Deregulation Bill

Debate between Baroness Kramer and Baroness Howarth of Breckland

Tuesday 3rd February 2015 Lords Chamber

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

For a moment, I thought your Lordships would have a very enjoyable debate with no opportunity for me to speak. Let me start by responding to the issue of why we are moving clauses ahead of our response to the Law Commission and—undoubtedly, some time in the next Parliament—primary legislation dealing with the much broader issues of the changing world of private hire and taxis. That is a huge area and there is significant work yet to be done.

There are two reasons for going early with these clauses. The first is safety. I point out to the noble Baroness, Lady Thornton, that subcontracting within a licensing district is permitted for everybody and has been for years and we know of no issues arising from it. In London 10 years ago this place and the other place agreed to subcontracting across districts to help deal with the problem of unlicensed cab drivers behaving in a criminal way and putting the public at risk. The noble Baroness, Lady Thornton, gave some numbers for sexual assaults in London but the category she described included unlicensed drivers as well as taxi drivers and licensed private hire drivers. Unlicensed drivers have been the real problem within London. Permitting subcontracting so that someone calling up a company can be assured that a car will come and get them instead of being told, “Sorry all our cars are taken”, makes them far less tempted to get into an unlicensed cab crawling along the street attempting to get their business. That was the driver behind subcontracting in London and those who talk to people with experience of this in London will recognise that it has indeed been helpful in increasing safety. However, one sexual assault is always too many: we have to be vigilant and there is a great deal more to do.

One of the reasons I support moving ahead with this is my own experience of being out in more provincial areas, calling every number I could find for local taxi firms and finding not a single car available. This happened to me when I was going to visit a friend in a nursing home in a country area. I was very glad that it was not dark, that I was not standing there with several small children and that it was not pouring with rain because I think that had an unlicensed cab come by and offered me a lift I might well have been desperate enough to take it. That is not a situation we want. This measure is largely designed to make sure that there is a car available when someone calls a reputable licensed operator.

The other thing I want to clarify—I think there is real confusion over it—is subcontracting from an operator in one district to one in another district. Each operator has to be licensed in their own district and each of them can give the job only to a driver and a vehicle that are both licensed in their same area. So if you call an operator in District A and they give the job directly to a driver, both the driver and the vehicle have to be licensed within that area as well as the operator. If Operator A were to subcontract to an operator in District B, as would be permitted under this change in legislation, then Operator B could give the job only to a driver who is also licensed in District B with a vehicle licensed in District B, so the chain of accountability remains. I want to make that clear because it seems there has been incredible confusion.

[Baroness Howarth of Breckland]

Can I just ask the Minister an honest question of clarification? In this age of technology, why can the person who has called the taxi not be told—because that is all that is being asked—that there is a different company coming and make the choice at that point that that is what they want to happen?

[Baroness Kramer]

Let me move on to exactly that issue because it refers to the first part of Amendment 4. We looked at this very seriously because consent is attractive. First, we looked at the existing situation. As I said, subcontracting across districts in London has been going on for a decade. We have never heard—and we genuinely asked around as much as we could—of anyone complaining that a car came to get them which was not from the firm that they called. You call the Yellow cab company in your area, and a cab from Sun arrives to pick you up. We have never found any complaints that people were not asked for their consent before that happened. So the question arises: is there a problem? Again, within individual districts, subcontracting has been permitted for as long as anyone can remember. We have not had any complaints and cannot find anybody saying “I wasn’t asked before the subcontracting happened within this licensing district”.

Then we looked at the practical application. The big companies—my noble friend Lord Deben underscored this—could probably handle it quite easily. For people who go to a website or an app to book a cab, some additional lines somewhere in the terms and conditions would probably cover the consent issue—not that I have ever met anyone who has ever read the terms and conditions. The burden will fall on small companies which rely on the telephone. When we first started to look at this, I was quite hopeful that a casual question such as, “Do you mind if we need to bring in a cab from another area?”, would do, but in this day and age, to be legally secure, in effect the operator would have to read out something very like those six or seven lines you would find in the terms and conditions. I suggest that would drive everybody batty. Small companies do not have legal staff on hand and creating that and having to say that routinely every time would be an imposition, particularly when we can identify no problem.

We want to make sure that small companies have flexibility. This brings me to the second reason why we have adopted these clauses because it is particularly important. It is that these are changing times. Small players will be able to create collaborations with other companies in another district to be sure that they will have a larger pool of companies. Their reputation is on the line and the original operator is always on the line for the booking. Having that greater reach of cars gives them the ability to compete against the big boys who, I suspect, would like to see many of them out of business. I am grateful to my noble friend Lord Ridley for enumerating the many other business benefits—not running empty cars et cetera. It is particularly important for small players to have that flexibility, and it is another rationale for bringing this forward ahead of the Law Commission.

I have covered some of the reasons why we are concerned about the consent language. It appears attractive on the surface, but when we looked at it, it was becoming an impossible burden, particularly on small players. The enforcement clause raised more questions. First, it is only with regard to a vehicle. We currently have that chain of accountability—operator, licensed vehicle licence, driver licence—within the same enforcement authority, which is important. This clause deals only with the vehicle licence. It also fails to recognise the reality on the ground—I am sorry; I have forgotten which noble Lord made this point. Local authorities can delegate enforcement powers on this issue to other local authorities. With increased subcontracting, which will primarily be across the borders of neighbouring districts, we would not be at all surprised if various local authorities decide to collaborate or to delegate enforcement powers. That has some economies for them and will streamline enforcement.

At the moment, cars constantly cross district lines. It is quite possible that the car you get into is taking you shopping in another licensing district or to see Aunt Sally in another licensing district, so local authorities are very used to having to deal with the fact that cars are coming from other licensing districts and to communicating with the licensing district for enforcement purposes. Therefore they have experience in this area and deal with it on a regular basis. I therefore suggest that we do not have a particular problem here, and that what has been presented is a rather clear and narrow power that, frankly, would not contribute very much to effective enforcement.