HC Deb 24 February 1969 vol 778 cc1231-41

10.21 p.m.

Mr. Michael Heseltine (Tavistock)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Public Service Vehicles (Licences and Certificates) (Amendment) Regulations 1969 (S.I., 1969, No. 32), dated 10th January 1969, a copy of which was laid before this House on 20th January, be annulled. I am glad to have this opportunity of raising a number of matters concerning the Regulations and the system under which the licensing of buses and goods vehicles is carried out. This is an example of the detailed implementation of legislation which it is difficult to deal with. Nevertheless, a large number of people are involved and substantial sums of money are raised during the year from people who get their livelihood from these industries.

This opportunity arises as a result of the Government's decision to increase certain charges levied on the bus industry. Basically the Regulations have the effect of raising the cost of public service vehicle licences from £8 10s. to £12 10s., the cost of certificates of fitness issued in respect of buses from £5 10s. to £6 10s. and the cost of the notes and proceedings of the Traffic Commissioners from Is. to 2s. 6d.

The principle of the service undertaken by the traffic commissioners, being made self-supporting and the cost of that service being met by the people who use the services, is perfectly acceptable. But the Government's bland acceptance that, because the costs of the existing service have risen, those costs should be passed on without examination to those who use the services is not acceptable.

The principal purpose of raising this matter by way of a Prayer is to probe to what extent the Government have tried to avoid the increases in these charges which, on a percentage basis, are very significant in one area by finding other means of administering the activities of the traffic commissioners and the traffic courts themselves.

Anybody taking a fresh look at the system of licensing for public service vehicles will be anxious about a system whereby, in order to put a public service vehicle on the road, a person must have a certificate of fitness, a public service vehicle licence, passenger insurance and a passenger service vehicle driver's licence. If he intends to charge separate fares to individual passengers, it is necessary for him to obtain a road service licence. In other words, five pieces of documentation are necessary to get a bus into service. These costs must be found by the people operating the buses. What is even more important is that the bureaucracy necessary to service a system of this kind must be maintained at the expense either of the industry or of the taxpayer.

It is necessary to obtain a public service vehicle licence as a legal document, because without it one is not entitled to ply for hire and reward. The people from whom it is obtained operate under two headings, first as traffic commissioners to regulate the bus industry, and secondly as the licensing authorities to regulate the goods side. It would seem from a casual investigation of the work that is done by these people that a great deal of probing could be profitable in terms of improved administration.

My first general question to the Joint Parliamentary Secretary is to ask when the last examination of the work of the traffic commissioners was carried out. What consultations has the Ministry had recently—and how long ago was "recently"—with the traffic commissioners to see whether a more streamlined system could now be introduced?

The sort of example about which we would be interested to hear is whether any examination has been conducted to see whether any of the documents which are necessary could be brought together into one document. Is it not possible, for example, that the public service vehicle licence could be combined with the road tax licence? Is it not possible that the p.s.v. licence, the road tax and road service licences could in some form be brought together in one licence, which could be applied for at the same time?

Then there are the procedures of the traffic courts. An immensely detailed set of proposals is submitted continually by the bus industry covering every minute detail of its operation—the fares it charges and the stops it intends to make, right down to the routes and every other small detail which is put before the commissioners and considered. As one would expect with a historically developed situation of this nature, there is a time-scale through which the procedure goes.

Mr. Speaker

Order. Perhaps the hon. Member can help me. We are not discussing the Road Traffic Act. We are discussing five amendments to Regulations, four of which increase certain fees—the hon. Member may talk about those—and one of which imposes a fee. He may talk about that also.

Mr. Heseltine

Yes, Mr. Speaker. Perhaps I may explain. The traffic commissioners and the road licensing authorities are self-supporting. They have to conduct certain services. Those services have not proved to be economic. Therefore, the charges are being increased. My argument is that the way in which those services are conducted should have been examined before the charges were increased to see whether the increases could have been avoided.

One of the ways in which a great deal of time is wasted, and, therefore, costs are incurred, is that there is a slow process of stages through which any application to the traffic commissioners must go, not only a series of stages with attendant notifications to the police and other bus operators, but a series of printings of various applications which are made, all of which have to be distributed and published. Therefore, I would like to know whether the system could be streamlined and whether this possibility has been discussed with the licensing authorities.

Now, the charges themselves. Until the introduction of the Regulations, the public service vehicle licence cost £8 10s. It has remained at that figure since 1962, when it was increased from £6. The certificate of fitness is now to cost £6 10s., having previously cost £5 10s. The notices of proceedings have until recently been charged at 1s. and are now to cost 2s. 6d.

Looking at the rate by which the various charges are being increased, one cannot seriously question the increase of cost for certificates of fitness or notices of proceedings, except that the various services might be more expensive than they need be; and if the costs of the service could have been reduced it would not have been as necessary to increase the cost of the p.s.v. licence. It is the cost of that licence which represents the major increased revenue which is achieved by these proposals.

This is where the first question about the charges arises. We must remember that these increased costs are borne in respect of each vehicle in each calendar year, so it is a substantial proportional increase, amounting since the last increase, to 7 per cent. per annum for each p.s.v. licence. How does the Parliamentary Secretary square this with the standard increases recommended by the Government in their dealings with the Prices and Incomes Board? It is double the norm. Has this charge been referred to the Board. Will it be? If not, why not? The cost to the industry of this increase—reached by multiplying the approximate number of buses by the extra £4—is about £¾ million.

What would the hon. Gentleman advise a p.s.v. operator to do if he has a fixed price contract with, say, a local education authority which refuses to accept any passing on of the extra cost? If this were the first increased cost for the industry it would be fair to say that £4 a year was not substantial, but only recently the industry has had to face repeated fuel tax increases, which are not refundable in the example which I gave, as they would be to a fare stage operator. How should such an operator absorb the increase? This might involve more than just local authorities.

Could not the road service licences, which are only a part of the operation, be extended from three years to five years, as they were originally extended from one year to three? This would produce an economy, although not a proportionate one.

Another way of reducing inefficiencies and delays comes from the detailed checking of routes when application is made for a particular journey. There may be objections to competition from other operators, but most objections come from local authorities or the police for reasons of public safety, which is right and proper. But the routes must be known on which these operators cannot be allowed. Could not a standard list be produced? Then operators would not need to apply, because they would know that objections to certain routes. Exactly the same consideration applies not to scenic routes but, in London, to congested routes.

There are 11 traffic areas and each has a traffic court producing detailed accounts at varying frequencies of all applications, appeals, findings and changes resulting from considering those matters on which decisions must be made. I find it difficult to believe that much of the information produced in these documents—I have one with me; it is 80 pages long and is not bedtime reading—is required by anybody. Certainly I cannot believe that it is required weekly.

The Parliamentary Secretary will no doubt reply that this material is no longer produced weekly. That is true, but it was produced weekly in four of the areas until this Prayer was tabled, whereupon instructions went out within three days to those four areas encouraging them to fall in line with the other seven areas, which produce reports on a fortnightly basis. That coincidence was noted. I can only presume that this was an administrative tidying up exercise which had not occurred to anybody until my hon. Friends began probing the matter.

But the process should not stop there. These documents are produced to an extremely high standard and the Ministry should investigate this. Need they be printed? Cannot they be duplicated? How much of this information is of value to those who get it? I have no objection to those concerned being asked to pay 2s. 6d. for these reports, but I would prefer their cost of production to be reduced and, while still charging the same price for them, some other charges now falling on the industry could be reduced. In other words, too much detail is being included in these documents and it would be profitable for the Ministry to conduct an examination into the whole matter.

It is fortunate that we should be discussing this matter tonight, because we have been considering establishing a computer centre in Swansea to handle the vehicle and road licensing system. What study has been made into whether a part of the work of the traffic commissioners could be incorporated into that computer? At least some of the traffic court work could be incorporated; for example, by the computer storing details of licenses. Much of the work done by the 11 traffic areas overlaps and some of this could be hived off to the computer. Without a computer the possibilities of centralisation are restricted. Much of this information—it is not wanted frequently, but when it is wanted it is needed quickly—could be stored by the computer.

My hon. Friends and I want to be sure that before these costs were passed on, at a higher level than I believe was compatible with the Government's level of price increases, a genuine attempt was made to achieve some of the productivity about which Ministers are only too happy to talk on other occasions. It seems to me that there must be room for this productivity in this service; and that there must at present be overlapping and duplication within a system that has gone on since the 'thirties. Circumstances today are totally different, and I hope that the Minister will be able to satisfy us that the licensing requirements now operating are those which apply to today—nearly into the 'seventies—and not, as they were, to the 'thirties, in quite different trading conditions. I hope that he will be able to satisfy the House that it is a last resort that forced him to pass on these costs, and that every other reasonable step had first been taken to avoid his doing so.

10.40 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Bob Brown)

Both sides of the House should be in accord that the public service vehicle licensing system, administered by the traffic commissioners, is a necessary piece of administration. The system is intended to ensure that buses and coaches which carry passengers for hire or reward are run by fit and proper persons; that the vehicles and drivers conform to proper standards, and that the regular public services are suitably regulated in the public interest. The system is generally endorsed by the operators themselves because of the support which it gives to the maintenance of standards for which the industry as a whole has a very good record.

Both sides of the House should also be in agreement that this licensing system should pay for itself, and I am grateful to the hon. Member for Tavistock (Mr. Michael Heseltine) for at least conceding this point. This has been the settled principle, accepted by previous Administrations since the system was introduced in the 'thirties. It should be clear to all concerned that the system is not a revenue-earning or taxation instrument; the costs and receipts of the system should break even. and no more.

The Government are as concerned as the Opposition to ensure that any increases in costs, and therefore in fees, should be kept to the absolute basic minimum. It is appreciated that the present 40 per cent. increase in fees is substantial. It is, however, nearly seven years since the fees were last increased. Costs during that period have been going up, due to factors with which all employers have had to reckon. They arise from the pay awards for the Civil Service—which have, of course, all been approved in terms of the Government's incomes policy—and from increases in overheads, such as National Insurance, heating, lighting, postal and telephone charges.

It may be suggested that these factors ought to be offset by introducing economies into the system. During this period, and I emphasise this, there has been little change in the volume of work done in the traffic areas, or in the overall numbers of people employed. There has been no inflation of staff. I can give a firm assurance that the traffic areas' working methods are kept under continuous review. A general work-study programme has steadily been producing savings, especially on the clerical side, but savings on the clerical side will not be dramatic in terms of overall costs.

Any economies must therefore lie in cutting down on the procedures themselves. Before we enter into this field I suggest that we have to consider carefully whether what we do will be at the expense of the efficiency of the licensing controls and of the safeguards which these provide, because the nub of the matter is the safety of the general public. I do not think that the hon. Gentleman suggests any economies which would result in a worsening of safety standards.

It is the case that suggestions have come from the operators in the past, and they have renewed them when opposing these fees increases, for cutting down on the procedures. They have suggested, for example, though not unanimously, that conductors' licensing should be abolished. It is suggested that the p.s.v. licensing and excise licensing systems should be combined, but how this would greatly help the operators unless the Government were to forgo the revenue from the excise licence is not plain. The operators have suggested that the road service licensing procedures should be streamlined, but the procedure for publication of all these licensing proposals in all the traffic areas on the route, hearing proposals at public sittings and so on, has to be comprehensive in order to protect the interests of competing operators themselves.

Most of the changes that have been suggested would be fundamental or controversial and most of them would require primary legislation before they could be put into effect. What is more, the savings produced from the suggested changes if put in hand, both in terms of licensing costs and operators' costs would be comparatively small. I think I am quoting the hon. Member fairly. He said there would be a substantial proportionate increase. He referred to prices and incomes policy and the 3½ per cent. norm for salary increases.

The increases are not inconsistent with the Government's prices policy, as set out in paragraph 16 of the White Paper Cmnd. 3590. This recognises that increases may be necessary in certain circumstances. This case satisfies the criteria. The increased costs are due either to approved wage increases or to unavoidable increases in overheads and so forth. The scope for absorbing costs is small, if the system is to continue to do its job. No one has suggested anything that will produce any large savings. It is not intended to recover the arrears of deficit, but the wide gap that now exists between expenditure and receipts must be bridged in future to safeguard the taxpayer. We are increasing fees by no more than is necessary to provide for foreseeable costs, and to avoid further fees revisions, in the next three or four years ahead.

If we do not make these increases, of necessity the deficit must rank as public expenditure because it will fall on the taxpayer. It ill behoves any hon. Member opposite to berate the Government about the level of public expenditure as they do day after day and yet adopt this type of attitude when we take steps to reduce public expenditure. It is not possible to go on playing the two ends against the middle.

Mr. Heseltine

I went out of my way to make clear that that was precisely what I was not trying to do.

Mr. Brown

That is precisely what the hon. Member tried to do in praying against an Order of this type without giving any concrete proposals.

The third point was in relation to the poor operator who had a fixed price contract with a local education authority. How is he to carry this increase of £4 on the p.s.v. licence? The last increase was seven years ago. The one before was five years earlier and the one before that five years earlier still. I am certain that no one tendering for a fixed price contract would not foresee that after six—nearly seven—years this was a decided possibility. I am not so naive as to accept that a person tendering for a fixed-price contract for taking children to school, for example, will not be wide enough awake to embody contingencies of this type. The hon. Gentleman has made a thin case there.

The hon. Gentleman laid stress on the question of the substantial proportionate increases. I have not attempted to deny that 40 per cent. or so is a substantial proportionate increase. But, if we are to talk in these terms, it is fair to compare our record with that of the Conservative Government. In 1952, they made an increase of 100 per cent. in p.s.v. licences, whereas we are making an increase of 47 per cent., which is rather less substantial. Again, we are proposing an increase of 18 per cent. for the certificate of fitness—and I agree that this, too, is substantial. But the increase made by the Conservatives was 66⅔ per cent., so our 18 per cent. increase is not nearly as substantial as that.

I come now to the question of extending the period of the licences to five years. This subject is continuously under review, but I do not think that any one, save in the wildest flight of fancy, could seriously suggest that this would give us any sizeable saving.

Then there is the question of the production of the detailed accounts by the traffic areas. This is something which has been done for a number of years, as the hon. Gentleman himself said. The eleven courts produce detailed figures and statistics. I am convinced that there would be a hue and cry if we were to try and dispense with these statistics. He asked whether we could not do this more cheaply, whether we could not duplicate it. But duplication of things in the quantities involved would be a great deal more costly than printing, once the cost of type-setting was met.

The hon. Gentleman also raised the question of what part of the traffic commissioners' work could be done by computer in Swansea. This we shall also be looking at in future. Once we get the computer in operation at Swansea, we might be able to effect economies, but again I do not hold out great hopes of this vast economies here because, as I have said, the question of making economies generally is constantly under review in the operation of the traffic commissioners' offices.

I come now to the question of a merger of the two licences. One is an Exchequer revenue charge and the other is more or less in the form of an identity disc. One is a £2 million Exchequer revenue and if we issued only one type of licence we would still have the administrative costs of two Departments in sorting it all out. Therefore, again I doubt whether any great savings could accrue from such a move. Having said that, when we look at the proposals in the cold light of day, if there is anything that the hon. Gentleman has said which will offer us any savings, we shall be only too delighted to take it up.

Question put and negatived.