I move: "That the Bill be now read a Second Time."
The Bill proposes amendments of road transport legislation to free the carriage of cattle, sheep and pigs for reward from the merchandise licence requirement and to provide for a measure of relaxation of the restrictions on the road freight haulage industry to enable the industry to adapt itself more easily to present and future requirements.
The proposal to decontrol carriage of cattle, sheep and pigs arises out of my consideration of the findings of an interdepartmental study group which examined whether restrictions on the carriage of cattle, sheep and pigs should be removed or relaxed. The group found in effect that the licensed haulage industry including CIE had been unable to meet adequately and flexibly the special needs of the livestock trade and that haulage of cattle, sheep and pigs could operate more effectively if restrictions were removed. A group set up by the Minister for Agriculture and Fisheries a short time before that to inquire into the store cattle trade also commented adversely on livestock haulage facilities.
It is apparent indeed apart from these studies that illegal haulage by interests associated with the livestock trade has become firmly established on a widespread basis and that reversal of this situation is impracticable. I am satisfied that a licensing system adequate for the exceptional needs of the livestock trade would involve the issue of so many licences that the effect would be equivalent to decontrol and wasteful of the time of civil servants, the gardaí and the courts. I consider, therefore, that the sensible and efficient solution is to remove cattle, sheep and pigs entirely from the scope of the Road Transport Acts. This is proposed in the present legislation.
It is not proposed to exclude the carriage of horses from the scope of the Transport Acts because the special considerations that warrant this course in the case of other livestock do not apply in the case of horses. Moreover, it would not be feasible to liberalise haulage of horses without including bloodstock. CIE who are virtually the only professional bloodstock carriers in the country are fully geared to cater for the needs of that traffic. Bloodstock carriage calls for highly specialised equipment and handling, and CIE have invested in a fleet of modern sophisticated bloodstock vehicles. The board also has special arrangements for door-to-door transport of horses between Ireland, the UK and the Continent. In addition the board co-operates with the racing and breeding interests by plating a panel of stud owners to enable them to carry for reward to and from stud farms within a 40 mile radius of their own studs. I am convinced that liberalisation of carriage of bloodstock would merely facilitate the erosion of the valuable traffic built up by CIE and undermine the economics of the regular service and costly equipment which is necessary.
As a result of reports in recent years it is now possible to measure the overall composition of the road freight transport market and to make a quantitative assessment of the extent to which the rigid restrictions on road haulage for reward either assisted the maintenance of railway services or affected the cost or efficiency of road haulage in general.
An analysis of road freight transport was carried out by the Central Statistics Office in 1964. This was published in 1967 as Sample Survey of Road Freight Transport 1964 and was presented to the Oireachtas (Pr. 9572). Subsequently, a paper based on the survey was delivered to the Statistical and Social Inquiry Society in 1967 by an officer of the Central Statistics Office in which the results were further analysed and relevant comparisons made with railway statistics and with the results of similar road transport surveys made in Britain. The survey was, of course, conducted on a sample basis and is subject, therefore, to sampling errors. The Central Statistics Office believe that the sampling errors for total road freight activity are only of the order of 2½ per cent but that sampling errors for detailed subdivisions may be significantly greater. Projections of these results and certain other figures used in these studies are also estimates and therefore subject to reservations. Nevertheless, this survey brought to light a great deal of new and valuable information of great relevance for national transport policy which has been of great assistance to me and my Department. I would like to take this opportunity of expressing my appreciation of the work of the Central Statistics Office in this field and of the officers concerned. I have been anxious to have similar and improved surveys carried out at regular intervals but, because of staffing difficulties, the Central Statistics Office have not, so far, been able to conduct further surveys.
I cannot deal at great length with the results of these studies but I should bring to the notice of Deputies some of the more important and relevant figures. Total estimated ton mileage for road freight traffic in 1964 was 1,048 million ton miles. Of this total it was estimated that 83 per cent was accounted for by haulage on own account using a total fleet of 44,180 vehicles. CIE road transport with 860 vehicles accounted for 6 per cent of the total and licensed hauliers with 1,140 vehicles for 11 per cent. This total figure, of course, included local deliveries and similar kinds of transport for which CIE and the licensed hauliers do not cater, but this element could not be segregated with any accuracy. Nevertheless, it is significant that for hauls of over 100 miles 81.5 per cent of tonnage was carried on own account, 4.7 per cent by CIE and 13.8 per cent by licensed hauliers.
In the same year, ton mileage of railway freight amounted to 212 million ton miles or 17-per cent of total estimated freight ton mileage for 1964. The railway, however, accounted for 24.9 per cent of tonnage for haulage over 50 miles. Comparisons with rail are relevant, of course, only where rail services are available and it is estimated that in 1964 the railway carried 43 per cent of tonnage originating in Dublin and 38 per cent of tonnage consigned to Dublin. The overall picture of freight transport in 1964 is, of course, a static one and it is necessary also to consider trends. Detailed or strictly comparable estimates are not available to anything like the same extent for other years because the sample survey was confined to 1964 but there are figures or estimates available which do show the trend. Thus total estimated road freight tonnage increased from 38 million tons in 1960 to an estimated 64 million tons in 1968, an increase of 26 million tons.
This latter figure is based on a projection of the 1964 sample survey results. CIE road freight tonnage increased from approximately 2.5 million tons by 1½ million tons to 4 million tons in 1969. Tonnage figures for licensed hauliers are not available except for 1964 when they amounted to 6.4 million tons but total mileage accounted for by licensed hauliers increased from 27 million miles in 1964 to 33 million miles in 1967, and it may be assumed that tonnage increased in at least a comparable ratio. Rail freight, which amounted to 2.69 million tons in 1960, fell to 2.46 million tons in 1964 and increased to 3 million tons approximately in 1969. The general picture which emerges is of a growing volume of freight of which the railway share is relatively static. A small part of the increase is accruing to CIE road freight and to the licensed hauliers but the bulk of the increase in volume is being carried on own account.
The increase in rail tonnage since 1960 is due mainly to increases in bulk long-haul traffic and this is reflected in the steadily increasing average length of haul from 82.2 miles in 1960 to 101.27 miles in 1969. While CIE has been able to maintain, and even increase, the absolute volume of rail freight this continues to be a diminishing portion of the growing total volume of freight. Moreover, maintenance of the volume of rail business has involved keeping down rail freights to highly competitive levels. Thus average rail receipts per ton mile which were 4.93 pence in 1959 amounted to only 4.37 pence in 1969 despite the heavy increases in costs in the interval. It is clear that the prospects of increasing rail freight depend very much on bulk and long-distance traffic carried at rates sufficient to deter large commercial and industrial interests from using or increasing their own fleets.
A striking feature of the figures I have quoted is the inordinate proportion of road freight carried on own account. In Ireland in 1964, 81 per cent of total tonnage was carried on own account and 81 per cent of tonnage hauled over 100 miles was also on own account. By contrast, in Britain in 1962 only 51 per cent of total tonnage was carried on own account and only 32 per cent of tonnage on hauls over 100 miles was on own account. A further contrast is to be found in vehicle utilisation. In Ireland own account lorries over five tons performed on average 186,000 ton miles as compared with 132,000 in Britain showing greater utilisation of own account vehicles in Ireland. But in the case of haulage for reward annual average ton mileage for similar vehicles in Ireland was only 109,000 compared with 293,000 in Britain, indicating an inferior utilisation of Irish vehicles in this sector.
Disparity in vehicle utilisation is also reflected in much higher empty mileage per vehicle in Ireland than in Britain. A further contrast with Britain lies in the composition of the whole road haulage fleet. In Ireland the professional road haulage industry consists of CIE with some 860 vehicles, unrestricted as to size or area, together with some 840 professional hauliers of whom 700 are restricted to only one vehicle and not more than 20 can operate three vehicles or more. Only 100 hauliers are licensed to carry throughout the State. In Britain there is a large number of substantial firms engaged in the industry who suffer no restrictions as to size or area such as apply in Ireland at present.
These comparisons, despite the differences in condition in the two countries, do suggest a significantly lower level of efficiency in the road freight industry in Ireland with consequent higher costs and poorer quality of service for industry and trade. Indeed, it is clear that individual firms limited to one or a few vehicles and in most cases restricted as to area cannot offer comprehensive or efficient services, avail themselves of modern management techniques, or employ highly qualified personnel. Neither can they benefit from economies of scale or organised back-haulage so as to enable them to offer rates more competitive with own account operation.
The CIE road freight fleet is, of course, subject to no similar restrictions but its management must take account of the interests of the railway, provide railhead deliveries and collections and operate regular services, not always economic, to meet public need and replace withdrawn railway services. Against this background, therefore, it is not surprising that over the years there should have been a very marked trend to own account haulage by larger industries and traders accompanied by complaints of high transport rates and inadequacy and inflexibility of transport facilities.
The existence of inadequacy of facilities is well borne out by the fact that the price payable on transfer of a single-vehicle licensed business exclusive of goodwill and the cost of equipement, has, I am informed, exceeded £7,000. This figure merely represents the scarcity value of the licence and is by itself a very strong indication of the inadequacy of the private sector of the licensed haulage industry.
The considerations I have outlined suggest that not only have the rigid restrictions of the Road Transport Acts led to reduced efficiency and to a consequent inordinate growth of carriage on own account, but have not served to protect the railway to any significant extent. As I have indicated, rail freight has remained relatively static in our rapidly expanding economy, consisting more and more of the long-haul bulk traffics for which it is specially suited and the maintenance of this position has required holding down rates to a level competitive with large scale own account road transport.
Road transport licensing, which was always very much less restrictive in Britain, was the subject of a public Committee of Inquiry there in 1965. The report of this committee found, inter alia, that the restriction of road transport by licensing reduces efficiency with no off-setting advantages, had not helped the railways and could not do so without a very large and complex administrative machine and without placing a heavy burden on industry and trade. Restrictions on road freight transport in Britain have now been abandoned.
In other countries, also, quantitative restrictions on road transport haulage have been largely abandoned. Transport policy in Common Market countries aims at the most economic and efficient use of road transport under harmonised conditions of competition. Own account haulage in these countries is unrestricted and there is free access to the professional haulage industry, subject only to qualitative conditions related to professional competency, technical and safety considerations and financial integrity. We must accept that in the Common Market we would have to move towards a completely liberalised position for road transport.
Indeed, the conclusions I have earlier drawn would, in any case, indicate that in our own interests we should move in this direction. In our expanding economy with its growing element of foreign trade and dependence on exports the overall efficiency and cost of transport must be the main aim of transport policy; the possible effect on CIE's finances in my view must be a secondary consideration. In any case, I do not believe that the adverse effects on CIE, even of complete liberalisation, would be unduly serious.
The railway is maintaining its role in the bulk and long-distance carriage for which it is best suited but is doing so only by keeping rates down to a competitive level. CIE road freight services operate profitably. In so far as any particular measure of liberalisation led to an overall increase in efficiency with lower transport rates by licensed hauliers, CIE might well have to adjust their rates to remain competitive. The main competition to the railway, however, will inevitably continue to come from own account transport.
It is in any case indisputable that the cost of any reduction in CIE freight rates, in itself a very desirable measure in the interests of the economy and the export trade, would be very much less than the total reduction in cost over the entire transport sector and the consequent benefit to the whole economy, brought about by any general reduction in road freight rates. Even if this involved some marginal increases in subsidy to maintain the railways we would have to face up to it. Moreover, an increase in efficiency and reduced rates in the professional haulage sector should help to direct traffic from the own account sector with benefit to both the licensed hauliers and CIE.
In the light of what I have said it might well be argued that we should move rapidly, if not immediately, towards complete removal of quantitative restriction on road freight transport for reward subject only to qualitative conditions directed towards technical and professional competency, financial integrity and general social and economic interests. But there are other important considerations to be taken into account. The existing licensed hauliers whose opportunity to expand and improve their businesses has been impeded by the restrictions under which they work must be given an opportunity to put their house in order. Likewise, we must bear in mind the need to protect their substantial investment in vehicles and equipment and to avoid heavy over-investment in equipment which might be encouraged by too rapid measures of liberalisation.
We must also bear in mind the uncovenanted but real scarcity value of their licences for which many new entrants to the trade have in recent years paid in cash when acquiring existing licensed businesses. Already relaxation of administrative restriction on the transfer and acquisition of businesses and on lorry weight have permitted some expansion of activity and should permit the emergence of larger and more efficient units with consequent reduction in real transport costs. My aim is to proceed by stages so as to permit the existing haulage industry to expand and improve in efficiency in our growing economy to the point where we can consider the complete removal of quantitative restrictions and the admission of new entrants to the haulage business without prejudice to the equitable rights of existing efficient operators.
For this reason I am, at this stage, proposing only a modest measure of liberalisation which should facilitate some expansion and improvement in the efficiency of the private sector of the industry and which should have no significant adverse effects on the railway or CIE, but it is abundantly clear that in the context of our probable entry into the Common Market and the overriding need to improve efficiency and reduce transport costs in the interests of the export trade and of industry and agriculture generally, we shall have to move further in due course in the direction of abolishing all quantitative restrictions on haulage for reward. In the meantime, the market is growing rapidly and there is ample opportunity for all efficient operators, including CIE, to expand and improve their businesses.
The present Bill provides, firstly, for the removal of weight limitations on licensed vehicles. In earlier years the standard lorry weight provided for in hauliers' licences corresponded precisely with the weight of the vehicles as weighed for tax purposes and enforcement of the weight restrictions was simple and uniform. Changes in the law relating to vehicle taxation and the special weight concessions granted administratively to permit the use of diesel engines, creels, et cetera in the interests of more efficient operation have, in large measure, made it impossible to enforce weight restrictions satisfactorily. Most licensed hauliers are now operating the size of lorry which suits them best and the relaxation provided for in this Bill goes little beyond recognising the facts of the existing position. Instead, therefore, of being confined to the standard lorry weight prescribed by their licences as modified by existing concessions, hauliers will be free under the Bill to use the size of lorry best suited to their business but they will be limited to the number of lorries which they had in operation or were entitled to have in operation on the 1st January, 1969. This date has been chosen to ensure that hauliers who, in anticipation of this legislation, might have expanded the numbers of their fleets by acquiring lighter vehicles will not enjoy any unfair advantage. There is provision at section 4 of the Bill, however, to enable me to make fair and equitable adjustments in the case of hauliers who at the prescribed date were not operating their normal complement of vehicles.
I know that Deputies will be concerned lest a substantial increase in the number of heavy lorries should have deleterious effects on our roads. I do not anticipate that this measure will lead to any rush by hauliers to plate larger vehicles. As I have already indicated, they are at present generally in a position to use the type of vehicle that suits them best. There is no limitation at the moment on the size of vehicle used by CIE yet only half of the CIE fleet consists of lorries in excess of five tons unladen weight. Similarly, only a small percentage of the private account fleet consists of very large lorries. Licensed hauliers would have no greater incentive than CIE to use heavier vehicles. The dimensions and carrying capacity of vehicles are, of course, the responsibility of my colleague the Minister for Local Government from the safety and traffic point of view and nothing in this Bill affects any regulations or prejudices any steps which he may feel it necessary to take. I am satisfied, however, that any restrictions on the size or type of lorry which may be justified by safety considerations or in relation to wear and tear on the road system should apply all round and should not be confined to licensed hauliers who have less than 5 per cent of the total road haulage fleet. Of all lorries over five tons weight CIE, licensed hauliers and unlicensed hauliers—i.e. for turf and in city areas—operated 1,042 in August 1969 as compared with 2,041 such vehicles on own account.
This Bill also provides for the abolition of existing restrictions on area of operation. Of the 840 licensed hauliers concerned only 100 are at present entitled to carry throughout the State. The balance are entitled to operate in areas ranging from a radius of ten to 15 miles or a single county up to substantial areas comprising the greater part of the State. These restrictions have been a major factor in preventing improvements of efficiency in the industry. They have militated against the provision of comprehensive and efficient services to industry and the export trade and against the organisation of back-haulage with consequent reactions on costs. They have also discouraged the amalgamation of businesses into larger and more efficient units and have excluded a large number of hauliers from participation in the cross-border trade which was liberalised some years ago with the result that an unduly large proportion of this trade has now been taken over by Northern Ireland hauliers who are not subject to any restrictions of this kind. A final consideration is that liberalisation of cattle transport will bear heavily on those licensed hauliers who were legitimately engaged in it and it is both equitable and in the public interest to provide them with alternative opportunities to maintain and develop their businesses.
I should explain that the concessions provided for in respect of commodity and area apply only to existing carriers, that is those professional hauliers who were licensed under the 1933 Act or the 1944 Act which brought certain previously exempted areas within the ambit of the legislation. They do not apply to special licences granted since then to meet local needs or special circumstances such as licences to permit the use of small vehicles for local distribution of Sunday newspapers or for the operation of local services such as exist in Valentia and Achill islands for which no licensed transport was available.
Section 8 of the Bill will enable me to authorise road transport for reward by hauliers coming from abroad. The Government in 1966 authorised the complete liberalisation of cross-border haulage for reward subject to the exclusion of haulage from point to point within the State. This decision was taken because of the overriding importance of our export trade and the development of trade with Northern Ireland generally. With the development of car ferries between this country and Britain and the Continent there has emerged a rapidly growing roll-on/roll-off traffic, particularly in perishable commodities, including fruit and other imports from abroad and export of meat and other produce from this country. This traffic has been facilitated as far as possible by administrative measures which somewhat strain the statutory provisions of the Road Transport Acts. It is desirable and necessary to make appropriate provision to deal with these developments on a comprehensive basis. I should point out that it is the long-term policy in the Common Market and among the member countries of the European Conference of Ministers of Transport, of whom we are one, to achieve complete liberalisation of international road haulage subject to harmonisation of fiscal, technical and social conditions of competition. The Common Market countries and the European Conference of Ministers of Transport have already agreed on the establishment of experimental multilateral quota schemes which will enable holders of multilateral licences to operate freely throughout the territories of member countries. Presently, such international traffic in Europe is facilitated under bilateral agreements concluded on a reciprocal basis. To permit us to become parties to such multilateral or bilateral agreements and so enable CIE and our licensed hauliers to engage in this potential traffic and to regularise entry of foreign hauliers under formal agreements or otherwise the powers provided for under Section 8 of this Bill are essential.
Section 7 of the Bill provides for the regularisation of the licence held by a particular firm. It was found in the course of preparatory work for this Bill that this firm's licence, which had been issued under an incorrect category in 1937, was now on a strict interpretation of the law no longer valid. The Bill aims to remedy this position on a reasonable and equitable basis. I will deal with this point in detail on the Committee Stage.
I have spoken at some considerable length on what is after all a relatively short Bill which will not make any immediate substantial change in the law or practice governing road transport for reward. I have done so mainly because the Bill marks a departure from previous thinking and policy in this field and must be regarded as a first important step towards a completely new regime more in keeping with the growth and orientation of our economy and foreign trade and the practice in other countries, with whom we are likely to become very closely associated, even if we were not to become members of the Common Market. Our present legislation is very much a relic of the very different conditions and climate which prevailed from 30 to 40 years ago. It is now inadequate and inappropriate and the Bill represents the first of a series of measures which we shall have to take on a phased basis, over a number of years.
Before closing, I should reiterate that nothing in the present Bill should militate against existing legitimate interests. The aim is to secure greater efficiency and reduce transport costs, and to reverse the present trend of the industry to haulage on own account to the advantage of the professional haulage industry of which CIE road freight is the largest component. It is up to the haulage industry to ensure that these objectives are achieved by offering to all users of road transport the improvements in quality and efficiency of service which these relaxations are intended to provide.
I recommend the Bill to the House.
