2014 / 2015 TRANSPORT EDITION
A YEAR IN PERSPECTIVE
FOREWORDS The Rt Hon George Osborne MP The Rt Hon Patrick McLoughlin MP
REPRESENTATIVES FedEx Pall-Ex Twente Express Advanced Supply Chain Hermes Vantec Europe ECM (Vehicle Delivery Service)
FEATURES Review of the Year Review of Parliament
©2015 WESTMINSTER PUBLICATIONS www.theparliamentaryreview.co.uk
Foreword
The Rt Hon George Osborne MP Chancellor of the Exchequer
The UK grew faster than any other major advanced radical new apprenticeship levy on large firms. We’re economy in the world last year, and is set to do the also devolving even more powers to local areas over same again this year. Over the past 5 years we created things like planning, skills and Sunday trading rules. two million new jobs. And the deficit – now 3.7% of And to back British businesses and encourage them to GDP – is a third of what we inherited in 2010. invest we’re setting the annual investment allowance at £200,000 and cutting corporation tax to 18% by 2020 But all that progress could be put at risk if we don’t – making it the lowest in the G20. continue with the plan that is delivering for the working people of this country. The final part of the plan is to make sure work always pays, so at the Budget I announced a new national living Economic security is at the heart of that plan. It’s not wage, reforms to our welfare system and lower taxes for enough to simply eradicate the deficit – we have to working people so we move Britain to being the higher reduce our unsustainably high level of national debt. wage, lower tax, lower welfare economy we want it At the Budget I published a revised Fiscal Charter that to be. commits us to running a surplus in normal times to bear down on debt. In the autumn the House will vote on that charter and I hope it will mark the start of a new settlement for Britain’s public finances.
Improving productivity – the amount that British Improving productivity is workers produce for every hour they work – is the key route to making the UK stronger and families the key route to making richer, and it’s the greatest economic challenge of our “ the UK stronger“ and families time. We’ve set out concrete steps that we’re going to take to improve the infrastructure, education and skills richer, and it’s the greatest of the UK – and to make sure that this time it’s a truly economic challenge of national recovery. Some of the biggest reforms include setting up a new roads fund to pay for the sustained our time investment our roads so badly need and introducing a
FOREWORD | 1 Foreword
The Rt Hon Patrick McLoughlin MP Secretary of State for Transport
Investing in transport is one of the most powerful ways We are electrifying hundreds of miles of railway lines. to spur growth in the economy and improve people’s We are devolving power and giving great cities like lives. That is why over the past 5 years we have set out Manchester the power to shape and grow their own the most ambitious transport modernisation plan Britain economies by controlling their own transport networks. has seen for generations. But when you are in charge of We are supporting the rapidly growing ultra‑low carbon long-term infrastructure projects, you need stability and vehicle market, with sales of plug-in cars more than continuity. So I was delighted when the Prime Minister tripling so far this year. And we are looking further into asked me to stay on as Transport Secretary and deliver the future, with plans for Crossrail 2 and a new trans- the improvements our transport system so badly needs. Pennine high-speed railway linking Liverpool in the west with Hull in the east. Transport connects people to jobs, training and education. Transport increases productivity, gives firms In the last parliament we gave transport the political a competitive edge and attracts new investment to the priority it deserved and injected record levels of much country. By keeping Britain mobile, transport keeps our needed investment. Now we will finish the job – economy on the move. And with an unprecedented building a modern, reliable transport network for Britain £70 billion of capital investment over the next 5 years, that will sustain economic growth for decades to come.
transport accounts for nearly three-quarters of the government’s infrastructure budget. That money
is carefully targeted to meet our main manifesto commitments – to grow and rebalance our economy, to close the prosperity gap between north and south, “ and to help working people get on. By keeping Britain mobile, There is an amazing amount of ground-breaking work going on across the DfT. We’re building transport keeps our Crossrail and in 2 years we will start building HS2. We “ economy on the move are delivering a £15 billion road investment strategy.
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High Speed 2
failing to make headway in the elections, Mr McLoughlin sought to declare an end to controversy over the project. ‘The general election result was a massive vote of confidence in HS2,’ he said. ‘The argument has been won. HS2 will be built, the full ‘Y’ network, from London to Birmingham and Birmingham to Manchester and Leeds, with construction starting in just 2 years.’
Although it is unlikely HS2’s opponents will see it this way, the election result has cleared the way for HS2 Ltd, the government-owned company developing and managing the project, to embark on a huge procurement Contracts worth exercise as the project gears up for £10 billion to build tunnels and viaducts for HS2 were The 2015 general election saw Patrick construction. Despite the hybrid Bill put out to tender McLoughlin remain as transport giving powers to build the scheme still secretary following an announcement making its way through parliament, from David Cameron – the first the company wants to be able to make Conservative leader to win an outright a start on construction as soon as majority for 23 years. Appointed as MP possible after Royal Assent. for the Derbyshire Dales in 2012, Mr HS2’s first appointment is likely to be McLoughlin held his seat with 52% of a delivery partner to project manage the constituency’s votes. the scheme. Invitations to tender for Mr McLoughlin has proved a safe the main contracts worth a total of pair of hands, and his reappointment £10 billion, including civil engineering has been widely welcomed as and construction as well as signalling providing much-needed continuity in and other railway systems, are due to a department where few transport go out in the autumn. The complexity secretaries last much more than a of these contracts requires a generous year. This is particularly significant amount of time for evaluating the for the high-speed rail project High tenders before the anticipated start of Speed 2 (HS2). Mr McLoughlin work in 2018. A tender for enabling travelled to Leeds where he used his work – demolition and clearance work first post-election speech to reaffirm along the route, which needs to be the government’s commitment to its underway a year before the start of the transport investment plans in general main tunnelling and construction – is and HS2 in particular. also due to go out later this year.
With anti-HS2 candidates along the Early in 2016 a start will be made on route of the line through the Chilterns the procurement of rolling stock. Train
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companies can be expected to start are expected in autumn. The Commons revealing concepts or early designs of committee is expected to finish its what they will offer, as Hitachi did at scrutiny by next January or February, a rail industry show in May, where it after which the Bill goes to the Lords. exhibited designs for a new ‘very high An announcement on ‘the way forward speed train’ for the UK. A significant for phase two’, from Birmingham to presence by two major Chinese rolling Leeds and Manchester, is also promised stock manufacturers at the show was for the autumn. In his Leeds speech, also seen as a statement of intent. Mr McLoughlin confirmed that legislation Meanwhile, the hybrid Bill for phase one would be brought forward to accelerate of the project (London to Birmingham) construction to Crewe, currently part of so far remains on schedule to receive phase two, so that cities in the north gain Royal Assent by the end of next year. the benefits of high-speed rail sooner. The committee resumed work after the A decision on safeguarding a preferred election from around the halfway point route to Crewe and an environmental of the route, having started from the statement and mini hybrid Bill to provide Birmingham end. Final proposals for the construction powers are expected to be Euston terminus are still awaited but deposited early in this parliament.
Rail
Within a month of being appointed transport secretary in 2012, Patrick McLoughlin had to deal with the collapse of the tendering process for the West Coast mainline and a crisis in the franchising system. Within weeks of being reappointed following this year’s general election, he was faced with a crisis in Network Rail’s investment programme.
A year ago the outlook seemed positive. A £38 billion programme of renewals and upgrades had been agreed for 2014–2019, bringing extensive and long‑awaited Two of the biggest electrification projects – electrification and other substantial on the government’s books, its the Midland main line improvements to the UK’s rail network. and trans-Pennine increasing level of debt came under Mr McLoughlin himself reaffirmed electrification from sharp scrutiny. Projects, said those in Manchester to Leeds – the government’s commitment to the know, were running late and over have been put on hold ‘the biggest investment in rail since budget, particularly the electrification Victorian times’ in a speech on 1 June. ones. The Transport Select Committee But the storm clouds had been warned that ministers were gathering for some time. announcing further electrification When Network Rail was reclassified schemes without a real idea of what as a public company last September, they would cost. When last month putting its finances officially back the Office of Rail and Road delivered a
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will face being split up into a number of separate regional firms.
That the first casualties of the crisis were electrification projects for the North caused dismay among city leaders in the nascent northern powerhouse. Improving rail connections between the cities of the north of England – under the banner of HS3 or TransNorth – is a key priority for the newly created Transport for the North (TfN) partnership, and trans-Pennine electrification was seen as the first step.
Sir Peter Hendy managed The Chancellor’s award in the July a number of cutting-edge budget of £30 million over 3 years to projects for London 2012 highly critical report on Network Rail’s TfN to develop its strategy and work performance in the first year of the towards an Oyster-style ticket system current 5-year period, Mr McLoughlin was seen as scant consolation. TfN’s had to act. interim chair and leader of Manchester City Council Sir Richard Leese said: His immediate response was to ‘pause’ ‘We must have a commitment from two of the biggest electrification the government that the electrification projects – the Midland mainline and works will take place – and soon. trans-Pennine electrification from Let us not forget that the delivery Manchester to Leeds and beyond. A of a Northern Powerhouse is a key range of new directors and advisers government pledge.’ were appointed. Sir Peter Hendy transferred from Transport for London Sir Peter Hendy, with his track record to become Network Rail’s new of managing highly complex projects at chairman. Mr McLoughlin’s immediate Transport for London and in particular task is to work with chief executive masterminding its success during the Mark Carney to identify how much of 2012 Olympics, is seen as a good choice the programme can still be afforded for the role of getting things back on for £38 billion, and report in the track. His disadvantage is that he is not autumn. Richard Brown, respected a railway man and he will be unfamiliar former Eurostar chairman, who also with the culture at Network Rail. came to the government’s aid in the There will be some anxious months franchising crisis, has been appointed until all these reports and reviews are as a special director with a remit to in. The result could be the biggest report directly to the secretary of upheaval to the railways since the state. Economist and regulator Colette collapse of Railtrack in 2002 and Bowe will advise on how investment possibly since privatisation. planning can be improved, and High Speed 1 chief executive Nicola Shaw The electrification programme, in will make recommendations on the particular, was long overdue – an structure and financing of Network area where the UK’s railways lagged Rail by next year’s budget, again far behind European rivals. Sir Peter working closely with Hendy. It is and his colleagues will need to aim to thought highly likely that Network Rail preserve as much of it as possible.
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Driverless cars
Driverless cars have been the stuff of science fiction for decades. But technology may finally be catching up. Many believe, just as the railway transformed transport in the 19th century and the internal combustion engine fulfilled the same role in the 20th, that autonomous vehicles will be the transport revolution of this century.
The technology, it is argued, will make roads safer by eliminating driver error. Autonomous vehicles will increase road capacity because they will be capable of driving at a regulated speed much Driverless cars could closer together, as well as reducing radically alter the transport hurdles and public attitudes to congestion and emissions. arena once deemed legal driverless vehicles. Google has invested heavily and A prototype pod was unveiled in attracted considerable publicity for February this year, and was delivered its autonomous vehicle. But the UK to Oxford for tests of the autonomous government has also identified the technology as an area where the UK has control system. The urban on-street the potential to be in a market‑leading trials are due to start in the autumn. position. The UK Automotive Council Following on from this, in last and innovation body Transport Systems November’s autumn statement the Catapult came together to create a government announced three consortia project to oversee real‑world trials and would take part in wider trials of demonstrate the technology. autonomous vehicles in four cities, sharing a total of £19 million. Bringing together Transport Systems Catapult, Milton Keynes Council, All four of the main LUTZ Pathfinder Oxford University’s Mobile Robotics partners are also involved in the UK Group and RDM Group, the LUTZ Autodrive project, led by Arup, in (Low-carbon Urban Transport Zone) Milton Keynes and Coventry. TRL leads Pathfinder project is working towards the Gateway project in Greenwich, and an autonomous vehicle trial in the Atkins leads the Venturer consortium pedestrianised areas of Milton Keynes. in Bristol.
The partners were given the task of UK Autodrive includes local authorities, producing three driverless pods that technology and automotive businesses, will operate in the heart of the city and academic institutions. It will between the railway station and the undertake a 3-year programme city park. The pods have been designed of feasibility studies and practical as electric-powered two seaters. demonstrations, with plans for a fleet As well as undertaking trials of the of 40 autonomous pods. On‑road technological feasibility of self‑driving testing will include the real-world vehicles, the programme will also evaluation of passenger cars with examine the potential legislative increasing levels of autonomy, as
6 | reiw v e of the year TRANSPORT EDITION well as further development and understand what concerns the public evaluation of lightweight autonomous have about driverless vehicles, and how self-driving pods designed for these can be overcome, as well as to pedestrianised spaces. examine insurance details.
The £8 million Gateway project will Whereas the sensory equipment used ‘allow thorough investigation of how by the Google car is estimated to automated vehicles can add to a cost around $150,000 (£90,000), the busy multimodal transport system’. system developed by Oxford University It will demonstrate automated mobile robotics group and used in the transport systems in three planned LUTZ Pathfinder and UK Autodrive trials, including public tests of fully projects uses off-the-shelf components automated passenger shuttle transport costing only £4,500. It employs systems, and autonomous valet parking stereoscopic cameras and lasers to for adapted cars. Feedback will be build up a 360° view so that the car gathered to evaluate the extent to can navigate without needing external which the systems are used, trusted infrastructure such as GPS. A spin-out and accepted. company, Oxbotica, has been created to exploit the technology. In Bristol, the Venturer consortium will test people’s perceptions of Momentum is building, and in March autonomous vehicles as well as the Chancellor George Osborne announced technology, with testing due to begin a further £100 million government in 2016, building towards a controlled investment to create a £200 million test on an urban road in mid-2018. Intelligent Mobility Programme (with Technology being studied for the matched funding from industry) project includes sensors, light detection that will focus on the development and ranging (Lidar), communication of driverless car technology and the systems and a Williams F1 simulator. systems required to implement and Work is also being undertaken to adopt the technology.
Devolution and local transport
In the course of the last year, the Newcastle and Sheffield published the idea of a northern powerhouse at the One North report – a set of transport centre of an economic revival of the proposals intended to maximise north of England became more than economic growth. Encouraged by the ministerial rhetoric. government, northern councils then came together to form Transport for Chancellor George Osborne first the North, to develop the One North proposed the idea of the northern proposals into a prioritised strategy. powerhouse, in which the cities of the north of England would operate In October, the Prime Minister and almost as a single economic entity, in Chancellor backed the idea of HS3 – June 2014. He challenged city leaders an east–west link that, while not a to come up with ‘an ambitious plan to high-speed line in the sense of HS2 make the cities and towns here in this but an improved or new conventional northern belt radically more connected line running at up to 140 mph, would from east to west’. In response, last nevertheless dramatically cut travel August, Manchester, Liverpool, Leeds, times between northern cities. The
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following month, the Chancellor Road maintenance is another offered a comprehensive devolution vulnerable area, with an estimated package to Greater Manchester. A £12 billion backlog. With spending Bill to provide the necessary powers on education, health and overseas was included in the Queen’s Speech development ring-fenced, the Institute following the election. for Fiscal Studies estimated that the budgets of unprotected departments Over recent years, Greater Manchester could face cuts of around 15%, and has developed a solid reputation with if capital programmes are protected, successive governments that it can local transport budgets will be even be trusted to spend public money more vulnerable. effectively. The devolution package will give the region control over budgets Moreover, several government funding for transport, skills and housing, with streams for local authorities, covering the ability to introduce bus franchising, transport, skills and housing, were in return for agreeing to have an bundled together from 2015 to George Osborne has made elected mayor. This was something form the single local growth fund, it clear there is opportunity city leaders were not particularly keen and devolved to Local Enterprise for cities to gain more on but agreed to as a condition of the Partnerships. Transport funding of autonomy over transport budgets wider package. George Osborne has £6.1 million has been committed to the made it clear that the door is open for fund for the financial years from 2015 other cities that want to go down this to 2020, making up almost 80% of route, and talks with other city regions the overall fund. Although this holistic are in progress. approach has some merit, there are concerns that transport will not get out If a welcome feature of the last of the process what it has put in. government was its emphasis on transport investment, the downside In a letter to the Observer in May on was that local transport budgets have behalf of 375 local authorities, David borne the brunt of cuts. This has been Sparks, chair of the local government felt particularly in subsidised or tendered association, said: ‘Local authorities have bus services – those that are considered made £20 billion savings since 2010 socially necessary by councils but not following reductions in government considered commercially viable by funding of 40%.’ The new government, operators, and therefore subsidised by he continued, must ‘consider the the local authorities. According to the consequences’ that further cuts would Campaign for Better Transport, since have on communities. ‘We need a new 2010 more than 2,000 bus routes have settlement for England that devolves been reduced or cut entirely. It said: ‘The decisions about infrastructure, transport, government needs to do more to save housing, skills and health and social care essential bus services which are being lost to local areas so they can tackle the big all over the country. We need to see an issues,’ he concluded. The pressure for end to year-on-year cuts in bus funding.’ devolution is only likely to grow.
Airports
‘You can only hide in the long grass Many had seen the setting up of the for so long.’ So said Sir Howard Davies, commission as an exercise in long‑grass delivering the final verdict of the kicking par excellence, specifically Airports Commission. designed to delay a decision on new
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runway capacity for south-east England Heathrow offered the prospect of until after the general election, and generating more long-haul routes to many expected the outcome to be emerging markets compared with a fudge. Gatwick, which was more oriented towards short haul. There would be Instead, after two and a half years a chance to restore flights to other and taking what is widely seen as a parts of the UK, particularly the north thoughtful approach to the question, of England and Scotland, which have the commission unanimously backed been squeezed out in recent years, the a third runway at Heathrow. commission said. The familiar clamour of outrage that But the current recommendation is greeted the recommendation suggests different in another way. Sir Howard that this takes us back 10 years to the said that the commission had listened last abortive attempt to build a new to ‘those who said Heathrow can’t runway. But not quite, Sir Howard expand unless…’ – and tried to build explained. The latest proposal, for on the ‘unless’ part. So much of the a third Heathrow runway to the commission’s report was devoted north‑west of the existing airfield, to how Heathrow could become a is not the same proposal that was better neighbour to surrounding abandoned in 2010. It being further communities. ‘In our view, Heathrow west means that aircraft will be higher can be a better neighbour because over centres of population as they make it is bigger,’ Sir Howard said. The their descent, thus reducing noise. commission put forward a number Economically, the commission of recommendations to make this estimated the benefits of the runway happen. Following the construction at £147 billion over 60 years – better of the new runway there should be than the other shortlisted options a ban on all scheduled night flights of a second runway at Gatwick between 11.30 pm to 6.00 am. A clear or the Heathrow Hub proposal to ‘noise envelope’ should be agreed, and double the length of the existing Heathrow must be legally bound to north runway. New capacity would stay within the prescribed limits. encourage competition and would The airport should compensate those allow fares to come down in price. The new runway could be who would lose their homes, at worth £147 billion to the 125% of the full market value, plus UK economy reasonable costs (almost 800 homes would be demolished in the village of Harmondsworth). Heathrow should spend over £1 billion on community compensation – for example, providing sound insulation and air-conditioning, especially for schools.
This should be supplemented by a new aviation noise levy on passengers at major UK airports. A rate of 50 pence per flight would raise £50 million annually, Sir Howard said. An independent noise authority should be established with the statutory right to be consulted on flight paths and other operating procedures.
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Heathrow is situated in an area of However, the government still has west London in which unemployment a headache. Although there is a is relatively high. The airport should parliamentary majority in favour of work with local communities to expanding Heathrow, a number of offer training opportunities and high-profile Conservatives are against apprenticeships to local people. A it – including Philip Hammond, Justine Community Engagement Board should Greening and Boris Johnson. To be established, with ‘real influence over gain planning consent the project spending on compensation and over will need parliamentary backing for the airport’s operations’. either a National Policy Statement or a There should be incentives to travel to hybrid Bill. the airport by means other than car, Transport secretary Patrick McLoughlin, through measures such as new rail in a statement to parliament, praised investments. A congestion charge for the ‘clear and reasoned’ report. He motor vehicles should be considered. promised to return in the autumn with One of the most critical considerations ‘clear direction’ on the government’s for the airport is air quality. ‘Additional plans. He added: ‘All those with an operations at an expanded Heathrow interest in this important question are must be contingent on acceptable expecting us to act decisively … And performance on air quality,’ the we must act.’ But what form that report said. action will take remains to be seen.
Roads
One of the final actions of the last government was the transformation of the Highways Agency into the new arm’s-length company Highways England, and the introduction of a 5-year road investment plan.
In its new guise, Highways England should have greater freedom to offer competitive salaries and attract high‑calibre staff. The 5-year plan aims to remove the short-term, stop–start nature of road investment, ending the recurrent tendency of successive governments to overturn their The government will predecessors’ decisions. commit to the biggest Secretary of state for transport Patrick programme of investment Using a similar approach to that McLoughlin has reaffirmed the in roads since the 1970s adopted for rail, the investment government’s commitment to the full plan seeks to give contractors and £70 billion of transport investment over suppliers confidence to plan ahead, this parliament, and the budget for which will result in them being able the strategy is ring-fenced, in theory to offer better value for money, the putting it outside the scope of normal Department for Transport believes. departmental spending decisions.
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The schemes in the investment plan to use the hard shoulder as a fourth will form part of Highways England’s lane at peak times. The £1.5 billion performance specification for the cost is committed: within 8 years there next 5 years: this will be scrutinised should be continuous smart motorways by the Office of Rail and Road (the between Liverpool, Manchester, reconstituted Office of Rail Regulation) Leeds, Birmingham, Bristol, London, and, from the users’ point of view, by Southampton and Portsmouth. Transport (formerly Passenger) Focus. Looking further ahead, six feasibility Overall, the hope is that a cross-party, studies in the first 5-year strategy will multi-parliamentary consensus can inform decisions on what goes into be built to allow the programme to the second. The most eye-catching be followed through irrespective of of these will look into the cost and changes in government. feasibility of a long Pennine tunnel. The The 5-year plan makes a bold attempt existing trans-Pennine route connecting to tackle some of the longest standing Manchester to Leeds and Sheffield and most intractable problems on the is of poor quality, with limited scope road network, such as the A303/A358 for improvement because it passes and A30 strategic route to the west of through the Peak District National England. Here, the new ‘expressway’ Park. Previously the Department concept, to make strategic A-roads for Transport has shied away from consistently dual carriageway with consideration of a tunnel, but, in grade-separated interchanges, will the climate of Crossrail and High be pioneered. Speed 2, it is considered worth at least investigating whether there is a case The A303/A358 will receive the for serious expenditure. expressway treatment to become dual carriageway from Amesbury to the M5. Although the overall reforms were This will include one of the strategy’s welcomed in many quarters as long most high-profile commitments, to put overdue, initial responses to some of the A303 in a tunnel at Stonehenge. the proposals, such as the reopening Given the length of the route and the of the question of a Stonehenge fact that it includes sections of single tunnel, have shown that their and dual carriageway built to diverse capacity for controversy remains standards, the complete programme as great as ever. The Campaign for will take 14 years and cost £2 billion. Better Transport has called on the Consideration of possible alignments government to reconsider its roads for the Stonehenge tunnels is an priorities and give more consideration immediate priority. to local roads. It questions the wisdom of spending ‘huge sums … on big new Further west, the A30 in Devon major road projects which will increase and Cornwall will also become an traffic and pollution, while there is a expressway, creating a continuous £12 billion backlog in maintenance of dual carriageway as far as Camborne, local roads’. 15 miles from Land’s End. The question of whether funding will The other key feature of the strategy be available was partly answered by the is a highly ambitious plan to extend Chancellor’s announcement in the July smart motorways from the current 70 2015 budget that vehicle excise duty miles to 650 miles, to make the ‘core’ would be reformed from 2017 and motorway network consistently ‘smart’, ring-fenced for its original purpose: to with variable speed limits and the ability create a roads fund.
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Transport for London
The reward for the financial and managerial competence that Transport for London (TfL) has demonstrated since it was established in 2000 was the financial settlement it received in the 2013 spending review. This gave it a capital budget of around £1 billion annually, plus annual borrowing of £600 million, for the 6 years from 2015 to 2020. It was a vote of confidence in projects such as Crossrail, and confirmed the continuation of the Tube upgrade.
This confidence was further demonstrated by the Department for The Prime Minister visits Transport’s continued willingness to Crossrail as tunnelling is phase should not be underestimated. completed transfer responsibility for suburban Services through the central tunnel commuter rail services to TfL, following from Paddington and Liverpool Street its success in transforming underused are due to begin in 2018. national rail lines, which became London Overground. To these were added, at the The financial settlement secured the end of May, the West Anglia suburban continuation of the Tube upgrade, routes from Liverpool Street. Stations which after a decade is increasingly on these lines are now continuously bearing fruit. Late last year, the staffed while trains are running, Oyster is Northern Line signalling upgrade accepted and new rolling stock is on the was completed 6 months ahead way. Proposals to take over Southeastern of schedule. It follows the Victoria services to Dartford, Sevenoaks and Line upgrade, which was completed Hayes at the same time were rejected. in 2012. In addition, stopping services between Liverpool Street and Shenfield in Essex Last year, TfL began the procurement were transferred under the temporary process for the ‘new Tube for London’. brand TfL Rail. These will, in due It plans to order 250 trains to enter course, become the eastern end of service from 2023 in its biggest ever Crossrail services. rolling-stock order. The trains will run on the Bakerloo, Central, Piccadilly, Crossrail, TfL’s flagship project, appears and Waterloo and City lines. Repeating to be progressing well. The tunnelling its strategy for the shallow ‘subsurface’ machine ‘Victoria’ made the final lines, TfL believes that the adoption of breakthrough into Farringdon station a common design for the three lines, on 26 May, to complete 26 miles replacing a number of train types of tunnel. Now begins the equally of different ages, will bring about challenging task of fit-out, laying efficiency savings in maintenance and tracks and installing the signalling, running costs. communication and station systems needed for running a railway. The The upgrade has allowed the Tube to project is on time and on budget so far, carry record numbers of passengers although the complexities of the fit-out with its greatest ever level of efficiency,
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the number of breakdowns reducing system automatically applies capping if as antiquated signalling systems are individual journeys add up to the cost progressively replaced. of a daily or weekly season ticket. Four million contactless cards were used in Often overlooked, London’s bus the first 8 months of the service. network continues to carry increasing numbers of passengers – every Where the funding settlement was less day, London’s buses carry as many generous was in TfL’s current general passengers as buses in the rest of the revenue grant, which subsidises day-to- country put together. day running of the system. This will drop One of TfL’s greatest successes is to zero over the next few years. TfL has its pioneering of smart ticketing. set up a new commercial development In September last year, contactless arm that is working on ways to cover ticketing was introduced, allowing this by converting underused assets into passengers to use a contactless bank revenue streams through investment in card on the Underground, London commercial activities in and around the Overground, buses, light rail and network. It aims to raise £3.4 billion in national rail within the TfL area, in the revenue over the next 10 years – a 40% same way as Oyster. The system went increase on previous proposals, through live with none of the teething troubles, activity such as property development crises or cost escalations associated on sites it owns, as well as improving with many public-sector IT projects. The retail facilities on its stations.
Smart ticketing
For years, a transport revolution Elsewhere, the government-backed catalysed by smart ticketing has been ITSO specification was developed to just around the corner, it seems. create a standard under which cards Advantages include the ability to buy, issued by different operators could renew and top up tickets online and all potentially be recognised by each avoid queuing at ticket offices, security other’s equipment and software against loss of a valuable season ticket, systems. ITSO cards can also be used and the ability to check your journey for non-transport functions – as library history. Most importantly, smart tickets cards, for example. were meant to usher in an era of The adoption of ITSO for concessionary seamless journeys by rail, bus or tram travel cards for the over-60s and and using different operators. disabled people helped to generate critical mass, and encouraged operators Outside London, the revolution has to fit their buses with ITSO-compatible London’s famous been slow to arrive, despite being ticket machines and card readers. The transport smartcard has championed by transport secretaries revolutionised the way integrated transport authorities in the at least since Lord Adonis, and by people pay for travel larger English cities continued to work around the capital transport minister Norman Baker in towards multi-mode, multi-operator the coalition government. The UK’s big cards – but progress was slow. smart ticket success story has, of course, been London, with the Oyster card. In the second half of the coalition But London is a special case because government Baroness Kramer Transport for London is free to specify became transport minister, and she the ticket system and fare structure. sought to impart some momentum.
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She identified fragmentation in the transport industry as the key barrier. She was able to use the clout of the Department for Transport (DfT) to get operators around the table to hammer out solutions and inject urgency into the process with a number of initiatives, impressing on the participants that the DfT had invested significant sums in smart ticketing and was not prepared to wait forever for results.
For rail, an early decision was taken Baroness Kramer attends to focus on the south-east England the annual Cenex Low commuter belt, linking in with The Holdall multi-operator ticket was Carbon Vehicles event in 2014 Transport for London (TfL), through the launched last March for use initially South East Flexible Ticketing project. on Norwich park-and-ride services, Last year, Southern’s The Key and Essex replacing conventional weekly, operator c2c’s Smart cards were the 4-weekly 12-weekly and annual first on which TfL travelcards could be season tickets. ‘A lot of companies are loaded in addition to the operator’s benefiting from this one workstream,’ own tickets, so that passengers from said Baroness Kramer. Essex or Sussex can travel between their home station and all around TfL’s A third initiative, the Smart Cities system using a single card. Partnership, is seeking to encourage multi-mode, multi-operator ticketing On buses, virtually all concessionary on bus and rail. Founded in October travel takes place using smart tickets. 2013, it brings together Manchester, The issue was to get mainstream travel Liverpool, Sheffield, Birmingham, tickets on smartcards. With a few Leeds, Newcastle, Bristol, Leicester and exceptions, such as Oxford’s smartzone Nottingham. The DfT has been holding project, it was particularly difficult regular round table meetings to work to persuade operators to collaborate through issues that continue to hold up on multi-operator schemes. Solent, progress. And last December, the big Birmingham and Merseyside are five bus operators made a commitment among those now moving forward on to introduce multi-operator flexible multi‑operator ticketing. ticketing in all the cities in the partnership by the end of this year. A pilot led by Norfolk County Council aimed to fit the county’s entire bus The announcement took many by fleet with smart technology and surprise, coming just a few days make smart ticketing work for small after Chancellor George Osborne operators, for whom the cost of announced plans for devolution to installing smart equipment can be Manchester that would include bus overwhelming. The pilot set up a franchising and a unified ticket system. ‘managed service’ with a shared back ‘I think the Manchester devolution office, which smaller companies can announcement concentrated minds,’ simply buy into, keeping the cost said Baroness Kramer. ‘But [the within their reach. By February this big five] couldn’t have made the year, 99.8% of Norfolk bus services announcement if they hadn’t done had ITSO-compliant ticket machines. the background work.’
14 | reiw v e of the year TR ANSPORT EDITION
FedEx
Our global air-and-ground network to speed delivery of time-sensitive shipments Michael Holt, Senior Vice President, European Operations more connected world means more opportunities. At FedEx, we provide UK businesses with the ability to ship across the AUK and enter international markets seamlessly. FedEx offers the best of both worlds – global reach backed by local expertise.
This means our customers can easily gain access locally to 95% ABOUT FEDEX of the world’s GDP within 72 hours. Facilitating trade is at the heart of our company, and with the rise in e-commerce, enabling » Number of team members worldwide: 325,000 businesses to cross borders is even more vital. » 11 million shipments each business day (average volume) Reaching growth potential » Number of aircraft worldwide: 647 Trade is the lifeblood of the global economy and is at the heart of what continues to make FedEx the world’s largest express transportation company. With the UK » Countries and territories Government setting an ambitious target of doubling exports to £1 trillion by 2020, reached: 220 companies must seek new global trade opportunities to remain competitive. For » Number of packages sorted in businesses to reach this target and for small and medium-sized companies (SMEs) an hour at the FedEx domestic to achieve their international potential, they need to be trading in the global hub in Stoke-on-Trent, UK: marketplace, for the largest economy in the world is no longer the economy of 28,000 any one country – it’s the global trade in goods and services between nations. To put the size of international opportunities into perspective, the UK’s population is » Number of FedEx depots in equivalent to 0.88% of the total world population – and to reach the remaining the UK: 62 99% of the world, we have to encourage exports.
International trade triggers and facilitating trade The rise in e-commerce business has also triggered international trade opportunities and is likely to play an increasing role in facilitating cross-border businesses. We
FEDEX | 15 THELA PAR I MENTARY REVIEW Highlighting best practice
Night flights allow UK exports to reach emerging markets by ‘next day’
have helped UK businesses connect international borders in a faster and with international opportunities and efficient manner. we aim to continue to do so to help the UK remain competitive. To enable We need government support to this cross-border business to grow, realise these trading opportunities. the use of night flights is paramount In order to facilitate trade, barriers to our business model – we place a to entry must be overcome. In other strong emphasis on the continuation words, we hope to see fewer trade of night flights, as it allows UK exports restrictions and more investment in to reach emerging markets by ‘next infrastructure. Modernising trade rules day’. By offering these express services to streamline customs procedures and and next-day time-definite deliveries, harmonisation of regulatory processes UK businesses are able to navigate will open up even more opportunities for businesses of all sizes to participate » FEDEX EXPRESS MILESTONES in the global economy. At FedEx, we have seen the results from the trade 1973 FedEx Express began operations agreements currently in force and have 2006 FedEx Corp. acquired UK-based ANC, to be run as a wholly a strong interest in the completion of owned subsidiary of FedEx Express EMEA the Transatlantic Trade and Investment 2007 FedEx Express announced that ANC to be rebranded as FedEx UK Partnership (TTIP). We believe that 2014 FedEx Express marked its 30-year anniversary in the UK TTIP is a great opportunity to integrate more closely the world’s largest trade 2015 FedEx Express celebrated 30 years of operations at the FedEx and investment relationship and help international gateway in Stansted, UK multilateral economic growth.
16 | FEDEX TR ANSPORT EDITION
» UK TRADE AT A GLANCE
» More than 50% of Britain’s trade is with the EU, and trading costs in the EU are some of the lowest globally » ƒ4 trillion worth of goods are delivered by European express delivery services, equivalent to 16% of European businesses’ sales revenue. This proportion is expected to increase to over 20% by 2020 » By 2020, the express delivery industry will directly employ 300,000 people we have seen throughout Europe the results from » The UK’s deficit on trade has decreased from £3.6 billion (November 2013) to £2.8 billion (May 2015) “ the trade
agreements
Future of trading explore how best to capitalise on their currently in British heritage. Ultimately there is no shortage in force and “ have a positive thinking about the UK’s We want to harness this growing exporting future. Over 94% of SMEs confidence and make the opportunities strong interest in feel optimistic about the year ahead; for British businesses to go global the completion with 8 in 10 believing their export sales even more feasible. There is a need will increase again over the same time for open trade and increased access of TTIP period. With this increased confidence, to overseas markets. If our country now is the time to encourage UK SMEs wants to ensure business growth to embrace their British identity when then we need to continue to support building global relationships. With UK commerce in order to capitalise 80% of SMEs who export believing on international trade and drive the that being a British brand gives economy forward – connecting UK them a competitive advantage when businesses worldwide. exporting, more UK businesses need to
Express delivery is central to the UK economy
FEDEX | 17 THELA PAR I MENTARY REVIEW Highlighting best practice
Twente Express
Twente’s £500,000 fleet investment is paying dividends Twente founder Trevor Paul celebrating 30 years uite simply we do ‘what it says on the tin’: 24- and 48-hour door-to-door parcel and pallet deliveries to Qand from the Benelux region – Holland, Belgium and Luxembourg. We have dedicated ourselves to serving this
ABOUT TWENTE EXPRESS geographical area for more than 30 years.
» Founded in 1984 by Trevor Paul and his wife Shawn We are the best in the field and the market leader in our sector because we:
» 94% owned by Trevor and » know our market inside out Shawn, the balance held » employ our own experienced and reliable British and Dutch drivers by the senior management » enjoy the strongest of relationships with our customers – more than 30% of sales team are from customers who have been with us for more than 10 years » 31 people employed at » have excellent partnerships of 30 years standing with our Benelux offices in Brownhills, West Midlands Dordrecht and Enschede » Benelux distribution depots » have a loyal and long-serving workforce who are passionate about customer care at Dordrecht, Enschede and » are innovative in our cost controls and business systems Brussels » have transparent door-to-door tariffs and remain competitive while still offering a » Currently averaging 3500 premium service deliveries each month » have had continuity of management and leadership for more than 30 years » have invested heavily in a modern tractor and secure trailer fleet » Operates own fleet ,with mega box trailers for » have an unblemished track record of safety and security. maximum security Taking on the ‘big boys’ The desire to do one thing outstandingly well should not be misconstrued as being unambitious or unexciting. We are happy to take on the ‘big boys’ of the freight
18 | TWENTE EXPRESS TR ANSPORT EDITION industry – and in fact have done just marketing, and so on. However, rapid that. A few years ago we came a expansion towards the end of that close second to TNT Express in the period, including a relocation from the Motor Transport Awards International original Lichfield site to the current Operator of the Year category to wholly owned distribution centre at find the most innovative, reliable and Brownhills in the West Midlands, also customer‑focused international road brought with it a drop in profitability operator in the UK. In this true ‘David and cash-flow issues. Our bank, The strong and and Goliath’ contest, coming second which we have been with since our to the giant that is TNT was truly formation, recognised this as a ‘one-off long-standing remarkable for a company that literally challenging period against a backdrop “ relationships started with one man and his van. of very strong performance’ and consequently supported us throughout we have with
Three key attributes of our business the period. To meet these financial praised by the judges in the Motor challenges we implemented a number our customers
Transport Awards underpin our of business changes to strengthen our reflect the success today: management team and give sales and » the real-time business systems used operational staff a critical awareness of culture of“ the to monitor and maximise our cost the importance of business generation company more controls, customer activity and gross and cost reduction. Among the new margins systems were: than any other » the strong and long-standing » Informative costing systems – to aspect relationships with our customers provide real-time information to » continued investment throughout rival that of any large international the 30+ years that we have been operator, and enabling staff to have operating. access to daily expenditure, profit and customer activity. The strong and long-standing » Daily consignment forecast relationships we have with our analysis – a dynamic report allowing customers reflect the culture of the staff to access live data on the number company more than any other aspect. and value of consignments exported We can honestly say that our team and imported on a daily basis. knows every single key customer Twente’s double-stack mega trailers have improved who calls up, and this personal optimisation and reduced our touch is vital to customer retention. carbon footprint Relationships are further strengthened by the assurance that we can give to customers that their products will be in the right place at the right time, whatever the circumstances. It is not by coincidence that our strap line is ‘… you couldn’t express it better’.
Navigating choppy waters As with any company with a 30+ year history, there have been some challenges along the way. The first 20 years represented growth and success – bigger premises, bigger fleet, more staff, more customers, more
TWENTE EXPRESS | 19 THELA PAR I MENTARY REVIEW Highlighting best practice
Success without compromise We are the proof that a smaller, privately owned company can set the standards and provide serious competition within its marketplace in terms of quality of service, innovative and efficient business systems, customer and staff retention, and investment.
Our continued investment – during good times and bad – reflects our resilience and determination to remain ahead of our competitors. Predictably, following a record-breaking 2014 in both sales and profit, we invested £500,000 in double-deck mega trailers and low-ride tractor units. Not only Office and retail deliveries are a are the newer engines cleaner and daily activity » Daily export/import trip analysis – more fuel efficient but the larger allowing us to see the gross profit mega trailers mean we can take 20% of each trip by trailer load and to more freight in one load – so reducing monitor trends and averages. journeys by a fifth and thus significantly reducing our carbon footprint. These systems, together with continued investment in recruitment, staff training, We can also rival our competitors in the quality of our operational marketing and fleet maintenance, and management team. Our most meant we were able to turn around recent appointment earlier this year previous losses, and we have shown is Matthew Verrall as Commercial pre-tax profits from 2005 to date. Director. Matthew’s strong 20‑year Other new initiatives, such as a strategic career in leading global freight partnership with the United Pallet companies shows he has the calibre Network, complement our services to drive the business forward to by providing cost-effective delivery even greater success and would be areas beyond our central location, and a huge asset to any company within further helped establish a pattern of our sector. growth over the next decade.
» THE TWENTE EXPRESS STORY What I believe we can show the industry as a whole is that we not only In January 1984, Trevor Paul and his wife Shawn spotted a gap in the compete with the biggest and the best market for a reliable and dedicated express freight service between the UK but we do it without compromising and the Netherlands. The couple secured their first contract with Dutch quality, standards or relationships. We manufacturing company Twente Graveer Industrie to carry gravure printing could do it cheaper; we could diversify cylinders to and from the UK. And so Twente Express was born and named and take the focus away from our core after its first international client based in Enschede. Its mission was to activity; we could chop and change provide an excellent, specialist service on a personal scale rather than a suppliers to get the best deals. We faceless pan-European operation. Strong relationships and unwavering choose not to do any of this. Crucially, loyalty to customers, staff and suppliers were key to its success. The we believe we are all the more mission and values remain the same, and the company is thriving 30 years successful because of this caring and later. 94% of the company is still owned by Trevor and Shawn, the balance respectful approach, coupled with our being held by the senior management team. simple desire to do what we do to the best of our ability. … you couldn’t express it better
20 | TWENTE EXPRESS TR ANSPORT EDITION
Hermes
Hermes sets the standard for home delivery Home deliveries are made by a network of over 10,000 local couriers he phenomenal growth of online shopping has created great opportunities and great challenges. Last Christmas Twas the busiest yet and saw annual online sales in the UK smash through the £100 billion barrier for the very first time. ABOUT HERMES The online retail association IMRG reported that £104 billion was spent in total, up 14% from 2013, and that forecast sales stand » Hermes is the UK’s leading consumer delivery specialist, at £116 billion for 2015. handling more than 240 million parcels each year » The company has achieved Hermes, based in Morley near Leeds, is one of the real success stories in the sector. business growth of 15% The company started life back in 1974 when, in a bid to overcome the power cuts every year since 2009 and postal strikes, Grattan Mail Order decided to launch its own home-delivery model. In 2009 it rebranded as Hermes, becoming what is now one of the industry’s » It operates a network of most recognisable brands. Today it is the UK’s leading consumer delivery specialist, over 10,000 local couriers handling more than 240 million parcels each year, second only to the Royal Mail. nationwide Its customers include a wide range of leading high-street, catalogue and online » 92% of the UK population is retailers in the UK, including Next Directory, ASOS, Tesco, John Lewis, Debenhams within 2 miles of one of the and Arcadia Group. 4,500 myHermes ParcelShops
Hermes provides a range of flexible and affordable delivery options to home, work, » Its first-time delivery success a neighbour, a safe place or to ParcelShop, and these include next-day, standard, rate for its standard service is international and Sunday deliveries. This means that retailers can let their customers an impressive 98.2%, which decide how, when and where they want to receive their online purchases, to suit exceeds the industry average them and their increasingly busy lifestyles. Home deliveries are made by Hermes’ of 92.4% unique network of over 10,000 local couriers, all of whom live in or near the » Hermes delivers on behalf community in which they deliver. As a result they know the area and often they of 40% the UK’s top 100 know the customers too, partly explaining why Hermes’ ‘delivered/attempted on retailers time’ rate stands at 98.2% – well above the industry average of 92.4%.
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Supporting SMEs and Saturday for a Sunday delivery, which is internet powersellers fully tracked.
Last year, The e-commerce revolution has also Carole Woodhead, CEO at Hermes UK, Hermes greatly benefited small businesses, explains: ‘The retail sector has been niche online retailers, eBay PowerSellers trading 7 days a week for a long time “ became the and Amazon Marketplace sellers. In now, and by introducing this service recognition of this, Hermes launched we are giving online shoppers the same first consumer its myHermes online delivery solution, service. We recently commissioned some delivery which provides a range of flexible and independent research that found that affordable delivery options. The service two-thirds of online shoppers found company to has proven extremely successful, Sunday deliveries appealing. Quite
offer its retail doubling its turnover year on year. simply, it fits around their increasingly myHermes is also helping these busy lifestyles and is often a day they
customers businesses to streamline their can guarantee being at home.’ operations and maximise efficiency 7-day coverage,“ Hermes also launched the 3 Click by fully integrating with a number Returns Service that allows customers with the launch of e-commerce platforms such as to organise return delivery of unwanted of its Sunday Linnworks, eBay, Amazon, Shopify and items online in just three clicks on a ChannelAdvisor. dedicated website, which includes the service ability to track a parcel to its destination. Investing in innovation According to research commissioned by Hermes, one in four fashion items is Hermes UK has grown in excess of returned to the retailer, so getting the 15% every year for the past 3 years. returns process right is vital for both The company’s profitable operations retailers and their customers. enable it to invest significantly in its infrastructure, development and IT systems, regularly bringing innovative Setting the green agenda new products and services to market. As retailers undertake new measures to Last year, Hermes became the first become more energy efficient and to consumer delivery company to offer reduce waste, delivery companies also its retail customers 7-day coverage, have a major responsibility to become with the launch of its Sunday service. more sustainable, especially considering the extensive transport networks that Our 100% electric zero-emission This is available as a next-day service, vehicles make carbon and with customers able to order all day are in constant operation. nitrogen emission savings for ‘last-mile delivery’ In 2015 a Hermes initiative to slash emissions significantly from its courier vehicles in London was welcomed by the Mayor of London, Boris Johnson. Using a 44-strong fleet of 100% electric, zero-emission vehicles, Hermes expects to save 146 tonnes of carbon a year, as well as reducing congestion. Working in partnership with Gnewt Cargo, Hermes aims to make carbon and nitrogen emission savings of 100% for ‘last-mile delivery’ within the city – the biggest commitment yet by a UK carrier to cut emissions in London.
22 | HERMES TR ANSPORT EDITION
British consumers show soaring confidence in online shopping Boris Johnson said: ‘Hermes is setting a the same local delivery experience in fantastic example for London’s logistics culturally different countries. companies, all of whom have their part to play in helping to improve London’s air quality.’ The road ahead Hermes’ latest annual Usage & Attitudes survey found that there Supporting international is still soaring confidence in online growth shopping, with 42% of British With the domestic e-commerce market consumers planning to shop online reaching saturation point, the next even more over the next year, and natural move for retailers is to grow 73% stating they are increasing the their businesses across the world. number of e-retailers they shop from. In particular, the demand for UK This is all great news for the sector, products, particularly fashion items, but only if it can continue to meet is high and growing, so Hermes has customer demands. launched an international consumer delivery service, enabling retailers ‘To manage this substantial growth seamless access to consumers in 20 efficiently, the industry must continue European countries. It also provides to streamline processes and prioritise a simple and effective cross-border innovation in order to meet rapidly returns service designed to overcome changing customer expectations. The the reticence of international customers retail sector has proven to be the very to buy from overseas websites due to best at doing this and the Hermes team concerns about returning unwanted is committed to matching that dedication items. The feedback so far has been and enthusiasm to ensure the end very positive, as the service enables consumer receives the highest levels of clients to expand their customer base service,’ concludes Carole Woodhead. with minimal IT changes, and offers
HERMES | 23 THELA PAR I MENTARY REVIEW Highlighting best practice ECM (Vehicle Delivery Service)
ECM’s livery provides a strong corporate identity Ray MacDowall, Founder and Chairman of ECM (Vehicle Delivery Service) Ltd he sale of new cars in the UK is undergoing unprecedented growth. With exports reaching record levels too, the Tdemand for vehicle transportation has never been greater. Specialist vehicle logistics companies like ECM have an essential role to play in supporting the car manufacturers ABOUT ECM (VEHICLE DELIVERY SERVICE) LTD and, consequently, ECM has been expanding its fleet of car transporters to keep up with the increased requirements from » Transports 1.2 million its customers. vehicles a year to 3,000 showrooms
» Operates 460 car carriers ECM is the UK’s premiere deliverer of new cars – finished-vehicle logistics. from 18 depots Established in Carlisle in 1977, a policy of gradual expansion, while maintaining a » Largest carrier in the UK focus on the UK market, has enabled ECM to build up an incomparable logistical knowledge and understanding. This, ‘steady as she goes’ approach is one of the » Multiple Global Awards reasons why the company has survived successive recessions. Most failures in vehicle Winner transportation result from overexpansion and underestimating the requirements » Customers include BMW, of what is arguably the most complex sector of the road transport industry. This Ford, General Motors, sector services one of the most sophisticated and challenging new-car markets in Honda, Hyundai, Jaguar, the world. Land Rover, Mazda, Mercedes-Benz, Mini, Market challenges Nissan/Renault, Toyota and Volkswagen Group The UK is unique in having new registration letters issued in both March and September, causing huge sales spikes. These spikes result in a massive 30% increase in delivery volumes lasting for up to 6 weeks at a time. With a finite capacity of car‑transporting equipment in the UK, meeting the demands of the market during these biannual peaks is a major challenge for the car carriers.
24 | ECM (VEHICLE DELIVERY SERVICE) TR ANSPORT EDITION
ECM is responsible to the car manufacturers for the timely delivery of their product – time is of the essence when it comes to the delivery of new cars. Factories have very limited space at the end of production lines, and if vehicles do not get dispatched from plants and ports on time it can result in costly production-line stoppages or delays to shipping.
Service is the whole ethos of ECM. It is not just something we talk about and promise, rather it is what we ensure we deliver to our customers. Our core values are quality, service and value. I have always believed these are the three foundation stones of a successful business. Too many businesses make Special nylon tethers secure service commitments to their customers vehicles to the car decks without properly evaluating their ability of how to operate as a vehicle logistics to fulfil those commitments. During service provider is a status not easily ECM’s lifespan I have impressed upon maintained in such a challenging and our managers ‘Don’t just say what you’ll competitive industry. However, it is one do but do what you’ve said you will do’, that, through a strategy of continuous which has earned us loyalty and a mutual improvement, we strive to live up to. respect from the car manufacturers. Recognition for Reputation for delivering on our Recognition for the quality and reliability promise is an important factor in the quality and of our service is something we are proud winning and retaining contracts, where “ reliability of of and which has manifested itself over price is always a key consideration for the years in an enviable array of global any customer, with finished-vehicle our service is industry awards. logistics being a fiercely competitive marketplace. something we Being selected by our customers as the industry benchmark and an example are proud of Championing change and which » AWARDS What makes ECM special is the value that
we create for our customers through the has manifested
Mercedes-Benz European Carrier efficiency of our bespoke network and itself over the Awards its operating system, SATS (Synergetic » 2013 Customer Dedication and Automotive Transport System). years in an“ Operating Excellence When ECM entered the industry, all it » 2011 Passenger Car Transport enviable array of had was one car transporter and one Automotive Supply Chain Global primary customer, a local Ford dealer, global industry Awards which required fleet cars to be delivered awards » 2014 Outstanding Achievement to its customers nationwide. The industry at that time operated in a very » 2013 Road Transport Company insular fashion, wherein manufacturers GM Global Supplier of the Year forbade the carriers to mix competing products on their transporters and » 2007, 2009 and 2010 dedicated fleets serviced lone contracts,
ECM (VEHICLE DELIVERY SERVICE) | 25 THELA PAR I MENTARY REVIEW Highlighting best practice
of a shared‑user approach to fleet management but pooling resources from a centrally controlled networked fleet could better flex capacity to suit market fluctuations. This provided improved reliability of service too.
Shaping our future ECM has always played an active part in helping to shape the future of transport, which, we believe, is best achieved by working in partnership with our contemporaries and engaging with government to raise standards and address issues posing a threat to the health of our industry. Volkswagen Group is ECM’s largest customer The fact that the British market loading outbound from the factories or has two sharp peaks means that ports and returning empty. extra capacity has to be provided to guarantee deliveries during these With no preconceived ideas of how two periods. This extra capacity has vehicle logistics should operate, the traditionally come from foreign lorries lack of a coordinated approach to working in the UK under contract managing fleet resources appeared to to British hauliers. So when in 2010 us to be an opportunity for significant the European Commission amended improvements in fleet utilisation. the rules governing the operation of Manufacturers were concerned about foreign lorries – the Cabotage Rules – losing what they saw as the inherent in order to restrict the number of loads reliability and quality of dedicated fleets moved by foreign lorries, that caused a delivering their products. However, real problem for us. ECM proved that not only could With support from ECG, the savings be made from the synergies Association of European Vehicle Eleven car loads can be 4.9 m high and 20 m long Logistics, of which I am the board member responsible for the UK and Ireland, the Society of Motor Manufacturers & Traders and the Road Haulage Association, we were able to convince the then Under-Secretary of State for Transport, Mike Penning MP, of the need for a solution. In July 2013, the government relaxed the Cabotage Rules in the UK, lifting the restriction on the number of loads carried by foreign car transporters during the March and September peaks. The collaboration between industry stakeholders and government in finding a solution is a great example of what can be achieved.
26 | ECM (VEHICLE DELIVERY SERVICE) TR ANSPORT EDITION
Pall-Ex
Pall-Ex delivers excellence in logistics operations across Europe
ogistics suffers from a tarnished reputation, with the ABOUT PALL-EX environmental impact, lack of skilled workers and financially » Pall-Ex specialises in the efficient, strapped hauliers often grabbing headlines. Yet the UK L cost-effective distribution of logistics industry employs more than 2.3 million people and palletised freight consignments has an annual worth of more than £96 billion. The sector is throughout the UK, Europe pivotal to economic stability, with the supply chain providing the and beyond backbone of the UK’s infrastructure. » In the UK, Pall-Ex members provide more than 7,500 vehicles and 5 million ft2 of In 1996, one business set out to offer a fairer deal to both hauliers and end warehousing, processing in customers, and to provide a more efficient way of moving freight. That business is excess of 9,000 pallets daily Pall-Ex. Almost two decades on, that vigour to revolutionise and lead the market » The Pall-Ex Group’s vision has never faltered and, with new challenges faced by the sector, Pall-Ex is forging a is to become the leading chain of operations that span Europe. pan‑European palletised freight network A very real concept » Pall-Ex’s hub-and-spoke model In 1996, renowned entrepreneur Hilary Devey was a businesswoman with an unites a network of more than idea that would change logistics for the better. Until then, movement of smaller 250 independent hauliers, palletised freight consignments had been financially and environmentally inefficient. forming a chain of operations Autonomous operators tended to defer customers’ deliveries until a full load of and delivering consistent consignments made it cost-effective for them to move their vehicles. This meant that quality services throughout freight would usually sit in a haulier’s warehouse for days. Alternatively, customers the UK and Europe had the option to pay a premium for a dedicated vehicle to move their freight. » Pall-Ex is poised to launch Hilary wanted to create a shared-user network of interdependent member hauliers, further partner networks which would collaborate to distribute freight quickly and cost-effectively. Each throughout Europe would collect and deliver in its own region, consolidating smaller palletised freight
P ALL-EX | 27 THELA PAR I MENTARY REVIEW Highlighting best practice
» KEY MILESTONES
1996 – Pall-Ex commenced operations from an old aircraft hangar in Wymeswold, Leicestershire. 1997 – Operations moved to a new hub in Gotham, Nottinghamshire. 1998 – Pall-Ex recruited its 50th member. 2001 – Pall-Ex distributed its two millionth pallet. 2003 – Pall-Ex’s new bespoke consignments and transporting these members, like all hauliers, had to face central hub was opened by HRH to Pall-Ex’s central hub for onward the loss of and reduction in customer Princess Royal. The network also delivery. Her partnership model would accounts. This, coupled with soaring fuel purchased Europe’s largest fleet of cut the number of journeys required to costs, left many businesses on the brink. compressed natural gas vehicles deliver consignments, slash fuel costs and achieved its ISO 9001:2000 and lessen the environmental impact. It is hardly surprising that the sector was Quality Management Standard. Vehicles would arrive at the hub full failing to attract new talent either. The 2004 – Pall-Ex processed its and leave full, maximising efficiency. media was awash with stories about the 6 millionth pallet and launched lack of HGV drivers and forklift operators, a live track-and-trace service. When banks refused to finance Hilary’s and the implications for the world’s 2008 – Pall-Ex achieved UK vision, she sold her car and home to supply chain. Meanwhile, the market network-wide ISO 14001:2004 raise funds. She travelled the country, was saturated by cheap, growth-focused accreditation for Environmental signing hauliers on her own, until she businesses. Hauliers faced slim margins Management, as well as OHSAS had enough members to form her and precarious finances as a result of 18001:2007 for Health and network. On its first night in the UK, customer demand for reduced prices. Safety Management, becoming Pall-Ex processed just over 100 pallets: As the founder of a network designed the first and only network to today, with operations spanning across to promote success, Hilary knew her be ISO accredited for quality, Europe, the Pall-Ex Group distributes members were being squeezed, and environmental and health and 20,000 pallets per night. she did not like it. safety management. Pall-Ex now runs its UK operations from 2009 – Pall-Ex’s model was a £12 million, purpose-built central hub exported to the Continent, in Ellistown, Leicestershire, employing A new direction launching a new partnership more than 200 people. Membership of Hilary believed all networks must raise in Italy. its UK network stands at 85 hauliers. prices to survive, because undercutting 2010 – Following the successful was proving unsustainable. She formed launch of Pall-Ex Italia, Pall-Ex a new investment strategy, focusing on a Rapid growth Iberia was launched. simple, quality offering that would deliver 2011 – Pall-Ex Romania was Now achieving a turnover of £75 million, value for members and service users in launched, introducing the Pall-Ex’s rise has been rapid yet sustained. order to reignite the core values of her palletised freight distribution Progression has been stimulated by network and raise industry standards. network model to Eastern Europe. continual investment, innovation and In addition, Pall-Ex unveiled collaboration. Growth in the UK was strategically TWINE, its pan-European IT controlled, with a focus on quality system, standardising operations accounts rather than freight volume. Rising to the challenge throughout the Pall-Ex Group. Resources were ploughed into positioning Despite success, the road has not always Pall-Ex’s UK operation as a centre of 2013 – Pall-Ex France commenced been smooth. In recent years, the best practice, ensuring all aspects of the operations. economic rollercoaster meant Pall-Ex business conformed to the highest
28 | P ALL-EX TR ANSPORT EDITION possible standards. This investment Pall-Ex continues to lead the way in fuelled strategic growth, allowing Pall-Ex offering a greener logistics solution. In to offer support to businesses affected 2014, Pall-Ex members’ vehicles were by the exit of competitor networks. filled to an average level of 97.64%, compared with 79.5% for competitor To help deliver her vision, Hilary network members. In the same year, restructured her group and UK board, Pall-Ex’s model saved 9,840 miles daily, appointing industry authorities who compared with traditional hauliers. shared her vision. Newly appointed quality assurance and security managers The Pall-Ex made an instant, network-wide impact, Flying the flag for UK logistics board knew working with members to reduce the As Pall-Ex continues to restore quality number of goods damaged, which to the sector, things are changing for “ that for the has seen insurance claims plummet the better. As of March 2015, there network by 63.7%. has been an average price increase of
5% across the network, showing that Emphasis was placed on staff safety to be truly customers are happy to invest in a too. Thanks to new health and safety quality, sustainable service. With others pioneering, procedures and monitoring, 35% fewer looking to follow suit, quality standards accidents occurred at the UK hub, technology “ are being driven upwards throughout resulting in 59% fewer workdays lost. the industry. would guide The Pall-Ex board knew that for Pall-Ex is well placed to offer a viable the direction of the network to be truly pioneering, alternative to inconsistent continental technology would guide the direction logistics operations, delivering excellence the business of the business. Over 4 years, throughout Europe. Pall-Ex is already £1.45 million has been invested in advanced negotiations to launch in developing Pall‑Ex’s bespoke, networks conforming to its highest multilingual, in‑house technology standards in both Benelux and Bulgaria. system, which is yielding results. The extra efficiency created by investment With Pall-Ex leading the charge, the UK in technology has contributed to a 45% logistics industry is now well placed to increase in European pallet volumes set the European benchmark. between January 2014 and 2015.
Pall-Ex has an average vehicle fill of 97.64%, considerably higher than the average pallet network figure of 79.5%
P ALL-EX | 29 THELA PAR I MENTARY REVIEW Highlighting best practice Advanced Supply Chain
Advanced Supply Chain provides a bespoke end-to-end service Our retail clients require an ‘agile’ methodology ver the past 20 years a combination of economic, technological and market forces has compelled transport Oorganisations to examine and continually reinvent their business strategies. Advanced Supply Chain is no different, ABOUT ADVANCE and we remain resolute visionaries for the sector, particularly SUPPLY CHAIN in the area of retail distribution. We are a bespoke provider of » Established in 1997 end‑to‑end, integrated logistics and supply-chain solutions for » Now operating from 8 sites more than 400 customers worldwide. in the UK
» 650 employees Retail distribution is no longer a mainland/pan-European activity, improving » £50 million group turnover international supply chains, turbulent raw material costs and the onslaught of » 200,000 deliveries per year e-commerce has made it a definite global necessity. Retail distribution used to be just about dropping the goods at the shop door; today it is imperative to » Key customers ASOS, the strategic plan of UK retailers. The need for ‘agile’ methodology has become George at Asda, Matalan, apparent for all Advanced Supply Chain’s retail clients, especially as supply chains, Debenhams, BHS the state of the market and business priorities remain changeable.
Innovative integration At Advanced Supply Chain we develop close partnerships and effective information links with our clients. Internal processes are becoming integrated and are spanning the traditional boundaries of outsourced logistics operations. The integration of Advanced Supply Chain into our clients’ retail distribution operations is difficult to separate from, or consider independently of, the strategic positioning and vision of the Advanced Supply Chain business model.
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Ten years ago, Advanced Supply Software-driven supply Chain restructured and completely The term ‘ASC e-business’ can be used re-engineered its operations to remain to describe our strategic adoption and competitive. The board made a development of our own in-house » NEW AND strategic decision to embrace ‘end-user ‘Vector end-to-end’ IT system, which has INNOVATIVE innovation’ – Advanced Supply Chain RETAIL accelerated our supply-chain effectiveness promotes innovation in-house because DISTRIBUTION for the benefit of our clients. existing products do not meet our or Ultra Finishing, a major our clients’ needs. Advanced Supply In this context, ASC e-business bathroom manufacturer, is a Chain identified end-user innovation specifically refers to the execution of prime example of innovative as, by far, the most important and the front-end and back-end operations integration. Twelve months critical source of innovative thinking, in a supply chain using web-based ago we were asked to help and a catalyst for integrating software. In fact, ASC e-business has ensure that the quality of operations and organisational thinking already had a significant impact for their supply chain was as with clients. our clients, but it is safe to say that good as their products. Advanced Supply Chain has only Many businesses focus on funding Working together we have scratched the surface. By adopting our research and development to boost reduced stock levels, freed ASC e-business approach, our clients innovation and maintain a competitive up warehouse space and can realise dramatic returns through reduced administration and edge. In contrast, our retail distribution efficiency improvements, better asset processes. The operation innovations have been developed by utilisation, faster time to market, is now benefiting from less formal on-the-job modifications reduction in total order fulfilment times increased productivity of practice, through exchanges with and enhanced customer service. clients and in-house logistics/supply- and output, and has chain experience. A large amount of Our in-house software platform increased the number of our success is down to incremental enables Advanced Supply Chain to daily despatches to their innovation that emerged from ‘best take collaboration one step further, customers. in class’ practice. Advanced Supply through coordination, integration Chain can cite bottom-up processes, and even automation of critical determined by close relationships business processes. The result is a with our clients, as major sources for much more cost-effective, speedy, new and innovative retail distribution reliable and a less error-prone retail enhancements for our clients. distribution operation.
Our in-house software platform enables us to take collaboration one step further
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» SUPPLY CHAIN Once our retail clients began to realise the Advanced Supply Chain believes in INTEGRATION promise of supply-chain integration, they training and developing managers for the BENEFITS CUSTOMERS discovered entirely new ways of pursuing future. Regardless of their formal title or For Menkind, which is both a business objectives, developing strategies the business unit they work in, managers high street and an online retailer, and operational models that were neither will focus increasingly on the concept apparent nor possible prior to their of an IT-enabled redesign of business our Vector software gives the partnership with Advanced Supply Chain. processes. Advanced Supply Chain has option to deliver products to only begun to explore the implications store or the customer’s home, and implementation of this concept, or to click and collect at a Innovation imagination and only a few other companies have designated location, through In the Advanced Supply Chain business, ventured into the area. Implementing interfacing with various third- innovation is the catalyst to growth. customer-driven processes that cross party software applications. In the past 3 years, Advanced Supply organisational boundaries is an intuitively Chain’s turnover has grown from appealing solution that has worked well a £19 million to a £45 million. The for our clients. target is to hit £100 million in 5 years. Our executives The organisation has established a The investment we have made in robust structure in order to retain a the training and development of our and managers competitive advantage for both its employees, instilling innovative thinking clients and its business. The board of along the way, and the capital investment “ have moved directors has created and nurtured an in our in-house technology mean that we environment of innovation. and our clients will be well equipped to away from succeed for many years to come.
traditional Our executives and managers have moved away from traditional ways
ways of of thinking and used change to their Valuable values advantage. The last few years have We can say with complete confidence thinking and “ been a time of risk but of even greater that Advanced Supply Chain knows how used change opportunity for ‘innovative’ third- to measure the value of things – key party logistics (3PL) providers. The performance indicators, assets, employee to their world of logistics and supply chains is performance and financial results. changing with the increase in the use of However, with equal assurance we know advantage technology, and both 3PL providers and that some things in business, and in life, their clients have become increasingly are unmeasurable and without equal. competitive on the global stage. Advanced Supply Chain has discovered, just as surely as we have learned how to build and grow our business, that these things – the unmeasurables – are the essence that brings the ‘values’ of a business to life. Every day presents a new challenge and a new opportunity, and Advanced Supply Chain employees look forward to the tough calls, the challenging customers and the constant push to keep our business competitive in an ever-changing market.
But, at its heart, Advanced Supply Chain, like all operators in retail distribution, is in the people business. It is the relationships we forge – and the trust we create – that matters most to our success.
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Vantec Europe
VEU provides storage and delivery solutions to some of the antec Europe limited (VEU) is a dynamic, third‑party largest and most demanding manufacturers in the world logistics and freight-forwarding provider, with its Vheadquarters in Sunderland, Tyne and Wear. It is part of a larger organisation, Vantec Corporation, a Japanese company that became a wholly owned subsidiary of Hitachi Transport ABOUT VANTEC EUROPE LTD System in 2012, following a shares takeover. VEU has now 2 become part of a leading global third-party logistics supplier » More than 1 million ft of warehousing space in the UK and subsidiary of Hitachi Ltd, a Japan-based corporation with a footprint across many different industrial sectors worldwide. » More than 1,000 employees » Currently 12 European logistics sites With extensive knowledge of and experience in just-in-time logistics, VEU has provided tailored solutions to automotive, manufacturing and construction services for 25 years. Its core services – warehousing, local transportation, JIT sequence/ synchro delivery, returnable packaging control and freight forwarding – are complemented by bespoke competencies including rework, sub-assembly, line‑side support, consultancy services, and design and implementation of warehouse management systems.
Operating out of more than 1 million ft2 of warehousing space in the UK alone, VEU has the capability to provide just-in-time storage and delivery solutions to some of the largest and most demanding automotive manufacturers and key original equipment manufacturers in the world.
Initially established in 1990 solely to provide services to Nissan Motor Manufacturing UK (NMUK) in Sunderland, VEU has undergone expansion and experienced several management buyouts under its parent company, Vantec Corporation. In March 2012, when Hitachi Transport System acquired 100% shareholding of the Vantec
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Corporation, VEU became part of » SOME KEY VEU one of the largest third-party logistics SERVICES providers worldwide. » Bespoke third-party logistics VEU prides VEU has the ability to plan, create » Warehousing and management and execute completely seamless, » Outsourced internal logistics itself on its integrated processes and systems, » Ocean/road/rail/air freight offering each customer a personalised » Customs clearance “ flexibility to and flexible service in order to meet adapt swiftly diverse requirements, allowing them to » Consultancy and project
focus on their core business activities. management to changes VEU’s expansion beyond Nissan and » Fully tailored solutions
in industry its immediate supplier base, having developed successful, long-term by putting ‘logistics excellence’ at demand “ relationships with globally recognised the heart of its activities, and in companies including Cummins Engines particular setting up a logistics centre and grow Darlington (since 2001) and Komatsu of excellence to develop fit-for-purpose alongside its UK (since 2008), demonstrates the internal training at all levels and provide company’s ability to sustain a high service a benchmark for company excellence. customers level in order to grow organically. The centre is working in conjunction with Gateshead College to design, create and Being a Japanese-owned company, deliver courses that are Vantec-relevant, continuous improvement is part of VEU’s and therefore relatable for the 1000+ internal culture, and VEU prides itself on Vantec employees that will complete the its flexibility to adapt swiftly to changes courses over the coming years. in industry demand and grow alongside its customers, ultimately strengthening VEU strives to develop trusted partnerships customers’ production activities and with its customers, rather than just ensuring they remain efficient and one‑stop solutions, demonstrated cost‑effective. VEU has driven forward in largely by long‑term investments, such this philosophy over the past 12 months as the 2012 construction of a 38,750 m2 The 38,750 m2 warehouse purpose built in 2012
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VEU offers each customer a personalised and flexible service in order to meet their diverse purpose‑built warehousing facility under the newly formed Vantec Hitachi requirements (equivalent in size to seven football Russia (VHR) name. pitches), to accommodate the volume expansion of one of its key customers, In terms of strategic growth and NMUK. A further investment this year in aspiration, VEU continues to strive the form of another new‑build warehouse for active growth across the UK and facility, again close to the Nissan plant Europe, and has further developed its in Sunderland, is testament to Vantec portfolio of globally branded customers and Hitachi’s commitment to invest in in 2015 through supporting more key supporting the growth of their customers. manufacturers in both the automotive The facility, this time, is slightly larger and non-automotive sectors. in size, at 40,500 m2. VEU has the ability to plan, VEU understands the highly diverse create and execute completely needs of each individual customer, and seamless, integrated processes has the ability to tailor processes and and systems systems specifically in order to achieve the best and most efficient solutions for each. VEU works in partnership with the customer to develop the most relevant and up-to-date solutions, assuring the customer of an attentive, flexible, and continually evolving logistics service provider.
In 2012 VEU was awarded the warehouse and transportation business with Nissan in St Petersburg. Starting officially in July 2013, VEU now operates out of two warehouses (54,000 m2) 17 km from the production plant, working in partnership with a Russian company (Major) and
VA NTEC EUROPE | 35 Review of Parliament
Labour MPs rebel over welfare
The package of welfare measures and minimum wage increases at the heart of George Osborne’s budget created havoc on the Labour benches. For many Labour strategists, the perception that their party was soft on welfare was an important factor in their election defeat. But faced with the sweeping cuts proposed by the Chancellor, Labour MPs were unable to unite around their acting leader, Harriet Harman, who wanted to abstain on the second reading of the government’s Welfare Reform and Work Bill. This lowered the cap on how much a household can The government’s receive in benefits and limited child post election Welfare tax credits to two children per family – Reform and Work Bill future.’ He visibly enjoyed the discomfort caused dispute within although it would only begin to apply to of Labour MPs. the Labour party children born after March 2017. For Labour, shadow work and pensions The former social security minister, minister Stephen Timms supported Helen Goodman, led the internal dissent some sections of the Bill but criticised with a ‘reasoned amendment’ to kill the the government for – as he saw Bill, which attracted the signatures of 60 it – dropping the ambition to reduce Labour MPs. That forced Harriet Harman child poverty: ‘Instead of eliminating to propose her own amendment setting the scandal of child poverty, the Bill out which cuts Labour supported, but attempts to eliminate the term.’ also seeking to stop the Bill. The other parties in the Commons In the ensuing Commons debate, the opposed the Bill outright. The SNP’s work and pensions secretary Iain Duncan Hannah Bardell said it would push Smith said his Bill would target the ‘five children and families deeper into poverty, key pathways to poverty that affect and the Lib Dem Tim Farron, making his children’s life chances: worklessness, Commons debut as party leader, said educational attainment, drug and the government did not have to take alcohol addiction, family breakdown £12 billion from the poorest families in and problem debt. The Bill will remove the country, but chose to do so. the existing measures and targets in the Child Poverty Act 2010 and introduce Another important voice was that a new duty to report on worklessness of the Labour chair of the Work and and educational attainment … Our new Pensions Select Committee, Frank Field. approach will drive real action, which He said Labour should defend the three will make the biggest difference to the million ‘strivers’ who depended on most disadvantaged children now and in in-work benefits. They were ‘walloped’,
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government had no mandate for the Bill: ‘Throughout the election the Tories refused to say how they were going to save £12 billion from the welfare bill, because they knew that the measures would be unpopular and it would hit them in the ballot box.’
Another Labour MP, John McDonnell, was more graphic: ‘I would swim through vomit to vote against the Bill … We hear lots about how high the welfare bill is, but let us understand why A split of 48 MPs caused that is the case. The housing benefit Labour’s amendment to bill is so high because for generations the welfare bill to lose by he said, with many becoming £1,000 a we have failed to build council houses, 208 to 308 votes year or more worse off. we have failed to control rents and we have done nothing about the 300,000 But there was strong support from the properties that stand empty in this Conservative side, where influential country. Tax credits are so high because backbencher David Burrowes was pay is so low. The reason why pay is so jeered when he claimed membership of low is that employers have exploited ‘the workers and one nation party.’ He workers and we have removed the trade said the Bill could also be described as union rights that enabled people to be the ‘catch you when you fall Bill’ or the protected at work.’ ‘lift you when you can rise Bill’. By signalling a major change in welfare Helen Goodman, whose rebel policy, the Bill had exposed a serious amendment had caused such rift in Labour’s ranks. In the end, difficulty for Harriet Harman, said the 48 Labour MPs voted against it.
English votes for English laws
The Scottish independence referendum 300-year-old union of England and Scotland voted to stay was a near-death experience for the Scotland – and after a poll showing in the UK after voters the ‘yes’ side was in the lead, the rejected independence main party leaders had issued ‘the vow’, a promise of extensive further devolution. But on the morning after the referendum result, David Cameron had also promised to address the English question – the growing resentment at an asymmetric constitutional settlement that allows Scottish MPs to vote on English issues but does not allow the reverse.
The ramifications of this issue, and the prospect of a minority Labour government sustained by the votes of
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SNP MPs, became one of the dominant ifs, no buts, no committee limitations, no themes of the 2015 general election. tricks. Give us what we want … Will he And the issue was previewed when now join me in speaking for England?’ the Commons debated a government document – a command paper – The Conservative 2015 manifesto setting out the options for EVEL, or included a detailed scheme for those ‘English votes for English laws’. standing order changes, to allow an effective English veto on legislation – The options included a total bar on and those proposals were confirmed Scottish MPs voting on English and in July. But when the former Scottish Welsh legislation, allowing English MPs secretary Alistair Carmichael, a a greater say during the early stages of Liberal Democrat, employed a rarely consideration, and giving English MPs an used procedural device to secure an effective veto at the committee stage of emergency debate on the proposals on a Bill, and an English Grand Committee 7 July, it became clear that a number of the Commons, again with a veto over of key Conservative backbenchers were England-only legislation. deeply troubled by the implications for the future of the UK. To the regret of the leader of the Commons William Hague, Labour Mr Carmichael said the proposal was had not engaged in the debate. ‘It is one no Unionist should advance: ‘It is an issue that too many people have perfectly understandable for people avoided for too long and it can no in England to identify a national longer be put aside,’ he said. interest in response to the mood of Scottish nationalism forming north of Labour’s shadow justice secretary Sadiq the border, but the answer is not to Khan warned against hasty action: ‘what meet it with more nationalism. The we must not do, only months after answer is, I suggest a proper federal the Scottish people voted to keep our structure.’ He was interrupted by kingdom united, is allow the division of the Conservative Andrew Bridgen, our country by the back door. Nothing who accused him of ‘wanting to we do should jeopardise the future have his porridge and eat it’. Mr of the Union … uniting our country Carmichael insisted he understood is more important than uniting the that there was a problem: he simply Tory party.’ That was a swipe at David didn’t believe that the answer was Sadiq Khan, Labour’s Cameron, who faced criticism within his ‘trashing the Union and the United shadow justice secretary party for making too many concessions Kingdom parliament’. to Scottish demands –it had become increasingly clear that many of his troops The new leader of the Commons, would not support the promised further Chris Grayling, insisted the central issue devolution for Scotland without action remained one of fairness: ‘If members on the English question. of the Scottish parliament are in future to decide a Scottish rate of income One of the key advocates of EVEL tax … is it actually unfair that English was the former cabinet minister John members of parliament, or English Redwood, who argued that major and Welsh MPs, or English, Welsh constitutional legislation was not needed, and Northern Ireland MPs have the and that it could be brought in via a decisive say over tax rates that affect simple change to the standing orders their constituencies?’ of the House of Commons, on a single vote. He challenged Mr Hague: ‘England But perhaps the most influential expects English votes for English issues. contribution came from the Conservative We expect simplicity and justice now, no ex-minister Sir Edward Leigh, who
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For the SNP, Pete Wishart drew a lesson from history: ‘What we are doing is quite extraordinary. We have not done anything like this for centuries. It is of historical significance because it is of such constitutional importance … Back in the days of Gladstone, this was being done in order to curtail the voting rights of Irish MPs, and history is able to judge how successful that was in maintaining the Union.’ A point that attracted the support of the Democratic Unionist Sir Edward Leigh warned Ian Paisley, who warned: ‘no-one can that Scotland must be predict the crisis that could engulf handed ‘home rule’ to crystallised the anxieties of some of stop a ‘toxic mixture’ of Scotland, England, Wales and Northern his colleagues. He said votes on many circumstances destroying Ireland as a result of what is happening the union ostensibly English issues had knock-on here’. This was a crucial intervention financial consequences for Scotland because it made clear that the (known as ‘Barnett consequentials’ in government could not rely on the DUP parliamentary jargon). So, he warned, to bolster its slim Commons majority. preventing Scottish MPs from voting on those issues would hand the Scottish Faced with evidence that a small nationalists a grievance they would but influential band of its own MPs exploit: ‘Of course the SNP wants would not support its proposals, the independence [cheers from the SNP government retreated and promised benches] but why are we making it a consultative debate, after which a easier for them? …Why are we giving refined version of the standing order this gift to the SNP?’ changes will be voted on in the autumn.
Bercow ambush
It was a cunning plan, a last minute motion allowing them to put new ambush, intended to make Speaker business before MPs, at short notice. Bercow more vulnerable to removal But in the early evening of the at the start of the 2015 Parliament. penultimate day of the parliament, the It backfired badly. leader of the Commons, William Hague, The final pre-election week of any visited the Speaker’s office to inform parliament is usually devoted to John Bercow that the government legislative loose ends, resolving detailed intended to use those powers to debate disagreements between the Commons changing the way that the Speaker and the Lords about Bills still in the was re-elected at the start of a new legislative sausage machine. This often parliament. The current procedure is for involves motions being tabled and MPs to shout ‘aye’ or ‘no’ to the motion debates being scheduled at short notice – that the incumbent Speaker resume the and so few eyebrows were raised when chair. Only if there is significant dissent ministers pushed through a procedural is an actual division held, and in those
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circumstances the way each MP votes is a matter of record.
That, of course, is a significant deterrent to voting against a Speaker – MPs who support an attempt at removal, and fail, could face retaliation – not being called to speak, or only being called very late, for example. So, there was a democratic case for changing the rules – but this manoeuvre smacked of a coup against a Speaker who had been a thorn in ministerial sides, and who had made plenty of enemies on the Tory benches with his withering put-downs. More William Hague wanted a than that, Bercow’s procedural rulings secret ballot to decide the had frequently displeased ministers – plot against the Speaker on his last day Speaker’s future after the election and might present them with even as a parliamentarian, the leader of the greater problems in the event of a House has failed in his duty.’ Other MPs hung parliament. used phrases like ‘stitch up’ and ‘grubby Conservative MPs had been kept schoolboy intriguing’. in Westminster for a party briefing. As a noisy, angry hour of debate However, many Labour MPs had already continued, the killer blow came from left to start campaigning: if the rule a Conservative, Charles Walker, an change was to be blocked, they had to ally of the Speaker and member of get back. So, to buy time, the Speaker the powerful executive of the 1922 allowed three urgent questions, using Committee, which represents Tory up a couple of hours before the house backbenchers. Crucially, he also chaired reached the government motion. the Commons Procedure Committee. By that time, the Labour benches had The anger felt across the chamber filled up. William Hague was given seemed to take form around him a rough ride as he argued that the as he complained that he was not rule change was overdue, and that consulted about a debate on one of the government had simply seen a his committee’s proposals – and he good moment to give MPs a chance recounted how he’d attended end-of- to debate it. He was supported term parties and farewell drinks where by Conservative MPs like Michael there had been plenty of opportunity to Fabricant – a strong critic of the tell him what was planned. Speaker, who invited him to ‘pay His peroration – delivered with tribute to Mr Speaker who, on 20 July considerable emotion – was 2000 and again on 23 April 2009, devastating: ‘I have been played as advocated the need for secret ballots to a fool. When I go home tonight, I stop government whips “browbeating” will look in the mirror and see an MPs as to the way they might vote’. honourable fool looking back at me. I But Mr Hague must have been wounded would much rather be an honourable by the furious response from his Labour fool, in this and any other matter, shadow, Angela Eagle, who said the than a clever man.’ For the only time leader of the House was supposed to in a difficult debate, William Hague’s defend MPs’ rights: ‘I am sorry to say composure cracked. Many Conservative that by supporting this grubby little MPs were tearful. Labour MPs delivered
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an unprecedented standing ovation. In the May 2015 General Election, was that moment the motion was clearly that the new Conservative government lost – and Charles Walker became the did not orchestrate a challenge to the likely successor to Mr Bercow. And the Speaker. Mr Bercow was re-elected sequel, when the Commons met, after with no opposition at all.
Assisted Dying Bill
A powerful riposte came from the Labour peer Lord Cashman, who described how his partner of 31 years had died of cancer. His voice shaking with emotion, he said the circumstances of his loss shed some light on the question – in his distress he had wanted to commit suicide; his terminally ill partner had needed to have his death accelerated. That was an important distinction.
The crossbencher Lord Pannick, an eminent human rights lawyer, said Rule changes that would the idea that the public would not give terminally ill patients understand the Bill’s terminology was Attempts to change the law to allow the right to die was simply fanciful. But the Labour peer rejected by the House of terminally ill people to end their lives and doctor Lord Winston disagreed – Commons have cropped up regularly in the House elderly, confused, angry, distressed and of Lords in recent years – but the perhaps even deranged patients who latest, the Assisted Dying Bill, proposed arrived in hospital needed as much by a Labour peer and former Lord clarity as possible, he said. Chancellor, Lord Falconer, has proved the most serious yet. Private members’ Lord Deben, the former Conservative Bills in the Lords seldom have much cabinet minister John Gummer, said realistic prospect of becoming law, the Bill’s terminology should be stark, but this one produced a series of not soft – and the hearer needed to passionate and emotional debates. hear the word ‘suicide’, not ‘assisted dying’. But Lord Low, vice president Some of the most striking speeches of the Royal National Institute of the came during detailed debate – when Blind, suggested the real aim of the the crossbench or independent peer amendment was to give assisted Lady O’Neill tried to change its title dying the same stigma as suicide. to the Assisted Suicide Bill. She said it He thought the latter word was was about aiding and abetting suicide, inappropriate to describe the rational and just as truth in advertising was choice of a mentally competent, essential, so was truth in legislation. terminally ill person seeking a dignified, She was supported by the Labour peer peaceful death. Lord Brennan – who said the language had to be brutally clear, and the clearer The Conservative veteran Lord Tebbit the law the better the decisions people produced a copy of the Oxford English would make. Dictionary and quoted the definition
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it gave: ‘“Suicide, the act of taking one’s own life – self murder”. Can we settle the matter now?’ Another Conservative, Lord Dobbs, retorted that to end one’s life in a process involving doctors, nurses and a judge was not killing oneself.
The most powerful attack came from the disability campaigner Lady Campbell of Surbiton – who has spinal muscular atrophy. Speaking from her wheelchair, she said that like many people with disabilities she had experienced long Baroness Campbell of periods of depression, ‘but then things Surbiton could get better. When you, and if you, produced a muted, rueful gulp, rather get through that period … If in my case than a giggle from peers. a new ventilation system is developed, But the House voted to reject both you get better again. Maybe you have the attempt to change the title of a week, or a month, or as in my case the Bill and another amendment another 2 years. But during that weary for more restrictive rules on assisted low time when everyone is expecting dying. And both votes underlined the that this is the time that you are going strong support it has now built up in to die, you could easily take advantage the Lords. In the end, the Bill ran out of an assisted dying exit.’ of debating time, but its supporters The House listened in utter silence believe the extensive debate, and as she said she’d taken important changes, including the addition of decisions in those low periods. She judicial oversight to the process, have had not taken a pension because she produced a well-honed proposal that had always expected to die – and can be laid before the new parliament, her request that peers remember for another attempt to write it into the that when she asked for a free lunch statute book.
The first Euro-rebellion of the 2015 parliament
The sequel to the 10 November 2014 parallel with the May 2016 elections – row over the European Arrest Warrant which will include the elections for the was played out when the Commons Scottish parliament and for the mayor came to debate the detail of the new and borough councils of London. Conservative government’s European And it also included a relaxation of Union Referendum Bill – when it the normal ‘purdah’ rules, which became clear that many Eurosceptic restrict government activity that might Conservative backbenchers harboured influence the result in the run-up to an deep suspicions of their own leadership. election or referendum.
The Bill would have allowed a vote Both of these could be – and were – on British membership to be held in seen as an attempt to bias the
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made at governmental level during the last 28 days of the campaign, what would stop the Prime Minister doing a tour of the capitals of each of the governments across Europe – suspending Question Time in the national parliament – and stop their flying as one to London to announce a new commitment, a new undertaking, a new pledge, a new vow?’
The Conservative and former defence secretary Liam Fox said it was ‘unseemly at best’ for the government to exempt itself from the normal pre- The European Union election restrictions – underlining that Referendum Bill caused it was essential that the referendum unease within the referendum in favour of the pro-EU Conservative party process was seen as fair. He noted that side: London and Scotland were seen he had never, in 23 years in parliament, as pro-EU areas, where extra turn-out defied his party whip, and he urged the driven by their elections could produce government not to force him to do so additional votes for the ‘yes’ vote, and on this Bill. the relaxation of purdah would have allowed, Eurosceptics feared, the whole In response, Mr Lidington said weight of the government machine to the government would exercise be thrown behind the ‘yes’ campaign. ‘restraint’ during the referendum campaign, and he promised to bring Before the committee stage debate forward new amendments at the began, the government had next stage of consideration of the announced the referendum would Bill – the report stage – in September. not be held alongside the Scottish and Crucially, this was enough to ensure London elections – which left purdah that Labour would not back rebel as the main bone of contention. The Conservatives, allowing them to defeat Europe minister David Lidington wrote the government. to MPs, arguing that the purdah rules could inhibit ministers in carrying out But a rebel amendment from the the day-to-day business. veteran Eurosceptic Sir Bill Cash was pushed to a vote – and, although it But as the debate began, the former attracted only 27 Conservatives, no SNP leader Alex Salmond, newly one missed the significance of the returned to Westminster and now moment. The Conservative Eurosceptics his party’s foreign affairs spokesman, had demonstrated that they had predicted a re-run of the events the numbers and the will to defeat that he believed had swung the the government – if the other main 2014 Scottish referendum against opposition parties lined up alongside independence. ‘Let us just assume them. So, the government avoided that, to try to get the “yes” result embarrassment only because Labour that the Prime Minister wishes, he did not take sides against it. With a needed a last-minute initiative. With new Labour leader due to be elected in no rules or restrictions saying that the autumn, ministers cannot rely on new political initiatives should not be similar support in future.
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Danny Alexander’s last stand
Until 7 May, Danny Alexander was one the general election, but as a piece of of the four most powerful members parliamentary theatre the speech was of the coalition government. As the a failure. Lib Dem’s man in the Treasury, he sat on the Quad – the key committee Mr Alexander was never a great coordinating coalition business, parliamentary orator, and was heckled alongside David Cameron, George mercilessly by Labour MPs. At one Osborne and Nick Clegg. As the point, the Labour front-bencher number two minister in the Treasury Andrew Gwynn threw a copy of the he was a co-author of the final coalition coalition budget book onto the table budget, delivered on 18 March by in front of the chief secretary. He cut a Chancellor George Osborne. And lonely figure at the Dispatch Box. Only the following day, with an election a handful of Lib Dem MPs had turned looming, and pressure to put clear out, and there were catcalls, jeers and yellow water between the Lib Dems shouts of ‘bye’ from Labour when his and the Conservatives, it fell to him to leader, Nick Clegg, left the chamber deliver a Commons statement entitled while Mr Alexander took questions. ‘Fiscal responsibility and fairness’, which Labour’s Treasury spokesman Chris Leslie was billed as his party’s alternative was withering: ‘doesn’t he realise how budget. The attempt was not a success. two-faced he looks’. He complained Danny Alexander’s ‘Yellow that the statement was an abuse of the Budget’ was poorly Even before Mr Alexander began, the received procedures of the Commons. Speaker, John Bercow, intervened, to make clear that any ministerial statement There was no official Conservative had to be made on behalf of the whole response – but the backbencher Adam government, not just one component Afriyie pulled no punches: ‘I have to say of it. He said it would be unfair to the that I am stunned by this statement … House for a minister to use his privilege This is the Westminster bubble at for party purposes, and would put the its absolute worst, and it represents chair in an awkward position. everything that is wrong with politics today. The Liberal Democrats have The chief secretary did attempt to betrayed their voters, and their voters unveil an alternative economic vision know it; their own candidates are to that of his coalition partners: ‘Today now pretending to be independents; I set out a better economic plan for and today’s display is an absolute Britain … based on values of fairness betrayal of the role they have played as well as strength … [that] enables in government.’ our country to see light at the end of the tunnel. It is not a rollercoaster ride, A bruised Mr Alexander staggered to but a steady path back to prosperity. the end of his statement. Whatever the It sticks to the path we have chosen in virtues of the policies he announced, this government, rather than lurching they did his party little good. Seven away from it by cutting too much or weeks later he was out of parliament, borrowing too much.’ Essentially, he a casualty of the SNP landslide in unveiled the middle-way campaign Scotland, and his party was reduced to theme his party then used throughout a rump of just eight MPs.
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A Queen’s Speech for working people from a One Nation Government
Recalling David Cameron’s admission that he would not seek a third term as Prime Minister, she remarked that they were both interim leaders – and she promised the Conservatives that, with such a slender majority, they would not have everything their way. But there were ironic cheers from the government side as she confirmed that Labour had dropped its opposition to a referendum on the UK’s membership of the EU: ‘We believe that it will be better for Britain if we stay in the European Union. It is The Queen outlined the important for the future of this country, one-nation programme of the first majority It was a tale of the unexpected; after which is why 16- and 17-year-olds Conservative government an election campaign dominated by should have the right to vote in the in two decades speculation over the possibility of a referendum – it is their future, too.’ hung parliament, David Cameron’s Conservatives were now in government She warned that the economy, the in their own right, with a modest but constitution and public services remained definite majority. in a fragile state and that the benefits of returning economic growth were not Their Queen’s Speech was the first being shared. ‘Britain cannot succeed purely Conservative programme for with low-skilled, low-wage, insecure government since the distant days employment and a race to the bottom. of John Major. Conservative MPs – The path to economic prosperity and whose number included plenty of new recovery must involve a high-skilled, faces – were jubilant. Labour, which long-term approach.’ She added that almost till the last had expected to be Labour was sympathetic to another key in government, not opposition, was government policy, the idea of a new cap in crisis. The Liberal Democrats were on annual household benefit payments. reduced to a remnant, and the SNP had taken over as the third party in On the constitution, she said any the Commons, forming a confident, change to ‘English votes for English sometimes noisy phalanx in a corner laws’ should be built on the ‘broadest of the chamber, where a lively border possible consensus’. And she took a dispute with Labour MPs became one swipe at the SNP MPs, who all but of the running themes of the early wiped out Labour in their former weeks of the new parliament. Scottish heartland: ‘Of course the Scottish National party wants to break One sign of the change was the up the Union – it wants people to have appearance of Labour’s Harriet Harman to choose between being Scottish and to speak for her party. Five years being British – but it would be utterly before, she had been acting leader irresponsible for the Prime Minister to after the departure of Gordon Brown; continue what he did so shamefully now she was filling in again, following in the general election, which was to the resignation of Ed Miliband. set the English against the Scots … Let
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us be in no doubt: the worst possible membership referendum and would outcome for Scotland would be the then embark on negotiations to reform SNP demanding full fiscal autonomy, Britain’s membership terms. And while which they know does not add up, and he welcomed Labour’s support for the a Tory Prime Minister giving it to them.’ referendum, he noted: ‘If we had listened to the Labour Party there would be no David Cameron began his response with renegotiation and there would be no a barbed welcome for Harriet Harman’s referendum; there would be no choice.’ return as acting Labour leader. And he noted the presence of the former As Deputy Prime Minister the Liberal Scottish first minister, Alex Salmond, Democrat leader Nick Clegg had sat The Prime Minister did back on the SNP benches: ‘I notice that alongside David Cameron on the not fail to notice the attendance of former SNP he is now the foreign affairs spokesman government front bench. But the leader Alex Salmond in the for his party – for which I assume he election reduced his party to just Commons speaks on issues relating to England, eight MPs – that meant he had to sit Wales and Northern Ireland.’ on the backbenches and wait quite a while for the opportunity to deliver his He said the last parliament had thoughts: ‘my party’s parliamentary been about a ‘repair job’ on the UK presence may be much reduced in economy, and this one would be about size, but our mission is clearer than ‘renewal’. ‘This is the Queen’s Speech ever. As we did in the coalition for working people, from a one nation government, we will fight any attempt government that will bring our country to weaken the fundamental rights of together. We have a clear mandate our citizens, whether those enshrined from the British people, a long-term in the European Convention on Human economic plan that is working, a Rights and the Human Rights Act, or detailed and compelling manifesto, and those threatened by what sounds, we will not waste a single moment in getting on with the task,’ he said. from what I have heard today, to be a turbo‑charged snoopers’ charter.’ He announced that the government These themes were to unfold over the would legislate immediately for an EU early weeks of the new parliament.
The new government’s first budget
It was George Osborne’s seventh Labour’s election manifesto. It will budget, but his first completely come into force in April 2016 and Conservative one. And its sheer radical rise to £9 an hour by 2020. As it was sweep left political parties and interest announced, the work and pensions groups struggling to catch up. secretary Iain Duncan Smith could be seen punching the air in delight. The central element was a series of And as Conservative MPs cheered, Mr radical cuts to in-work tax credits, Osborne repeated the announcement new restrictions on housing benefit with theatrical flair – in case Labour and a reduction in the annual benefit MPs hadn’t heard it the first time. cap to £23,000 a year per household in London and £20,000 in the rest of The Chancellor hailed his proposals Britain. These measures were partially as a budget for working people ‘that compensated for by a new £7.20 an sets out a plan for Britain for the next hour national living wage for workers 5 years to keep us moving from a low- aged over 25 – an audacious raid on wage, high-tax, high-welfare economy
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When the Chancellor sat down there were ecstatic cheers from Conservative MPs, who sensed that he had produced an economic package with real voter appeal, and one that wrong-footed the opposition. Labour’s acting leader, Harriet Harman, promised to look constructively at proposals to cut welfare spending. But she warned that the new national living wage would not make up for the cuts to tax credits, and many families would suffer as a result. And she added that the budget was ‘less about economic strategy and more about political tactics to help him move Chancellor George next door [from 11 Downing Street to Osborne’s focus was the Prime Minister’s residence, No. 10]’. on cutting the welfare to the higher wage, lower tax, lower bill by £12 billion and The responses from a slightly punch- welfare country we intend to create’. boosting employment and drunk House of Commons reflected productivity in Britain He said the budget was the product of the need to fully digest an unusually a ‘one nation’ government, which had complicated and far-reaching financial been entrusted by the British people package. The newly re-elected chair to rebuild the economy on a stronger of the Treasury Select Committee, the footing. And he pointed to the Conservative Andrew Tyrie, suggested unfolding crisis in Greece as a warning that the recent electoral ‘bidding war’ of what could happen if this country had reduced the Chancellor’s room failed to deal with its borrowing. for manoeuvre, leaving too much of government spending ring-fenced One key announcement was that he from cuts, and he had not made his would continue to cut the deficit at the job any easier by tying his hands on same pace seen in the last parliament tax, by legislating to prevent increases – a pace that would see the UK move to the main taxes. But he thought this to a surplus in the 2019–2020 financial budget, the forthcoming spending year. That promise was underpinned announcements in the autumn by a series of measures, including the statement and the budget next year decision to restrict public sector pay would, taken together, provide a real rises to 1% per year, to replace student opportunity to secure the economic maintenance grants with loans and revival of Britain. to abolish permanent non-domiciled tax status. A less favourable assessment came from the SNP’s finance spokesman These measures would also allow the Stewart Hosie, who said that the government to meet NATO’s annual Chancellor had been wrong to suggest defence spending target for member that people living on benefits were nations, of 2% of GDP. The threat making a ‘lifestyle choice’ even if they that Britain might not meet that were trying hard to find a job: ‘their requirement had caused considerable lifestyle choice is to work, and they disquiet on the Conservative benches – should not be denigrated by someone so the announcement was greeted who has never been short of a bob with some pleasure there. or two’.
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Westminster Publications is grateful to Mark D’Arcy and David Fowler for their contributions to this publication.
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