AQW 10042/17-22

Mr Andrew Muir
Alliance Party
North Down

Tabled Date: 10/11/2020
Answered On Date: 25/11/2020
Priority Written: No

Question:
To ask the Minister for Infrastructure whether she will share the evidence gathered which did not suggest that exceptional circumstances exist to justify a bespoke financial assistance scheme for the haulage sector.

Answer:

My officials sought a range of evidence to put in place a financial support scheme for the Haulage sectors. The first requirement for the Determination and Designation under the Financial Assistance (Northern Ireland) Act 2009 is to prove that ‘exceptional circumstances’ exist.

As part of the evidence gathering on this issue I received letters from Ministers Murphy and Dodds on this issue and Minister Murphy pointed out that there were no 'exceptional circumstances' that have prevented the haulage sector benefitting from the existing schemes.

In terms of other evidence provided, before the summer, DAERA officials worked with DfI officials in an NI Haulage Industry Critical Goods Supply Analysis Group (NIHCA) to address evidence gaps, where possible, to inform decision making around any need for urgent NI specific financial assistance to ensure that critical goods can continue to flow. This group concluded that at that time:

a)the food supply chain was operating relatively normally, with the large retailers indicating that they were not facing any major issues in relation to supply;

b) Large hauliers appeared to be coping and in some cases had managed to share their empty running costs with their clients;

c) The opening up of sectors in GB was expected to reduce the scale of empty running;

d)As far as it could be determined, demand for road haulage services was being met; and

e)Food and other critical goods were continuing to be hauled as and when required for supermarkets, pharmacies, etc. That was consistent with evidence from Road Haulage surveys across these islands which indicated that more than 80% of companies were expected to survive the next two months.

In addition the Department for Transport (DfT) has had regular engagement with both the Road Haulage Association and Freight Transport Association (now Logistics UK) to understand the up-to-date picture for road hauliers at a local and GB wide level. An analysis of available data by DfT concluded that it did not demonstrate an urgent and compelling need which would satisfy Treasury’s threshold for intervention.

DfT have recognised that, with the road haulage industry being highly fragmented and SME dominated, it has proven difficult to obtain robust data on its economic position and resilience. However, they advised that available data sources, including the Logistics UK monthly tracker do not suggest that there is a general problem for road haulage, especially given the extension of the Coronavirus Business Interruption Loan Scheme (CBILS) and the announcement of the Job Support Scheme by the Chancellor of the Exchequer (now replaced by the extension of the more generous furlough scheme). The monthly tracker report for September 2020 highlighted that;

a)business outlook for the logistics sector for next six months is positive;

b)The number and proportion of HGVs parked up was 2.8%, while the number of vans was 0.8% - this reflects the return to normal levels of traffic for commercial vehicles; and

c)According to ONS vacancies data (provided by the online job search engine Adzuna) for 17 September, the number of transport /logistics/warehouse online job adverts are one-fifth above their average.

Additionally, in line with the Logistics UK findings for financial health, ONS data from the Business Impact of Coronavirus Survey (BICS) found the proportion of businesses in the transport and storage sector with cash reserves of more than six months has risen since April.

Taking into account all of the evidence it is clear that, like many sectors across the economy, the haulage sector has faced some difficulties from demand for its services because of the impact of Covid-19. Current analysis still suggests a mixed picture with some hauliers reporting no significant issues while others have been impacted. Based on the evidence and engagement with the sector, it is my view that there is insufficient evidence to demonstrate ‘exceptional circumstances’ which would justify a bespoke financial support for the haulage industry. I will, however, continue to keep this matter under review.