§ Mr. Vivian Bendall (Ilford, North)
I beg to move amendment No. 39, in page 22, leave out lines 13 to 26.
Mr. Deputy Speaker
With this amendment it will be convenient to take the following amendments: No. 40, in page 22, line 19, at end insert'provided the annual charge does not exceed £2.50'.No. 41, in page 22, line 26, at end insert'provided the annual charge does not exceed £2.50'.No. 42, in page 22, line 34, at end insert'provided the annual charge does not exceed £60.00'.
§ Mr. Bendall
The amendment concerns the licensed taxi trade in the Greater London area, and, indeed, in the provinces. Whilst one appreciates, in going back over the last two years, that the Government have been somewhat generous to the licensed trade in its increases in fares during that period, when looking at and analysing the situation over the last month or so it is true to say that the taxi trade, like many other trades, has had to suffer the increased cost of derv. Also, it is often not realised by many people that VAT is chargeable on derv for the taxi trade but that public transport—for example London Transport—which is in competition with the taxi trade does not pay VAT on derv.
The taxi trade in London is an important and integral part of the transport system of this city and has been for many generations. It comprises a group of people who are proud of their heritage and achievements and of the service that they have given to this city over a great number of years.
It is probably also not realised that the licensed taxi trade is in a somewhat different position from that of many others. The owner-driver in the licensed trade relies very much for the purchase of his vehicle on the sale of fleet cabs, which are run by large fleet operators. In this situation there are problems with regard to VAT, which means that the fleets now tend not to pass on their taxis to owner-drivers because they have to compete with London Transport, which has brought in a 25p fixed fare in outer London, which is welcome but is creating competition for the trade.
It must be remembered that public transport is subsidised to a great degree. However, the Government propose in clause 32(1), (2) and (3) to increase charges to the taxi trade. In the metropolitan area of Greater London, 286 there lids been no cost to the licensed cab driver for his taxi-cab licence. I appreciate that the administrative costs in issuing licences to cabs and cab drivers are high and that costs are rising. However, to introduce a charge of about £35.50 per annum for a taxi cab licence when previously there was no charge will be a considerable burden for those who run fleet cabs in London.
The driver's licence has remained at the low level of 15p since the middle 1800s. It is now to be increased to about £29.50 for three years. Will a driver who is approaching retirement be entitled to a rebate if he has to purchase a licence for three years when he has only a year to work before retirement?
The story is different in the provinces. Last year, the cost of a driver's licence in Birmingham was £5 a year. It is to be increased to £7.50, a 50 per cent. increase. The vehicle licence was £25 last year and it is to be increased to £35. However, in Manchester the driver's licence was £12 last year and it will be £24 this year, an increase of 100 per cent. The owner's vehicle licence for the cab cost £33 last year and it will cost £100 this year.
These are steep increases. It is difficult to understand why the increases are so large in the outer London areas, even taking account of inflation. As I represent a constituency in which there are many taxi drivers, I shall concentrate on London. Over the past few years the taxi trade has seen a gradual decline because of a lack of tourism. It has been welcomed in the House that Members of Parliament can now more easily get a taxi late at night than a few years ago. The taxi trade will have to endure extra increases in the immediate future against the background of a decreasing tourist trade and the increased price of derv.
The black cab, which is used basically by the London trade but in certain other cities as well, is built by Car Body Vehicles, of Coventry, which is at present on a three-day week. Sales have been dropping. The components are supplied by British Leyland. The number of employees has dropped from about 1,400 to 400. In the first six months of trading this year the company's loss has been about £600,000.
The firm's second trading phase is always considered to be worse than the first. Therefore, it is important to preserve this firm of body builders so that it can supply the London taxi trade with the type of vehicle which it wants and prefers. Indeed, there are rumours that both Mitsubishi and Mercedes are working on a cab which would be suitable for London and the provinces. I would be sad if another British industry went out of existence as a result of foreign investment and trade.
I ask the Government to look seriously at the situation as it affects the licensed taxi trade. I ask them to consider limits on the costs of licensing, in respect of both the driver and vehicle. They should consider spreading this large amount over two or three years instead of introducing it all at once. I ask my hon. and learned Friend seriously to consider the points that I have made, because the London taxi trade provides an important and integral part of the transport system of this great city.
§ Mr. Sydney Bidwell (Baling, Southall)
Among my parliamentary tasks I have the duty of liaising with the Transport and General Workers Union and the taxi-cab trade. On these matters there are no differences between worker-drivers and those who work for proprietors.
287 The hon. Member for Ilford, North (Mr. Bendall) skilfully set out the position. Therefore, I shall not repeat the arguments. Unlike the hon. Gentleman, I was a member of the Committee. The difficulties of the licensed taxi-cab trade, as well as its apprehensions, were debated at some length during those proceedings, but I suspect that other hon. Members do not avidly read the Committee proceedings on such matters, especially when they involve a wide-ranging Bill such as this.
Some of us are dismayed that the Secretary of State has introduced these proposals at a time when wide consultations are taking place. However, as they are in the Bill we must give them due consideration. I entirely share the hon. Gentleman's apprehension that the overhead costs, both to the workers and the proprietors, may be too steep, especially at a time when there is a decline in earning possibilities because of the contraction in the tourist trade.
I want to see this tradition preserved. We should ensure that the Bill does not impair the opportunities of the taxi trade. In the previous Transport Act, the Government gave some aid to the licensed cab trade, whose fares are strictly controlled compared with the car hire trade.
We felt a sense of gratitude to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowan) for his amendment earlier, and to the Minister of State when he accepted that one way to aid the taxi drivers was to prevent the minicab or car hire trade from running around with illuminated roof signs, and so on, which might suggest that they were plying for hire.
My sentiments would have been best expressed by the final amendment on the Order Paper, which may be eclipsed by the guillotine under which we have been placed by this very wide Bill, which includes the taxi-cab trade. I hope that we shall hear something from the Minister that is sympathetic and that shows the Department's sympathy. I hope that there will be reference to the charges. Inevitably, those must affect the fares in the declining market.
§ Mr. Kenneth Clarke
The taxi trade as a whole will recognise that it has had a fairly reasonable deal from the Government so far. My right hon. Friend made adjustments to its price levels the last time the fares were increased in London—adjustments that were acceptable and that redressed a long-standing grievance. As the hon. Member for Ealing, Southall (Mr. Bidwell) fairly conceded, last year's Transport Bill, now the Transport Act 1980, contained measures for which the taxi trade had been pressing for some time. We included those measures. It is the intention of the Government to deal sympathetically with the taxi trade in its present difficult trading conditions.
I met a deputation led by my hon. Friend the Member for Ilford, North (Mr. Bendall) two days ago, when taxi drivers made representations about the part of the Bill, that affects them. They covered a wide area of their present grievances. Most are best dealt with in another context. Many of them will be faced by my right hon. Friend the Home Secretary in the consultation document that he proposes to issue shortly. It will deal with the whole matter of the law governing the taxi trade and the hire car trade. 288 It will put forward proposals for discussion, which might lead to some modernisation of the regulations and the terms and conditions of the trade.
That is the right way to consider the problems of taxi drivers, and not the comparatively narrow issue of the licence fees, which are all that is covered by this part of the Bill. There is no intention in the Bill or in Government policy to discriminate against the taxi trade in any way. We are merely bringing the practice of charging for licences for taxis in line with the Government policy of charging for all other sorts of licences. Where Parliament prescribes a licensing system and where licences are issued either by central Government or by local authorities, it is the policy that the costs of that licensing system shall be recovered in appropriate fees from those who receive the licences. There is no intention of making a profit, and there is no element of tax. However, it is right that the trade and those who use taxis, and not the general taxpayer—including many people who make no use of the taxi system—should pay for the cost of licensing.
It has not been possible to follow that policy for taxis so far because of outdated statutory restrictions on the maximum fees. The fees for London have not been changed since 1869. The fees for provincial cities, where the Local Government (Miscellaneous Provisions) Act has not been adopted, have not been changed since 1847. They are farcically low.
In London, no fee is being charged for the vehicle at the moment because of doubts about whether the legislation applies to anything other than horse-drawn cabs. For drivers, the levels have been fixed at 3s since the mid-1930s. The level is still 15p. The result is that at the moment the public carriage office of the Metropolitan Police is costing the general taxpayer about £¾ million each year. The present licence fees are recovering the princely sum of £1,500. With respect, that cannot be allowed to continue. My right hon. Friend the Home Secretary has confirmed that it will be open to the taxi drivers to recover it in fares from their passengers, because the new fees will be reflected in the new fare levels when they are next increased.
However, the effect on fares will, I dare to suggest, be trivial. The extra cost involved is about ½ per cent. The generality of taxi passengers will pay for the taxi licensing system and they will benefit from the licensing and control of taxis. It will no longer be the general taxpayer who pays.
I told my hon. Friend the Member for Ilford, North the other day of the likely fares in London, and he used my figures in his speech this evening. He will have observed that they are much lower than local authority fees charged outside London. The public carriage office of the Metropolitan Police is comparatively small, and carries out a serious task for the whole city. The Home Secretary will respond to respresentations about its cost.
We are not imposing a new and onerous burden on the taxi trade; we are merely correcting a long-standing anomaly. I acknowledge that there are bigger problems. I accept the strength of feeling that lies behind my hon. Friend's speech and the views of this constituents, whom he brought to see me two days ago. It arises from other matters, such as their taxation liability, the importance of the law on hire cars and the state of the law on the licensed taxi trade, which are all matters that can be properly dealt with when the consultation document is produced and 289 when the general debate on the future of the trade is initiated by the Home Secretary. Our fees may be an irritant, but they are no more than that.
I commend the provisions of the Bill to the House, and I ask my hon. Friend to ask leave to withdraw the amendment. It is a common-sense and comparatively minor change.
§ Mr. Booth
The guillotine means that the House cannot debate the amendment that my hon. Friends and I have tabled.
The London taxi trade is subject to stringent controls, requiring major annual overhauls for relicensing and quarterly inspections of individual cabs, in addition to random tests. Maintaining the standards set by the public carriage office involves the trade in considerable cost. If the office is freed from the present financial restraints, which would be the effect of the clause, the trade may face higher and most costly standards. The Government say that the trade can pass on the cost in higher fares, but the trade believes that if fares were substantially increased trade would fall off.
The amendments are not the real solution. We need a mechanism to enable the Secretary of State to involve the trade in considering how to achieve higher standards before fees are increased. Taxi drivers, operators and owners cannot count for nothing in tightly controlled and regulated business. The standard of taxi operation required by law in London is probably higher than that in any other city in the world. The regulations are to protect the travelling public. If fees are to be increased, which will in turn increase fares and result in operating difficulties, the trade should be consulted. The trade is at one in wanting to be consulted before the Secretary of State makes decisions about driver and vehicle fees that affect the livelihood of drivers, owners and operators.
I therefore feel that the narrow line of approach of the amendments will not provide a real solution to that problem. Had the Secretary of State, with his right hon. Friend the Home Secretary, been prepared to reach the long-awaited decision on recommendations of the Maxwell Stamp report, we might have had, either in this Bill or in a Bill produced by the Home Secretary, a series of proposals that would have enabled the House to do something other than free a Transport Minister——
§ It being One o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to the Order [9 March] and the Resolution this day, to put forthwith the Question already proposed from the Chair.
§ Amendment negatived.
§ MR. DEPUTY SPEAKER then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at One o'clock.