John O'Mahony (Mayo, Fine Gael)
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The purpose of this meeting is to meet with representatives of the Irish Road Haulage Association, IRHA, to discuss the impact Britain's HGV Road User Levy Act 2013 will have on Irish hauliers, particularly as it applies to Northern Ireland. We will also hear about other issues including commercial vehicle road tax, vehicle testing, cabotage, the National Employment Rights Authority and outsourcing of the Irish road haulage industry. On behalf of the committee I welcome Mr. Eoin Gavin, Mr. Eugene Drennan, Mr. Richard Nolan and Mr. Paul Donovan of the Irish Road Haulage Association.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if you are directed by the committee to cease giving evidence in relation to a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise nor make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. The opening statements you have submitted to the committee will be published on the committee's website after the meeting.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.
We only have the use of this room until 1.45 p.m. and we are also due to hear from representatives of the Freight Transport Association, so we will have to keep this section to an hour. I have already asked members to keep their questions as brief as possible so everybody will have an opportunity to participate. I ask Mr. Gavin to limit his presentation to ten minutes, if possible, because often the questions and discussion can be better. I invite Mr. Gavin to make his presentation.

Mr. Eoin Gavin:

I thank the Chairman and the committee for giving us the opportunity to appear before the committee this morning.

The Irish road haulage industry is under severe threat from both our near neighbours and our European counterparts. We have highlighted five issues to explain why Irish hauliers will be registering abroad. A total of 10% of our fleet is already gone. As of midnight last Monday, the UK introduced the road tax levy of £10 on the roads of Northern Ireland and the UK. That has probably been the catalyst for this meeting. However, other issues have also arisen in the last three or four years which have resulted in 10% of the fleet going, with probably another 70% to follow. These are vehicles that will no longer be registered or taxed in the Republic of Ireland. They are businesses that will no longer be part of the local economy.

The first of the five issues is the interpretation over the last four or five years of Republic of Ireland unaccompanied trailers that cross the Irish Sea into mainland Britain, that is, the interpretation of the UK authorities of how those trailers should be handled and the licensing arrangements for them. There is also the interpretation of Republic of Ireland traffic in and out of Northern Ireland across the Border on a daily basis and how the Northern authorities have interpreted Republic of Ireland vehicles.

The second issue is the lorry road user levy that was introduced on the roads of Great Britain and Northern Ireland from 1 April.

The third issue is the commercial vehicle road tax in Ireland, for example, the cost of taxing an articulated truck in Dundalk versus the cost of taxing the same vehicle in Newry and how we compare with our European counterparts.

The fourth issue is the Road Safety Authority and commercial vehicle testing. New changes in commercial vehicle testing have left us approximately €50 or €60 more expensive than our United Kingdom counterparts. It is also a more cumbersome way of testing vehicles, trucks and trailers.

The fifth is the National Employment Rights Agency and its refusal to recognise the tachograph in a vehicle as means of recording the times of drivers on a weekly basis. The method is recognised across Europe and Ireland is the only part of Europe that does not recognise the tachograph, either digitally or analogue, as a recording mechanism.

My colleagues, Mr. Eugene Drennan and Mr. Richard Nolan, will explain in detail the road taxation issues, the cabotage issues, the NERA matter and the vehicle testing issue. We would welcome questions from the committee. Some of the issues are quite complex. The basis of our presentation is that it is now uncompetitive to run a truck south of the Border in Ireland. It costs in the region of €30,000 per annum more to run an articulated truck when one is based in County Clare as opposed to Manchester, which means the business is unsustainable. We have lost 10% of the industry and we will lose 70% more between now and next January if serious action is not taken.

Mr. Richard Nolan:

I shall expand on two points, the UK regulator's interpretation of both unaccompanied Republic of Ireland trailers to Great Britain in the main, and daily Republic of Ireland traffic in and out of Northern Ireland.

The Single European Act came into force in 1992 which meant free movement of goods and services. That provision led to the growth of a very efficient industry and one that delivered goods in the most efficient way possible. In terms of crossing the Irish Sea, it meant that trucks dropped trailers onto ferries, the ferries moved overnight at an off-peak time and other drivers picked up the trailer on the UK side and delivered the goods while Irish trucks rested. All the new law has done is add costs and now invariably the tractor unit must be attached to the trailer to do the very same journey and carry the very same goods which are international all of the way, just as they were before. Let me give an analogy. If we crossed a bridge, no one would argue about the matter because it would be deemed as international. However, when it involves a ferry crossing and the goods trailers are unhooked, because that is an efficient way to do business, it is viewed as wrong. The new provision does not serve health and safety regulations, the environment or efficiency. It simply causes unnecessary angst, bureaucracy and cost.

The second point that I shall expand on is the UK's enforcement of a tax on Irish trucks in Northern Ireland and Great Britain from yesterday. The second point, even more so than my first one, is the point that will drive trucks to the other state. For instance, depending on how one buys the tax it ranges between £10 to £20 per day. If one forgets to purchase that tax on the day in question, one will be fined £300. The reality is that one is better to pay the tax for the full year or re-register the truck in that state, thus incurring no tax and no problems. The provision is unnecessary but that is the way that the UK has dealt with the matter.

The IRHA can suggest three obvious possibilities to fix the problem. First, we can use the Ireland Act 1949 which is a British Act of Parliament that states that Irish people will not be treated as a foreign country for the purposes of a British law. That is a British Act of Parliament and has nothing to do with us. Second, we could have a focused unilateral agreement instead of a bilateral agreement which would isolate the area of Northern Ireland as well as the ro-ro ports of Great Britain and the Republic of Ireland. Third, the Minister for Transport, Tourism and Sport put forward a solution and called it a functional area for the peoples of these islands. He made the suggestion in his speech at the British-Irish Parliamentary Assembly in Seanad Éireann on 14 May 2012. His suggestion is the best of the three options but any one of them will work to resolve the issue we face today regarding these two points. That is enough on that matter.

Mr. Eugene Drennan:

I will deal with the issue of road tax. The main problem is that it is too expensive. The commercial road vehicle tax is having a strangling effect on competitiveness here in Ireland and has left numerous operators with no other choice but to re-register their vehicles and trailers in other jurisdictions. That means they will re-flag their business to another jurisdiction, they will pay no tax to the Irish State and their overheads will be depleted substantially while retaining the business out of Ireland. To that end, for the budget before last, the IRHA commissioned a set of proposals and examined the whole scenario of taxing commercial vehicles in Ireland. At the time we took cognisance of the state of moneys in this country and where we were in the recession. Initially, we sought to have wayleave for the tax in some way but then we saw there may be room for re-appropriating what tax goes on what vehicles. To that end, we compiled a table that I hope has been circulated to members. It shows that the total tax take of all commercial vehicles in Ireland is €143.5 million. By rejigging that table ever so slightly we can have a substantial lifting of the financial load yet the Exchequer will have the same tax take as the provision is revenue neutral.
We brought our proposal to the Minister for the Environment, Community and Local Government two years ago or a year and nine months ago. To date, we have been told the matter is in hand and something may happen but nothing has happened. Everyone can do the maths easily. Let us say it costs €4,500 in road tax for larger commercial vehicles in Dundalk - and I have used Dundalk as an analogy again but perhaps it is unfair to always mention the town - as opposed to £650 or £750 in Newry because in that jurisdiction axle weight, environmental impact and a few other things are taken into account. Clearly, there is a colossal gap in expenditure even for small and medium-sized enterprises. At my local tax section it costs me €28,000 for five trucks but I have twice as many trucks and I give them €50,000 every day. This man seated beside me owns a huge business and I would not like to mention the figure he must pay. Tax is a very significant overhead.
The IRHA has submitted its proposal. I hope that we can kick-start its implementation and that something will be done about the matter. The delegation has outlined its proposals but we are not asking the Government to stick to them. We have, without a shadow of a doubt, pointed out that our overheads are way out of sync with the rest of Europe. No other jurisdiction or country in Europe has a road tax regime that is so high or so costly. Some of them may be close or on a par with us but they have different trading conditions and different fuels, etc. and compared with us pro rataIreland is way out of sync. Those are our tax proposals in a nutshell and we will take questions after a little while on the matter.
The other matter that I emphasise is commercial vehicle testing by the RSA. Testing has gone pear shaped since it took over the revised testing regime for commercial vehicles. The RSA does the work on behalf of the Department of Transport, Tourism and Sport. There have been a number of very negative consequences resulting from the revised approach the RSA has taken to testing.
I refer to the cost. We can break down the costs for members. There is a difference of approximately €50 per year when compared with the UK. We are €50 per truck and per trailer in excess. When the NRA took over the testing, it increased the initial test fee by between 8%, 10% or something and also imposed a levy to finance its programme. This is a water change of movement and legislation in this country that we have been asked via a levy to pay for a body of the State to enforce this on us.

When they go to court, they seek expenses and whatever other moneys they perceive it has cost them to do so. However, that is an aside.

Again, the cost basis and the way it is done and how we go about our business in this is excessive. To that end, they also brought in a regime where they want one to test one's vehicle on its birth date. This could be perceived as very practical in its own right but because of the downturn in business and the type of business we do, a lot of our vehicles are off the road for quite considerable periods of time, especially in the articulated sector in which one has drop trailers. With the lack of business in the construction industry, a huge amount of equipment has been left idle. If someone gets a bit of work, the vehicle will be taken out and tested. Heretofore one did the annual test and paid one's fee. Now when one goes to the station, one pays up to the birth date. I did an annual test the other day but I got six weeks on a vehicle. It passed the test but it was only good for six weeks. They say they have decreased the cost but in that case, they have tripled or maybe quadrupled, it.

If I had the same vehicle off the road in Northern Ireland or if I purchased that truck from Northern Ireland, England or mainland Europe and went in to get the same test, even if it was off the road in another country, it would not have mattered. It was new to Ireland and it had a birth date from which I would be given a year.

The basic cost, the levy and the way they have gone about their business has heightened the cost hugely. When this testing regime came in in Ireland some years ago, we were the first who had to go about doing it, and rightly so. We had no qualms with it and we adhered to it. We do not know why the ante had to be upped and why it has become so much more expensive. I do not want to delay members as we have a timeline and I am sure I will get questions from members.

John O'Mahony (Mayo, Fine Gael)
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Has the charge been implemented since yesterday? Did I read somewhere that the legislation has not been passed?

Mr. Eugene Drennan:

On our way here, someone informed us that the charge came in yesterday. However, in regard to Northern Ireland - Deputy Ellis may know more about it - it has not been passed by the Northern Ireland Assembly, so it cannot be taken in in Northern Ireland.

John O'Mahony (Mayo, Fine Gael)
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I heard the Minister say that in the Dáil this morning.

Mr. Eugene Drennan:

That gives us time to try to do something about it.

John O'Mahony (Mayo, Fine Gael)
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It may be a window. I understand there is a cross-departmental group.

Mr. Richard Nolan:

I can guarantee that the charge has been operational in mainland Great Britain since yesterday. It is inevitable that it will be introduced in Northern Ireland. I do not know why it is not in.

John O'Mahony (Mayo, Fine Gael)
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The reason it is not in is that the legislation has not been passed. The point I am making is that it may give us a window to solve some of the issues.

Timmy Dooley (Clare, Fianna Fail)
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I thank the IRHA for the presentation, which was helpful. I propose that we compile the evidence we have taken today and submit it to the Department of Transport, Tourism and Sport and the Department of the Environment, Community and Local Government. Mr. Nolan identified three particular solutions. I am not so sure we can implement those solutions as some of them are outside the control of this jurisdiction. We need to ask the Government to find it within the laws of this State, or to amend our laws, to resolve the problem. What all three witnesses have clearly said is that the cost of doing business, based on the changes that have taken place, effectively make it completely anti-competitive to operate.

John O'Mahony (Mayo, Fine Gael)
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I notice there is a vote in the Dáil, so we will take your questions-----

Timmy Dooley (Clare, Fianna Fail)
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I will complete my questions because I will not be able to come back after the vote. It is obviously a function for the Irish Government and Parliament to change the laws and to change the tax code to make it competitive.

It is very difficult for hauliers to operate their businesses south of the Border. From my contact with hauliers, quite a number of them are considering re-registering and moving north of the Border. I think that is deeply damaging and would have a negative impact on our indigenous haulage sector. We must find the solution. The information the witnesses have provided is helpful and it is now over to the Government to deal with that.

Mr. Eugene Drennan:

There is another scenario, which may work. The Government could try to address it with the English. We believe their definition of cabotage is too narrow. The cabotage legislation was brought in following a directive from Europe. As we have seen many times, it is down to how a country interprets these rules and regulations. England allows one into the country in three movements within seven days and then one must leave the country. They count the import load and the export load as two of the movements, or they can do, depending on which vehicle inspector one meets and his or her interpretation. One is not going to change English law on the side of the road or how they interpret it.

However, if the overall English interpretation of this directive was a little bit more lenient, it would give a little bit of room. Mr. Nolan already pointed to the 1949 Act and how they designate their ports. Any of these solutions is within their remit, without having to go back to Europe, although it is for our side to argue that with them. It could be done without having to change any laws, without having to go back to Europe and without having to change the tax, as it is their definition which is very narrow.

Timmy Dooley (Clare, Fianna Fail)
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From my knowledge of dealing with the witnesses and others, the difficulty we have is that there is not an efficient enforcement of cabotage in this State. If we upped the ante from our point of view and enforced cabotage laws here, we might have some bargaining chip with our counterparts in other states.

Mr. Richard Nolan:

In regard to the five points - I think Mr. Gavin will touch on the fifth one at the end - two of them are international and involve Great Britain more than anywhere else. The other three are totally within our grasp and we can fix them immediately. The two that are international really involve Ireland and Great Britain as a unit and some degree of co-operation among those countries. The reason we use the 1949 Act is that it existed before the Treaty of Rome. Benelux has a similar arrangement. If the will is not there, let us accept that and let us reflag what we are going reflag. Let what is not going to be reflagged be enforced in the Republic of Ireland to the same extent as in other jurisdictions.

John O'Mahony (Mayo, Fine Gael)
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We will suspend for 15 minutes for a vote in the Dáil. I apologise to the witnesses but it is part of the way we operate around here.

John O'Mahony (Mayo, Fine Gael)
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We will pick up where we left off. Deputy Phelan is next.

Ann Phelan (Carlow-Kilkenny, Labour)
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I will make hay while the sun shines and try to be brief. I am very concerned about the impact of this measure on jobs in the general economy and in local economies in particular. We will have to engage with the Minister to try to come up with a solution. We might not be able to get everything we want but certainly, given that much of this issue centres around bureaucracy and interpretation, we should be able to find a way forward. I ask the witnesses to explain the rationale behind the birthday testing for vehicles applied by the RSA.

Mr. Eoin Gavin:

European legislation states that commercial vehicles - trucks, trailers, vans, jeeps and so forth - must be tested annually. The testing system is operated on the basis of legislation and we have no problem with the law. The RSA was concerned about the fact that vehicles were not being tested on the public road. The new system put in place by the authority imposes a financial penalty on those who do not test their vehicles within a 12 month birth-date period. In the UK, for example, if a test is carried out on 1 January, the vehicle is not tested again until December, regardless of what happens prior to that date. The RSA has said that if a vehicle due for testing in January is not produced until July, it will only be given a six-month test and the owner pays for the full year that he or she missed. Approximately 30% of our vehicles are not on the road at any given time. They are either sitting in forecourts or elsewhere. They tried the birth-date system in the UK seven or eight years ago but it did not work. It is very convoluted. The Minister has granted a derogation up to 7 October while the review of the RSA testing procedures is taking place. In that sense, the Department has acknowledged that there is a problem. We would like, through this committee, to feed into the review in October and to indicate to the Department that the system does not make either economic or practical sense. Enforcement needs to happen through Garda checkpoints and RSA spot checks, with very severe penalties. Why penalise somebody who is bringing a vehicle for testing and who genuinely had that vehicle off the road because of lack of work? That is the approach we would like to see taken.

Ann Phelan (Carlow-Kilkenny, Labour)
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I wish to ask about the refusal of the NERA to recognise tachograph records as an acceptable form of time recording. Mr. Gavin alluded to the fact that Ireland is the only member state that does not recognise such records. What is the rationale behind that? Perhaps that question should be directed to the NERA.

Mr. Eoin Gavin:

There was an omission in the working time legislation originally. Our drivers are governed by tachograph laws and the hours worked are recorded by the tachograph. They cannot drive any more than the law permits, and the law is strictly enforced both locally and abroad. As part of its inspections, NERA has been looking for an office-based written record, similar to that which would be obtained from a person working in a factory who clocks in and out.

This is not recognising the function of the tachograph which is recognised in every other member state. It is adding unnecessary costs for operators.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank Mr. Gavin for his presentation. I had tabled questions on this issue and the Minister acknowledged at Question Time this morning that there was a crisis. It is not just the 1948 Act but this is also breaking the spirt of the Good Friday Agreement, an agreement for mutual co-operation, and the Minister indicated that he was worried about it. There is no mechanism in place in the North for the PSNI to deal with this issue or collect the levy. Sinn Féin has tabled a motion in the Assembly. While it may be in place, I do not see how the charge can be imposed and it is extremely worrying that 10% of the haulage fleet has relocated. When I questioned the Minister on the issue this morning, he acknowledged that hauliers had registered and would register their vehicles in the North. This significant loss of revenue must be addressed and the Minister must find a mechanism to deal with it.

Will Mr. Gavin elaborate on the tachograph and the implications of the way it is used in the United Kingdom as compared to the Republic? Attempts have been made to exclude certain roads in the North, but that does not address the core problem. The ports are also an issue. Even when one unloads the carriage, if a vehicle is picked up, the haulier faces a levy. This will have a major effect on transport in this jurisdiction. The Minister has indicated that he has been considering a number of ideas, including a change in motor tax, but I would like to hear Mr. Gavin's opinion on whether this is a workable solution. It was also indicated that cabotage or other new mechanisms were under consideration. If the numbers indicated by Mr. Gavin register in the North, that will be a major issue in terms of where we go from there.

Mr. Gavin has mentioned that under the provisions of the Single European Act, there are no borders. Could we make a case that these impositions on hauliers are in breach of the principle of fair play across borders? The Minister has indicated that most European countries are opposed to what the United Kingdom is doing. Can Mr. Gain suggest other means by which the members of the joint committee can help, other than by raising the issue with the Minister?

Mr. Eoin Gavin:

The problem is that haulage operators in the South will move to the North, elsewhere in the United Kingdom or even other European jurisdictions. Many have moved to eastern Europe. How can we solve this problem? There are two international issues, cabotage and the lorry road user charge in the United Kingdom. It is difficult to change what is happening in the United Kingdom; however, there is a British-Irish Parliamentary Assembly, as well as an Irish-UK trade body, which allows room for negotiation. Ireland and the United Kingdom could consider a model similar to what operates in the Benelux counties where, for example, operators in Belgium, Luxembourg, Holland and Denmark pay one charge when they operate in these four countries. They were part of the Schengen agreement, unlike Ireland and the United Kingdom. That system works quite well, as one may be in and out of each jurisdiction perhaps two or three times a day.

The Department of the Environment, Community and Local Government needs to come to the table to discuss the issue of motor tax before the budget. Road tax for an articulated truck is €4,000 compared to £650 in the North and €640 in Belgium. The Government could change the road tax structure immediately. It was stated last week that the Twenty-six Counties could do a deal with the North on a road tax, but they cannot to do a deal while the road tax structure for haulage vehicles dating from 1956 is still in place. The United Kingdom authorities have laughed at what happens here. In the Republic a truck is weighted when it is empty and the tax is based on unladen weight. Some three years ago we raised this issue with the joint committee which recommended that there was a need to change it, but we are still waiting for the Department of the Environment, Community and Local Government to come to the table. Mr. Eugene Drennan went through our very strong recommendations. As they would be cost neutral, they could be included in the budget, but we need to get to the table with the Department of the Environment, Community and Local Government. That could happen within these four walls.

Deputy Dessie Ellis stated Sinn Féin had tabled a motion in the Northern Ireland Assembly which we would very much support.

Dessie Ellis (Dublin North West, Sinn Fein)
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We know that, in general, Unionists are in favour because of their ideological link with the mainland.

John O'Mahony (Mayo, Fine Gael)
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I will call Deputies Helen McEntee and Seán Conlan in that order.

Helen McEntee (Meath East, Fine Gael)
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I thank the delegates for their presentation and apologise if I repeat what has been asked.

Will Mr. Gavin clarify if he is seeking an exemption from the levy in respect of particular roads or the entire road network in the North? If it is possible to secure an exemption, how will it operate? I know, as Deputy Dessie Ellis has stated, that the Minister is looking at the feasibility of operating a pay-as-you-go road tax system. Does Mr. Gavin have a view on whether such a system would be beneficial? He has stated 10% of the vehicles used in the road haulage industry have been registered elsewhere. What is the value of that 10% to the Irish sector? How detrimental would the loss be to the economy if other vehicles are registered abroad? The British-Irish Parliamentary Assembly and Deputy Joe McHugh have been working on the issue. Has Mr. Gavin lobbied public representatives in the North on it?

Seán Conlan (Cavan-Monaghan, Fine Gael)
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I welcome the delegates from the Irish Road Haulage Association and fully support their position. I live near the Border and it would be completely detrimental to the haulage industry if the proposed levy were introduced, with the proposals on cabotage and port-to-port transport. The proposed changes would be barriers to trade and ultimately lead to higher consumer prices for everybody on the island. Through the process of the Good Friday Agreement we are trying to create an all-Ireland economy. On Monday I was appointed as rapporteur on behalf of the Government at the British-Irish Assembly and have been charged with producing a report on foreign toll taxes and cabotage. Unlike what Deputy Dessie Ellis stated, I have engaged with the UUP, for which Mr. Danny Kinahan has been appointed co-rapporteur. He will liaise with the Transport Minister in the North, Mr. Danny Kennedy. We will bring the report to the next plenary session and hope to have a resolution of the issue of cabotage which is wider than the North and the South. The Assembly covers a number of islands, including Jersey, Guernsey and the Isle of Man, and includes representatives of the Welsh Assembly and the Parliaments in Scotland, at Westminster and in Dublin. We can create a functional area for all of the islands similar to the system which operates in the Benelux countries. We need to take a wider view than simply at the North-South dimension. We could try to ensure that none of our jurisdictions will impose a foreign toll on operators from any other member country of the Assembly. It is also better to look at the issue of cabotage in terms of how it applies in a functional area. We will give serious consideration to this issue which I raised with the Taoiseach when he spoke at the Assembly. I was appointed as rapporteur on behalf of the Joint Committee on European Affairs to deal with it and I look forward to engaging with the Irish Road Haulage Association on it.

John O'Mahony (Mayo, Fine Gael)
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Mr. Gavin mentioned a recommendation made in the 2012 report. A major issue at the time was the rebate on fuel. Will he comment on whether the recommendation was helpful?

What is the situation in that regard now? Perhaps the witnesses can address that at the end.

Mr. Eoin Gavin:

Deputy McEntee asked us to name the roads we are focusing on in the North of Ireland. We want all roads in the North of Ireland to be exempt. The A5 and the Dundalk to Castleblayney road have been mentioned. One needs to travel on other roads to get onto those roads. We would be looking for all roads to be exempt as any other approach would not make practical sense.

Deputy McEntee also asked about the cost of leaving. We have come up with some quite scary figures with regard to the five issues. The cabotage issue is a significant one. A person based in Letterkenny who works for Donegal Creameries and has to go to the port of Derry every day to unload for the creamery can only do three loads before he has to go home. The cost of that is enormous. If person based in Dublin Port who wants to send trailers to Holyhead has to send a driver and a truck on the ferry as well, he will have to pay for the extra berth and the extra space on the ferry. The cost of that alone would be approximately €25,000 per annum, which is a massive cost. Our road tax structure is €4,000 more expensive. Our testing fees are more expensive by between €50 and €60 per vehicle. The overall saving per vehicle adds up to approximately €30,000. Each vehicle represents 3.8 jobs in this economy. I refer to those who fit tyres, those who work on the mechanic side, those involved in finance and leasing and the officials in the Road Safety Authority and the Department of Transport, Tourism and Sport. We have proven over the past 20 years that there are 3.8 jobs for every truck in Ireland. We would be talking about a big bleed in the economy.

We have representatives here from the Border areas, the north west, the north east and the south east, which are regions of very high unemployment - up to 20% in some areas. The biggest fleets in the country are in those areas. It is possible that those fleets will relocate outside this jurisdiction, in another economy altogether. The risk is not that they will move to Dublin or centralise. It is that this whole sector of the economy will decentralise. Given that transport is of great importance to our export-led economy, this could have significant costs at the end of the day.

Deputy McEntee also asked how we have gone about lobbying our people in the North of Ireland. We have a very close relationship with the hauliers there. We compete in the same business. There are 7,000 trucks in the North and 15,000 trucks in the South. There is a big transport industry up there. They do come south of the Border. Approximately 70% of their business is south of the Border. We have a good relationship with them. Initially, they were saying we should be paying something in the North because they pay tolls down here. They subsequently realised that the tolls apply to good quality motorway infrastructure, which was built to get people from A to B more quickly, whereas the roads in the North are not motorways. We still have to pay road tax on our national routes here.

Deputy Conlan alluded to the possibility of proceeding on an all-island basis. The hauliers in the North have moved closer to our position in that regard. They would be more likely to be in favour of working towards that if a common road tax structure were in place. The Department of the Environment, Community and Local Government needs to change our current road tax structure, which operates on the basis of unladen weight and dates back to 1956, immediately. We would be wasting our time by going to the Assembly and asking for co-operation because they would turn around and ask about the kind of road tax structures we have in place. They would laugh at us. It is important for the current structure to change immediately. We welcome the support that has been expressed by Deputy Conlan in his capacity as rapporteur on behalf of the Government at the British-Irish Assembly. As he attended the meeting we had with the Minister, Deputy Hogan, in November, he knows exactly where we stand. He has seen our figures. I strongly believe he will put his best foot forward in this regard.

The Chairman asked about the fuel rebate, which was most unwelcome. The recommendation that was made by this committee in its 2012 report definitely helped to bring about the decision that was made by the Minister, Deputy Noonan. It has separated the rogue operator from the legitimate operator. One needs to have one's road licensing in place and one's tax up to date. It has attracted a great deal of additional revenue into the Irish coffers. We have had two periods of pay-out. The third one kicked in yesterday. There is still a slow take-up with the IT system but we are working through it. The Revenue online service is a very good system when people get used to it. We are working through it.

John O'Mahony (Mayo, Fine Gael)
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If the system is so good, why have people been so slow to take it up?

Mr. Eoin Gavin:

Many hauliers might not be used to working with IT systems. Some hauliers rely on their agents or their accountants to do this work for them. The registration process is a little different from that used under the PAYE and VAT systems. I refer to the allocation of fuel cards, for example. The fuel reporting legislation, which was designed to combat the use of the laundered fuel when more than 2,000 litres are in question, created havoc. It required oil distributors to report anything over 2,000 litres, with no reporting of anything under that level. We are going through the difficulties to iron them out. Overall, the new fuel rebate system is welcome. The ironic thing is that if any of us were to register north of the Border tomorrow morning, we would still claim that rebate and still avail of the corporation tax rate, but this country would lose the benefits it gets from our trucks leaving this economy. We would be soaking out.

The IMOD has launched a proposal aimed at making Ireland a shipping transport hub. It has spoken to people in the association about making Ireland a friendly place to do transport and shipping business. This proposal is similar to the IFSC and aircraft leasing proposals that were made some years ago. If this country's road tax structure and the charges between Ireland and the UK were to be sorted, we would be in a very good place. I mentioned to the Minister at our conference in Kilkenny last weekend that this is a very good place to do business because the Department of Transport, Tourism and Sport is very efficient, our corporation tax structure is very good, the fuel rebate system has been improved and upskilled and there are well-educated drivers and other people involved in the industry. It would be a pity to lose all of this in nine months by failing to make some little changes.

John O'Mahony (Mayo, Fine Gael)
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Okay. We will end on that positive note unless anyone has something to clarify.

Dessie Ellis (Dublin North West, Sinn Fein)
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I would like to know what we intend to say to the Minister. Will we send something to him?

John O'Mahony (Mayo, Fine Gael)
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A great deal of work is going on. Solutions are being urgently sought. Some of them have been suggested during this morning's hearings. I assume we will consider the matter at our next meeting.

Dessie Ellis (Dublin North West, Sinn Fein)
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I know we will sit down to take much of this on board in advance of the budget that is to be announced later in the year. It is important for us to remind the Minister about some of the suggestions that were in the document.

John O'Mahony (Mayo, Fine Gael)
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Absolutely.

Ann Phelan (Carlow-Kilkenny, Labour)
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What is the next most important date, in advance of the budget later this year, with regard to this issue?

Mr. Eoin Gavin:

A committee will be established in May of this year involving the Departments of the Environment, Community and Local Government, Finance and Transport, Tourism and Sport. It will examine the entire issue of road tax charges, including the operation of a Eurovignette-type system. We need to be at the table at that committee because we are the industry experts. We have solutions and we know what happens in Europe. It is important for us to be part of that.

Seán Conlan (Cavan-Monaghan, Fine Gael)
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Mr. Gavin spoke about the whole of the North being exempt. I know there are difficulties with the way the UK legislation has been framed. I agree that it would be impractical to suggest that certain roads should be exempt. It would be impossible to police. I have heard certain trunk routes in the North, including the A2, the A3, the A4 and the A5, being mentioned as if they were golden routes. All of these port-to-port routes are important. No one specific route is more important than another. The imposition of this charge on all of them will have serious consequences for transport across the Border. We need to think more widely about this. We should not focus solely on the routes that have been mentioned. The focus must be much wider than that. The only way to deal with this is to provide for a block exemption. As this cannot be done through the present legislation, an amendment will have to be introduced or a wider solution will have to be found.

Mr. Richard Nolan:

Deputy McEntee asked about the value of each truck that leaves this State. We estimate that between 8,000 and 9,000 trucks will go because that will make financial sense. The value of each truck, in terms of its turnover, is between €150,000 and €250,000. This money is predominantly spent in the jurisdiction in which the truck is based. If the truck's base moves, the procurement that goes with it follows it. I have to make the point that approximately 28,000 jobs would be in jeopardy if all of this were to happen. It is close to happening. One of our hubs is based in the south east. It will go to Wales, England or France because it will make sense to do so. It is already happening. It is good that recommendations are being made. We have been talking about the functional area for a long time. All of this makes sense. The irony is that there is a development coming into Dublin. If we can hold what we have, we can turn an absolute negative into a triple positive. If we can hold what we have and grow it, we can attract elements of the large fleet business throughout Europe and the world to be administered here in the same way as the IFSC and the aircraft leasing business, which were mentioned by Mr. Gavin. These things generally happen five or ten years after the conditions are put in place. It takes time. If this business moves, the only way we will get it back - ironically - will be to use IDA Ireland to bring it back as foreign direct investment, which would be madness.

John O'Mahony (Mayo, Fine Gael)
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I thank Mr. Nolan.

I thank the group for its presentation and for its engagement with members. The committee flagged this issue some time ago and we welcome the group's presence here to discuss it. Mention was made of interparliamentary groups. We contacted our opposite groups across the Border and in the UK on this issue and the Taoiseach has also raised the issue with the British Prime Minister. The issue is being raised at all levels, but we need a solution quickly. I thank the group and we look forward to making progress on this issue.

John O'Mahony (Mayo, Fine Gael)
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We will now meet the Freight Transport Association to hear its views on the United Kingdom's HGV Road User Levy Act 2013 and other issues of concern to the association. On behalf of the committee, I welcome Mr. Aidan Flynn, Mr. Mick O'Dwyer and Mr. Neil McDonnell of the Freight Transport Association.
I wish to draw the witnesses' attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and they continue to do so, they will be entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against a person or an entity by name or in such a way as to make him, her or it identifiable. I advise witnesses that the opening statements they have submitted to the committee will be published on the committee's website after the meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

Mr. Neil McDonnell:

I thank the committee for having us here today. The Freight Transport Association of Ireland has operated in Ireland for the past five years or so. The employers and companies we represent employ approximately 25,000 people and use 6,000 heavy goods vehicles and buses in the retail and passenger transport sectors.

The UK's HGV Road User Levy Act 2013 became effective yesterday for Great Britain and Northern Ireland. However, the Isle of Man and the Channel Islands will be treated as foreign operators for the purposes of the Act. The interesting fact is that for UK operators, the levy is cost neutral. It operates like road tax does here for our transport companies. Therefore, if companies pay their road tax in the UK, they will have paid their UK road levy. However, the effect of this Act for us means that the typical truck that crosses the Border or takes the ferry to Britain will pay up to £1,000 per annum.

We want to speak in particular about the effect of this levy in regard to the north west. Like our colleagues in the Irish Road Haulage Association, we would prefer if the road user levy, RUL, did not apply anywhere on the island of Ireland and would love it if there was political consensus north of the Border on it, but there is not. A clear majority north of the Border wants it imposed. Therefore, we are afraid that if we pursue this as a policy goal, we will get nothing. That is not an option for our operators.

I am accompanied by Mr. Mick O'Dwyer and I will call on him to speak on this issue in a moment. He is the regional transport manager for the Musgrave Group, Ireland's largest domestic retailer and one of the largest employers in Ireland. It is expected that soon it will be the largest retailer on the island. The reason the north west is unique is that our people in the north west are in a situation that is almost unique in Europe, in that they must transit another jurisdiction to access their sea ports and airport. I am conscious of Deputy Conlan's comment earlier regarding an exemption for certain roads, but we do not concur with that view.

The A5 is a primary trunk route through Northern Ireland. Many people may not be aware - we have included this information in the annex to our submission - that Ireland will pay £50 million over the next two years to the British Exchequer to upgrade the A5 because of its importance as a transit route. As far as we are concerned, we have paid for that route and Irish hauliers should, as of right, be able to use it without having to pay the UK road user levy. The primary route from the south of Donegal and north Sligo is the A49-A509. This route is very important to the Donegal fishing industry and we would like to see this route exempted also. Despite the perception, an exemption could be done more easily done than expected because the same rules that would apply to cabotage could be used to ensure truckers could transit Northern Ireland and not pay the road user levy.

In regard to hauliers that who the Border, they do so for three main reasons. They cross to do business in Northern Ireland, to go through Northern Ireland or to get services such as services from garages or tyre companies. We would love to see 100% of that type of traffic to be exempt from the UK road user levy, but we do not think that will happen. We have provided some figures, but I have asked the secretary of our group to ensure these are not made available under freedom of information after this meeting because they include commercially sensitive data. However, up to 40% of the traffic by our members across the Border is transit traffic. These hauliers do not do business in Northern Ireland, but travel from the Republic, north into Donegal or come from Donegal back into the Republic. We believe it is justifiable, reasonable and legitimate to expect this traffic should not pay the UK road user levy, because all they are doing is travelling from one part of the Republic to another.

We were asked to comment on a number of other issues in our correspondence. On road tax, we concur with the views heard earlier. We included the OECD figures in our submission, because they are incontrovertible and show the extent to which people pay road tax. We already pay the highest road tax of the European nations in the OECD. Like the IRHA, we have experienced reflagging of our members. Mr. Flynn and I negotiate annually with members in regard to renewal. However, we are being told that people are sorry, but they will not pay us the same as the previous year because they have moved X numbers of their trucks to Newry or to Wales.

In regard to the Minister's announcement in January that he is considering a road user charge for Irish trucks, we would ask that any proposal the Minister introduces would be like that in the United Kingdom and be cost neutral for Irish hauliers.

If that is not going to be a runner, we would like the Minister to consider free tolls. He organised a toll holiday in November which we understood resulted in a substantial uptake in the use of the motorways by truckers. Clearly this is an issue. We have truckers going through small towns who should not be doing so. We ask the Minister to consider that.

I must say on behalf of the Freight Transport Association of Ireland that we strongly support commercial vehicle roadworthiness testing, or CVRT. It has demonstrably saved lives. It is also ensuring fair competition for operators like the Musgrave Group, which spends time, effort and money on its kit. We strongly support what the Road Safety Authority is doing in that regard.

While the rules on cabotage are a little tricky, they were introduced in the first place to allow international transport to take place in an economic and environmentally friendly manner. A haulier goes to another jurisdiction and delivers his load, and in order to make it viable economically, he picks up a load in that jurisdiction and can stay up to seven days and carry out three loads on the way home. These rules are very fair and we want them retained but the big issue in Ireland is that they are not enforced. When our hauliers go to Northern Ireland, Britain or the Continent, they will have their paperwork checked to ensure that they are obeying cabotage rules. The same does not happen to foreign operators here, and we have people openly operating non-domestic registered trucks out of depots in the Republic, and this is just not acceptable. Some are of the view that cabotage restrictions should be relaxed entirely but our submission shows that road tax on a Latvian truck is €543 per annum, so where do Deputies think the trucks doing domestic transport in the Republic will be coming from if those rules are relaxed? We should think long and hard about that before we decide we are going to bin the cabotage rules.

We were asked to comment on NERA and our members have similar experience to those of our colleagues in the IRHA. It is clear that the Labour Court and the National Employment Rights Authority are misinterpreting the Organisation of Working Time Act 1997. They are not applying the relevant EU directive, which is 2002/15 EC. This is leading to a misinterpretation of the working week in terms of hours worked, and it is leading to unfair outcomes for employers. Some are being accused of working employees for too long, others are being accused of paying below the minimum wage, but none of this is true. We wrote to the chief executive of the Labour Court and the head of NERA in December 2013 to point this out. Our legal advice is that the Labour Court and NERA are misapplying the law. When we met with officials from the Department of Transport, Tourism and Sport, they acknowledged internal legal opinions that also state that the Labour Court and NERA are misapplying the law, which quite frankly we think is a farcical situation. At a minimum, the Department of Jobs, Enterprise and Innovation needs to ensure immediately that there is a moratorium on any determinations against employers under the Organisation of Working Time Act 1997 until this is addressed.

The last issue on which we were asked to comment was outsourcing in the sector. We know from our member renewals that there is a re-flagging of Irish transport north of the Border, typically into Newry, or into Wales. When we were renewing with him in January, one of our members said directly to our face that he could now register in Anglesea and claim the road user rebate. We have actually given them a free pass to take their trucks out of Ireland but claim the levy from the Revenue Commissioners in Ireland, and this is causing a severe issue for us. The other reason outsourcing is occurring is that aside from the rebate which makes it viable for them to do so, not enforcing the cabotage restrictions here means that there is a positive inducement for them to leave the country. Due to the unfair interpretation of the law by the Labour Court, by NERA, and by the cowboy sector that is paying our transport workers below the minimum wage, legitimate operators are under attack from all fronts over here.

The last comment before I hand over to Mr. O'Dwyer-----

John O'Mahony (Mayo, Fine Gael)
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We are under pressure on time.

Mr. Neil McDonnell:

I would like to pose one question to the Deputies before I hand over. If the UK paid £50 million sterling for a section of road and the Irish Parliament passed a law to impose a levy for driving along that road in the UK, what do Deputies think would be the reaction from their counterparts in Westminster?

Mr. Mick O'Dwyer:

I will be brief. I am the regional transport manager for Musgrave Retail Partners Ireland. We supply SuperValu and Centra stores, and we are an example of an operation that transits the North to get to Donegal. We service 16 Centra stores and nine SuperValu stores in that region alone. We are unique in that we ship anywhere between 40 and 50 trailer loads of stock up that road every week, with approximately 100,000 cases of stock, both chilled and ambient, into stores in locations that may not be serviced by any other retailer. We are also unique from the point of view of the number of stores we have in the region, the stock we are sending up the road and how often we are going there. The effect of the UK road levy charge is the cost in which our operation has to take on to continue to supply those stores in that region.

John O'Mahony (Mayo, Fine Gael)
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I am confused because your organisation published a newsletter in which you stated you met with an environment committee in the North and asked for the imposition of the levy. Is there some explanation for that? The subject under discussion was the HGV road user levy, and the fact that the subordinate legislation necessary to enable the driver and vehicle agency in Northern Ireland to issue a fixed penalty for non-payment of the levy has still not been made law. The purpose of the meeting was to explain why these powers are needed to create a more level playing field for the Northern Ireland operators. Until the legislation is passed, the DVA will not be able to enforce the levy on 1 April. Are you asking for it to be imposed in the North?

Mr. Neil McDonnell:

We are organised on both sides of the Border. The position for our members north of the Border is exactly the same as for our members on this side of the Border, which is that the Legislature is entitled to pay for its roads as it wishes. The Legislature north of the Border is bringing in a levy that is cost neutral for our operators in the North, so they have got a levy that will not cost them a penny. We acknowledge that there is not a consensus about trucks from the Republic crossing into Northern Ireland but we want transit traffic which is not doing any business in Northern Ireland to be able to transit free of charge. For any proposal that the Minister may be considering on road charges or user levies on this side of the Border, we also want that to be cost neutral for our hauliers because we have shown already that we are paying the highest costs in Europe.

John O'Mahony (Mayo, Fine Gael)
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Are you saying that in the North you want one thing and down here you want something different?

Mr. Neil McDonnell:

Absolutely not. We want our Legislature, when deciding by whatever means to charge people to use the roads, to make it cost neutral for us because we already pay.

John O'Mahony (Mayo, Fine Gael)
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Yet you want the HGV implemented.

Mr. Neil McDonnell:

From the point of view of road users in Northern Ireland, it is an absolutely fair way to charge. We want a minimal impact for our people who cross the Border, and we ask the Minister to consider a similar means of imposing a cost neutral form of charging.

John O'Mahony (Mayo, Fine Gael)
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In other words, this jurisdiction would charge coming in the opposite direction?

Mr. Neil McDonnell:

However this House decides to charge HGV users-----

Dessie Ellis (Dublin North West, Sinn Fein)
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It is to make up the losses.

Mr. Neil McDonnell:

In Great Britain and Northern Ireland, it is done by paying road tax. In the Republic, whatever consideration the Minister gives to road charging, we are already paying for it. Arguably we are paying far more for it than we should.

John O'Mahony (Mayo, Fine Gael)
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It appears to me that it would be better to have no charge in either direction. That would be cost-neutral.

Mr. Neil McDonnell:

We would like that to be the solution but we know there is no consensus on that north of the Border. That is our difficulty.

Paudie Coffey (Waterford, Fine Gael)
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Has the Freight Transport Association made representations at committee level to the Northern Ireland Assembly, or to the transport committee in the British Parliament similar to those it is making here today?

Mr. Neil McDonnell:

We have said it to the Members of the Legislative Assembly, MLAs.

Paudie Coffey (Waterford, Fine Gael)
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Has the association made representation at committee level?

Mr. Neil McDonnell:

No. Not yet. The Deputy must recognise that truckers are organised on both sides of the Border. They have their own businesses. They make their representations.

Paudie Coffey (Waterford, Fine Gael)
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It is very strange.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank Mr. McDonnell for the presentation. The truckers have organisations North and South. In the South they want the charge to be cost-neutral. In the North, however, the charge is imposed. People have talked about an exemption for the A5 and other roads but it is a difficult matter to police because there are roads criss-crossing everywhere. Mr. O’Dwyer spoke about Musgraves. Transport goes into the North, heading up to Donegal, and crossing the Border. That will be badly hit if we cannot find some other arrangement. I agree there are serious problems about this in the Northern Ireland Assembly. Sinn Féin has tabled a motion on this but it will not be implemented because there are no clear rules for the PSNI, which is supposed to police it but does not know what to do. There is a window of opportunity to consider this. Pressure must be applied to the British Government. We need an exemption. We need to be tied in with some of the other countries mentioned. If we start to argue about this road or that road we may end up with an exemption but if we keep arguing we will be giving in straightaway, saying this is our position. That is what worries me.

The Minister will not run with the toll-free idea. I have talked to him about this several times, although he has indicated that he will consider the tax. It is extremely important for the truckers to send out a strong message when the budget is being formulated because there is no doubt the association will lose some members, who will go North. That has already happened. The same has happened to the Irish Road Haulage Association, IRHA, which has lost 10% and the figure will continue to rise. There are major losses. The issue is not just between North and South on the roads but also South to North at the ports. There is a big problem there. If we focus on one area at the Border we forget that we have to deal with freight from Wales, Scotland and England. I am not sure the association's focus is right. We entered into the Good Friday Agreement on the basis that there would be co-operation between North and South. We have been arguing that the Border should be removed. What Mr. McDonnell says about exemptions consolidates borders.

Mr. Neil McDonnell:

I would love that to be the case. The Minister has already asked his counterpart, Patrick McLoughlin, MP, for this and has been refused. We can have an academic debate about whether our vehicles should pay in Northern Ireland. If it can be delivered for our members that would be great but if it cannot our taxpayers from next year will start to pay for the A5. There are certain exemptions we would like to see in place. That is a very important distinction. If the committee can deliver an exemption that covers all of Northern Ireland for all our members they will be very grateful but we want something to come of this process. Returning to companies such as Musgraves with nothing would be a big problem, given the volume of their transport crossing the North.

Dessie Ellis (Dublin North West, Sinn Fein)
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There are other deals. We have contributed to the A5 and to the Narrow Water Bridge. We need to consider all of them. The association could get caught up in this argument.

Paudie Coffey (Waterford, Fine Gael)
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I apologise to the Irish Road Haulage Association because I came back late after a vote in the Dáil and missed their presentation but I assure the witnesses that I have their concerns on file and will be working with my colleagues and the Minister to try to address them.

I thank the Freight Transport Association for its presentation today and for highlighting the concerns within the industry. The committee is acutely aware of them and has discussed them over the past weeks and months. The major concern is the international or cross-border issue. It is extremely difficult for us as Irish parliamentarians to find a way to resolve this. That is why I asked if the association had made representations at committee level to the relevant transport committees in the Northern Ireland Assembly and to the British Parliament. That would have been the appropriate place to go, before the new legislation came into force in Northern Ireland and the UK. I find it extremely strange that the association has not acted on behalf of its members at that level prior to the regulation’s being implemented because the horse has bolted. We are trying to defend a rear-guard action and do what we as Irish parliamentarians can to address it. The association is sending out conflicting messages. That is my honest appraisal. It is trying to represent members on one side of the Border who are being treated in a different way from those on the other side. I find it hard to accept that conflict. The association cannot have it every way.

I am concerned about the operators based in the Irish Republic who are members of the FTA and of the IRHA and how to assist them. Whatever strategic approach the FTA takes to representing them must align with what we and others are trying to do. I am not telling the witnesses how to do their business but I sense conflict there and it does not sit well with me.

We need to try to achieve an all-Ireland approach that will level the playing pitch. How to achieve it is the problem. We have to acknowledge that the Minister and the Department officials are working at diplomatic level with their UK counterparts to try to find common ground. I am open to advice. In fairness to the IRHA, it mentioned three solutions, the Ireland Act 1949, a unilateral agreement and a functional area, as proposed by the Minister. The functional area proposal would be the best solution for an all-Ireland approach. What is the FRA’s view of that?

Does the association have support or otherwise for that type of approach? On the matter of overheads, the cost of doing business in Ireland and the threats of displacement to other countries, it should be acknowledged - I note that the Irish Road Haulage Association and the Freight Transport Association have acknowledged the support of the Irish Government by means of the essential user fuel rebate - that a genuine effort is being made by the Government to assist the industry. I recognise the association's concerns about road tax but, speaking as a public representative, I am aware that we need to be responsible. To be fair, we have a smaller critical mass of road users in the Republic than in the UK, so it is quite easy for them to have a lower road tax rate than it is for us. This is a difficulty we will have to overcome. I agree with the principle that those who use the roads the most should pay the most. That is only fair, in my view. However, the challenge is how to reduce the rate and to find the funding. I am a Government Deputy and if I want to support a budget and also see a reduction in the rate of road tax then I have to be able to show where the money will come from to make that saving. I hope the association will understand my position. I will support a reduction in road tax in any way possible.
I share the concerns with regard to tachographs. I am not fully au faitwith the issue and I ask Mr. McDonnell to explain the Labour Court ruling or why it refused to take account of tachographs. This is a matter that the committee should revisit and possibly explore further because if it is accepted as the Road Safety Authority measurement for working hours it is a cause for concern if another State agency does not accept it. To be fair to all parties, we need a bit of consistency. It is a problem the committee needs to deal with.

Mr. Neil McDonnell:

In answer to the perception that there is a different message on either side of the Border, the Road Haulage Association in the UK and the Freight Transport Association went to the UK Minister for Transport and asked for a good deal for their hauliers and they got it. That is exactly what we are doing here. We represent our members in the Republic and we want the best deal that is going. If that means we do not have to pay any road user levy North of the Border that is great, and we wish the committee every success in achieving that. However, I caution that we know there is not a political consensus north of the Border and coming back to us with a glorious failure is not an option in our view, especially when the Irish taxpayer will be paying £50 million. I ask the committee to consider, if the tables were turned, what would they be saying in London about being asked to pay a levy on a stretch of road which they have paid for. We are in exactly the same position as the Road Haulage Association in the UK, which asked for a good deal for its hauliers. We are doing the very same here; it is as simple as that.

The Deputy asked me about the fine detail of the Labour Court ruling. I will send the determinations by e-mail and I caution that they are written in very dense legalese and are very tricky. The reason we raised a red flag on the issue is because Labour Court divisions have different chairmen and members but have used the same formulation in words. The tachograph records have no probative value in establishing compliance with the Act. For two entirely independent divisions of the Labour Court to have the same wording in determinations against different companies, frankly, I find it a little strange. Perhaps it is pure coincidence. When it is also the case that people in the Department of Transport, Tourism and Sport are saying that these people have got it wrong legally, it is of real concern to our members.

Mick Wallace (Wexford, Independent)
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I raised some of these issues this morning in the Dáil with the Minister, Deputy Varadkar. It is unusual that Ireland and the UK are unable to come to a more amicable and common-sense arrangement. The Minister was at pains to point out that the UK was governed by some EU regulations - the cabotage rules - and he was making the point that the EU regulations were the reason. If the road hauliers want to get a better deal it will have to come from the Irish Government and be an internal arrangement. When the hotels were on their knees they were given a VAT reduction to avoid hotel closures. The haulage industry will ship out 20,000 jobs to outsourcing if it does not get a better deal. It is a case of doing the maths and deciding what is the most sensible action. A loss of approximately €15 million to €30 million in VAT resulted in a reduction of the VAT rate for restaurants, but there was an all-round saving because the measure made economic sense. The hauliers will have to push the Government to get a deal rather than expecting to get the UK to throw any crumbs their way.

Paudie Coffey (Waterford, Fine Gael)
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I ask for a comment on the functional area proposal being mooted by the Minister, to which the Irish Road Haulage Association referred. I presume the defined functional area will be an all-Ireland area and that it will be possible to find common ground with regard to the application of levies.

Mr. Neil McDonnell:

If that is deliverable. We have taken soundings North of the Border. If it is deliverable, that would be an excellent result for our members. What would not be a good outcome is if we throw up our hands in the next few months and say we are not going to have anything - that we tried and we failed. We have taken some soundings. People from the UK Department of Transport attended a seminar here last week and they have acknowledged that the legislation permits the exemption of roads. That is already in position in some roads around Clones. The UK officials have said there is nothing to stop that legislation from excluding other parts of the North. Ideally, that is what we want. If we could get all of Northern Ireland exempt that would be a result for our members, but please do not tell us that we cannot do anything and there will be no result in a couple of months' time.

Paudie Coffey (Waterford, Fine Gael)
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With all due respect, it would seem from the soundings carried out by the association among its colleague organisations in the UK and its members in the North that it has political support in Northern Ireland and possibly in the UK. Am I correct in the view that the association has a fairly strong indication of the political position?

Mr. Neil McDonnell:

Yes, we have.

Paudie Coffey (Waterford, Fine Gael)
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I ask Mr. McDonnell to elaborate.

Mr. Neil McDonnell:

I refer to what we said earlier about Irish grant aid for the roads in the North. In answer to Deputy Wallace, I will be quite open in saying that there would definitely be a split between our Unionist and Nationalist members about their relative perceptions of the levy. We have sounded out both sides of the fence on this matter. The majority opinion would be that the road user levy stays. However, when we pointed out to people North of the Border that the Minister is considering a similar levy south of the Border, the tone moderated a little, especially with regard to the notion that Northern Ireland hauliers might have to pay anything similar to Irish road tax rates south of the Border. I can say that this changed the perception in the room of what might be available. In that regard I would say that there is political scope to negotiate about what might happen either side of the Border. From our point of view, we want to make a strong representation on the A5, because almost half of the transport of our members crosses the A5, not to do business in Northern Ireland but just to get over and back to Donegal. I would advise the Deputy that one of the concerns of people North of the Border is that the Minister, Deputy Varadkar, would impose a charge on the M1. If that were to occur, I could suggest that there might be a very different approach North of the Border. The difficulty we have right now is that we do not have any proposal on the table with regard to an Irish road user levy.

I am putting that forward as something that might possibly move the situation on more quickly.

Ann Phelan (Carlow-Kilkenny, Labour)
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My question is to Mr. O'Dwyer. If we do not achieve any change in this regard, what long-term impact does he foresee for his business and for retailers?

Mr. Mick O'Dwyer:

We do not really have an option here. We will continue to use the roads we are already using, including the A5. The end effect for independent retailers will be an increased cost per case delivered.

John O'Mahony (Mayo, Fine Gael)
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I thank all of the witnesses for their contributions and their engagement with the committee. Following on from our discussion today, we will review the issue at next week's meeting. There is a great deal happening on this matter at different levels, including at Government and committee level. The main point that has come through today is that we need a resolution to the problems facing the delegates' members. We look forward to advancing the issue at this committee.