HAULIERS are demanding tough penalties to stop foreign transport companies entering the UK and putting them out of business.

Haulage bosses in the region said there were fears that foreign companies were pricing them out of the market because they did not pay tax or toll fees in the UK.

The concern follows an influx of foreign hauliers offering to undercut local businesses, which have to pay huge tax bills when they drive across Europe.

Foreign hauliers also benefit from cheaper fuel abroad, paying half as much as their UK counterparts.

During a recent trip to Italy, C and N Transport Services, of Spennymoor, County Durham - whose main business is European transport - spent £338 on tax and road tolls.

Owner Karen Lawson said: "There are many foreign companies starting up in business now who are really knocking their prices down because they don't have to pay the toll fees and tax when they come over here.

"In the past six months I can think of ten companies that have switched to foreign hauliers. It's not because our prices are so high, it's because they can afford to do it for nothing but wages."

Recent Government figures revealed that 30 per cent of the international market was carried out by UK hauliers last year, compared with 53 per cent five years ago.

The same statistics showed that one in 12 truckers entering the UK were from eastern Europe - compared with one in 20 five years ago.

Steps being taken by the Government include introducing a lorry road user charge within the next four years to ensure that foreign hauliers pay their way.

But Anne Preston, chairwoman of haulage company Prestons of Potto, near Stokesley, North Yorkshire, said: "There are steps being taken, but it is going to take a long time for it to work and, in the meantime, the foreign drivers are going to get a stronger foothold in the UK."

It was a major problem and one that was worrying the industry tremendously, said Ms Preston, who sits on the board of the Road Haulage Association