Private Hire Vehicles (London) Bill [Ways and Means] (Hansard, 16 March 1998)

§ Mr. Eric Forth (Bromley and Chislehurst)
The measure is important, because it involves not just money, but many people's livelihoods. It is odd that nobody seems to want to come to the House to explain why we should vote for the motion. The debate is in danger of being back to front. In the normal course of events, someone with an interest in the issue—who knows?—would come along and argue in the House for the motion to be agreed to.
The motion would authorise the charging of fees payable by the holders of licences granted under the Act and the payment of sums into the Consolidated Fund. In other words—were the Bill ever to become law—we are talking about fees chargeable to people operating private cabs in London. That raises a whole number of questions to which, I would have thought, we would want to know the answers before we proceeded very much further. I hope that the Minister will be able to provide them at some stage in the debate so that the House can consider whether it wishes to approve the measure.
The very obvious first question is what level of fees we are talking about. That will have an effect on the people whom the measure seeks to regulate. Self-evidently, if the fees were set too high, people would almost certainly be deterred from seeking a licence, as provided for in the Bill, which would in turn lead to a sharp diminution in the number of people offering minicab services in London. Some important consequences flow from that—not just for the people involved, who are a vital part of our enterprise culture. They enter business at the most basic level to provide a service which, patently, is required and very much valued by certain sectors of society. The users of the service would also suffer were the fees set at an excessive level.
That point raises an important question about the philosophy behind the setting of fees. Would they be set at a token level? Would they somehow be related to the number of people who were deemed to be operating the service? We should bear in mind that it says in the Bill: There are no records of how many operators, drivers or vehicles there are in the London private hire vehicle industry. We therefore start from the rather odd position of not knowing the population—if I can put it that way. That must give rise to enormous difficulties in trying to determine an appropriate level at which to introduce the regime, were it ever to become law. Will the fees initially be set at a relatively high or a relatively low level? That is the first question that must be answered before we can proceed any further.
1060 That point interplays with the money resolution, which we shall also want to debate—I hope—in some detail. The money resolution is the other side of the coin; it deals with the costs. There is inevitably a relationship between the measures. A regulatory regime—a bureaucracy—will have to be set up to administer the proposed scheme, but without us knowing how many drivers or vehicles it should cover. The question arises whether fees will be set to cover the cost.
The Bill says: It is intended that all continuing costs of administering the licensing system will be met from fees charged under the Bill. There is a clue: the fees will be set at a sufficient level to cover the cost. How can we know the cost if we do not know the number of operators, drivers or vehicles involved? The House faces a difficulty. We are being asked, without explanation so far, to approve a measure based on an unknown population of drivers—or vehicles—who are to be licensed. We therefore do not know the potential revenue. We cannot, therefore, know the size of the bureaucracy, a point to which I shall come in the next debate in more detail. It is, therefore, very difficult to assess the relationship between all the different variables and factors.
I hope that the Minister will be able to give us a detailed explanation of how she envisages the regime working. Otherwise—I am sure that this is not intended—the House will be asked effectively to sign a blank cheque and give open authorisation for an unspecified fee regime. I fear that, if the fees were initially set at the wrong level, the regime could destroy a very valuable service sector in the economy of London.
The service is important because it provides basic transport to those on relatively low incomes. Those of us on higher incomes can use black cabs, but there is a huge demand for the service offered by the vehicles covered by the Bill. The fees charged will be critical in determining whether we encourage this sector, or risk throttling it by setting the fees too high.
The number of vehicles—which we do not know—will determine the size of the bureaucracy. As the Bill tells us that the costs are to be covered, the initial fees may be unduly high and may contribute to reducing the number of licensees. We know none of the underpinning details, and no one has come to the House to explain them. [Interruption.] I am hearing noises from Ministers on the Treasury Bench.

§ Mr. Deputy Speaker (Sir Alan Haselhurst)
Order. I want to hear noises only from the right hon. Gentleman.

§ Mr. Forth
I am grateful for your encouragement, Mr. Deputy Speaker, and I will seek to respond to it.

§ Mr. Deputy Speaker
Order. But not repetitive noises.

§ Mr. Forth
Indeed not.
Clause 20 says: The Secretary of State may by regulations provide for prescribed fees to be payable". 1061 One's heart leaps, as one imagines that this gives us a clue as to the level of fees. However, one finds that the fees will be payable

"(a) by an applicant for a licence under this Act, or for the variation of a London operator's licence under section 18, on making the application;

(b) by a person granted a licence or variation".

The Bill continues: Regulations under this section may provide for fees to be payable by instalments"— a hint that the fees may be on the high side— or for fees to be remitted or refunded (in whole or part) in prescribed cases. Clause 20 does not help, and suggests that the fees may be set at a high level. That confirms my worst fears. If a Minister decides to set the fee at a high level to cover the bureaucratic costs, the number of applicants may be reduced. The Bill states of the financial effects: It is intended that all continuing costs of administering the licensing system will be met from fees". What will happen if the situation I have described occurs?

§ Mr. David Davis (Haltemprice and Howden)
This is a rather specialised case of a general problem facing the Government. Everybody accepts that over-regulation is a problem in any modern western society.

§ Mr. Deputy Speaker
Order. I remind the right hon. Gentleman that he should not be having a conversation with the right hon. Member for Bromley and Chislehurst (Mr. Forth). He should speak to the Chair.

§ Mr. Davis
I apologise, Mr. Deputy Speaker. My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) was making a specific point about an important issue in western society—the control of the level of regulations. If the House agrees to the Ways and Means motion, that control will be completely given away. By imposing no limit on the money that can be raised, we shall put no limit on the bureaucracy that can be imposed on the industry.

§ Mr. Forth
My right hon. Friend makes an important point, but I think that the matter goes further. He touches on another possibility that I wanted to mention—that the regime could become a covert method of raising revenue for any purpose.

§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle)
Will the right hon. Gentleman say whether, if he is so opposed to the regulation of the licensed minicab trade in London, which is the subject of the Bill, he would abolish the licensing system that operates effectively in every other town and city?

§ Mr. Deputy Speaker
Order. I hope that the right hon. Gentleman will not respond to that intervention, which goes well beyond the scope of the Ways and Means resolution that we are discussing.

§ Mr. Forth
I will, of course, adhere to your ruling, Mr. Deputy Speaker. If the Minister tempts me on another occasion, I may succumb, but not when your beady eye is on me.
1062 My right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) made an important point. We need to know much more about the intended relationship between the fee level, the revenues raised by the fees and the cost of the bureaucracy. We also need to know the effect on the number of licensees and whether the fees raised will exceed the costs, which could provide a temptation to a Secretary of State who wanted to raise revenues for other purposes. We want the Minister to guarantee that the regime will not be used as a money-raising facility.
As I keep having to remind the House, this aspect of the Bill has not been explained—we are flying blind, and I can raise these issues only in a fog—but it would help if the Minister could tell us whether she can guarantee that in no circumstances will the fees be used as a pretext to raise revenues beyond what will be needed to pay for the costs of the bureaucracy.
That point also raises the question whether the bureaucracy will be sensitive to the number of operators. In fairness, I must concede that, as the Bill suggests, we do not know how many operators there are, so there will have to be some initial guesswork about the size of the bureaucracy. However, at some point, we shall be able to determine the numbers, and whether they are increasing. We shall then be able to set the fee more accurately.
We need to know much more about the measure before we can give it our approval. I hope that the Minister can answer some of my questions, and give an idea of the Government's general approach to the matter. I also hope that she can say how she envisages that the regulations that will flow from the Ways and Means resolution will operate in detail.

§ Mr. Tom Brake (Carshalton and Wallington)
Liberal Democrats are also surprised that the Minister has chosen not to come to the House to explain the details of the Ways and Means resolution and perhaps pre-empt some of the points raised by the right hon. Member for Bromley and Chislehurst (Mr. Forth). [HON. MEMBERS: "The Minister is here."] I mean the Financial Secretary, in whose name the motion was tabled.
I hope that the Minister will consider hypothecating the charges for transport—specifically for public transport—expenditure. The funding of transport in London is a matter of conjecture and concern, and hypothecation of the charges could contribute a small sum towards public transport improvements, albeit we do not know the sum involved. We will support the resolution, but I hope that the Minister will respond on hypothecation.

§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle)
First, let me explain that the resolution relates to a private Member's Bill, promoted by the right hon. Member for North-West Hampshire (Sir G. Young), who is not here tonight. It is also clear that—

§ Mr. Deputy Speaker
Order. Perhaps, in fairness to the Bill's promoter, I should say that a letter has been sent on his behalf saying that he originally expected the matter 1063 to be dealt with on a previous day and that, as he is with the armed forces parliamentary scheme, it was impossible for him to change his diary for tonight.

§ Angela Eagle
That is a perfectly reasonable explanation, and I fear that the right hon. Member for Bromley and Chislehurst (Mr. Forth) is to blame for—

§ Mr. Forth
On a point of order, Mr. Deputy Speaker. If the Bill's promoter had given notice that he would be unavailable to attend the House today, why on earth was the resolution tabled today? That seems rather odd.

§ Mr. Deputy Speaker
The Ways and Means resolution is a Government item of business, as opposed to the Bill.

§ Angela Eagle
Thank you, Mr. Deputy Speaker.
The Bill is a private Member's Bill. Should the right hon. Member for Bromley and Chislehurst want explanations of the thought behind the proposed legislation, I suggest that he talks to the Bill's promoter.
The money resolution is entirely simple. The Bill provides for the regulation of the London minicab trade, in the interests of public safety. That should not be politically contentious. The Bill simply ensures that charges may be imposed on licence holders when licences are renewed or varied, and the money resolution provides for modest payments by the Secretary of State, arising from the Bill.
The principle in the Bill is that the costs of regulation should be met from the fees paid by the minicab trade, but that it is prudent to ensure that the Secretary of State can, if necessary, give some assistance with start-up costs before the income from fees is available. It is a very modest money resolution, as is generally the case with private Members' legislation. I hope that the House will approve it.

§ Mr. Simon Hughes (Southwark, North and Bermondsey)
I am a sponsor of the Bill, and I think that 1064 the Minister was discourteous, to say the least, not to reply to the perfectly proper intervention by my hon. Friend the Member for Carshalton and Wallington (Mr. Brake). This is a Government Ways and Means resolution, tabled in the name of a Treasury Minister, and the Government should give account for it; the fact that the Bill is a private Member's Bill is an entirely separate matter.
My hon. Friend the Member for Carshalton and Wallington asked whether the money would be ring-fenced. The resolution says that the money goes into the Consolidated Fund, with the implication that it could be spent on other things. My hon. Friend and I would not want that to happen. We, and most hon. Members, want the money to be spent only on transport in London. I hope that the Minister will reconsider her decision not to respond. I hope that, if she knows the answer, she will give it, and that, if she does not know it, she will assure us that the Financial Secretary, who tabled the resolution, writes to my hon. Friend and to me.

§ Angela Eagle
I can assure the hon. Gentleman that the idea behind the money resolution is simply to give assistance with start-up costs before income from fees is available; it is not a massive revenue-raising measure. That, simply, is what it is about—to make the Bill, if it becomes law, operative and to give the scheme a chance to start before fees are generated to pay for regulation of a sort that happens everywhere else in the country. It is as simple as that.