HC Deb 17 December 1985 vol 89 cc277-82

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]

11·59 pm
Mr. Vivian Bendall (Ilford, North)

I declare an interest in the matter, in that I represent the Licensed Taxi Drivers Association. My interest is declared in the Register of Members' Interests.

Not long ago we had a meeting with the Minister, for which I thank him, when we said that members of the taxi trade have been extremely concerned about the 50p tariff proposed by the British Airports Authority for the feeder park at Heathrow. I have also been in correspondence with Sir Norman Payne of the British Airports Authority to ask him to reconsider his decision about a charge for entrance to the feeder park. Unfortunately, when I wrote to him several weeks ago, he was not prepared to do so.

I should give the House a little background to how this unfortunate situation arose. Some time ago it was realised by the airport authority that there were problems with the taxi ranks at the airport, and taxis were using airport roads and getting in the way of the normal flow of traffic. Perhaps with more forward planning, taking into account the increase of the number of passengers going through the airport, that could have been realised some years ago and adequate provision made for it. However, that was not so and adequate provision was not made.

The airport authority rightly, to try to resolve the problem, suggested that taxis should be put through a feeder park. Some years ago, in conjunction with the licensed trade, talks took place on having a feeder park. General agreement was reached and certain aspects of it were contained in the 1983 byelaws. However, at the outset there was no mention of any charge to be made at that time or in the near future. Now drivers are being penalised by being charged 50p to enter the feeder park.

On the average Heathrow to central London run, depending on what part of London it is, on the present tariff, the taxi driver is likely to get £17 or £18. The problem arises when a cab from the feeder park has to go on a more local call such as in Isleworth or Hounslow, which are quite close to the airport. If the fare is fairly low, 50p for entering the feeder park is a considerable sum. The taxi can come back to the front of the feeder rank after a short journey only after it has been to some specific hotels adjacent to the airport. There will be confusion in the feeder park as cab drivers who have been waiting there for a considerable time will not be too happy about other taxis coming in front of them, even if they have been on a short journey.

The LTDA has informed me that the likely cost to the taxi trade of a feeder park charge of 50p is about £40,000 a month. There have been problems at Heathrow. There has been a boycott of the airport by a number of taxi drivers. The LTDA has supported that boycott. In such a situation, it is the public who are liable to be the losers.

The Minister should be made aware that since the boycott began several anomalies have arisen. Mini-cabs have been exploiting the situation to great effect. Cases have been reported to the LTDA and, in turn, to me of mini-cabs which have in the last few weeks charged tourists and visitors as much as £97 to come to central London from Heathrow. In one case a trip to the Hilton hotel cost £60. Some mini-cab drivers have suggested that if they take more than one passenger to central London the charge will be £20 for each passenger.

The English tourist board has taken an interest in the matter and it wrote to Mr. Feigen of the LTDA on 12 December. That letter pointed out that its infrastructure committee was extremely concerned about the 50p parking charge that was to be levied at the airport. It believed and hoped that it would not result in the deterioration of the taxi service and asked for the LTDA 's advice on that. A copy of that letter was forwarded to Mr. Bell of the British Airports Authority.

Although the trade is boycotting Heathrow, it has acted in a proper and responsible manner. In other countries when such a situation has arisen there has been, quite wrongly, the blocking of airports—a ridiculous attitude towards the problem. The LTDA wishes it to be made clear that it would have nothing to do with such action because it would have serious consequences for emergency services in the event of an unfortunate accident.

There have been meetings today between the British Airports Authority and the members of the taxi trade interested in the problem. However, I am afraid that no agreement has been reached. The British Airports Authority's suggestion was that perhaps charges should be held until the end of January. That would only put off the situation for a few weeks. I can understand the British Airports Authority's concern with Christmas coming given the number of passengers going through Heathrow. Naturally it is concerned about the passengers and how they can disperse from the airport and get to it.

Another suggestion is to hold charges until May and in the meantime a committee could be set up to try to find ways of passing the charges on in a combined commercial venture. I do not understand whether that involves the trade because I have not yet had an opportunity to consider the finer points.

A member of the LTDA has asked for a judicial review, and I understand that that has been granted. I should have thought that it would have been prudent and sensible of the British Airports Authority to have held or withdrawn its charges pending the judicial review. That would stop the boycott immediately and would give time for the judicial review to be heard and for a decision to be reached.

I understand that in future legislation the British Airports Authority is liable to be privatised. I support the Minister in that. But what is liable to happen to charges on feeder parks once privatisation takes place? Will there be any control of increases? To some degree that trade has been let down.

Some years ago British Rail tried to introduce charges on taxi ranks outside stations. It decided that it was not practical and withdrew the proposition. Now that the BAA has introduced charges, I can envisage British Rail reconsidering its position. If it introduced charges, that would increase costs to the general public.

My right hon. Friend the Secretary of State for Transport is responsible for the tariffs charged to the public by taxi drivers. It is rather unfair that their tariffs are controlled in one area, but in another area they must face this increase. The Minister was asked to consider an increase in the tariff. I can understand his problem, because how can we separate taxis coming from Heathrow from taxis in London?

The BAA should reconsider the matter. I hope that my hon. Friend the Minister will intervene and will discuss the issue with the BAA. I understand that the original direction may have come from his Department, which is interested in increasing revenue from airports. I do not understand why that increase should be to the detriment of the taxi trade.

The taxi trade in London is an integral part of the transport system of Greater London. It is important because it is properly controlled and properly licensed and its drivers have to pass a knowledge test, unlike many parts of the private car hire system. In those circumstances, it is not fair to penalise those who are running a good service as an integral part of London's transport system. I hope that the matter will be reconsidered. I believe that it can be resolved—and, I hope, resolved before the continuing boycott at Heathrow really begins to affect the public.

12·12 am
The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell)

I thank my hon. Friend the Member for Ilford, North (Mr. Bendall) for raising this matter, and so giving the House the opportunity to consider the real issues that lie behind it.

The facts of the matter may be simply stated. The British Airports Authority incurs identifiable costs of some £500,000 associated with the marshalling of taxis at Heathrow. After extensive consultation with the London taxi trade, The authority decided to recover that cost by means of a levy of 50p on each vehicle entering the taxi feeder park. That charge was introduced on 27 November, since which date the taxi trade has boycotted the feeder park. I am sure that my hon. Friend will correct me if that is not his understanding of the position.

Before discussing the implications of this, I must state at the outset that the decision to introduce that charge was an administrative matter for the British Airports Authority acting under the Airports Authority Act 1975. It was not something for which I or my colleagues were responsible. I shall not comment on whether the authority had the vires to make that charge as I understand that this specific question is now the subject of a judicial review.

As I see it, this matter gives rise to two relatively distinct questions. The first is whether it was right for the authority to levy this charge at all, and the second is whether such a charge should be recovered from taxi passengers in the form of a surcharge on the fare for hirings made at the airport. I see my hon. Friend indicating that I have identified the key issues.

Taking the first question of whether a charge should be levied, I think that it is common ground that the authority has the power to provide these facilities for marshalling taxis at Heathrow. Indeed, under the 1975 Act it has a duty to provide such services and facilities as are necessary or desirable at its airports". I think that it is also accepted that the provision of these particular facilities costs in the order of £500,000 per annum, which has to be met from one source or another. At the moment it is a charge on the general revenue that the authority receives from its activities—that is, it is primarily recovered from aircraft landing charges.

We know that there is a cost and how it is being met. What are the effects? First, it makes flying into Heathrow a little more expensive for the airlines, but they pass that cost on to their passengers. Every passenger passing through Heathrow is making a contribution toward meeting the cost of marshalling taxis—a taxi tax on all the users of the airport. It seems to us not wholly unreasonable that the charge should be on the taxi operators who benefit from it.

A taxi charge on all the users might be justified on social grounds, but I do not think that my hon. Friend was claiming that the London taxi trade was a disadvantaged group in need of social support. The closest analogy that I can find is with the road haulage industry, which meets through taxes and duties the cost of the damage that its vehicles do to the roads. No one has yet claimed that we should increase excise duty on all vehicles to relieve the industry of this burden. The costs are identifiable. The road haulage industry gives rise to them, and it pays. This is the same principle that is being applied in the present case.

Let us examine the argument that the taxi trade is providing a service to the airport authority by carrying "its" passengers and should not be charged for doing so. But the shops in the terminal buildings are also providing a service and it is not said that they should not pay for the privilege of serving this lucrative market. It could be said that that is not a fair analogy. It has been asserted that London taxis have a right to ply for hire throughout London, including Heathrow. However, the airport is on private land and bus operators, who are licensed to ply for hire anywhere in Great Britain, pay a fee towards meeting the costs that they give rise to at the airport. That is directly analogous to the position of taxi drivers.

Of course the taxi trade does not like paying for something that it has previously had for nothing—I understand why my hon. Friend raised this matter of behalf of the taxi drivers—but I am afraid that all the logic lies in favour of putting these costs on those who benefit—the taxi drivers who choose to ply their trade at the airport.

Mr. Bendall

Will my hon. Friend concede that shops at Heathrow do not have the prices at which they sell their goods controlled?

Mr. Mitchell

My hon. Friend has made an important point, to which I shall come in a moment.

That brings me to the second strand of the argument—that, if the taxi trade is to bear this cost, it should be permitted to pass it on to passengers in the form of a surcharge on the fare. My hon. Friend claims that it is totally unreasonable that fares should be controlled and that the taxi trade should be unable to respond to an increase in costs by increasing its prices. At first sight, I was sympathetic to this argument. That was before I made further inquiries.

Soon after we first took over this responsibility from the Home Office, my officials came to me saying that it was time to increase London taxi fares. I must admit that my first reaction was one of amazement that the prices in this industry are controlled by central Government. What was so unique about the London taxi trade that it alone in the entire economy should be controlled in this way? Why cannot each taxi driver decide on the price at which to sell his services?

I was then presented with the following argument: first, to protect the consumer, all taxis must charge the same fare; secondly, the fare must be set by some authority; and, thirdly, my right hon. Friend the Secretary of State for Transport had drawn the short straw. We have aceepted this—so far—but I would state unequivocally that, if there were true competition between taxi drivers charging different fares, I would have no objection whatsoever to them taking this levy into account when deciding what fare to charge from Heathrow.

That is not the present situation. As I have said, we control taxi fares to protect the consumer. Let us examine the effect that the present tariff has on services at Heathrow. Apparently, hundreds of taxi drivers are willing to queue for several hours for a hiring from the airport. Why? Not all passengers are American tourists or Arab sheikhs, from whom the driver might expect a handsome tip.

The reason is that the fare tariff makes hirings at Heathrow particularly lucrative. That is because the meter rate is increased by 50 per cent. when the journey passes the six-mile mark. That was not an unreasonable provision for the normal taxi driver compelled, say, to take somebody to Bromley or Enfield, from where he was unlikely to get a return fare. Often it is the case that a taxi picks someone up in the middle of London or at a station, takes her or him to whatever the destination may be and there is no fare back. To compensate for that, there was put into the system this 50 per cent. increase.

The increased earnings on the outward journey cover the cost of returning some way towards the central area, where the driver might reasonably expect to get another hire. But this same surcharge applies to hirings at Heathrow airport, most of which leave the cab in the middle of central London, where the driver can immediately be in the best possible position to pick up another hiring. I can see little justification for a tariff structure which inflates the average taxi fare from Heathrow by as much as £3.

To be frank, all the evidence is that Heathrow is highly profitable to the taxi trade. The levy that we are now debating will make a slight impact on its profits, but, so far as I can see, there will still be plenty. I told my hon. Friend when he visited me, together with representatives of one of the London taxi associations, that if this levy gives rise in the longer term to an undersupply of taxis at Heathrow, I shall be willing to reconsider the case for a surcharge on the fare, and I stand by that undertaking.

But tonight I go further. If, in spite of the 50p surcharge, there is still an apparent oversupply of taxis at Heathrow, there would be a strong case for a review of the tariff structure with a view to reducing the excess profitability of providing these services in the circumstances I have described. It does not benefit Heathrow or the passengers who pass through the airport for there to be hundreds of cabs stacked in a feeder park in the central area. It certainly does not improve the availability of taxis in the centre of London.

This matter demonstrates vividly the anomalies that can arise when market forces are suspended in favour of central determination. It is certainly not the wish of this Administration to be in a position of controlling London taxi fares—but while we have this responsibility it is our duty to exercise it in the best interests of the passengers. I therefore thank my hon. Friend for drawing my attention to an anomaly which has previously gone unnoticed in the detailed and complex exercise of determining taxi fares.

I know that my hon. Friend, besides supporting the London taxi trade, is concerned for the welfare of taxi passengers. He will therefore be relieved to know that the dispute is not causing too much inconvenience to those who would normally have chosen to travel by taxi. While I am sure he shares my regret that there should be any inconvenience at all, the majority of such passengers have transferred to other forms of public transport.

Heathrow has particularly good public transport links which include the underground, the airbus, run by LRT, and a minibus service called Airliner, which provides a covenient door-to-door service to and from the airport. In addition, those with heavy luggage or going to destinations that are difficult to reach may telephone for a hire car or taxi to pick them up at the airport.

One often finds when considering a particular case that it is grounded in more general and fundamental issues. As I said in my opening remarks, this apparently detailed matter has caused us to consider two such issues—first, whether costs should be borne as a general tax or should fall on those who benefit, and secondly whether the fare tariff for London taxis should be reviewed in relation to Heathrow.

For the reasons that I have given, our view on the first of those is that such identifiable costs should be borne by those who benefit, not by all airport users. On the second, we are not persuaded of the immediate need to pass this levy on to the passengers, but we shall review the situation with a view to securing an appropriate level of supply of taxis at Heathrow up or down depending upon how the matter develops.

My hon. Friend expressed his anxiety and that of the trade, which he has expressed to me before, about what would happen in the event of the privatisation of Heathrow. The fair trading and competition laws would come into operation. That applies not just in the future but at present. My hon. Friend might like to consider that that might be a more effective way of taking the matter forward than the boycott which is currently losing members of the taxi trade a useful income during the pre-Christmas period.

Question put and agreed to.

Adjourned accordingly at twenty five minutes past Twelve o'clock.