HC Deb 24 July 1957 vol 574 cc545-53

9.35 p.m.

Mr. Ernest Davies (Enfield, East)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Public Vehicles (Licences and Certificates)(Amendment)(No. 2)Regulations, 1957 (S.I., 1957, No. 1118), dated 26th June, 1957, a copy of which was laid before this House on 2nd July, be annulled. These Regulations increase on 15th July the fee for a public service vehicle licence from £4 to £6 and increase the fee for a certificate of fitness from £5 to £5 10s. The reason why I have moved this Motion tonight is to ascertain from the Minister why this increase has been imposed, and to find out what justification he can produce for his new imposition on the road passenger transport industry.

The House may consider it rather strange that we should be raising this matter while there is a bus strike in progress—a very serious strike in an industry which has had a fine record of industrial relations over a very long period. Needless to say, this Motion was tabled before the strike was called, but we decided to proceed with it because we considered that this new imposition on the industry, small in comparison as it is, is another blow, even though a minor one, which is being struck at the industry by the Government at this time.

The road passenger transport industry is suffering from great handicaps. It has, on the one hand, a heavy tax burden to carry both as regards the fuel tax and the vehicle excise tax, and it is necessary for it to run a large number of unremunerative services. Its costs are so high that the industry is finding it difficult to continue to maintain its services at their previous high level, and in a number of cases some services have had to be cut out which are so unremunerative that they cannot he maintained because the losses can no longer be suffered.

In other words, there is a deterioration being experienced to some extent in the road passenger transport industry, and it will increase progressively if there are any more impositions placed upon it. The public reaches a point where it will no longer pay higher fares. The passengers resort to other forms of transport, such as the motor scooter and the bicycle, in order to avoid the high costs of travelling to and from work and for other purposes.

It is true that this increase does not represent a large sum, but it is indicative of the attitude of the Government towards the industry. As I have said, the licence goes up from £4 to £6, which is a 50 per cent. increase. The certificate of fitness of a vehicle goes up by 10 per cent. This will cost the bus operators some £160,000, which is not an insignificant sum.

I know that the argument advanced for increasing these licence fees is that it is only reasonable and just that the revenue produced from them should equal the administrative costs. But that was not the original intention of charging these licence fees. The original purpose, as laid down by Section 86 (2)of the Road Traffic Act, 1930, was that the sums raised from the issue of licences should go into the Road Fund. The Road Fund, of course, was created in order to raise money for the construction of roads. That Fund has now been abolished, because it was never used entirely for the purpose for which it was created, and, in its later days, was not used at all for that purpose.

All taxes and charges on the industry go into the general revenue and far exceed by many times the amount which is spent on road construction, maintenance and the rest. It would really make very little difference to the Treasury whether there was any charge for the issue of these licences or not, but, of course, it makes a considerable difference to the industry.

The administrative costs could very easily be met out of the other taxes which are imposed upon the industry and to which I have already referred, the fuel tax, etc. If the Minister insists that it is necessary that the cost of issuing licences and certificates of fitness should be borne by the industry itself, then I would ask him whether it is really impossible to cut the administrative costs—they seem to be extremely high, and they have risen very considerably—and if it is necessary to put up this charge now by 50 per cent. in the one case and 10 per cent. in the other in order to cover these costs.

He should bear in mind that the increase has been since June, 1952, from £2 to £6 for a licence and £3 to £5 10s. for a certificate of fitness. Can he state that the administrative costs have really gone up three times in the last five years? If so, there seems to be something wrong with his Ministry, which has resulted in this very large increase in costs simply in the issuing of the licences.

I see that the July, 1957, issue of "Bus and Coach," one of the trade papers which is read by 'bus operators and which expresses their views, states: The issue of public service vehicle licences is little more than a formality, requiring a minimum of clerical labour. And there is reason to believe that in several cases a real stream-lining of the work carried out in Traffic Commissioners' offices would bring about substantial economies, particularly in labour costs. The Minister has not proved need. He would hardly have got away with it had he had to apply to an impartial body like the Commissioners themselves. By that last sentence, presumably they mean that the Minister has taken arbitrary action in this case and they are inclined to imply that this is done for the purpose of raising revenue rather than to cover the administrative costs.

I suggest to him that these costs could be cut and should be cut in fact, the system itself could be changed to some extent because it is most complex and cumbersome at the present time, and economies could be effected. A public service vehicle licence, although issued today in respect of a specific vehicle, is, in fact, a licence for a particular person to operate the vehicle and cannot be issued unless the licensing authority is satisfied that he is a fit and proper person.

What seems so unnecessary is that there has to be a special licence issued to the same person in respect of each vehicle. That means that, although there are only some 5,250 operators, because there are some 75,000 vehicles 75,000 licences have to be issued to 5,250 persons. It would be a great saving if, instead of a certificate being issued in respect of each vehicle, saying that the person owning that vehicle is a fit person to own the vehicle and operate it, a certificate was issued to a person saying that he is fit to operate vehicles, and to leave it at that, in the same way as driving licences are issued. If the number of licences was reduced from 75,000 to just over 5,000 there would be very considerable economy effected and it would not be necessary to raise the fee for the issue of the licences,

In fact, the Thesiger Committee considered this and made a strong recommendation to the Minister that there would be considerable administrative economies if this system were followed. and that he should closely examine the possibility of making this change.

I should like to know whether the examination has taken place, and with what result. It should have taken place before the decision to increase the fee was reached. If it has not taken place since the report was issued in 1953, it is most regrettable. However, if such an examination has taken place, I am sure the House will be interested to know why the decision was taken not to follow this suggestion.

As I have said, we have raised the matter only to ask for an explanation of his action from the Minister and to enter a mild protest at what we consider to be the unjust and perhaps unnecessary new burden which is being imposed upon the industry. The industry is suffering very severe handicaps at present, and the maintenance of a satisfactory public transport service is vital to our economy, and it is very regrettable that the situation is made more difficult by small pinpricks such as this one.

9.46 p.m.

Mr. David Jones (The Hartlepools)

I beg to second the Motion.

It is not without significance that last week I spoke in the House on almost the same subject. Then it was the crushing burden of diesel oil taxation on public transport services. Over the past year or two there has been debate after debate about rural transport services and hon. Member after hon. Member has complained about villages being denuded of their public transport services because the operators, whether municipalities or private companies, whether owned by B.E.T. or the British Transport Commission, could not undertake to carry on the majority of their services when they lost money.

Now the industry has a further irritation. My hon. Friend the Member for Enfield, East (Mr. Ernest Davies)has spoken of the increase in the licence fee in recent years. It is significant that in 1939 the fee which had been fixed at £3 in 1934 under the Regulations of that year was reduced to £2. In 1952 it was increased to £4. The new Regulations increase it to £6.

I support the view expressed by my hon. Friend and would ask the Ministry whether anything can be done to minimise the costs of the service. No doubt the Minister will quote a speech delivered by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison)when this instruction was originally introduced. It was then suggested, I agree, that these services ought to be self-supporting and that the fees collected ought to cover the costs. Things have changed considerably since that day. While it might still be desirable that receipts should cover costs, what has the Ministry done since 1952 to streamline the services and reduce costs?

It may well be argued that the addition of £2 to £4 for a vehicle will be neither here nor there to a transport company, but it is irritating pinpricks of this kind which finally decide many bus companies to withdraw services. If it is necessary to increase the licensing fee from £4 to £6, why has it been necessary to increase the cost of a certificate of fitness from £5 to £5 10s., when it was increased to £5 from £3 in 1952?

It does not necessarily follow that a certificate of fitness is issued for a full period. There are many cases in which, because of circumstances over which the bus operator has no control, the certifying officer certifies a vehicle for a period shorter than five years—I agree that there is the restriction that he has to indicate why he is doing that. Am I to understand that if a certificate of fitness is issued for a period substantially less than five years £5 10s. will still be charged? It should be possible by reorganisation or streamlining for the Ministry so to reduce costs as to avoid this imposition.

The Joint Parliamentary Secretary and his right hon. Friend have frequently protested that they are willing and ready to do everything possible to assist public service vehicle operators to run rural services. I remind the hon. Gentleman that in his previous position in the Government he was concerned with maintaining the high standard of agriculture. That cannot be done unless we can keep people in the countryside, and that will only be achieved if we provide amenities to enable people in the countryside to get to the towns.

Small irritations of this kind, coming as they do after the blank refusal of the Government last week to do anything about the heavy burden of the tax on fuel oil, may compel a number of authorities to draw more services as a consequence. In those circumstances, it should have been the first business of the Ministry to see whether by a reorganisation it could have carried these additional costs.

We are sometimes reminded that the cost of living is not rising nearly as far as it did under a previous Government, but I remind hon. Gentlemen opposite that this is the second increase of 100 per cent. which the Ministry has sought for this service in the last five years. Whatever explanation may be given, that responsibility cannot be passed to somebody else. During the whole life of the Labour Government licences could be obtained for £2 and certificates of fitness for £3. Now we are told that under this Government of all talents, as we are led to believe, licences will cost £6 and certificates of fitness £5 10s. In other words, they are now to pay more than two-and-a-half times as much for the same service. Therefore, in the interests of the travelling public, particularly those in the rural areas, one would hope that the Ministry would have seen its way either to re-organise the service to carry this increased cost or to ask the Treasury to carry any deficit.

9.55 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. G. R. H. Nugent)

These Regulations, as has been stated by the hon. Member for Enfield, East (Mr. Ernest Davies), increase the cost of a public service vehicle licence from £4 to £6, an increase of £2, and a certificate of fitness from £5 to £5 10s., an increase of 10s. I would say straight away that the Government are at least as concerned as hon. Members opposite to see these public transport services flourishing. We regard them as an essential part of our national life and we are conscious of the many difficulties they have to contend with especially, as was said by the hon. Member for The Hartlepools (Mr. D. Jones)in the rural areas. We regret any increased charges that may fall upon them.

I received a deputation from the Public Transport Association last month on this subject and I have first-hand knowledge of the problems involved. It is fair to say that this increase—I accept that any increase is regrettable—falls on top of average running costs for vehicles in the rural areas of about £4,000 per annum. Seen in that perspective, although still important, it is not an addition of very great magnitude. The necessity for it arises because the licensing system has been traditionally self-supporting, as was mentioned by the hon. Member for The Hartlepools. The hon. Gentleman's right hon. Friend the Member for Lewisham. South (Mr. H. Morrison)established that principle as long ago as 1930 and it is one we feel that we should stick to.

The increases are due to increases in salaries of officials during the period. The fact is that the system ran into deficit in 1955–56 to the extent of about £91,000, and in 1956–57 this increased to £172,000. We feel that this deficit cannot continue. The proposed increase will bring the account roughly back into balance. To deal with the point mentioned by the hon. Member for Enfield, East, and which was referred to in more detail by his hon. Friend, the increases are about three times the pre-war charge of £2 per passenger vehicle licence in 1939. It is over that period that it is fair to reckon the increase of three times, which is not altogether out of line with general increases over the same period.

Both hon. Members made the point at some length about what scope there is for economies in this administration. I accept that we have a basic obligation to see that this administration is efficient and as economical as possible. There has been an O. & M. investigation into the traffic area offices to ensure that the administration is as efficient and economic as it should be. The results of the investigation are still under discussion, but substantially the team confirms that the offices are being run efficiently and economically, and that the system is about as good as it can be. I do not say that small savings cannot be made and we shall certainly take advantage of them where we can.

To the particular point raised by the hon. Member for Enfield, East, of a system of one licence per operator instead of one licence per vehicle, we have given preliminary consideration. The hon. Gentleman must not take this as being a final conclusion, but the general conclusion was that it would not amount to a very substantial saving. It would, of course, involve a change in the law because the proposed system would not be suitable to deal with the practical necessities.

The reason is that, as things stand at the moment, the P.S.V. licence gives control not only over the proper conduct of the licence holder but over the proper use and maintenance of the vehicle. The certificate of fitness is a certificate that the vehicle complies with the relevant requirements of the Construction and Use regulation and is a necessary document when the P.S.V. licence is issued. It can only be revoked; it cannot he suspended.

If a vehicle examiner of the Ministry considers that for some technical reason a vehicle must be put temporarily off the road he therefore suspends the P.S.V. licence for that vehicle. If one P.S.V. licence were issued for each operator there would obviously be a difficulty for him in carrying on. So it would be necessary for the law to be altered to allow for suspension of individual certificates of fitness in order to deal with the practical problem. The general view at present, in view of the O. & M. investigation, is that the saving which would result would not be substantial and certainly——

Mr. Ernest Davies

The Minister says that preliminary consideration has been given to this matter. Why is the Ministry so slow? The Thesiger Report appeared in 1953, four years ago. I should have thought that a matter like this could have been sufficiently considered in four years to enable a final decision to be come to.

Mr. Nugent

What I was saying was that our present opinion is that there is unlikely to be much benefit to be got out of this. The final conclusion that we might make on it would naturally be combined with the O. & M. examination of the existing system. I do not think it is unreasonable for events to have followed the course that they have and I certainly do not agree that it indicates any inefficiency in the Department.

I am very glad, as I see from the day's papers, that there is some relief for passenger transport operators in the reduction in the price of fuel, so that if they have to meet this increase in their costs they have some relief in another sphere.

The issue is quite simply this: we need a system of passenger service vehicle licences and a system of certificates of fitness. The systems must be paid for either by the operators or by the taxpayers. The tradition is that it should be paid for by the operator. I hope I have satisfied the House that the existing administration is, broadly, efficient and economical and that it leaves us with the choice of whether it should be changed from the operators to the taxpayers.

I am quite sure that it should riot, and that it is right that the operators should continue to bear the cost of this administration. I therefore ask the House to reject the Motion.

Mr. Ernest Davies

In view of the statement made by the Parliamentary Secretary and the reasons he has given why these Regulations should be made, I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.