Deregulation Bill

Debate between Baroness Thornton and Baroness Kramer

Tuesday 3rd February 2015 Lords Chamber

[Baroness Thornton]

My Lords—

[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 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.

[Baroness Thornton]

The noble Baroness keeps saying that there is no problem here. Why then, for example, do the student unions all say that their agreements with local taxi companies will be undermined and that they have problems? Those campus universities have huge problems with taxi companies going from one district to another and with the accountability of those companies. The noble Baroness knows that, because she will have received the same information that I did from Warwick, Coventry and Huddersfield.

[Baroness Kramer]

I point out to the noble Baroness that she is describing a situation that exists today. I cannot answer to the individual situations, but it may well be that with a subcontracting arrangement in place it would be possible to have more secure arrangements for these various universities, which presently go to operators that cannot do the subcontracting that I have just described. However, there are many misconceptions about the relatively small changes that we are making and the benefits that they offer.

[Baroness Thornton]

These student unions are concerned about the safety of their students—that is their issue. The noble Baroness is dismissing those concerns and the safety issues that noble Lords have been asking her about. She needs to address the issues around safety here.

[Baroness Kramer]

I absolutely accept that safety has to be the primary issue. I make the argument that you could see these measures as only enhancing safety by making licensed vehicles or drivers more available to a wider range of people, through subcontracting from one operator to another. This system was adopted in London because it added to the safety of the travelling public. We have not allowed the rest of the country to have that benefit, and it is time we did. Having read much of the material that has come to me, I agree that there are many misconceptions around the clauses we have brought forward. However, it is important for us to look at the reality and make sure that we make these relatively small changes. Eventually there will be a major piece of primary legislation, so it is important that we do not pursue the amendments that the noble Baroness has brought forward and that we understand the benefits that will come from the clauses that have been proposed to provide for subcontracting across districts in the private hire industry.

--- Later in debate ---

[Baroness Kramer]

I am sorry, but I feel as if I am constantly bobbing up and down. Yes—we are preparing our response to the Law Commission.

[Baroness Thornton]

I thank noble Lords for this debate and for all their contributions. I agree with the noble Lord, Lord Deben, that technology has moved on—he is absolutely correct. However, the principle of safeguarding people is one that you would want to operate whatever the technology or lack of technology that is being used to order your taxi, whether you do that online or not. I thank the noble Baroness, Lady Howarth, for her contributions.

I need to be quite clear with the Minister that I have not said that we are opposed to flexibility. The Minister keeps putting this sally up, that we are opposed to the availability of more taxis. That is not the case; I have now said it twice on the record. In these amendments, we seek to ensure that people have a choice. The Minister dismisses the idea of consent in a very cavalier fashion; she says, in effect, “Consent is attractive, but we have looked at it and it is too complicated, so we are not going to go down that road”. Well, frankly, I do not think that is good enough. It is very important that people give consent as to whose cab they get into and when.

The Minister is right that local taxi companies will combine and provide a better service, and we want them to do so, but we need to ensure that it is done with the safeguarding of the travelling public in mind. That is what these very small and very modest amendments seek to do. I say to the noble Viscount, Lord Ridley, that we are not seeking to oppose these clauses. In fact, we are silent about Clause 10. We are seeking to make modest amendments to Clause 11 that address the issues of customer choice and the travelling public’s safety.

The Minister said that there were a lot of misconceptions out there. Well, frankly, if people are worried and have misconceptions, it is the Government’s job to put those to rest, and the Government have failed to do that. They have failed to make the student unions believe that their students will be safe with this legislation and failed to convince the Suzy Lamplugh Trust that this deregulation will make women safer. At the moment, the only things before the House are my amendments, which seek to do those things. I wish to test the opinion of the House.

Deregulation Bill

Debate between Baroness Thornton and Baroness Kramer

Tuesday 21st October 2014 Lords Chamber

[Baroness Thornton]

My Lords, I understand that the Minister has something new for the Committee, which it may be better to hear before we proceed any further.

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

My Lords, as you will know, the Government introduced three measures into the Bill earlier this year relating to the regulation of taxis and private hire vehicles. Although an extensive review of the legislation has been carried out by the Law Commission and its recommendations are being considered, the Government decided that three measures could be taken forward separately to help reduce burdens on businesses more quickly. This clause is one of those.

Its purpose was to allow the use of private hire vehicles for leisure purposes. Noble Lords will be aware that, outside London, a person who is licensed as a private hire vehicle driver cannot use the family car and therefore has to purchase a second car. At £20,000 or £30,000, or the lease equivalent, that is a barrier which denies people employment. It is an issue that we need to address at some point. It also means in particular that in a number of rural areas there is, frankly, a shortage of private hire cars and taxi services. Bringing in more of those vehicles and their services for local people could be helped by removing this barrier.

However, after the Government listened closely to issues raised about the way in which we have presented this clause, we have decided that listening, as we always do, is important, and concluded that although we can still see arguments for tackling this underlying problem—I think that there is general agreement on that—it would be better done as part of the package of measures recommended by the Law Commission in a broader reform of taxi and private hire vehicle licensing than through this clause.

It is therefore my intent—although I am not sure how the procedure works—to withdraw this clause, and I am delighted to have the opportunity to do so.

--- Later in debate ---

[Baroness Kramer]

My Lords, Clauses 11 and 12 cover separate, different but sensible measures. Obviously, a thought for safety penetrates all of our thinking as we address this range of issues.

To pick up on the issue raised by my noble friend Lord Bradshaw and explained by others, particularly my noble friend Lord Greaves, the amendments do not in any way change the rules on vehicle licences. Those are tough and carried out by local authorities and there is absolutely no change. If my noble friend Lord Bradshaw knows a firm that thinks it can run a £200 car for successful private hire and meet the standards, I suggest that he call the local authority. It would be extremely difficult for a car that has that kind of market value to achieve the standards that are rightly required by local authorities in licensing those vehicles.

Clause 11 aims to reduce the administrative and financial burdens on some taxi and private hire drivers. The measures we have included in the Bill, which I will address in relation to Clause 12, will also help to improve the experience of booking taxis and private hire vehicles. I join with others in saying that in making his case my noble friend Lord Greaves prayed in aid London. Both the measures in Clause 11 and Clause 12 are already the status in London. Indeed, when we turn to London as the example that we are trying to copy, that is exactly what Clauses 11 and 12 do. It means that we have a good history of the way in which Clauses 11 and 12 function.

Clause 11 will standardise at three years the duration of both taxi and private hire vehicle driver licences; and at five years the licence for a private hire vehicle operator. Shorter periods would be permitted only where there are specific circumstances around a particular application. For example, a local authority might decide that a probationary period was necessary. Typically the duration would be three years for the vehicle driver licence and five years for the operator licence. Frankly, it means that those people will not have to renew their licences as frequently as they do in some areas.

The Department for Transport carries out a biennial survey of licensing authorities. Our 2013 survey showed that nearly half of licensing authorities grant taxi and private hire driver licences for three years, so this is not a sudden revolution. A number of local authorities use a shorter term but we can see by comparing safety records that there is nothing to suggest that those local authorities that grant their licences at three years have an inferior record. That is important to note. When it comes to the operator licences, a number of licensing authorities routinely grant private hire operator licences for five years although the substantial majority do less than five years. Again, there is nothing to suggest that there is a difference in safety between one authority and another on the basis of those differences in licensing terms.

The Government therefore consider that this is an area of taxi regulation that would benefit from deregulation. By setting a standard duration of three years for taxi and private hire vehicle driver licences and five years for private hire vehicle operator licences life will be made a lot simpler and substantially cheaper for licence holders. We estimate that the measure will save drivers around £8 million per year and operators around £1 million per year. People who are in this trade are not wealthy people. They find it tough to make a living and any little help we can offer is valid when it is not putting safety at risk.

I appreciate that some stakeholders have expressed concern about safety implications. There may be a slight misconception. It is now the case that many licensing authorities that grant annual licences actually carry out criminal record checks only every three years. Although the licence is annual, the criminal records checks—the issue that has noble Lords exercised—are typically a three-year process. Of course, we are now saying that the standard for criminal records checks will be three years. That would be a relatively small change for most authorities. They will continue to do those formal checks. As I said, we have examples in London and in the many local authorities that already use that three-year cycle that it is not associated with additional risk.

Clause 12 will allow private hire vehicle operators to subcontract bookings across licensing boundaries. Again, this is a capacity that has been available continuously for London. The noble Viscount, Lord Ridley, made the case extremely well and illustrated the many situations in which this is an extremely important measure and the extent to which car hire companies outside London are put at a disadvantage compared with London operators. One of the main motivators behind this measure is that it is so difficult when people call a taxi firm that cannot provide a taxi and are then turned away. I have a relevant personal experience, which could have turned out to be extremely difficult. I was in Gloucestershire and going to visit an elderly friend in a nursing home. I got to the station and there was no one around. I looked at the board and started calling taxi firms and car hire firms and not one could supply a car. They explained to me that they could not call someone else because they would have to call out of the area and they could not do that. In such cases one would hope to have a mobile phone that is smart-enabled to get on to the web to try to find other firms in the area to call. I was glad that I was not a mother with three children, that it was not getting dark and that it was not raining. It seems unreasonable not to allow the taxi firm to subcontract in order to be able to meet the booking.

We are often concerned about young people out late at night who try to find a taxi to take them home safely. In that situation, we do not want them having to track down one company after another. They should be able to call an operator who they have confidence in who can find them a taxi, even if it is subcontracted from out of area. You can already subcontract in area, and I should make that clear to those people who may have used subcontracted taxis or private hire vehicles and were not aware of it.

The noble Lord, Lord Greaves, said that he was concerned about disabled people. Surely that is the group which has the most to benefit from this change. Most car hire companies have a limited number of wheelchair-accessible vehicles and there may be circumstances where a disabled person needs to travel in a particular kind of vehicle. It is all very well to say that disabled people need to make advance bookings, but I want people with disabilities to be able to live their lives as freely as the rest of us can and not always have to think about things in advance—or, frankly, have to do without. We have a mechanism here which gives an operator the scope to reach out of area and subcontract to someone else who has a wheelchair-accessible vehicle to meet a need. That is exceedingly beneficial.

I want to make it clear that the initial operator who takes a call and makes a booking remains liable to the passenger who made the booking. He is the person with whom the contract has been established. If someone chooses to call a particular operator, that operator retains the liability for the subcontractor, so the terms and conditions, the recording of the booking and the fare, if it has been agreed, all remain with the operator who the customer has contacted.

[Baroness Thornton]

I should like to ask the noble Baroness two questions. First, has she taken into account the fact that enforcement works differently in London, with TfL working in conjunction with the police on street enforcement, yet there is still a huge problem of sexual assault involving licensed minicab drivers? Secondly, how many disabled groups has she consulted about this deregulation and can she tell us what they had to say about it?

[Baroness Kramer]

I personally have engaged more with disabled individuals rather than with groups, which were approached by the Law Commission as part of the consultation. But the Committee will understand the reality of what I have just described. Many Members of the Committee will have friends with disabilities or indeed may themselves have them, and they will recognise what I have just described. It is for the Committee to make its decision, but I think that noble Lords will recognise the particular set of problems and will empathise with those who have a disability.

Enforcement against an operator continues to be the responsibility of the local authority which licensed that operator. Where there is an issue of enforcement against a driver, again it is for the local authority which licensed that driver to enforce. However, to make life easier and help things to work more smoothly, in some places around the country local authorities have concordats between each other so that they can delegate enforcement powers and thus make the process more simple and straightforward. Liverpool and South Bucks already do this, and I would think that it is a logical direction for many local authorities to go, not because enforcement is difficult but because it is even easier if ongoing relationships with neighbouring areas where subcontracting may take place are developed. We already have vehicles from out of area coming into area. When you order your private hire vehicle, you may be sending it out of area, so cross-boundary issues arise on a regular basis even as it is. As I say, some areas have decided that the sensible way to deal with this issue is to work together with a concordat between them.

The noble Lord, Lord Greaves, raised one issue which I thought was interesting and is one that I will take away and think about, and that is the issue of disclosure; that is, where an operator looks at the cars he has available, cannot find a vehicle available in his own company, and therefore looks elsewhere. That is something I will take a look at. However, I want to make it clear that there are real anomalies which we have to deal with. At the moment we have a silly situation in some parts of the country where related companies cannot subcontract to each other. Although they may be part of the same company, one branch will be licensed in one area and the other in another area. That, quite frankly, is one of the silly anomalies that we want to get rid of. Also, because the company you call and the individual you call is liable throughout, in order to uphold its reputation the company will make sure that the people it subcontracts to meet its own standards and are reputable. We have just heard today that very many people will turn to a company which they consider to be reputable. The notion that such a company would subcontract to drivers who let the company down, drive customers away and ruin its reputation is, I suggest, reasonably far-fetched. Under all circumstances, the driver to whom the business has been subcontracted has to meet licensing standards, and that is something we should not forget.

These are, frankly, two relatively small measures. The subcontracting issue is particularly helpful for someone with a disability who needs to call for a vehicle when many of a company’s cars within the area are already taken. We have to take that seriously. I go back to the issue on licensing. The three-year period is a reasonable standard that is used by many local authorities. It delivers the same level of safety that we see in other local authorities so why not relieve of an extra burden those who function at the margin in terms of income, if there is no safety price to pay?