Deregulation Bill

Baroness Kramer Excerpts

Tuesday 21st October 2014 Lords Chamber

Moved by

[Baroness Kramer]

5: Schedule 2, page 76, line 15, leave out from “licence”” to “as” in line 16 and insert “has the same meaning”

--- Later in debate ---

[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.

Clause 10 disagreed.

--- Later in debate ---

[Viscount Ridley (Con)]

My Lords, I apologise to the Committee for not being present at Second Reading, but perhaps I may be allowed to comment on Clause 12, which I believe is a fair and reasonable measure that will bring improvements for customers.

At the moment it is only outside London that a private hire operator cannot subcontract a booking in a different district. Is there something peculiarly wicked about provincial private hire firms that does not apply in London? A London-based private hire firm can subcontract, as can a foreign unlicensed company, and this gives it a huge advantage. It puts private hire firms outside London at an iniquitous disadvantage, but it also leads to perverse, inconvenient and even unsafe consequences for customers. I shall give your Lordships a real example.

There is a private hire firm in Birmingham that has a contract to transport any staff with minor injuries from Jaguar Land Rover’s plants to hospital. As the firm cannot subcontract a booking to an operator in another district, if the injury occurs in the Wolverhampton plant, the car does a 55-mile return journey to take the person to a hospital 2.6 miles from the plant. For most of that round trip the car is empty. Jaguar Land Rover wants to deal with a single operator, but this is the result.

Another real example is of a private hire operator in Derby asked by a customer to collect an important client in another district. It must refuse the job, and refuse to arrange it with another firm in that district. The firm appears unhelpful to its customer. I have a third real example. A private hire firm in north Tyneside has a member of staff with a terminal illness. He would like to continue working, but from home. Since he lives just outside the north Tyneside border, that is illegal. I have another example. People often hire private minibuses to do long journeys for groups of up to six or eight people—to an airport, for example. That vehicle must return empty. If it breaks down en route, the operator is breaking the law if he asks another firm in the district where the breakdown happens to take the customer on. This measure would reduce congestion, pollution and noise a little, too.

Please note that the beneficiaries of this change in the law would include people with disabilities. That is because a wheelchair-enabled vehicle that has taken a customer from his home in district A to a hospital in district B would now be able to collect a different customer at the hospital and take him back to district A. As far as I can tell from Hansard, when exactly these measures were discussed and passed in this House in 1998 for London, one organisation that was widely praised in the debate for its support of the measures was the Suzy Lamplugh Trust. It therefore surprised me to hear today that it is against this measure. If this rule is good for London, it is surely good enough for the rest of the country. Can it be that London-based private hire firms are worried about competition from firms based outside London? This is an excellent and sensible measure that has benefits for customers.

[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?

Clause 11 agreed.