy takes a comprehensive look at what is and is not available in Scotland. Ultimately, if people are not happy with that, they have recourse to us.
Can you give us an example of an underutilised line?
Most railway lines are volume hungry. It is a question of ensuring that there is not a specific point at either end or somewhere in the middle. It is difficult to say that a line is empty or not well used, because it depends on what we try to do with it. For example, Anglo-Scottish coal is making better use of the Glasgow and south-western route, which is a tight route, and that enables use of the Settle to Carlisle line, which has a lot of capacity.
Do you envisage any general expansion in rail freight that could be carried at night outwith normal passenger times? Is that the kind of expansion that you are looking at?
As Sarah Straight said, freight needs to be flexible. Freight operators are always in a position to seek out opportunities, get access for them and make arrangements for slots in the timetable.
Now that so much power has been devolved to us as a consequence of the Railways Act 2005, will your role as rail regulator here differ from the role that you play in England?
The difference is not so much in our role, but in the environment in which we operate. In the future, the Scottish ministers will have responsibility for specifying and funding rail services in Scotland. We have to set Network Rail's outputs and funding in Scotland in the light of the guidance that we get from the Scottish ministers. We will have to set a separate set of passenger access charges for Scotland.
You will be required to establish separate rail outputs for Scotland. When will you be in a position to develop your first set of outputs? How far down the line are you—are you still waiting for information from the Scottish Executive?
We set national outputs for Network Rail in the passenger access charges review for 2004 to 2009, which completed in 2003. We split that up as best we could between England, Wales and Scotland and we are producing the Network Rail monitor for Scotland that summarises how things are going in Scotland compared with England and Wales.
Do you expect, or have you discerned, a difference in approach to the expansion of the use of rail for freight transport in Scotland compared with England and Wales?
We do not yet have any definitive views on that. Clearly, the Scottish Executive and Transport Scotland are doing a lot of work on transport strategy. The clear message is that the focus in England will be on passenger performance, passenger capacity and safety. Rightly, the present work in Scotland is on developing the answer for Scotland.
You indicate that, in England, the concentration will be on improving passenger service output. Our inquiry aims to establish whether enough is being done to develop freight transport in Scotland. I realise that you have had your overarching role in Scotland for only a short period, but we are anxious that, in Scotland, we are attempting to maximise the use of our freight capacity. Is that objective coming through in your discussions?
The role of freight in the Government specification in Scotland is being considered, but the issue is yet to be thought through. The model in the white paper on the matter for England and Wales was essentially that freight should be incremental on the passenger network , which is funded by Government. The Scottish ministers must decide on the extent to which they want to make funds available specifically for freight and what sort of mechanism they want to use. That may well be done through the continued use of freight facilities grants. European law places constraints on the extent to which the Government can put money into freight—Sarah Straight may wish to comment on that—but the Scottish ministers have options, which they must work through. We are working with ministers to ensure that they have the best available information.
Many recent European initiatives have been directed at liberalising the freight market and opening up Europe to freight. The European Union is setting rules about the way in which charges are made but, on the whole, those rules are aimed at providing a level playing field among member states, rather than at giving freight an advantage or disadvantage in relation to passenger traffic.
Your submission suggests that there will be a change of policy on access charges. Will you comment on that?
At present, there is no plan one way or the other. We reviewed freight access charges in 2001, which is why we did not review them substantially as part of the 2003 review—we did not think that it was right to change them, as we had only just reviewed them. However, we need to consider freight access charges in the 2009 review. Issues arise about the principles for access charges. This spring, we will consult on what the principles should be and whether the present ones should be changed. Work is also needed to ensure that the wear-and-tear element of freight access charges is realistic and sensible. Overall, the infrastructure costs of the railway are a bit higher than they were when the charges were first set. That is work in progress, although we are getting on with it because we understand its importance to the freight industry.
My second question is about timber transport, which was mentioned a week or so ago. I am using this only as an example, but there is an area in my constituency where for about two years an issue has been on-going between English Welsh & Scottish Railway and Network Rail, and in which the Minister for Transport and Telecommunications has also been involved. How exactly would you be involved in a project such as that, which is about when freight travels on certain parts of track?
Sarah Straight is probably the expert on access. Our key involvement is to do with determining what contractual rights the freight operators would have to operate on Network Rail's network. In doing that, we must clearly balance the requirements of freight and passenger services. In Dr Jackson's constituency, there are constraints on what can be done, but our job is very much about seeking the best public-interest outcomes.
We would not be asked for an access right for a short time to run a particular load on a particular track. What usually happens is that a company such as EWS comes to us—as it has recently—to ask for access rights across the country for a long period, in order to give the company as much flexibility as possible and the ability to respond to business opportunities. Once the company has those rights, the day-to-day operational issues about how those rights can best be used is best discussed between Network Rail and EWS on the day, if there are specific issues to resolve.
Would you make the long-term decisions about freight's being on a track at certain times?
That is not necessarily the case; we usually find that freight rights have a lot of flexibility around them and that timings for specific days are decided between Network Rail and the freight company.
Ultimately, train operators can appeal on timetable issues to the ORR if they do not get satisfaction through their contract with Network Rail.
Their contract?
Train operators have contracts—access agreements—with Network Rail. There are provisions for appeal to the ORR if timetabling issues cannot be resolved.
Thank you.
What, roughly, are the terms of usage of the rail network, and what is the relationship between freight-service use and passenger-service use?
I am trying to think of a useful statistic on that. About 1,000 freight trains a day are run by EWS and probably another 500 are run by other operators, so it is a relatively small proportion of the number of trains or train miles on the network. However, the amount varies hugely by route because large parts of the network are used largely by passenger commuter trains and carry very little freight. A number of main lines carry significant freight, however.
Have you been given any parameters, instructions or guidelines by ministers, whether of Her Majesty's Government or the Scottish Executive, on those usage ratios? Are you under any kind of imperative to alter the relationship?
Our guidelines are essentially our statutory duties, which are set out in section 4 of the Railways Act 1993, as amended at various times. It requires us to balance various requirements while protecting the interests of users. We must consider the use and development of the network for passengers and freight; sustainable development and the environment; the ability of industry parties to plan; and any general guidance that is given to us by a secretary of state or by Scottish ministers. It is a question of balancing various duties, which includes balancing the needs of passenger services and freight services. We must then take a view as to how that is best done. When we make such decisions we have to set out the principles that we have adopted.
So when there is a conflict over access to a particular route or line between the demands of passenger operators and the desire of freight operators to develop new freight services, there is no bias in any direction from ministers that makes you more disposed to a freight service rather than to a passenger service, or vice versa. Is there a guideline that indicates that in such a conflict situation one should be preferred?
There is no such guideline from ministers. We have published our own criteria, according to which we make such decisions.
Do your criteria dispose you to opt for development of freight services or passenger services?
Generally, the issue does not arise in exactly that way. Unless there is no room left on the track, we can generally fit a freight train round a passenger service or a passenger service can run at a slightly different time. In a situation in which nothing more can fit on the track, the decision is made for us, although we are not yet at that stage. We must take advice from Network Rail, which has to operate the railway.
If an operator says that it wants to run a new passenger service or freight service, but you cannot fit it in without bumping an existing service or affecting how an operator runs an existing service, can you interfere with the service or the access right of an existing operator?
The short answer is that we cannot. We have no power to direct an agreement that would automatically cause Network Rail not to be able to meet its obligations to another party.
You talked about your discussions with ministers on the overall policy. Everyone is signed up to the idea that we need to get more on to rail and off the road. We have also heard about the capacity problems in accommodating passenger services and rail freight. This morning I visited the Mossend railhead before I came through to Parliament. A new partnership has developed there between a cement company and the operator. A few weeks ago, the committee visited Eurocentral and we saw the partnerships that operate there. Both those sites have huge scope for expansion. More than 50 acres is potentially still to be developed at Eurocentral and at Mossend railhead 20 acres is still to be developed. If there was competition between two operators, what would your role be in ensuring that the market was not skewed? How would you ensure that two competitors were given an equal chance of success?
We deal with any applications that are put to us for rail access rights. We try to ensure that no barriers are put in the way of freight operators and operators that are entering the freight market. We use various mechanisms to ensure that that is the case; for example, we use option access contracts. If developments are taking place, someone can come to us and say, "We are building a development and we would like to use trains in three or four years. We want to use them for X years to get a payback for our investment." They can almost book some access rights in advance. Developers are taking that option. We are trying to make that available to operators and potential operators so that rail becomes an attractive option. However, they have still to find space on the network once the trains are outside their development.
Do you have to show the Scottish Executive that you are operating even-handedly? Who holds you accountable?
Our clients—the train operators—hold us accountable.
If an operator feels disadvantaged, how can it obtain redress or get the imbalance taken out of the market?
Ultimately, if anyone is concerned about a decision that we have taken, we can always be judicially reviewed. We hope never to get to that point, however. The hallmarks of the ORR are our openness, transparency and our consultation of all parties that are involved in the cases that we deal with. We always hope to have a completely open deliberation about any suggestion that is that is put to us.
Your submission identifies the main freight-capacity issue as being movement of coal. It also acknowledges that the opening the Stirling-Alloa-Kincardine line will address one of the problems in that regard. What are Network Rail and, indirectly, the Scottish Executive doing to tackle other constraints on the movement of coal?
As I said, Network Rail is working on a route utilisation strategy for Scotland. We asked it also develop a freight utilisation strategy for the whole network. Clearly, we are conscious that freight in particular is transported across the entire network. We have to have joined-up thinking on that. Network Rail will assess freight needs across the whole network, including specific work on Scotland. That work will begin to identify whether there are any other problems. As far as movement of coal in Scotland is concerned, the obvious problems concern locations in the central belt, particularly in the Glasgow area. As far as movement of coal from Scotland to England is concerned, the issue will be the Glasgow and south-western route. The freight utilisation strategy should identify those issues.
Will the ORR have a direct input into the freight utilisation strategy and the Scottish route utilisation strategy, or will you assess them following their publication?
We are consulted on the strategies and are asked for our views on their development. The main process by which they are developed is by Network Rail engaging with the train operators, the funders—such as the Scottish Executive and the Department for Transport—and with the passenger transport executives and other such groups.
On capacity, I am sure that the priority that the rail freight industry places on gauge enhancement on the Glasgow and south-western line to enable 9ft 6in containers to use the line as a diversion when the west coast main line is not available is being considered as part of the freight utilisation strategy. The matter has been brought to our attention in earlier oral evidence and in submissions. Does the ORR have a view on the issue or will you await the outcome of the strategy?
We will await the outcome of the strategy. I understand from technical experts that the issue is not trivial; given the nature of the route, significant work is required and it may be better to focus on other routes for that traffic. That is the sort of issue that I expect Network Rail to address in the freight utilisation strategy. Basically, it will have to take a view on the route by which the high containers will get to Scotland.
I return to the response that you made to my colleague, David McLetchie. You gave the figure of 1,500 for the number of freight journeys that are made in a day. The figure seems to be a high one for Scotland. Was the figure for the UK?
I am sorry; the figure was for Great Britain.
Do we know what the figure is for Scotland and what proportion of total freight it represents? I know that, compared to the passenger side, the figure is small.
I do not have the figure for Scotland. I imagine that it would be in the order of 100 to 150 journeys.
Are you the right people to ask for the figures?
We can ask Network Rail for them or you could ask it directly.
We should probably ask Network Rail directly, in that case.
Facilitation is mostly about not putting up barriers before new entrants to the freight market. I mentioned access rights contracts, which are an option that developers have used, but we have other mechanisms to make rail freight as attractive an option as possible. There are various mechanisms to do with contracts. For example, there is a mechanism to ensure that if a company has rights that belong to a particular contract and a competitor comes into the market and wins the contract from it, the rights can transfer to the new contract. We can do things that do not make life difficult for rail freight operators in the market, but we cannot do anything more about money because we are not funders.
That ends questions to Michael Beswick and Sarah Straight. I thank them very much for their evidence.
I thank the witnesses for coming along. In your written evidence, you talk about a shortage of drivers in the road haulage industry and estimate that the United Kingdom shortage is some 40,000 drivers. If we extrapolate a Scottish figure from that, is the result that there is a shortage of about 4,000 drivers in Scotland? If so, is there any evidence to back that up?
I will pass you straight to Tony Devlin, who is our expert on the road haulage industry.
It would be pretty difficult to get an exact figure for the shortage of drivers in Scotland. I would argue that the Scottish figure would be a bit higher than 4,000 drivers.
To what do you assign the shortage? Is it simply the conditions of the job? Is there anything the Scottish Executive can do? The minimum wage is, unfortunately, a reserved matter; is it the main determinant of the shortage?
A number of factors cause the shortage of drivers—the issue could merit an inquiry of its own. One factor is the working time directive and abuses of it in respect of holidays and periods of availability, for example. The directive has not been operated in the spirit that was intended.
In sections 2.8 and 2.9 of our written submission, we tried to identify some positive things that the Executive could do to create a better working environment for drivers in the road haulage industry. For example, there could be adequate and affordable roadside facilities, and better parking facilities in all local authority areas.
I have a related question for either Stephen Boyd or Tony Devlin. We have heard that Scottish haulage companies are making increasing use of foreign drivers, and that foreign companies are increasingly involved in the Scottish industry. Polish drivers have been mentioned in particular. Is there a discernible problem of competition for Scottish workers? Are the foreign drivers being employed for lower wages and under poorer working conditions than Scottish workers would expect?
That is a problem, and not just in the transport industry, unfortunately. My union regularly finds that eastern European labour is brought in and trained to a level that is in most cases definitely not acceptable to do the long-distance and short-haul jobs of an LGV driver. As the question suggested, they are there for a reason: they are being exploited as cheap labour, which has the knock-on effect that the Scottish workforce is exploited at the same time.
You mentioned the driver shortage. We have talked about the fact that many of your concerns would have to be resolved at Westminster or in Europe. The Scottish Executive, however, has the power to subsidise or provide more courses for young people to train to be LGV drivers. Would you support that? Have the unions discussed that with the Executive to try to address the labour shortage in the industry?
I come from a transport background. I was involved in establishing the industry forum for tanker drivers, for which the Scottish Executive commissioned a report on the tanker industry by Walter Williamson just after the fuel crisis in 2000. That was a good report; not a lot came of it, although it hit the nail on the head at the time.
How much does it cost a young man or woman to train to be an LGV driver from start to finish, including any tests and possible failures? Bristow Muldoon's point was spot-on—if the Executive would consider implementing schemes to subsidise that training, that would help. However, that would not help if employers—especially foreign employers—continue to employ cheaper labour. In that case, even if someone was trained, they would not get the work unless they were prepared to work for a lot less.
Yes, there is a lot of scope for that, but to achieve it the will to do so is needed on both sides. The industry has road-haulage agreements that are very basic and which do nothing other than meet the legal minimum requirements. There would have to be some form of minimum standards agreement with the employers.
Sorry, that is the cost of obtaining—
A driver would have to sit a class 2 test to drive a rigid lorry. Once they had driven that type of vehicle, they would apply to sit a class 1 test, which is to drive an articulated lorry. A driver would have to sit two tests and meet the cost of that. It is quite a difficult procedure to go through, especially as the road haulage industry in the UK, not just in Scotland, is in real need of a review of the type that we did in the tanker industry. In that industry, drivers need professional qualifications and a minimum standard has been agreed with the employers. There would have to be genuine willingness on both sides before that could happen in the haulage industry.
In recent meetings, a committee member who is, unfortunately, not here today, Fergus Ewing, has described the working time directive as possibly one of the worst pieces of legislation in the past couple of decades. I do not subscribe to that view. Your written submission states that you are concerned with trying to address the long-hours culture in the industry and raising the health and safety concerns that are associated with drivers working long hours. What is your response to Mr Ewing's view of the working time directive?
I will be honest. I find that an incredible view for anybody to take on the working time directive, given the fact that it is health and safety legislation. In 2006, in an industry in which staff are in short supply, to ask people to work 50 or 60 hours a week—that is a conservative estimate, as people complain to us about working 80, 90 or 100 hours a week—driving lorries, petrol tankers and what have you, is astonishing. If we are serious about addressing shortages in the transport industry, we should be trying to make it a reasonably attractive and secure industry for people to work in. People will not be attracted by the prospect of being paid the minimum wage and having to work 80 to 100 hours a week at the straight-time rate, on the back of which they will get no pension or qualifications. The working time directive can address that if there is a genuine will for it to do that.
The words that Mr Ewing used were:
There has been a success story in the freight industry throughout Britain, although there is room for improvement. We have had to work within the constraints of the working time directive as well; however, for the companies that employ train drivers, that has not been such an issue as it has been for our colleagues in the T&G. I am saying that it can be done and is being done at this time.
I hear what you are saying about the working time directive. The road haulage industry and trade bodies have presented evidence to us that the directive has resulted in significantly inflated road haulage costs. Indeed, the UK Government suggests that the cost might be around £1 billion. I have no idea whether that is right or wrong. What is your view?
I do not know the detail of the issue and I certainly would not put a figure on the costs. However, the costs have to be weighed against the benefits. That has not happened in discussions about regulation. The benefits are that we now have a higher standard of health and safety in the road haulage industry. Tony Devlin might want to say more about that.
I support that. The costs of any new legislation must be weighed against the benefits. The benefits of the working time directive for lorry drivers and others in the transport industry are important. It is easy for me to say that, because my experience is that the directive has brought real benefit to people. It was the norm, and the long-hours culture meant that it was expected, that people would work long hours. A refusal to do so usually led to a threat against your employment or dismissal, because employers thought that they could find drivers easily.
Is there any evidence, across the UK, that the directive is being implemented in different ways?
Yes. There are about four or five large logistics companies in the UK and a variety of companies of other sizes, down to the family-run firm with two or three trucks. Some manufacturing companies, which are not primarily involved in the transport industry, have trucks as well. Some companies have come up with good examples of ways in which to manage the working time directive, as Stephen Boyd said, and have arrived at good operating practice on a day-to-day basis, while others fall down in that regard. Sometimes, even though good deals might have been reached across the negotiating table, the way in which the system operates on a day-to-day basis can be less than satisfactory.
Are you saying that there is a difference between how the large companies and the small companies implement the working time directive? Are the smaller ones having greater difficulty?
I do not know whether that is necessarily the case. The businesses that have the most difficulty with the working time directive are those in which people just buried their heads in the sand. Everybody knew that the directive was coming in. Those who simply buried their heads in the sand in the hope that it would not happen and did not prepare for its implementation are now not very happy. However, for companies large and small that prepared for the directive and worked towards implementing it within the three to five year timescale, the working time directive made no difference when it came into force. The difference that exists is not between large companies and small companies, but between those that prepared for the directive and those that did not.
I ask the question because larger companies generally find it easier to implement whatever new regulation is introduced because they have human resources personnel who are employed to deal with that sort of thing. Normally, tradesmen and smaller units have more difficulty putting new regulation into effect because they do not understand all the implications. Perhaps the latter are more representative of the nature of the Scottish industry. That is what I am trying to get at.
As paragraph 2.5 of our written submission highlights, the introduction of the working time directive has been an opportunity missed. Some of the anti-regulation rhetoric ignores the fact that the implementation of the directive should be an opportunity to create a level playing field on working time. The directive provides an opportunity to address the real recruitment and retention issues to do with why people do not want to join the haulage industry. It provides an opportunity for the industry as a whole—employers and trade unions—to get together and address those issues, as has happened in the more progressive parts of the industry.
I accept all that, but I am trying to get my head round whether the industry in Scotland has particular problems because its structure involves more small, family-run, independent operators. I do not want to cast blame on anyone, but the reality is that such operators have taken a bit longer to get used to the idea.
I may be wrong, but I suspect that one reason that the directive has caused more problems for Scottish transport companies than for others in the rest of the UK is that Scottish hauliers take longer to reach the marketplace. In the past, drivers might have been required to work longer hours and that was not a problem. Companies could employ fewer staff because drivers were able to work perhaps 14 or 15 hours a day. Now that the working time directive has come into force, the requirement for daily and weekly rest periods means that that cannot happen. For Scottish hauliers whose failure to prepare for the directive means that they now take longer to reach the marketplace, I imagine that the regulation was quite a thunderbolt when the day of reckoning came round.
I seek clarification of paragraph 2.2 of the STUC's written submission. Am I right in thinking that the drivers' hours regulations under the working time directive came into force in April 2005? Are those the regulations that we are discussing?
Yes, we are talking about the road transport regulations.
Those regulations came into effect in April 2005. However, paragraph 2.2 of the submission mentions that 195 drivers' hours offences were identified in a survey that was carried out by the Association of Chief Police Officers in Scotland on 3 February 2005. Those offences must have been infringements of the regulations that applied to drivers' hours as measured under what might loosely be called the tachograph regulations. Is that correct?
Yes.
For how long have we had the regulations on tachographs in relation to drivers' hours?
I think that the tachograph regulations have been in force for about 20 years.
If those regulations were introduced in 1986, they have been around since well before 1997. Good.
Is the question about how the regulations work in an operational sense?
Yes. Do the regulations that came into effect in April 2005 limit the number of hours that a driver can work, or the period over which a driver can work, to a more significant extent than the regulations under the tachograph regime did?
Yes. As I said earlier, they should significantly reduce the period over which a driver can work. Unfortunately, that does not happen in every circumstance, because of the way in which different employers operate the system on a day-to-day basis.
The figures that you have are from the Association of Chief Police Officers in Scotland. Who polices or enforces tachographs? Who will police drivers' hours under the new regulations?
VOSA will do that.
So it will perform both functions.
Yes.
In paragraph 2.8 of your submission, you make suggestions about improving roadside facilities—parking places and so on—for drivers. Has the STUC or the T&G carried out a survey of the main routes in Scotland and identified where there are deficiencies of provision of which you could advise us? We might then be able to highlight the fact that the facility on a particular road is totally inadequate and that there should be some point where a driver can stop.
Our national committee includes representation from each of the regions into which the union is divided and has investigated the matter in detail. I do not have the exact figures with me, although I believe that I could supply them. I will try to provide members with a better understanding of the issue. When a driver goes away overnight or for a couple of nights, he is given a subsistence allowance—perhaps in the region of 20 quid. If he goes away for a day, is he to feed himself three times and to pay for the truck's parking fees out of that 20 quid? A cup of tea and a roll at motorway services can cost anything between five and seven quid.
If the committee is particularly interested in this matter, we are more than happy to develop the proposals that we have touched on in our submission.
That would be very helpful.
That is a big question. Obviously, major priorities at the moment include securing clearance for 9ft 6in high cube boxes, which are about to be introduced on the Aberdeen line; the reopening of the Stirling to Alloa line, which will be important for coal flows; and enhancing the Glasgow and south western line to Dumfries and Carlisle for coal flows from Ayrshire.
You referred to the issue of gauge. Do you agree with rail freight operators that enhancing the Glasgow and south western line to take larger gauge containers is a significant priority that requires investment?
Containers do not use that route, which carries mainly coal and other aggregate freight. I imagine that it would be used as a diversionary route if something happened on the west coast main line—on which, as members know, there have been many delays because of engineering and upgrading work. In such cases, the passenger train operating companies have been able to move their passengers with buses; however, with freight, we have to find a diversionary route back into the central belt, which usually means going via the east coast. This is the first time I have heard anyone suggest that the Glasgow and south western line be used as a diversionary route for container traffic. That said, many more containers are being moved from the central belt. For example, the Malcolm Group, which began by moving four trains a week, is now looking to move 80 trains a week. The majority of its freight is in containers. It could well be that the Glasgow and south western line is used as a diversionary route in future.
We have taken a lot of evidence from people who operate in the rail or road transport industry. A few weeks ago, we took some evidence from environmentalists and the environmental industry. They advocated a green jobs strategy and no growth in freight. Once they have finished hugging their trees, they will want to come home, get things from the shops, watch television and live in a nice house. How do we move stuff around the country if we do not develop the freight industry? Do you have any views on their strategies for reducing freight in Scotland?
We are also awaiting a green jobs strategy. Something was published last year, but there was not much in it about creating jobs, unfortunately.
If it is any consolation, we also tried to discover what a green jobs strategy is, and we did not get very far beyond the envirobabble that we usually get. There was no strategy. The environment is important and everyone is concerned about it. People can see the potential for damage to the environment if things are allowed to grow and develop unrestricted. Would things such as the reintroduction of the fuel duty escalator have an adverse effect on the jobs and potential jobs for your members, or would a freight transport strategy just have to take that into the mix?
When we start talking about transport, it is inevitable that—if you will pardon the pun—the road will lead to discussion of the price of fuel. The price of fuel is only part of the package. There is no doubt that we would support a reduction in the tax on fuel as much as anyone would, as long as the benefits that came from that reduction were passed on to the workers driving the trains and trucks and delivering the freight. It might be argued that reintroducing the fuel duty escalator would cost jobs in the transport industry, but that might not be the case. What will cost jobs in the transport industry is the constant striving to cut costs at all costs. That is understandable because people are in business to make a profit—I am not against people making a profit as long as the distribution of the wealth is even. The price of fuel would be part of the package and, because of its profile, it might be put forward as the reason why jobs are lost without being the real reason.
Obviously, as members of the STUC, you do not see any competition between members who drive lorries and those who drive trains. If everything is working cohesively, everyone benefits.
That is right.
The presentations show how it is; there is no conflict of interest here.
On the environmental issue, I would not want to be portrayed as being flippant about climate change. It is a real issue and we hope to address it in our work plan next year—after congress—perhaps in a more focused way than we have done until now. However, it is unrealistic and unhelpful to stipulate in a strategy for tackling climate change that freight transport should not increase.
So you want a balanced strategy that takes into account the needs of both the transport industry and the environment.
Yes.
The reduction in services on the Rosyth to Zeebrugge ferry route will impact not only on your members in the transport industry but on those in the manufacturing sector. They have expressed concerns about the situation. Does the STUC have any specific information on the effect on Scottish companies of the reduction to three sailings per week in each direction?
We have some information, but I am not sure whether it is in the public domain.
I think that it is. I spoke to people from a large tyre manufacturer in Dundee. I believe that they have been down to Edinburgh to put their case on the perceived cost of the reduction in sailings of the Superfast ferry to Zeebrugge. I read the various submissions to the committee's inquiry and I also spoke to the convener of our Dundee branch this morning, who faxed some details to me. I find some of the figures that he gave me astonishing. Some 25 per cent of finished product loads—that is, 1,157 loads per year—were going on to the Superfast ferry. The imported semi-finished product—1,000 loads per year—was still going by road. If the ferry had kept to its full capacity, Michelin perceived that, in time, it would carry 40 per cent of finished product loads, which would take the figure from 1,157 up to nearly 2,000 loads per year. The company was thinking about expanding, perhaps by constructing a storage warehouse in the Rosyth area. The company would have stored winter tyres there before running them across to Scandinavia and the rest of Europe via Zeebrugge. It was also planning to set up a terminal in Zeebrugge and to form a link in Ballymena.
I am sure that the issue is of concern to the committee generally.
Does any Scottish or UK legislation leave your members at a disadvantage either to English drivers or to drivers from Europe?
The European working time directive, which has been implemented here, is the same for all drivers throughout the UK. The difficulty is with the daily operation by transport managers, rather than with the policies that directors and chief executive officers of companies have developed. Their mission statements on the working time directive make fine reading, but issues arise when those are cascaded down to day-to-day operational matters. On the issue of whether the directive discriminates against Scottish workers and eastern European labour, I would say that it exploits, rather than discriminates against, those workforces. One workforce is played off against the other to keep the terms and conditions and wages of both down and to keep costs down. If the working time directive was operated in the spirit in which it was intended to be operated, many of the problems that we have discussed today would not exist. The problem is that it is not operated in the intended spirit and we therefore have problems.
Is the directive not being operated as intended only in Scotland, or is the situation worse elsewhere? Is it worse in England or among those who come from the rest of Europe or, indeed, from outwith Europe?
The operation of the working time directive in Scotland is not further from the spirit of the directive than the operation is down south. With any industry, if a piece of legislation is introduced that the industry is not particularly keen on, it will not be too long before the industry finds a way round it. It is no worse in Scotland than it is in England. The trend for migrant workers to come here from eastern Europe started in the rest of the UK and it has filtered through to Scotland.
At previous meetings, there was concern that other European Union member states are not implementing the directive as effectively as they should be. I am not in a position to say whether that is true, but if it is, the way to tackle it is to ensure compliance in other member states by taking the matter to the Commission, not to weaken the regulations at the UK level.
That brings us to the end of questions, so I thank Stephen Boyd, Tony Devlin and Hugh Bradley for their evidence to the committee.
I welcome the opportunity to give evidence. National Union of Rail, Maritime and Transport Workers colleagues would have joined us, but the date clashed with their spring conference.
Before I welcome our next panel, I have some sad news to convey. Margaret Ewing MSP has unfortunately passed away. On behalf of the committee, I convey our deep condolences to Fergus Ewing and to Margaret's wider family. I am sure that it is a sad loss not only to Margaret's family but to the Scottish Parliament because of her contribution to public life in Scotland over many years.
On behalf of the Rail Freight Group, I welcome the opportunity to talk to the committee and to answer questions. We hear a great deal about the switch from road to rail and how that will help the economy and the environment, but as I indicated in the paper that has been circulated to members, we have to get that into perspective. There is no magic wand that will suddenly switch everything from road to rail.
Thank you.
You mentioned the freight facilities grant. Have we used those grants as well as we could have done in Scotland? Have they been as effective as we would like them to be? Everyone seems to think that they are a good idea, but have we developed the strategy around freight facilities grant in the way that we could have done?
They are a good idea and they are effective when they are used properly. You will be aware that there is a clawback mechanism. Someone can be given a grant, but if the deal does not come off—often for legitimate business reasons—the money is returned. It is not the case that the money is chucked away.
My experience is that those who have tried to pursue freight facilities grant have found the process of trying to convince the Executive that they have a viable proposition arduous. They often have to put substantial investment up front to have any prospect of getting a grant. Could freight facilities grant take the form of pump-priming rather than being an addition to a potential investment?
It never does any harm to re-examine procedures to establish whether they put people off. The Scottish Executive has a duty to ensure that it gets value for money for the taxpayer and the rigorousness of its procedures endeavours to ensure that that is the case. The procedures do not seem to put a number of firms off applying for freight facilities grants—some firms have had several grants. It often comes back to the ability of the management in the companies and how serious they are about the application.
We are talking about trying to get more for smaller companies that may see the vast potential for development. Would a mechanism to allow them to use the freight facilities grant for investment be helpful, or do you believe that the system is working effectively at the moment?
No system is perfect. It may be worth looking at the section that deals with freight facilities grants to see whether it is worth spending a modest amount of money on a coaching or assisting team to help small companies through the system. However, it is right to have a rigorous application to ensure value for money for taxpayers. There have been too many areas in which it has not been clear that money has been spent wisely or prudently, and I would hate that to be said of the rail industry.
I know that significant growth in rail freight travel has been reported in Scotland, but a significant part of that has been for coal to Longannet and to power stations in the English midlands. Does that increased coal-related tonnage mask the fact that other aspects of the rail freight industry may not be performing as well as we would wish? What more could we be doing to generate more tonnage in other areas of the rail freight market, given the possibility that power stations in the English midlands might find alternatives to Hunterston for rail freight in the future? Even if that is not the case, we must look to see what other opportunities we have to transfer road freight on to rail.
It is difficult to ascertain exactly what is happening behind the morass of figures. As has been mentioned, the Freightliner Group from Coatbridge faces competition from feeder ships. In an overall transport policy, that is not a bad thing, as the most environmentally friendly way of moving a lot of traffic is by sea. If it meets the transit time and customer service requirements, it is fine, because it means that there are other opportunities for rail in intermodal traffic. There is certainly growth, and the Malcolm Group and John G Russell (Transport) are the people driving it.
I was going to ask about the route utilisation strategy in relation to freight. I welcome your indication that you are not dissatisfied with the way things are progressing in that regard. Can I take it that you are optimistic that the priorities that you have set out in your paper—particularly those relating to gauge enhancement—will be adopted as part of the route utilisation strategy?
There is a clear recognition that the first priority must be the Glasgow and south-western route, because there is a problem here and now with the movement of coal traffic. We are enthusiastic about gauge clearance across the rail freight industry, because we see it as a means of keeping Scotland connected so that the industry can serve Scottish industry properly.
I think that your comprehensive paper and introduction have answered all the questions that members had. Thank you for your evidence to the committee this afternoon.
Meeting continued in private until 17:00.