Written evidence submitted by the Road Haulage Association (LRS0039)
- The RHA welcomes the opportunity to comment on the call for evidence by the Business, Energy and Industrial Strategy Committee on post-pandemic growth and the levelling-up agenda. We note that the Committee has a sub-inquiry focussed on Sustainable local economies, and it is on this that we wish to focus our response.
- We represent 7200 members across the United Kingdom who predominantly operate heavy goods vehicles (HGVs). When road transport accounts for 24% of UK greenhouse gas emissions, we support the UK Government’s broader “green recovery” ambitions. However, this must be done in a sustainable way that nurtures, not disrupts, economic growth.
- Our position is based on two starting points. First, a sustainable “green recovery” must balance economic, social and environmental well-being. As economic enablers, hauliers drive economic well-being and are willing to invest in environmental well-being.
- Secondly, for a successful “green recovery” to occur, the right national and local policy frameworks must be in place to achieve it. Key to this is recognising and respecting asset lifecycles, so that waste and the “stranded asset” risk is avoided. Our core ask of central government can be summarised as:
well-designed standards, phased in sustainably as market supply allows, works well for everyone.
- We crystallised this thinking in our policy paper Eliminate – Minimise – Offset: RHA vision for decarbonising road freight (Jan 2020) where we set out the case for the UK Government to develop a roadmap to decarbonise HGVs. It is vital that policymakers adopt a co-ordinated evidence-based approach upon which all can act, including national, regional and local governments. Proper planning, good quality information and clear ways forward in lower carbon solutions are needed. We expanded on these arguments in a recent article for Air Quality News (August 2020).
- Environmental, social and economic wellbeing depends on the effective movement of goods. In 2019, 1.44bn tonnes of goods were lifted by road freight and 19.1 billion vehicle kilometres travelled. Road freight creates the connectivity we all need, and businesses depend on road freight to receive and dispatch goods essential for operation and continued employment. Efficient road freight is critical in delivering productivity, development and employment. Jobs depend on goods being able to be transported to where they are needed.
- We recognise that road freight transportation is one of the most difficult sectors to decarbonise while maintaining the customer-focussed, efficient and cost-effective movement of goods. Unlike cars and vans, the UK Government’s Road to Zero (2018) strategy does not specify a timescale to shape the technical journey to decarbonise HGVs. A supportive, coherent and consistent set of policy measures is therefore essential to define a clear pathway forwards and which nurtures the economic well-being necessary to invest in the green technology desired.
- At the heart of our core ask is a specific request that central government provides a stable national regulatory framework that recognises asset lifecycles of at least 12 years This will create the level of certainty needed to allow hauliers to invest-with-confidence in the desired technology. With this framework in place, we believe that market-driven solutions, guided by corporate social responsibility policies framed by a public awareness and demand for investment in green technology, are then best placed to achieve freight decarbonisation. It will stimulate the innovation and investment needed in a sustainable way.
- Good practice already exists. We commend to the Committee the development of the Euro VI standard, introduced from 2013, as a model for policymakers to follow. In this instance, a well-designed technical standard led by business in a stable regulatory environment incentivised vehicle manufacturers to create new technology which generated significant reductions in NOx air pollution. Hauliers have invested £1.9bn in the latest Euro VI lorries and, in August 2020, we published our annual NOx emissions assessment which, based on government data, showed that NOx emissions from HGVs has fallen by at least 59 percent since 2013.
- We believe that this positive experience can be applied to the “green recovery” agenda and, with the Government determined to carve a green role for the UK internationally, we urge ministers to act as champions of a recovery which delivers a predictable regulatory framework. It is the consistent improvement of standards over time that has driven the huge fall in NOx from HGVs, and the RHA recommends building on what is proven to be effective.
- By contrast, hauliers and the businesses they supply must have confidence that the regulatory framework will not retrospectively undermine that investment. This can only be done if vehicle life cycles are respected and business investment is supported by clear rules. We are accordingly calling for the Joint Air Quality Unit (JAQU) administered jointly by DEFRA and the Department for Transport to review and learn lessons from the well-intended but ill-designed Clean Air Zone (CAZ) Framework (2017). This is for two reasons.
- First, by causing the “stranded asset” effect, CAZ has seen £1.2 billion prematurely wiped off the value of the Euro V HGV fleet (112,000 lorries), damaging business finances and leaving firms with older, more polluting vehicles. This is wasteful and counter-productive to the goal of a sustainable green future. Better ways exist to clean up the environment, and we have consistently highlighted the many flaws in the design of the CAZ framework and provided alternative approaches. Secondly, we are concerned by the bureaucratic burden on SME hauliers, because centrally-driven CAZ policy has allowed local authorities to develop a confusing array of different charges, exemptions and implementation delays.
- As the UK emerges from lockdown, it is essential that policymakers take account of the profound economic shock to SME businesses from COVID-19 together with the planned phase-out of the Government’s Coronavirus Job Retention Scheme. When 73% of respondents to an RHA survey reported significant drops in cash-flow in April 2020, struggling businesses must be supported to recover and prioritise the provision of employment opportunities.
- 98% of all goods consumed in the UK are moved by road, with 2.54m people employed in the haulage and logistics sector, and around 530,000 HGV’s over 3.5 tonnes operating on UK roads. Not only does the haulage industry make a significant contribution to the UK economy (£124bn GVA), it also acts as an economic enabler that facilitates the operation of other sectors, such as construction, housing, food, and retail.
- Evolving to a clean environment is about doing the right thing for everyone, supported by a coherent policy framework that takes account of multiple competing factors. This will require substantial thought, care and consideration to ensure the needs of the public, all industry and the hauliers who serve them are catered for. The RHA looks forward to working with policymakers and our partners to achieve this.
Chris Ashley: Head of Policy – Environment & Regulation
Road Haulage Association
Annex 1 - Background about the RHA
- The RHA is the leading trade association representing 7,200 road haulage and distribution companies across the UK, 85% of whom are small and medium-sized enterprises (SMEs). Our members operate around 250,000 HGVs (around half of the UK fleet), ranging from a single-truck company to those with thousands of vehicles.
- We proactively encourage a spirit of entrepreneurialism, compliance, profitability, safety and social responsibility. We do so through a range of services, such as advice, representation, and training. We also work alongside policymakers and haulage companies to identify ways to move freight more efficiently at a lower cost based on our widespread knowledge and expertise in the area.
- Our comments in this response are set against an overall context where 54,800 SMEs are involved in haulage and 52% of lorries operate in fleets of less than 20 (source: Traffic Commissioners - 2016/17). The purchase cost of an HGV starts from £85,000 and its life span is typically 12 years. In the case of low mileage, specialist-built vehicles such as mobile cranes, the lifespan can be much longer (30yrs +) and cost considerably more to purchase (£200,000+). Due to the high efficiency of logistics, operators typically work on a 2% profit margin (source: Statistica 2020), meaning any additional costs incurred cannot be absorbed.
- During the Covid-19 pandemic, policymakers have recognised lorry drivers as “key workers” and the value and critical nature of haulage to keep the UK economy functioning. The RHA will continue promoting the need for resilient, cost-effective supply chains.
 See: https://www.rha.uk.net/news/press-releases/2020-01-january/eliminate-minimise-offset-%E2%80%93-rha-publishes-its-vision-to-decarbonise-freight-and-logistics
 See: https://airqualitynews.com/2020/08/27/the-green-vision-is-exciting-but-the-government-must-change-course/
 See: https://www.gov.uk/government/statistics/road-freight-statistics-2019
 Euro VI HGVs cost around £7,000 more than Euro V HGVs when new. Over 280k Euro VI lorries have been purchased in GB, resulting in an additional investment by hauliers of £1.96bn.
 See: https://www.rha.uk.net/getmedia/456bb7d1-3806-4d63-9aff-c424f1cef322/RHA020_Emission_Assesment_A4_v3.pdf.aspx
 See for example: https://www.rha.uk.net/getmedia/7087fd6a-f49f-45db-9108-594a474445a7/200311-RHA-response-to-APPG-CAZ-Inquiry.pdf.aspx
During Q2 of 2020, the UK economy contracted by 20.4%. In July 2020, the claimant count for out-of-work benefits more than doubled from April to 2.7m. Source: Office for National Statistics
 See: https://www.rha.uk.net/news/news-updates/a-summary-of-survey-responses-on-the-impact-of-Covid-19-on-the-haulage-industry