Speech to Freight Transport Association

Speech by Rt Hon. Douglas Alexander, Secretary of State for Transport at the Freight Transport Association Annual Dinner.

Ladies and Gentlemen. It is a privilege to be here tonight to address your annual dinner for the first time.

And thank you Mr Chairman for your introduction. It was far kinder than one I received the other day at a dinner in my own constituency, where my host asked if I would like to start speaking now or let people enjoy themselves a little longer.

In the six months I have held the position of Secretary of State for Transport I have come to appreciate the information and expertise of those who work throughout your industry.

It's been quite a learning curve, but I must admit I was thrilled when in May the Prime Minister appointed me Secretary of State for Transport and for Scotland. And I was particularly touched by the reaction of my friend the Chancellor Gordon Brown to the news. He left a simple message on my answer phone - congratulations - there's no more money by the way.

I would like to begin tonight with a word of thanks for the work that you do - and the difference you make our economy.

You drive consumer choice, allowing retailers to offer an ever-increasing variety of goods from around the world.

You provide manufacturers with just-in-time deliveries to improve efficiency, and reduce costs.

And you ensure that British exports are distributed rapidly and effectively to markets abroad.

We have had a stronger and more stable economy than any other country since 1997. And that growth in no small measure is due to your efforts, your expertise and your excellence.

As the economy has grown, demand for freight services has risen sharply. But at the same time, the sector has become more competitive - so that today, Britain can claim to have one of the most sophisticated freight industries in the world.

But this in itself presents real challenges - to your industry - and to Government. And tonight I would like to talk about three of the key challenges we face.

First - we need to ensure that the industry keeps pace with the demands of a growing economy; with competition from abroad; and that it does so profitably - and safely.

This means ensuring that all drivers and all vehicles comply with safety rules, regardless of their nationality.

Second - we need to tackle congestion in our towns and cities - something that's crucial for hauliers, for other road users, and for the wider business community too.

And third - we need to ensure that growth comes not at the expense of our environmental obligations, but sustainably. That is vital.

Let me start with compliance.

When operators skimp on maintenance, force their drivers to exceed the permitted hours, or overload their vehicles, that gives them an unfair competitive advantage. It also makes them a danger to themselves and to others on the roads.

Foreign competition is a fact of life in all aspects of business and industry, and freight transport is no exception. Fair competition helps the economy grow, which benefits us all. But there are limits.

When foreign operators break the law then fail to pay fines or appear in court, that is unacceptable.

That is why we are legislating to allow us to take a cash deposit at the roadside from foreign vehicles that break the law, against the fine for the offence. This should be implemented next summer after the Road safety Bill is enacted.

That is why we have invested £2 million for weigh in motion sensors to better detect overloading.

This is leading to greater prohibition of non-compliant vehicles, many of them foreign, and many of them breaking the law in several different ways.

You will understand better than I the complex EU rules surrounding cabotage, the rights for operators from one country to offer goods transport services inside another country.

The rules require us to allow temporary operations. But some foreign operators have been pushing their luck and undertaking operations that look far from temporary.

We have issued a clear policy statement to help you report breaches of the rules so that VOSA can take action.

And the Haulage Industry Task Group has played an influential role here, helping us understand the potential wider impacts of cabotage more fully.

We have also exercised our right to refuse operators from seven of the ten European accession states undertaking cabotage until at least May 2008.

VOSA is also working with the Highways Agency in South-East England targeting vehicles of all nationalities on international journeys that threaten to cause accidents.

Of course, we continue to look at ways to increase detection, and improve enforcement.

Freight industry members on the Task Group, including the FTA, continue to support you - the freight operator - vociferously.

And this is how it should be.

We need as much dialogue as possible with you, and we need at all times to know what you're thinking.

For example, it's been important for us to know just how difficult it has been for you to implement the new EU requirements for the use of digital tachographs - even though in the medium term, they should begin to save you money as your drivers' hours records can be analysed electronically.

Alongside this, we intend to review very soon the way we have implemented the EU Road Transport Working Time Directive - and the FTA will play a key role in this process.

The new EU drivers' hours regulation will come into force next April, and we recently issued a consultation paper on the changes we need to make to comply.

As ever, our overarching aim is to create fair competition and better road safety, while doing all we can to reduce the burden on your businesses.

The second point I would like to raise is about tackling congestion. Nothing is more crucial to the future success and profitability of this industry than the issue of road congestion.

We all know that demand for road space is rising rapidly across the country - and at an unsustainable rate.

We are building new capacity where it makes sense, and where it's environmentally acceptable. But more concrete is not the solution to congestion.

So we're improving the management of the road network - for example through the introduction of Highways Agency Traffic Officers, and through Active Traffic Management.

But, on their own, these initiatives cannot solve the problem.

So increasingly we're looking to see what more we can do - including demand management to help get the most out of road space.

Plans to charge lorries to use the road network are being taken forward as part of our wider work on national road pricing, so we can develop the potential for a single, cost-effective, comprehensive system for the UK.

But we also continue to move forward plans to pilot road pricing in urban areas, so we can learn how it works, and help us make decisions about national road pricing.

We want you to be involved in the planning of the road pricing strategy.

Because if the system doesn't work for transport operators, then the system doesn't work.

Alongside road pricing initiatives will be a growing commitment to improve freight transport's environmental performance.

My third key challenge is perhaps the greatest we face, both collectively and as individuals. The issue of tackling climate change.

My department has promoted sustainable distribution for many years - through grants to move freight to rail and water. And more recently with guidance to help train your drivers to use less fuel.

From next year, we will launch the Sustainable Distribution Fund to secure a more efficient future for freight, and in 2008 we will introduce the Renewable Transport Fuel Obligation to increase use of biofuels.

But let me be clear. Environmental responsibility and profitability can go together. Reducing fuel use saves money - and cuts CO2.

Other freight modes are also playing an important part in the 'greening' of transport.

The railways, for example, are carrying around 60% more freight today than they were in 1995 - cleanly and efficiently. And the shipping sector is well placed to continue attracting more business.

I think the prospects for freight operators in each transport sector are very good.

The economy continues to get stronger, and with the predicted growth in population, demand for goods and distribution will continue to expand over the next 20 to 30 years.

Next year, we'll be setting out our long-term strategies for the rail and aviation sectors - and moving ahead with road pricing pilots. And, as we've talked about many times, our plans are backed up with long-term transport investment.

But we know that we can no longer merely apply the lessons of the past to build a freight industry for the future.

So we have to find new ways to move forward - in co-operation, to achieve targets on which we all agree.

That is our shared challenge, or shared responsibility and also our shared opportunity.

Thank you.

Delivered: 07 November 2006

(This speech represented existing departmental policy but the words may not have been the same as those used by the Minister.)