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Taxi Licensing Regulations

Volume 609: debated on Wednesday 4 May 2016

Motion made, and Question proposed, That this House do now adjourn.—(Kris Hopkins.)

Thank you, Mr Speaker, for ensuring that I was able to have this debate today, not least because I raised the matter at business questions last Thursday before I had seen the email that had already arrived from your office informing me that this date had been allocated. I do not know whether it is the curse of Andrew Gwynne, but the last time I applied for and was successful in securing an Adjournment debate, it was on the last day before a recess. This time, it is on the day before the local elections. Nevertheless, it is a great opportunity to raise a matter of importance on the Floor of the House.

I should start by declaring an interest in that my wife, Councillor Allison Gwynne, is the cabinet member for environmental services, which includes taxi licensing, at Tameside Metropolitan Borough Council. It was on a visit with her to the excellent taxi licensing department at Tameside during the February recess that people at the office raised with me some concerns about the operation of the current legislation.

The licensing of taxis and private hire vehicles, drivers and operators has been a function of local authorities in England and Wales for over 350 years. Local authorities are expected to run a licensing regime that ensures that fare-paying members of the public are carried comfortably and safely in vehicles that are suitable and roadworthy by drivers who are trustworthy and responsible. The legislation governing taxi and private hire licensing is quite old, but each local authority can determine its own policies and licence conditions to ensure that the taxi and private hire trade suits its area and its residents.

Long before the invention of the motor vehicle, it was recognised that drivers of public hire, horse-drawn carriages held a uniquely trusted position. Members of the public, who were often vulnerable and alone, got into their vehicles and were effectively at the mercy of the driver for the duration of the journey. The first hackney carriage licences were issued in London in 1662 in response to a rapid increase in the numbers of for-hire coaches and coachmen plying the streets for work. They were causing congestion, and fights over fares were a regular occurrence, and it was recognised that a number of the coachmen were undesirable characters who were likely to pose a risk to their passengers.

Further legislation was introduced over time, and local authorities now issue licences under two key pieces of legislation. The first is the Town Police Clauses Act 1847. It governs the licensing of hackney carriages, which are public hire vehicles that can ply for trade by driving around until they are flagged down by a member of the public or can wait for passengers at taxi ranks. The second piece of legislation is the Local Government (Miscellaneous Provisions) Act 1976, which governs the licensing of private hire vehicles, drivers and operators. Private hire vehicles cannot ply for hire or wait at ranks; they can only pick up passengers who have pre-booked the journey via a licensed private hire operator.

The two-tier system brings many complications. Members of the public, and even some members of the taxi trade, often become confused by the differences between the two regimes and how the legislation is applied. In addition to the two separate, distinct pieces of legislation and the two types of vehicles, local authorities are also able to impose their own separate, additional policies and conditions that apply to the vehicles, drivers and operators licensed in their area. That is why in some authorities, such as Tameside and Stockport, which cover my constituency, we will see only London-style black cabs being used as hackney carriages. In other boroughs and council areas, we will see all manner of saloons, hatchbacks and other standard vehicles being used as hackney carriages as well as private hire vehicles. Some areas require drivers to pass a driving test, an English language test, a local knowledge test and courses on how to behave appropriately, whereas other areas simply require a driving licence and a Disclosure and Barring Service check. In addition, the Transport Act 1985 allows local authorities the option of retaining or removing a limit on the number of—

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Kris Hopkins.)

As I was saying, in addition the Transport Act 1985 allows local authorities the option of retaining or removing a limit on the number of hackney carriage licences they issue. Prior to 1985, local authorities could simply set a limit on the number of hackney carriage licences they issued. That meant the licences became an asset, with a monetary value; nobody could simply apply for a hackney carriage licence if the limit had been reached, so the only way to obtain one was by purchasing the rights to a licence from an existing licence holder. Values of hackney carriage licences reached £30,000 or more—for the rights to the licence only; that did not include the vehicle.

The 1985 Act required local authorities either to remove their limit on hackney vehicle licences, de-restricting numbers, or to justify keeping a limit by holding an “unmet demand survey” every three years. The survey would assess the demand for hackneys in the council area and adjust—or increase—the set limit by the required number. In councils that retained a limit on hackney numbers, hackney licences—the plates—retained their value, and to this day taxi owners in these areas still view the value of their plates as an asset that they can cash in at some stage in the future by selling the plates on. In councils that removed their limit, the hackney trade was simply allowed to find its own level. There is only a certain amount of demand for hackney carriages, and, theoretically, hackney vehicle numbers will self-limit, because of the demand, or otherwise, for hackney carriages in each local authority area.

Since the existing hackney legislation was introduced in 1847, hackney carriages have always been able to carry out pre-booked work in the same way as private hire vehicles. Hackney carriage drivers can supplement their income by hiring a radio or PDA—personal digital assistant—from a private hire operator and carrying out private hire work alongside all the other private hire vehicles and drivers. The legislation also currently allows vehicles licensed as hackney carriages in one area to carry out pre-booked private hire work anywhere else in England and Wales, apart from in London and, bizarrely, Plymouth, which are covered by separate pieces of legislation. This is not a loophole or a fiddle, but something that has always been permitted; it is not expressly prohibited by the existing legislation.

The Local Government (Miscellaneous Provisions) Act 1976 introduced legislation that, for the first time, governed private hire vehicles, drivers and operators, and set the legal parameters within which these vehicles were allowed to operate. This legislation did not affect the ability of hackney carriages to carry out pre-booked work anywhere in the country, because in 1976 all authorities had limits on the number of hackney licences, so there was no huge problem with hackney carriages working “cross-border”. There was always sufficient work for hackneys within their own boroughs and counties, and they were therefore not tempted to move to another authority to pick up additional work.

The introduction of the 1985 Act did not have a massive effect at first; a few local authorities removed their restriction on hackney numbers, but most kept the limit. Over time this has changed, and many more authorities have removed the limit, but matters only started coming to a head in the mid-2000s. The problems started in the north-east of England. In 2006, Newcastle City Council noticed that a number of their private hire drivers and owners left the authority and obtained hackney vehicle licences from the neighbouring borough of Berwick-upon-Tweed, as it did not impose a limit on hackney numbers and its procedures for obtaining licences were much easier than those set out in Newcastle. In two years, the number of hackney licences issued by Berwick rose from 42 to 672. The vast majority of those vehicles were owned by people who lived in Newcastle and used their vehicles for private hire work in Newcastle. For Newcastle City Council, there were a number of problems. First, officers from Newcastle had no powers to deal with complaints or issues involving Berwick vehicles and drivers. Only the licensing borough’s offices can deal with matters relating to their vehicles and their drivers.

Secondly, Newcastle had lost the ability to regulate numbers and, thirdly, there were more serious concerns that the much stricter policies and conditions imposed by Newcastle on its hackney and private hire fleet were being undermined by the influx of Berwick-licensed vehicles and drivers who were regulated by much less strict policies and conditions.

The matter went to court via a judicial review, which was heard in the High Court. The judge in that case, although sympathetic to the issues raised by Newcastle City Council, stated that Berwick-licensed vehicles and drivers were operating entirely within the relevant legislation and were doing nothing illegal.

That is now pertinent to Greater Manchester, because, although all 10 of the Greater Manchester metropolitan boroughs have fairly stringent rules and regulations in place governing who can and cannot apply for hackney licences, there is a problem in that a neighbouring authority across the county boundary in Lancashire is issuing quite a large number of hackney licences. We are now seeing those licence holders operating within Greater Manchester. I am referring to Rossendale, which is a small Lancashire district council. About a decade or so ago, following the Berwick judgment, the number of applications for hackney carriage and vehicle and driver licences started to increase in that particular authority.

At that time—I appreciate that things have changed—Rossendale’s standards were less restrictive than those of the 10 Greater Manchester metropolitan boroughs. It did not, for example, require applicants to pass an English language test or a local knowledge test. It also had much less restrictive conditions for hackney vehicles. It would, in effect, license almost all types of vehicles—saloons, estates and hatchbacks and so on—as hackney vehicles. Its age limits for vehicles were more relaxed and vehicles were tested to a lower standard than that of the Greater Manchester boroughs.

Previously, those policies and conditions had been fine for a small borough such as Rossendale, but it started to become apparent that the owners and drivers of these cabs were not in fact using the vehicles in that particular local authority. They were using them as private hire vehicles in other local authorities—indeed, lots of other local authorities. They started appearing in other Lancashire boroughs first: Blackburn with Darwen, Burnley and Hyndburn. They then started popping up in Greater Manchester boroughs: Oldham, Rochdale, Bury, Central Manchester, Tameside and Stockport. By 2015, Rossendale was issuing approximately 2,500 hackney vehicle licences a year and more than 3,000 hackney driver licences. By comparison, Tameside council currently has 150 hackney carriages and 450 private hire vehicles. To put that into context, the population of Tameside is around 221,000, and Rossendale has a population of fewer than 70,000 residents. It is clear what is going on.

As I have already said, no law is being broken. Rossendale-licensed vehicles are allowed to operate across almost the whole of England, and indeed that is what they do. They are working in Leeds, Bradford, Birmingham, Bristol and even Cornwall. There are large numbers of these vehicles operating in Greater Manchester, and licensing offices within Greater Manchester’s 10 boroughs are virtually powerless to deal with these vehicles and drivers. Some are known to have been refused licences for perfectly good reasons by the Greater Manchester local authorities.

In areas where policies and conditions are strict and high standards are required, the influx of out-of-county vehicles has been a particular problem. Members of the public regularly complain about poor standards of English and drivers who do not know the local area. Licensing officers and managers are concerned that their high standards are being seriously undermined, and there is particular concern in the light of what happened in Rochdale and Rotherham that child safeguarding could also be undermined.

To be fair, Rossendale has moved on that. For instance, the council has now adopted the Greater Manchester-approved convictions policy, which should ensure that its drivers are in future vetted to the same standards as drivers across Greater Manchester. In addition, Rossendale council has just introduced an intended use policy whereby, following the judgment in the Berwick case, it will now ask applicants whether they intend to use their vehicle within the borough of Rossendale and will refuse to grant a licence if the answer is no, but the policy will be slow to take effect as the council has given it a soft landing and it will not apply until 2017. Plus, if we do not change or tighten up the law, another council, if not this council or Berwick, will spot an income-generating opportunity in much the same way.

I want to turn briefly to the Law Commission report. The Minister will know that between 2013 and 2014, the Law Commission conducted a consultation on potential new taxi legislation in England and Wales. At the start of the consultation, it stated that it was looking to take a “clean sheet of paper” approach and potentially redesign the whole licensing regime from the ground up. Some early suggestions included removing the two-tier taxi licensing structure entirely and introducing a single national standard for vehicles and drivers.

The Law Commission was overwhelmed by the number of responses to the consultation, and the final report was far from the clean sheet approach that it promised. The final recommendations were, in fact, extremely watered down and seemed simply to be a re-write of the existing legislation with a few problems ironed out. Since publication of the report, it seems to have been shelved and no further proposals for changes to legislation have emerged, apart from two small ones that were introduced in October 2015 via the Deregulation Act 2015. The first was that drivers’ licences should last for three years and operators’ licences for five years, and the second was that operators should now be allowed to sub-contract bookings to operators in other councils.

I want to be positive in the last few minutes of my speech and give examples of how we might be able to deal with the issue. I have a number of ideas. First, I suggest that there could be a requirement that operators could operate only with vehicles and drivers licensed within their own council area. This would prevent out-of-council vehicles and drivers from working outside their licensed areas on other operating systems. Secondly, I suggest national standards for vehicles and drivers. If standards were consistent across the country, there would be no need for applicants to travel out of their council area looking for a more relaxed licensing regime. Thirdly, licensing officers could be given powers to deal with any licensed vehicle and driver, not just those vehicles and drivers licensed within their own council area. Fourthly, could the Minister consider making changes through the buses Bill? That might seem an odd piece of legislation to choose, so let me explain to the Minister why I think that it is pertinent.

Over the past few years in Greater Manchester we have seen a number of evening and bank holiday bus services removed because the subsidy from Transport for Greater Manchester has been removed, but rather than leave communities isolated—this is quite an innovative idea—TFGM has produced something called Local Link, which is a local telephone number that any user within the old area of the bus service that has been removed, or when a bus is not running, can ring to get a private hire taxi cab. The taxi will come and pick the person up and take them door to door, so long as that is within roughly the same area as the old bus service that was withdrawn. Because of the small numbers of people concerned, that is cheaper than subsidising a bus service used by very few people.

However, TFGM is using private hire companies in Greater Manchester that may well employ private hire drivers and vehicles that were not licensed by any of the 10 Greater Manchester authorities, and that raises some concerns for the travelling public. There might be an opportunity at least to give Greater Manchester additional regulatory powers in that respect through the legislation that I hope we will be pleased to see in the Queen’s Speech next week.

Lastly, I want to give a quick plug for guide dogs. I have worked with the charity Guide Dogs, which told me in advance of this debate that as the law stands, drivers who refuse to take passengers accompanied by guide dogs can face a modest fine through the courts, but not necessarily a revocation of their licence. It would be entirely up to the issuing authority whether such drivers were able to continue operating and, as we have heard, the issuing authority does not have to consider the interests of the population in whichever area the driver was operating.

To sum up, I hope the Minister will agree with the points that I have raised this evening. Privately, I am sure that he will agree that the taxi licensing regime is drastically outdated. I implore him to get his skates on and have his Department respond in full to the Law Commission report on taxi licensing. Let us sort out the problems that we face in Greater Manchester, and let us sort out the guide dogs issue too.

I congratulate the hon. Member for Denton and Reddish (Andrew Gwynne) on securing the Adjournment debate this evening. I know that the topic of taxi and private hire licensing issues has been covered in previous debates in the House. Colleagues are very interested in the subject, but I doubt whether many colleagues could match the historical knowledge that the hon. Gentleman brought to the debate this evening.

As hon. Members will appreciate, although the Government are responsible for creating the legislative framework within which local licensing authorities license taxis and private hire vehicles, responsibility for licensing rests with the local authority. It is the local authority’s responsibility to decide who is a suitable person to hold a taxi or private hire vehicle driver’s licence or a private hire operator’s licence. The local authority is responsible for ensuring that all its licensees comply with the rules and regulations that govern their industry.

I understand the hon. Gentleman’s desire to raise on the Floor of the House his concerns about what is happening locally in his area—he obviously has an inside track on the situation in his council—but as licensing is the responsibility of the local authority, I may not be able to address all his points.

Let me start by emphasising the importance of the taxi and private hire vehicle industry. The traditional taxi has become an icon of passenger transport in the UK and around the world. The taxi industry has played a key role in keeping Britain moving for many years, and has a history and reputation that drivers are rightly proud of. The UK’s taxi industry is recognised as one of the best in the world. All the vehicles are of a high standard and are driven by skilled and knowledgeable drivers. I admire the time and dedication that prospective drivers put into becoming taxi drivers—perhaps most famously London cabbies, who have to learn the world-famous “knowledge” of London. That brings the reward of having the unique right to ply for hire on the streets.

In the 1960s, minicabs began to appear in London and the private hire vehicle industry began growing across the UK. Licensing and regulation have ensured that when using such services the public have the same assurance of safety as when using a taxi, and have raised standards throughout the private hire sector. As of March 2015, there were 242,200 licensed taxi and private hire vehicles in England—an increase of 9.3% in just two years—and 69% of those vehicles are private hire vehicles. The availability of taxis and private hire vehicles offers the public real choice: they can instantly hire a taxi in the street or at a taxi rank, or they can pre-book a taxi or a private hire vehicle. When pre-booking, passengers can make an informed choice based on factors such as price, availability and quality. The combination of taxi and private hire ensures that the needs of as many customers as possible can be met.

If a licensing authority such as Tameside or Stockport in my constituency decides for perfectly legitimate reasons that somebody is unsuitable to be a taxi operator in its area, should it not have the power to enforce that to prevent that person from getting a licence from another local authority and operating on the streets of Tameside or Stockport?

I am coming to cross-border working and licensing. We have had some terrible cases across the country, which have clearly shown that the system has failed in certain areas. We all know these cases, and they are positively shocking.

The industry is seeing real change as new technology provides new ways for the public to engage taxis and private hire vehicles. Smartphone booking apps are now available for taxis and private hire vehicles, offering passengers easy access to services, more choice, faster pick-ups and options for sharing, which can reduce cost. It is encouraging that the London taxi trade has been at the forefront of that technological change. There are now numerous smartphone apps for booking a taxi, and more drivers are embracing cashless payment options. However, that new technology is challenging the traditional operating boundaries between the taxi and private hire trades. That is straining the relationship between local authorities and the industry, but by working in partnership they can deliver a modern industry that continues to provide choice and high standards.

I would like to say a few words about an issue that is particularly important to me. The Government are committed to building transport networks that work for everyone, ensuring that disabled people have the same access to services, and the same opportunities to travel, as other members of society. Disabled people are heavily reliant on buses and particularly on taxis and private hire vehicles, which are critical. That is why the Government intend to commence sections 165 and 167 of the Equality Act 2010 this year. That will impose duties on the driver of a taxi to accept and assist a wheelchair user and not to charge extra for doing so.

I would also like to mention the Government’s ongoing work to improve air quality and reduce emissions in the taxi and private hire sector. In March 2015 the Government launched a £20 million scheme to support the roll-out of ultra-low-emission taxis across the UK. A further £25 million was set aside specifically for the Greater London area, to help taxi drivers cover the cost of upgrading to a greener vehicle. Our aim is for almost every car and van to be a zero-emission vehicle by 2050. The transition to ultra-low-emission taxis is especially important to help improve air quality in our towns and cities.

The hon. Gentleman made specific points about working across areas, and I would like to address those now. The issue involves taxis and private hire vehicles licensed in one area working in another. I appreciate the concern here, but while standards vary between authorities, all taxis and private hire vehicles and their drivers should have been licensed by their home authority, thereby ensuring that the driver is a fit and proper person and that the vehicle is safe.

Local licensing authorities have a duty to ensure that any person to whom they grant a taxi or PHV licence is a fit and proper person to hold such a licence. The term “fit and proper” is not defined in legislation, but the procedure for assessing a driver’s fitness will typically involve criminal record and medical checks. In an instance where a driver commits an offence in a jurisdiction in which he is not registered, the local authority where the offence was committed can prosecute.

The points raised about protecting more vulnerable users are incredibly important in this regard. Some of the cases we have seen in different parts of the country are shocking. I therefore take this opportunity to address the issue of child sexual exploitation related to the taxi and private hire vehicle industry. Let me start by reiterating the Government’s commitment to eradicating the risk to children and vulnerable people from taxi and minicab drivers who seek to abuse their position of trust. I would also like to make it clear that local authorities are responsible for background and safety checks on all employees, including drivers, who work with children and vulnerable people. They have a duty of care to ensure that young people are protected.

The Government expect those who exercise licensing functions routinely to use the powers available to them to keep young people safe. We encourage all local authorities to carry out an enhanced criminal record check on everyone who applies to drive taxis and minicabs. We want to ensure that our licensing arrangements provide the strongest possible protection to children and vulnerable people. We are drawing on lessons learnt in Oxfordshire, Rotherham and other places. I know that there is currently a very topical issue in Lancashire in a neighbouring authority. We are drawing on these lessons to reform and strengthen the law. I have been meeting Home Office Ministers and will continue to work on this.

The hon. Gentleman asked about the Law Commission. The Law Commission undertook a very comprehensive review and published its final report, which contained recommendations for a modern and simplified structure. The legislation that governs this industry goes back hundreds of years and is convoluted. The Law Commission’s report provided not only crucial analysis of the problems posed by the current law but solutions designed to make a difference to the travelling public and to those who work in the industry, either from a driving or a licensing perspective. As a Government, we are considering the Law Commission’s recommendations. I recognise the hon. Gentleman’s point about getting a move on with this. That is very timely, as we are working on it. I cannot yet give him a date for when the scrutiny will be complete. We will respond as soon as we can, and I recognise the requirement to do so.

The hon. Gentleman raised other points that I will mention briefly. I am happy to take ideas from all sides as to how we can improve the service, but it might be quite restrictive to operate only within a council area—for example, in the airport taxi service market. There are some difficulties there. However, I am happy to consider all sorts of interesting ideas.

One of the benefits of an area such as Greater Manchester is that it is a big city region, so perhaps we could have a specific regulatory framework for Greater Manchester taxis.

I am happy for local authorities to work together to set high standards in their areas, and there is nothing stopping them from doing so. We should all be seeking to raise standards.

The issue of Rossendale’s performance has been raised. I suggest that I write to Rossendale to highlight the concerns that Members have expressed and make sure that it is aware of them. There are quite significant differences between the fees charged in Rossendale for a licence and those charged in Greater Manchester. That might reflect the different standards. It might also reflect the bulk purchasing that Rossendale may be able to do because it processes so many applications. In any case, I will raise the issues with Rossendale and come back to the hon. Gentleman when I get its reply.

The Government are fully aware of the changes and challenges affecting the taxi and private hire vehicle industry across the country, including in and around Denton and Reddish. There are the challenges not only of new technology and increased competition but of the need to ensure that vehicles play their part in improving air quality and accessibility. I believe the reputation of the British taxi trade to be high, and the quality of service it can offer means that it should be well placed to continue to compete in this changing market and have a strong and healthy future. Taxis are an important part of the transport mix in all areas. It is now our responsibility to make sure that they have the regulatory regime among local councils to ensure that they can continue to ply their trade profitably, but securely, for the people whom they serve.

Question put and agreed to.

House adjourned.