Transport Act 1985 (Amendment) Regulations 2019

Baroness Randerson Excerpts

Monday 20th May 2019 Lords Chamber

Moved by

[Baroness Randerson]

That this House regrets that the Transport Act 1985 (Amendment) Regulations 2019 were laid before the conclusion of the judicial review of the Department for Transport’s current position in respect of community transport, and, given the potential impact of the changes in these Regulations on community transport operators, that they do not contain sufficient detail (SI 2019/572).

Relevant document: 23rd Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

[Baroness Randerson (LD)]

My Lords, these regulations are designed to amend the Transport Act 1985 to bring it into line with EU regulations on community transport. They are the culmination of two years of consultation by the Department for Transport and a lot of toing and froing between the community transport industry, the commercial bus operators and the Government.

The reason for my regret Motion is, I hope, clear in the wording I have used. The Government have been carrying out a consultation which many in the industry feel has been mishandled. They are going ahead with these changes while there is still a judicial review under way, which may or may not clarify at least some of the issues concerned. It is ironic that the Government, who are set on leaving the EU, are rushing ahead to try to align us with EU regulations long before receiving the clarity which the court case will hopefully provide. Once again, we must pay tribute to the Secondary Legislation Scrutiny Committee, which drew attention to the problems with these regulations and has led me to put this regret Motion forward today.

I will start with a bit of background. Most operators of public service vehicles operating for hire or reward require a PSV operators’ licence. Sections 19 and 22 of the Transport Act 1985 provide for exemptions to this. Section 19 permits allow an organisation to provide transport for its own members or people it exists to help. It can charge for this service, but the vehicle cannot be used for profit or to carry the general public. The sort of organisations covered by Section 19 permits within the community transport area include schools, churches, scout groups and so on, which own or use a minibus as part of their overall task, which is certainly not to run a transport system.

Section 22 permits allow a body to run a community transport bus service which can carry members of the public. That bus can be used for other purposes in order to financially support the community bus service. Community transport operators have traditionally used these permits to allow them to provide services in a sector that operates generally on very stretched finances. Historically, the Department for Transport accepted that, if you hold a permit, you automatically meet the EU’s non-commercial criterion. If you operate on a not-for-profit basis, you are non-commercial—that has been the accepted wisdom.

The EU regulation allows operators to be exempt from PSV licences if they have only a minor impact on the market. However, existing legislation in the UK needs updating to bring it in line with EU regulations. Hence, the Department for Transport embarked on a consultation. There is another complication because, since then, a commercial operator has launched a judicial review. The operator concerned is a small company that used to provide minibus services although, I believe, no longer does so. It is part of—or has formed—an organisation called the Bus and Coach Association, which is not to be confused with the bus and coach council. It is challenging the DfT’s approach to the non-commercial exemption.

While this judicial review is ongoing, the Department for Transport cannot update the meaning of the term “non-commercial”. Yet the result of the judicial review is not expected until 2020. Even then, the judicial review may not answer the questions that we are asking. Despite this, the Government are going ahead with these amendments to existing legislation. This means that they will be tightening up on some definitions while leaving a gap in others.

While the Department for Transport has made it clear that no local authority should cancel contracts until the outcome of the judicial review, many organisations in this socially valuable sector have, in effect, been left in limbo. The Government, however, have not issued the guidance necessary to go along with these regulations. They require an organisation that utilises permits to identify as an exempt body and to produce evidence of that.

I shall go through the various exemptions. The first is the main occupation exemption—that is, the school minibus type of exemption—which is mainly unchanged. The difference is that now you will have to provide evidence of that by 1 October. The second is the non-commercial exemption, the one that is subject to judicial review.

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[Baroness Vere of Norbiton]

I thank the noble Lord, Lord Berkeley, for asking that question. I will certainly have to write, as I do not have those numbers in front of me, but he makes an important and valid point and I will write to him.

There are three exemptions in EU law which can be used. The Section 19 and Section 22 permits guidance explain how two of them can be applied to the community transport sector. The first is the “main occupation exemption”. The guidance that we published explains how this exemption can be used by organisations whose primary activity is not transport; for example, schools, community groups or local authorities. We believe that this represents around half of the community transport organisations, which will fall into this group.

The second exemption is the short-distance exemption. This allows organisations which have a minor impact on the transport market, due to the short distances they travel, to be exempt. In defining 10 miles as a short distance, as noted by the noble Baroness, Lady Randerson, the Government believed that it was important to consider how these bus services work across the country. What is a short distance in a rural area may be a very long way in a big city, and rural areas are of specific concern when it comes to community transport. Where community transport operators provide bus services in rural areas, they have the flexibility to make the case that a short distance is longer than the automatic 10-mile distance. The noble Baroness noted some discrepancies in the application of the guidance. I would be grateful if she could share the specific pieces of evidence with me, then we will be able to review them and perhaps get to the bottom of what is going on.

Finally, the third exemption relates to the services which are non-commercial. The Government are not able to provide guidance on this exemption, as there is an ongoing judicial review in respect of it. However, as noted by the noble Baroness, Lady Randerson, the Government are clear that it would be premature for any local authority to end or withhold community transport contracts while this legal action is ongoing. The High Court has not yet given us a date for the hearing but we hope that it will be soon. Once the High Court has reached a decision, the Government will revise their guidance to give effect to it.

[Baroness Randerson]

Will the Minister extend that very welcome assurance and say that the Government will promptly contact the offices of the traffic commissioners to ensure they understand that that is the Government’s intention, and that they are not applying different rules?

[Baroness Vere of Norbiton]

Without having seen the evidence, I obviously cannot make that commitment right now but I should imagine that if we can give any further guidance, we will certainly do so.

The Transport Select Committee acknowledged that this uncertainty has already impacted some community transport operators—there has been lots of concern about it in Parliament. There are real costs from uncertainty and implications from doing nothing at all, so the Government are able to provide clarity on two of the three exemptions. Where community transport operators can use either the main or the short-distance exemption, they do not need to wait for a High Court judgment. They can plan for the future and deliver important transport services with confidence.

We recognise that in certain circumstances, according to the impact assessment, there will be an impact on some operators. We believe that 50% of the operators will fall under the main occupation exemption, but there is the extent to which the remaining 50% will be able to take advantage of the new short-distance exemption. We hope that many of them will really consider that option, and that we will therefore be able to reduce the number of operators impacted.

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It is clear from the Government’s consultation and today’s debate that community transport evokes strong feelings for many people. I sense that this may not be the end of this conversation. On our side, we are working closely with local authorities, the Community Transport Association, Mobility Matters and the Association of Transport Coordinating Officers, and will continue to do so over the coming months. I reiterate that we will continue to support the community transport sector, because it is terrifically important. However, it is also important to achieve the right balance for this sector, so that we build a bright future for community transport operators and the communities that they serve.

[Baroness Randerson]

I listened with great interest and thank the Minister for her response. I will review Hansard tomorrow and I promise to write to provide her with more information. I hope she will write to me to provide more information as a result, because this is such a valuable sector. It is so important to the survival of many of our rural communities and social links for many who are most at risk within our society. As I promised, I will withdraw the Motion, because my interest in doing this was to get the commitments from the Government that I hope the Minister will see through, following this debate.

Motion withdrawn.