Community Transport

Lord Clarke of Nottingham Excerpts

Thursday 10th May 2018 Westminster Hall

[Lilian Greenwood]

Yes, the hon. Lady is right—absolutely. For years, guidance and practice in the UK had considered “not-for-profit” and “non-commercial” to be interchangeable terms. The DVSA investigation and the DFT’s letter signalled a completely new interpretation. The consequence for the operator investigated by the DVSA was that it could no longer operate on the basis of community transport permits, because—according to the new interpretation—the derogations from full public service vehicle operator and passenger carrying vehicle driver licensing did not apply.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Did the Select Committee have any chance to access any legal advice on this rather startling interpretation of this regulation, which has been interpreted in totally different ways, as the hon. Lady said, for decades? Very little policy point seems to lie behind the changes that are being proposed, and I wonder whether we are somewhat pedantically accepting a rather eccentric legal opinion that is threatening very genuine voluntary services that are quite non-profit making in many parts of the country.

[Lilian Greenwood]

The right hon. and learned Gentleman makes a very important point, and I think that it is for the Minister to explain precisely why he has taken this specific legal approach to the interpretation of the regulation. I am sure that he will do so in his response to the debate.

The DVSA told Erewash Community Transport that it must

“take action to bring its operations into line with all applicable legal requirements”,

and that that applied to all its drivers and services, not just those provided under the terms of contestable contracts. The DFT’s letter confirmed that this interpretation was now to be universally applied, and not just applied to one operator, and that it was intended to make clear the broader implications for the community transport sector. The letter acknowledged that existing guidance

“may have provided an inaccurate indication”

of the rules for sections 19 and 22 permit use. Nevertheless, all operators in similar circumstances would

“now need to take action to bring their services into compliance with legal requirements.”

The letter asserted that additional licensing requirements were likely to apply mainly to large, transport-only organisations, and that many—perhaps the majority—of other smaller and community-based permit holders were likely to be unaffected. It said that the DFT intended to explain the implications more fully and to consult on its proposals in the autumn. The evidence to our inquiry, including evidence from hundreds of community transport organisations of various types and sizes, overwhelmingly suggested that that assumption was simply wrong.

Although the DFT’s letter may have been well-intentioned and designed to clarify and calm the situation, it achieved the opposite effect, by creating widespread confusion and panic. Mobility Matters, an urgently convened campaign group, told us that its survey evidence suggested that the new requirements were likely to be catastrophic for many community organisations, with 40% saying that they would be unable to carry on operating as a result of the additional costs.

There were many unanswered questions and the broad community transport sector was understandably confused about what action was required and by what date.

--- Later in debate ---

[Alex Chalk (Cheltenham) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. In the short time available, I will make some brief points. Firstly, the implications of these changes for my community in Cheltenham are very significant. The hon. Member for Ealing North (Stephen Pound) just referred to volunteers, and Community Connexions in my constituency has 50. It makes 100,000 passenger journeys a year, with 13,000 passenger trips to day centres and 5,000 trips to health appointments. As one example, we have a fantastic facility near Cheltenham called the Butterfly Garden, which provides education, therapy and recreation for people with disabilities, and the commercial providers simply do not want a contract to serve that fantastic facility.

If I may say so, from this side of the fence, is this not paradigmatic of David Cameron’s big society? It is about using corporate receipts to maximise community benefit. [Interruption.] I knew that would rile up Opposition Members, but it is true. We should be doing everything possible and straining every sinew to support these fantastic organisations.

In my constituency, Community Connexions is now having to consider winding up the organisation because of the cost of getting an operator’s licence—some £26,000. It does not know whether its application to get a licence will then be challenged by the Bus and Coach Association or whether commercial operators will pursue loss leaders to try to drive them out of business.

In its briefing for this debate, the Community Transport Association said, quite fairly:

“We understand that this action does not result from policy decision within government, and our sense is that they would rather not be doing this.”

That is fair and right. We have to recognise, as has already been indicated, that the issue derives from an EU regulation from 2009 that came into force in 2011. Therefore, the implication of the Government’s position must be that we have collectively misinterpreted the law during that time, which leads me to think that the law is moot—it is arguable.

The question about what non-commercial purposes means must be a matter for legitimate legal debate. Should it cover the organisation, as has already been intimated, or simply the specific contract? We are a nation of laws and we comply with the law—that is one of the most solemn undertakings of any British Government— but where the law is arguable, there is a duty on those community providers who do so much good in our society and in our constituencies to take up those arguments, to deploy them to the fullest extent and, if necessary, to litigate and test them. It is only where the case is unanswerable that we should be taking the necessary action.

[Mr Kenneth Clarke]

Would my hon. Friend agree that it is not unknown for Governments to gold-plate European regulations and that, quite often, that is at the instigation of commercial organisations, which do not have terribly strong objections to costs and burdens being placed on rivals? Does he not think that the Department’s interpretation of this regulation being applied, for example, to non-profit-making organisations with unpaid voluntary drivers, providing services that no commercial operator is actually trying to get, should be seriously questioned by the Minister? Perhaps he should challenge the rather pedantic nature of the legal advice that he has received.

[Alex Chalk]

As always, my right hon. and learned Friend presents the point extremely powerfully. My concern is that it is not so much about gold-plating the EU regulation as it is about being excessively cautious in its interpretation. There is a role here for the Government to take a robust line. With any litigation there is the risk of failure and I recognise that, but there is an overwhelming public interest and, just as importantly, a powerful and legitimate legal argument for taking this on, and I would urge the Government to do so.