Taxis and Private Hire Vehicles

HC Deb 24 June 2004 vol 422 cc1510-35

[Relevant documents: Third Report from the Transport Committee, Session 2003–04, on The Regulation of Taxis and Private Hire Vehicle Services in the UK, HC251–I, Fifth Report from the Transport Committee, Session 2003–04, on The Office of Fair Trading 's Response to the Third Report of the Committee: The Regulation of Taxis and Private Hire Vehicle Services in the UK, HC418, and the Government's response thereto, Cm6183; The Department for Transport Annual Report 2004, Cm6207.]

Motion made, and Question proposed,

That, for the year ending with 31st March 2005, for expenditure by the Department for Transport—

(1) further resources, not exceeding £5,665,964,000, be authorised for use as set out in HC 466,

(2) a further sum, not exceeding £5,144,950,000, be granted to Her Majesty out of the Consolidated Fund to meet the costs as so set out, and

(3) limits as so set out be set on appropriations in aid.—[Paul Clark.]

4.8 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab)

With the leave of the House, we unknown, up-and-coming Members of Parliament have to take every opportunity to get heard. I therefore hope that I shall be forgiven for introducing my Committee's second report.

My Government rely heavily on the theory that only by continually introducing competition to various services can high standards be achieved. I have reservations about that, especially in relation to state services such as the national health service. However, it is a sensible idea for transport.

Taxis are a form of transport that is not often debated in the House of Commons, and it is not always realised that they are not only part of the general transport system but an essential part of the system for a great many people, including those who do not own a car, and those who no longer drive or no longer have access to a car. Such people are very dependent on the provision of efficient taxi services, and that part of the transport system is always growing. It is therefore essential that the way in which taxis operate, the safety levels that they provide, the prices that they charge and, above all, the services that they offer are those that are required by the general public and are of a consistently high standard.

Because Her Majesty's Government have, in the past, been so reliant on the opinion of the Office of Fair Trading, the Select Committee on Transport was somewhat surprised to discover that the OFT had produced a report that seemed to suggest that it was no longer a good idea for local authorities to control the number of taxi licences issued in a particular area. A normal way of balancing supply and demand in such services is to ask local people what they want, and to place the responsibility for deciding the size of a particular fleet on an elected authority.

My own council, for example, decided some time ago, under a previous Administration, that it would be challenged if it sought to restrict the issuing of licences, and there followed a period during which almost anybody with respectable traits—rather than people who did not comply with proper standards—was able to obtain a licence. That resulted in an extraordinary situation, in which there was not only an increase in the number of taxis but a drop in the number of private hire cars, which had previously not been allowed to ply for hire on the roads. That change was not necessarily to the advantage of the general public. I speak from personal experience as one who uses the taxi system in my constituency widely.

In Crewe, the large taxi firms that had provided a 24-hour service, including at difficult and sometimes unpopular hours—enabling people to get to railway stations or to get home safely at times when there were not large numbers of passengers looking for taxis—suddenly found that, following the issuing of large numbers of taxi licences, the emphasis was on providing lots of taxis at the times when there were lots of people available, but not on an equal basis right across the 24-hour period. So, if someone required a taxi late on a Friday, Saturday or Sunday night from one or two of the well known centres of entertainment, there would probably be a large number of taxis available, some of which would previously have been private hire cars. However, those services were not necessarily being provided at unpopular hours.

I therefore took a very personal interest when the Committee decided to consider the OFT's examination of the provision of taxi licences, and I have to say that the Committee found the report fairly disquieting. In the past, the OFT has been well known for the very high standard of its work, and the care with which it provided reports. Under Sir Gordon Borrie—with whom I had the privilege of working when I was an extraordinarily junior Minister of no import whatever in what was then the Board of Trade—the OFT had developed a very good reputation, not only for looking into the essential problems that were arising across the board, but for coming to measured and careful judgments based on fact.

I am not making a general assumption that all the OFT's work is now substandard, but the sad thing is that the Committee found that this report was frankly not one of which the office could be proud. Indeed, we found that, in many respects, the report was slovenly and did not seem to have been carefully researched. The research had not been undertaken by the OFT itself, but seemed to have been based on a ragbag of other people's research. Some of the research was done for completely different reasons, and then somehow aggregated into the report, which precipitated a series of decisions that boiled down to the fact that one way in which the travelling public could be assisted to get many more private taxis was to remove many of the responsibilities from local authorities, and to say, in effect, that almost anyone could have a licence if they complied with one or two very minimal conditions.

When we questioned the Office of Fair Trading, we were concerned about the quality of the research, as I have said, about the conclusions that it had reached, and that it had not given nearly enough weight to the views of local authorities. One of the responsibilities of an elected member in a particular borough, or town, wherever it is in the United Kingdom, is to know what their electors want and, certainly, to be aware of the conditions that apply in relation to the provision of transport. It seemed to us that the OFT had decided in a cavalier manner that local authorities should not have rights to place restrictions on the number of licences based on their assessment of need in a particular area but rather on a rather outdated view of the provision of competition, which had not been justified either by the OFT's report or the modelling that it had undertaken. Our inquiry session with the OFT confirmed that, and when we said one or two things that the OFT seemed to regard as at best disobliging and at worse cruel, it came out with a report saying, in effect, that we were all wrong and that we did not know anything about the subject. Well, it was precisely because we were concerned about the quality of its work that we asked it those questions, and we did not receive satisfactory answers.

I do not conclude from that that every inquiry into competition throughout the United Kingdom will produce a report that cannot be justified on the basis of facts and figures. In this particular instance, however, I repeat that we were clear that the Office of Fair Trading, which has a special responsibility and could destabilise taxi firms throughout the United Kingdom if it took the wrong decision, had not in this instance undertaken its research to an adequate standard. In some cases, it had been involved in very odd decisions. For example, in Cambridge, a university city, it had done this piece of work during the holidays. When we asked it why it had done so, it seemed to think that that was an unnecessary question. When we pointed out that one of the big users of taxis would be student populations, we did not really get a coherent reply. Indeed, some might say that we did not get a reply at all.

The Committee's report says plainly that for many women, elderly people and people who do not have access to cars, the taxi is not an indulgence or an expense but a fundamental way of getting to and from essential services such as doctors and shops. If there is not a proper taxi service available to everybody, across the board, at prices that they can afford, that is a definite drawback. It is not an abstract argument. This is a transport system that underpins the existing transport. In some areas, particularly where bus companies arbitrarily withdraw services on their own criteria, without, as far as one can see, considering the needs of the population, only people's ability to replace that with a taxi service, preferably at a reasonable rate, makes it possible for them still to enjoy a normal standard of life. It is therefore very important that we get this right.

I was not impressed with the original evidence from the Office of Fair Trading, and we have said why: the work was not well done, deeply researched or properly prepared. I was mildly irritated by the OFT's peevish response when we dared to criticise it. I am afraid that the House of Commons is here in order to criticise. Although some Members of Parliament might think that it is more important to notch up the number of television programmes on which they appear, I happen to think that it is more important to be here doing detailed Select Committee work, looking at what we need for our constituents and defending their interests when the occasion arises.

Even if we are few in number today, the extent to which we make up for that in quality is so notable that I am sure that the House will not be surprised to hear how important I find this debate. I am grateful to the Minister for coming along this afternoon to discuss with us whither the future of the taxi service. We have to get away from the idea that only rich people use taxis. Rich people do not need taxis; ordinary people do. Ordinary people, at all stages of their lives, require access to taxis and private hire vehicles. Those are not the same thing. They perform different functions and it is clear that the ideas that the OFT was promulgating were neither soundly based, sensible nor, ultimately, defensible. That seems to me a sad comment on the OFT, and I hope that it will never do such a sloppy piece of work again.

4.21 pm

Clive Efford (Eltham) (Lab)

I should like to preface my contribution by saying that I have been involved in detailed discussions on the taxi industry as a representative of the industry before entering the House—hon. Members will know that I am a former London taxi driver—and since I have become a Member of the House, particularly on the Private Hire Vehicles (London) Act 1998. I have to say that I find that the Department for Transport—although I do not mean the Ministers when I say this—is impenetrable when it comes to trying to get it to understand just exactly what the taxi industry is, what it stands for and what service it provides.

It is worth starting by trying to determine what a taxi is. It is a highly personalised transport service, but it is also an essential part of the public transport system. From my experience, I can tell the House that many main stations in central London would suffer enormously from the congestion of people and personnel on platforms and around stations were it not for the efficient way in which taxis can move people through those stations. Hundreds of people per hour can be shifted through a station rank as a result of the efficiency of our London taxi service. The failure to understand the contributions that taxis make in all sorts of ways to life not just in London, but in communities up and down the country, is at the heart of why we continually return to false arguments about what a taxi is and what the private hire industry provides.

It is clear what people want: an efficient service that is safe and affordable. We always return to the argument about what private hire is and what a taxi is. Page 2 of the Government response to the Select Committee report refers to an expectation, or assumption, that if we deregulate or derestrict the number of taxis in an area, there will be a flow of private hire drivers to become taxi drivers. That does happen now, as many private hire drivers are aspiring taxi drivers; but that is not an assumption that can be made. That demonstrates the false assertions and assumptions of which the Department is guilty in its response to the Office of Fair Trading. The Government have shown considerable sympathy for the position advanced by the OFT, though their final conclusion was to give local authorities the opportunity to determine numbers at the local level.

The private hire vehicle and the taxi provide the exact same service. Whether the vehicle is hired on the street and stops on the street, whether it is summoned through the telephone or pre-booked, the service provided is a door-to-door service that is exactly the same. It is important to recognise that if we are to discuss the taxi industry properly.

My view—it is a personal view and I would not suggest that others would necessarily support it—is that we should set a target date. I apologise to Conservative Members for referring to targets there. We should set a target date some time in the distant future when there will be a single system of taxi service throughout the country. We should set the standards for the vehicles, the drivers and the knowledge expected, establishing a framework to which all future drivers, proprietors and local authorities would have to adhere. Within that, there would be local frameworks of operation.

What would be the result? At the moment, several metropolitan districts require vehicles to have metropolitan standards of fitness—turning circles, size of vehicles, applicable tariffs and so on. If we were to require a greater degree of compliance with the metropolitan standards—they may need to be reviewed, but not dramatically changed—we would be opening up a much wider market for purpose-built vehicles. In the long-term future, that would enable us to provide wider variety and wider choice, allow us to meet a wider variety of disabilities through vehicle design—as suggested by the Disabled Persons Transport Advisory Committee in its evidence to the Select Committee—and reduce the cost of vehicles.

There is no doubt in my mind that the monopoly of London Taxis International—Metrocab until it went out of business—over the purpose-built vehicle industry enabled the company to name its price. Until we expand the demand for purpose-built taxi vehicles and open up the marketplace to a much wider area of demand, we will not have the necessary competition over designs that would force prices down. The inflation in the cost of the taxi to the driver has far exceeded any other costs facing the industry. We should deal with that problem.

Mr. Christopher Chope (Christchurch) (Con)

If the hon. Gentleman is correct about London taxi builders, why has the matter not been referred to the Competition Commission?

Clive Efford

I cannot answer that, because I do not know what rules the Competition Commission would apply, but there is no competition. That is the point. There is only one company. It cannot be accused of restrictive practices, as it is not preventing others from entering the marketplace. The problem is that it is such a closed niche market that very few people have moved into it. The Nissan engine that was placed in the Fairway taxi about 12 years ago was the first purpose-built engine for taxi vehicles. Before that, there were ex-army engines that blew up when the engine blocks broke on them; earlier still, there was the transit engine. Throughout the history of the taxi, the design evolved, but no one bothered to construct a purpose-built engine for the job until Nissan designed one. That demonstrates that we need to generate wider demand for such vehicles to bring about greater competition, more efficiency in the vehicles and lower prices to the driver, which will lead in turn to fewer increases in the tariff to the travelling public.

I have said already that the Government have displayed considerable sympathy to the OFT's demand for derestriction in various areas. The Government have said that they are sympathetic to that, but it would be wrong to override local knowledge. Local authorities know what problems derestriction might cause at local level, but those are problems that the Government cannot foresee.

For instance, taxi enforcement officers made it clear in their evidence that derestriction in taxi numbers would cause massive congestion in the centres of some towns and cities because of the shortage of taxi ranks. I know from experience that taxi drivers, when business is slow, tend to stay at the ranks. Drivers can cause congestion by blocking access to stations and other areas, but sometimes they have to wait a long time before they find another job. Driving around merely burns up fuel and increases overhead costs, so it is inevitable that, in periods of low demand, taxi drivers will park their vehicles and wait. If there are too few ranks, there will be congestion in city centres. People with long experience of the industry and of taxi enforcement know that, but the OFT report ignored it completely.

It is clear that the OFT knew what sort of report it wanted to produce. It had predetermined that it wanted to promote a laissez-faire approach to the industry—a completely free market, open to anyone who met the required conditions. The OFT's evidence made it clear that it was ignorant of the trade, and that very little effort had been made to understand it.

I shall give an example of that. It is true that, because the tariff is a maximum, people can negotiate it downwards. I congratulate the OFT on getting one thing right, but the report suggests that people could agree a price in negotiations at the taxi window with the driver.

I can imagine what the result of that would be at some of the taxi ranks that I know, as late-night revellers—perhaps triumphant England football supporters celebrating victory in Portugal—negotiate with drivers the price that they are prepared to pay. The OFT suggested that a marshal would be needed to overcome any problems that might arise. The marshal would be expected to tell tired and emotional revellers what they would have to pay for their journey, or that they should join the queue for another vehicle.

We have all seen the Robocop films, but a taxi marshal would need to be as heavily armoured and to carry as many weapons as that character. That may sound cynical, but the suggestion shows the extent of the OFT's understanding of the industry. The OFT's approach was predetermined, and it tried to make its facts and figures fit accordingly.

In areas with restrictions on the number of taxis, services must undergo unmet demand surveys every couple of years or so. Those surveys determine whether there is unmet demand, and whether the number of taxis should be increased. The OFT criticised the surveys for being inefficient. They are mostly carried out by a company called Halcrow—yet the OFT commissioned the same company to carry out its own survey.

As my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) noted, the OFT visited Cambridge, but not at a time when the students were around. I know Cambridge reasonably well; I have visited it on many occasions. Even I can see that it would be beneficial to carry out a survey when the students are at college, not away from the city, to get a true picture of the demand there.

There is a catalogue of other criticisms. Initially the OFT set out to survey only the taxi industry. It took no heed of the existence of the private hire industry and its impact on the outcome of the surveys and the decisions that it might need to make about the industry. I questioned it about telephone hirings, which is a rapidly growing area of the taxi industry, but it took no account of the fact that that was a major part of both private hire and taxis.

The reason why hon. Members wait longer outside the House for a taxi to answer the light is that many taxis are pre-booked. People standing in the street may complain about empty taxis with the light out and no one in the back, but that is because it is increasingly a pre-booked service. That highlights the fact that the taxi and private hire industries are very similar and it is why the Mayor of London consulted and increased the excess after 10 o'clock at night. He wished to encourage more drivers to ply for hire on the street rather than be pre-booked through the radio circuits. I have made this argument over many years. The way to overcome the increasing trend towards pre-booking is to increase the fare when the driver first puts the meter on when people get in the cab. The radio services in the taxi industry have tried to keep the figure down because they want drivers to sign up for the radio service and not to ply for hire on the streets. That is where the problem comes from.

The backdrop to the debate is not only the OFT report but the other issue of major concern to the public, namely, safety. For many years I have argued with people about the way in which incidents are reported when someone is attacked in the back of a taxi. Too often, it has been reported that a taxi driver has attacked a member of the public, but when one looks at the detail, often it is an illegal hiring. It is invariably a tout who has picked someone up from the street and then attacked them in the back of the vehicle. We have failed the public by not reporting incidents properly.

When we debated the Private Hire Vehicles (London) Bill more than six years ago—something that has still not been implemented in London in full—the Government had plans to provide 20 enforcement officers across London. I pointed out that that would lead to a false sense of security among the public about how well regulated the private hire vehicle industry would be under the new legislation. Unless we have enforcement of a kind that can guarantee that a vehicle is licensed, we will create such a false sense of security. We must take such issues into account when we consider derestricting numbers. If any hon. Member steps outside the House now they will be able to spot every licensed taxi that drives past, but they will not be able to spot every minicab that drives past. My point is that enforcement is much easier with purpose-built vehicles than ordinary saloon cars used as taxis and private hire vehicles. That goes back to my argument for moving to a one-tier system in the distant but not too distant future.

In conclusion, I wish to highlight one of the points that emerged in evidence to the Committee and that was acknowledged by the OFT. Over the past 25 years, the taxi industry has been the fastest growing form of public transport. It has grown by more than 40 per cent. since 1995. The OFT cannot conclude that that has been the result of the derestriction of the number of taxis in certain areas—although it tried to suggest that in response to the Committee's report. If that had been the case, it would have emerged from the OFT's surveys of the industry. That is a damning indictment of the OFT's report and its conclusions.

Not everything is perfect in the taxi industry. We could improve it in certain areas and we should endeavour to do so. However, blanket deregulation and riding roughshod over local knowledge—as the OFT has suggested—are not the answer. If it isn't broke, let's not try to fix it.

4.41 pm

Linda Gilroy (Plymouth, Sutton) (Lab/Co-op)

I pay tribute to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and the other members of the Transport Committee for the work that they have done in closely scrutinising the OFT's report. I share many of the concerns that the Committee expressed about the quality of that report and the conclusions it reached.

Taxis and public hire vehicles play an important part in the lives of most of our constituents, especially in a city such as Plymouth, which has more than its fair share of low-income, non-car-owning households, with many vulnerable and disabled people who depend on such transport. We also have a lively night-time economy, in which taxis and private hire vehicles play an important part in getting people to and from the clubs and pubs. We also have a big student population and I recognise the comments made about Cambridge. At times when most students have gone home, demand for such vehicles is lower, but at other times there are not enough to go round. It is important to consider provision at the appropriate time in the season.

Cost is important, but so are the issues of safety and reliability. At least the Government have not opted for big bang deregulation in response to the OFT report. It will be up to local authorities to make sense of the local situation, in the context of their local transport plans. In Plymouth, the situation has always presented a challenge to council officers and councillors, and I wonder how they will respond to some of the challenges that the issues will produce locally in future.

I have two particular concerns, and I hope that my hon. Friend the Minister will be able to respond to them when he winds up. Plymouth has its own legislation on private hire trade issues—the Plymouth City Council Act 1975. The city council is unique in having the power to grant licences for the purpose of private hire, which, technically, gives it the right to limit private hire vehicle numbers. In practice, it chooses not to do so. However, local people are well aware that the council has that capacity and some in the private hire vehicle operator community have sometimes called for it to exercise that power.

Like my hon. Friend the Member for Crewe and Nantwich, I make wide use of taxis and private hire vehicles in my constituency. Over the years, a number of concerns have been raised with me that should leave us with no illusion that the relatively free market in the private hire vehicle sector compared to the taxi sector is by any means perfect. One of my constituents wrote to me about her current experiences of that trade. Her letter gave me cause for concern that a similar situation could arise for taxis if numbers are derestricted.

My constituent wrote: For the last two years I have been a private hire driver in Plymouth. For the first few months, it was great". Then things became difficult for various reasons. She continued: Things started to pick up gradually and then started to go downhill again. I have realised now just what it is. There are too many private hire drivers and more pouring in each month. When she phoned Plymouth city council, she was "absolutely amazed" to discover that there was no regulation to stop the issue of private hire licences, which was, she said: Something to do with freedom and democracy. Well, I'm all for that but not if it affects my weekly income. She asked why people are allowed to go through the taxi schools run by some of the fleet operators in Plymouth when there is no work for them and existing drivers struggle to meet their bills. She described the difficulties in meeting those bills: If we were seeing small losses that would be acceptable, but in two years I have lost between £250-£300 per week and I put it down largely to the saturation of the market. It is something to do with the market, but it is also to do with the way that some fleet operators suck some of the people they put through their driving schools into leasing vehicles with high maintenance costs. I am worried that we could have the same unrestricted market if we derestrict the numbers for hackney cabs.

Will the Minister look into that situation? If he goes ahead with the proposals in his action plan, will he ensure that the OFT and the Department of Trade and Industry give as much attention to the unfair competition aspects in the operation of the private hire market as they give to deregulation? Will he consider whether his Department could alert local authorities to look into such issues? He may tell me that they already have such a role, although I am not aware of it. However, if there is to be a greater move towards deregulated markets, perhaps he could provide guidance for local authorities on how to deal with such issues in the framework of competition legislation.

Secondly, will the Minister look into the position of the very worried black-cab drivers who have invested a considerable amount in their taxi business? They are concerned about the impact of the changes on the value of their plates and the existing trade in plates. Unless local authorities are allowed to manage change sensibly, people who count on that as part of their retirement fund could face a sudden loss that might hit them very hard indeed.

I should like the Minister to say to what extent local authorities will be able to take account of such positions, given that, under the Government's proposals, they will have not only to review regularly but justify their decisions to continue to restrict licences. An article published in the Financial Times earlier this year shows just how unfair that would be. It was written by John Kay, who says: When licences are restricted. they acquire a value". That value can vary. He says that in Crawley or Wycombe you may have to invest up to £50,000. I suspect that the figure is probably a little less in Plymouth. He continues: The potential profit a taxi driver might derive from restrictive licensing through higher fares and fuller cabs is absorbed in the costs of servicing the loan needed to acquire the licence. Today's taxi drivers are no better off than if the restrictions on numbers of cabs had never been introduced … who does benefit from quantity licensing? The gains go to the people who were in business when the restrictions were introduced". So a problem could arise if local authorities had difficulties in justifying deregulation.

We are all vulnerable with regard to our safety and, often, to our ability as consumers to know whether we are being taken all round the houses to get where we want to go. My hon. Friend the Member for Eltham (Clive Efford) referred to the difficulties that people face in trying to bargain over price; but, equally, if people turn up in a city or community with which they are not familiar, they do not know whether they are literally being taken all round the houses to get to their destinations. So there is scope for abuse.

I hope that the Minister will bear in mind the points that I have raised in ensuring that taxis and private hire vehicles can continue to serve our constituents' interests. On balance, at best, the benefits of implementing the sort of deregulation that the OFT envisages might be described as a cake that is not worth the candle and, at worst, such deregulation could open up a very nasty new can of worms.

4.52 pm

Mr. David Lepper (Brighton, Pavilion) (Lab/Co-op)

I, too, congratulate my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who is the Chairman of the Transport Committee, and the members of her Committee on their work—I was going to say, "for the demolition job that they have done", but it is, in fact, not a demolition job but a systematic, step-by-step taking apart of a wholly unsatisfactory piece of research by the OFT. We are all indebted to my hon. Friend and her Committee for the way in which they have approached the OFT report.

I will declare an interest. I am one of the few people in the country who not only does not drive, but has never learned to drive. I imagine that that can be said of few hon. Members. So to do my job—and, indeed, to do the job that I did before I was elected to the House—I have had to rely on public transport. I welcome the fact that the Government say in their response to the report that they consider taxis and private hire vehicles to be an integral part of local transport provision and that proper account should be taken of them in the local transport planning process. Like many other people, I regard taxis and private hire vehicles as important parts of public transport.

I echo the comments that my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) made about the investment that so many taxi drivers have made in setting up in the trade that they are engaged in. Given that investment, they must pay huge attention to the quality of the vehicle and its maintenance. The job that they do can be risky. My hon. Friend the Member for Eltham (Clive Efford) mentioned the ridiculous proposals about haggling over prices that were recommended as part of the OFT report. I would recommend that members of the Office of Fair Trading group that carried cut the report come to West street in my constituency on a Saturday night and try to haggle at the taxi rank. I wonder how long they would last and whether they would be successful in getting a cab or would be set upon by others in the queue.

For taxi drivers themselves the job can often be risky. They do not know who they will be picking up late at night in our big cities—whether at a rank, when they are hailed or when they are sent in a private hire vehicle in response to a telephone call. All of us may well have heard from taxi drivers who, having taken a fare to a destination, are told by the passenger, "Sorry, mate. I haven't got any money with me." They can then get into difficulties trying to get the fare that they are rightly owed.

The OFT report shows no understanding of what the taxi trade is about and totally disregards the work that is going on locally in so many places to ensure that the quality of service offered by the taxi fleet is high. Let me put the report into the context of what has happened in my local authority area. Over the past three or four years, the taxi trade in Brighton and Hove has been through two upheavals. Two licensing authorities—Brighton and Hove—were eventually brought together uneasily when we became a unitary authority. Some leeway in the time scale was given for that process, but it caused concern and disruption to the livelihood of some taxi drivers.

Just a year or so ago, the licensing authority commissioned Halcrow to carry out research into significant unmet demand in the Brighton and Hove area. As we have heard, Halcrow not only carried out some work for the OFT but usually conducts research for local licensing authorities. There was haggling locally between the trade and council officers, but a plan was agreed as a result of the Halcrow report for the managed growth of the trade over the following few years. That agreement was not necessarily reached easily, but everyone Knew where they were.

Then, in a matter of months, the OFT's report came along, disregarding completely the detailed local negotiations that went on all over the country of the kind that I saw from a slight distance in my constituency. The report caused a shock wave sufficient to bring out 270 drivers in the Brighton and Hove area in a convoy in protest through the city. I am not sure whether that was the best way for them to make their point, but that was what they decided to do. Some 30 or 40 came up here to discuss the report and my views on it with them.

Managed growth is the key to a successful taxi fleet as part of the public transport network in any area. The people best suited to make decisions about the form that that managed growth should take are those on the local council and the local licensing authority, in consultation with local representatives of the taxi trade. In that way, we can end up with a system that is more likely to best suit the needs of the area. The underlying mistakes of the OFT's report—there were lots of mistakes—were to assume that one system was right for everywhere in the country, and to overlook totally the likely negative results of the delimitation of numbers.

I welcome the response to the OFT report. I also welcome the Department for Transport's decision that the delimitation recommendation at least should not proceed and its adoption of a more cautious approach than the OFT would have liked to many other recommendations. The taxi trade—I include in that the private hire trade—wants some certainty about the future. It does not want to think that every two or three years there will be another revision of how it does things. I think that local authorities want that certainty as well so that they can truly make their taxi fleets and private hire vehicles part of their local public transport network.

This is the second time in a couple of years that the OFT has considered an activity that is a business and a service. I also have in mind its report on community pharmacies. There are serious questions to be asked about the way in which it considers service industries of any kind. It shows glaring ignorance in both reports of the impact, or the likely impact, of its recommendations on the lives of the communities that we are here to represent. Although I welcome the response and, more cautiously, the approach adopted by the Department, there are wider issues on the remit of the OFT that might also need consideration.

5.2 pm

Mr. Paul Marsden (Shrewsbury and Atcham) (LD)

I congratulate the Transport Committee, and not just because I am a member of it, on this very useful report. It demonstrates yet again the power of Select Committees. I also congratulate all hon. Members on their fine speeches: the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) showed robust leadership, the hon. Member for Eltham (Clive Efford) demonstrated his expert knowledge, and the hon. Member for Plymouth, Sutton (Linda Gilroy) showed her in-depth knowledge of constituents' concerns.

The hon. Member for Brighton, Pavilion (Mr. Lepper) raised a number of issues not least that taxis and private hire vehicles offer a public transport service. That should never be forgotten. He also said that it can be overlooked that they provide safety for passengers. Those drivers are often put at risk, especially late at night. Having spoken to taxi drivers and private vehicle operators in Shrewsbury, I know that those isolated attacks can be frightening and have devastating long-term effects on the health and welfare of drivers, who provide such an important service.

Taxi drivers and private vehicle operators offer a vital service to local communities, especially those in rural areas. Where there are few bus, train or tram service sand so on, or if those services are non-existent, taxis are the only recourse for people who cannot afford a car or who want the convenience of someone else driving them. Every time a bus service is altered in my constituency, it is often the elderly and disabled who have to turn more and more to taxi services to get them from A to B. I know of one case in which a route change to a bus meant the elderly taking taxis to the local hospital far more often. That is why it is important that the services are affordable.

Taxis do their bit for the environment. They reduce the need for car parking spaces and reduce congestion. As has been mentioned, they have been the fastest growing part of the transport sector for the past 25 years, with the greatest usage coming from those on low incomes, and disabled groups.

The problem with the OFT's report, which has been dissected by the Chairman of the Transport Select Committee, my hon. Friend the Member for Crewe and Nantwich, stems from a patent lack of understanding of how the industry works, and the fact that it is important that local decisions are taken by local people.

The OFT's report, which was published in November 2003, set out three recommendations, of which only the first was seriously put forward as a solution. The three were quantity regulation … quality and safety regulation … fare regulation". It is key that it is the Office of Fair Trading, not merely free trading. It should be about making sure that it is a free and fair marketplace, not unfettered free trade. We do not want to see a derestriction of numbers, which will result in a lowering of regulations and a lowering of standards.

The Select Committee showed in its report a number of key faults of the OFT. It stated that it did not understand why the OFT did not ensure that its surveys matched its wider dataset, and particularly why it did not ensure that all the evidence relating to derestricted authorities was usable. I hope that the Minister will be able to explain why repeatedly the OFT did not seem to have robust and accurate data available. Likewise, when the OFT made the claim that the relevant basis upon which the decision to derestrict should be made was whether restricting taxi numbers benefited consumers today, its analysis robustly demonstrated that it did not, yet the Committee had to point out that that was based on flimsy evidence to do with waiting times.

The Committee also talks about the confusion of the quality of data. I hope that the Minister will be able to show the House that the OFT has learned from its mistakes. Page 2 of the Government's response states that they had concerns about the evidence. The Government, contrary to what the OFT were saying, stated that ultimately, local authorities are best placed to determine local transport needs. Why did the OFT seemingly make such a poor case, by basing it on poor data, in its report?

The Government also responded to the issue of best practice licensing guidance. They said in their response that advice on quality standards for vehicles to be licensed, covering the needs of disabled people, would be published. When will that advice be forthcoming?

Likewise, it is said that the situation will be reviewed in three years' time. It would be useful for the House to know whether that will be at the beginning or the end of 2007. As the hon. Member for Brighton, Pavilion said, stability is so important. Those in the industry deserve to know what will happen in future as soon as possible.

Taxis are not as polluting in some regards as other vehicles, but in other regards they most certainly contribute significantly to overall air pollution. To set this in context, I know that in Bejing city centre, 70 per cent. of taxis fail to meet even basic emission standards. That goes to show that we are making great strides in the EU and in Britain in improving air quality and reducing air pollution. However, as The Scotsman showed on 21 January, in a report to Aberdeen city council environment committee, the council's head of road management stated: There is a statutory requirement to tackle poor air quality because of the risk to human health. The AA's view is that there is a real problem in Aberdeen city centre that is caused by old buses, old lorries and old taxis, and all diesel-engined vehicles in particular. The Commission for Integrated Transport has said that the retro-fitting of catalytic converters could be one of most effective ways of reducing emissions, although it would cost up to £500 per vehicle. Would the Government consider introducing an incentive for the retro-fitting of such converters to older taxis?

Elsewhere, there are robust attempts to tackle the problem of air pollution. In California, for instance, all cars, including taxis, in downtown Los Angeles are to be powered by alternative fuels, which would be a considerable advance on current EU standards. Diesel-powered taxis compare favourably with conventional taxis, as they emit only a third of the carbon monoxide and two-thirds of the hydrocarbons emitted by taxis with petrol engines. However, they emit twice as many nitrogen oxides and 10 times as many particulates, which affect people with asthma and breathing difficulties. Seventy-eight per cent. of particulate pollution in London is caused by road transport vehicles, of which taxis are a significant proportion. I welcome the fact that the Government have agreed to introduce new EU standards in January 2006 that will encompass taxis and halve the particulate emission rate. However, I urge them to look at older vehicles, because we want a thriving and robust taxi service that is nevertheless less polluting.

I will conclude with the concerns of the LTI and the industry. As has been said, the LTI has a virtual monopoly on the manufacture of vehicles, but it has said: Taxi vehicle manufacturers need to play their part in improving air quality and preventing damaging climate change. It wants to increase the efficiency of diesel and petrol engines and decrease the pollution that they cause, and it urges manufacturers to consider the use of alternative fuels. However, it wants more encouragement and support from the Government to meet the ideal of zero emissions. I pay tribute to taxi drivers, particularly in London, who have the knowledge. The LTI asks for a review of antiquated administration and testing techniques and says that the Public Carriage Office should remove unnecessary delays from the Knowledge test process whilst not diluting the standard. It is concerned about proposals for the rear loading of wheelchair users that threaten the security and safety of disabled people. I hope that the Minister can address those concerns and ensure that, above all, the OFT is rebuked for a clearly substandard report.

5.13 pm

Mr. Christopher Chope (Christchurch) (Con)

I, too, congratulate the Transport Committee on its report, which has inspired a well-informed debate and influenced the decisions that the Government made in March. It is right that local licensing authorities should decide certain issues, as that is a true example of localism, which is supported throughout the country by Conservative authorities. We are delighted that there is to be a Conservative chairman of the Local Government Association as a result of our continuing success in local government elections.

Everybody loves a cabbie. Members of Parliament particularly love cabbies because they are a useful barometer of the political climate and are well informed about what members of the travelling public think. Now is an especially good time for Conservatives to travel in the back of cabs, as we are getting encouraging messages from cabbies.

It is interesting that, as has been pointed out in the debate, since 1995 taxis have been the fastest-growing form of public transport. It is significant that they are not subsidised. They are flexible and responsive. One can get a cab on Christmas day or in the early hours of the morning. One can get a cab more or less on demand, and it is not surprising that despite not receiving a subsidy, they meet the needs of the public. On the whole, the cabbie is an entrepreneurial, hard-working person. That is exactly what is needed in a dynamic industry that is consumer-facing, as the taxi trade is.

It has become apparent from the debate that for a taxi driver who has invested in purchasing a plate or the right to ply for hire in a particular locality, it must be worrying to think at out the future. As was pointed out by the hon. Member for Plymouth, Sutton (Linda Gilroy), the only people who benefited from the introduction of restrictions on the number of cabs in particular localities were the people who were there at the outset, who were immediately able to sell their restricted right to ply for hire at a premium. Now that people have bought in under that system at premium rates, it is difficult see how the local licensing authorities can be fair in relaxing those restrictions while at the same time preserving the investment of those who purchased the plates

Despite the flexibility and the growth in the taxi service, there are times in parts of the country when there still is not an adequate taxi service. That is the case in London in the early hours of the morning. If there were an adequate taxi service at that time, there would not be a proliferation of unlicensed minicabs. It is a difficult matter to enforce. I wonder whether thought has been given to the possibility of licensing a particular type of cab so that it can ply at particular times of day. At present, understandably, relatively few cabbies want to be out at 2 am, when they can earn no more than if they were out at 10 pm. There is a problem of demand exceeding supply.

Clive Efford

There are many types of taxi driver and they fill different niches in the industry. Many choose to work nights because they prefer the free roads and the speed with which they can get work done. They earn very good money indeed working at night, so it is an attractive type of work in the industry. It is not necessarily the case that there are fewer cabs on the road at night because of the lack of trade

Mr. Chope

I bow to the hon. Gentleman's great knowledge of the subject. I, no doubt like him, have often left functions in London late at night or in the early hours of the morning and looked in vain for one of those cabs to which he refers, yet have found myself being offered the services of unlicensed minicab drivers, who draw up alongside, see someone in a suit and think, "There's the opportunity for a rip-off exercise." In my experience, there is a mismatch between supply and demand, particularly in the early hours of the morning.

It is clear that in certain parts of the country, the cost of taxis is a significant burden for people for whom no public transport is available. In many areas, there is no true bus or rail alternative, and taxis are effectively the only form of public transport. They can be a pretty expensive option, so affordability is an issue.

I hope that the Minister will respond to the points that have been made, which come from a knowledgeable group of participants. The hon. Member for Shrewsbury and Atcham (Mr. Marsden) referred to many of the points that LTI Ltd. made in its briefing. I hope that the Minister will respond to the points that the hon. Gentleman raised, but I should like to add another—the metropolitan conditions of fitness review. LTI Ltd. is concerned that the metropolitan conditions of fitness should not be altered so as to remove the very tight turning circle that London cabs enjoy. I am a proud Volvo driver. The Volvo has a pretty good turning circle, but even its turning circle is not as good as that of a London cab. LTI makes a very good case on the grounds of reducing congestion and allowing flexibility, particularly in London circumstances, for maintaining the standard conditions of fitness.

Although the hon. Member for Eltham (Clive Efford) argued the case for national standards, there are different circumstances in different parts of the country. In some areas, there are many part-time taxi drivers. Such drivers may run garages during the day, for example, and offer a taxi service on an occasional basis. In London, taxi driving is very much a professional's activity.

Mrs. Dunwoody

Surely, the reality is that we should have a set of standards enabling somebody who has a mobility difficulty, a pram or a lot of difficult parcels to use a taxi. All those needs are much better catered for by a proper, agreed design and by vehicles that have large doors and proper access, which mean that people can use any available vehicle. We should not be saying that people throughout the country can accept different standards, as they face the same sort of problems wherever they are.

Mr. Chope

The hon. Lady is right that the problems of a disabled person who wishes to go to a particular destination are the same anywhere in the country, but we would not want to introduce a system that restricted entry into the cab trade by imposing a very high barrier in terms of providing an expensive vehicle. Sometimes, such a vehicle will be used relatively infrequently, perhaps because of the remoteness of the location where it is kept and used. Would we really want to penalise villagers in remote locations where nobody can afford the capital investment that is required to purchase a cab of a standard similar to those in London? London cabs can be used by a series of drivers almost 24 hours a day.

I submit that we need to maintain some flexibility and common sense in these matters, so that the consumer is advantaged and will not be precluded from having the important mobility that we all cherish, yearn for and wish to extend to as many people as possible.

5.23 pm

The Parliamentary Under-Secretary of State for Transport (Mr. Tony McNulty)

I congratulate my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), as others have done, on choosing taxis as the subject of the second part of today's debate. They are a very important transport mode in the wider context of integrated transport strategies, and they are all too infrequently debated in this place.

The Government are dedicated to delivering better transport, and taxis and private hire vehicles, which are sometimes called minicabs, have an important part to play. I demur from the point made by my hon. Friend the Member for Eltham (Clive Efford) about the Department for Transport somehow being a black hole or a dead zone in terms of taxis and PHVs. If my hon. Friend and others read the body of the Government response to the OFT report, they will find that it is more at one with the Transport Committee than it is with parts of the OFT report, so I did not understand the point about the impenetrability of the DFT on taxis. We broadly agree with the Transport Committee that the relationship between PHVs and taxis is a lacuna in the report, and I shall return to that matter in a moment.

I shall start at the same point as my hon. Friend the Member for Crewe and Nantwich by acknowledging the invaluable service that the taxi and private hire industries provide to the people of this country. I shall tell a short anecdote, which may add to the point made by my hon. Friend the Member for Eltham. I met representatives from the taxi trade shortly after I joined the DFT. Hon. Members who are familiar with the fifth floor of Great Minster house will know that it is replete with pictures of various transport modes such as planes and buses in all their respective glory. After one meeting, colleagues from the taxi trade went up and down the corridor looking in vain for a picture of a black taxi. However, if one goes up to the fifth floor now, a photograph of a black cab in all its splendour is on the wall straight outside my office, although perhaps that is part of the problem raised by my hon. Friend.

My hon. Friend the Member for Crewe and Nantwich made the important point that taxis and PHVs are not only for the rich—far from it, because the rich can afford alternatives. In the more deprived parts of our towns and cities, taxis or PHVs may be the only form of transport that people can rely on. Furthermore, taxis or PHVs provide safety, security and reliability. Even in areas where the transport network is well developed, PHVs and taxis complete the tail end of journeys from the railway station to locations such as the home or hospital.

The use of taxis or PHVs is not linked to affluence. As a matter of record and research, people in the lowest income groups make the most taxi trips, so taxis and PHVs are vital in tackling social exclusion to enable the most marginalised members of society to access services and a quality of life that many of us take for granted.

In that context, it is not surprising that, as many hon. Members said, the taxi and PHV industries have experienced some of the greatest growth rates for any transport mode over the past 20 years, and that is true not only in cities, but in rural communities as well. Taxis and PHVs provide opportunities for entrepreneurs to innovate, which is why we relaunched our guidance "Flexible Transport Services" in 2002. The guidance explains the various options that the law allows and provides many examples involving buses, taxis and car-sharing schemes. We want people to utilise taxis and PHVs to fill the gaps. Even if nothing else emerges, it would be a broad advance if hon. Members were to leave this debate with the notion that taxis and PHVs are key to an integrated transport system, and that the DFT treats them as such.

It is most important that transport authorities outside London consider taxis and PHVs as fundamentals in any local transport plan. To aid that—I freely admit that the first round of transport plans contained a gap on taxis and PHVs—we shall produce model local taxi-PHV policies for the next round of local transport plans in the taxi-PHV best practice licensing guidance, which I shall return to later and which was part of the response to the OFT.

Aside from which party is in power, for the first time we shall reach a stage where local transport plans, which are the key resource allocation packages, routinely include a strategy that places PHVs and taxis at the heart of every community outside London's local transport planning strategy.

Let us consider the Office of Fair Trading's market study into taxi and PHV services. It is not for the Government to comment on the OFT's choice of subject for the study—that is a matter for the OFT. Beyond our response to the report, it is not necessarily my place or that of the Government to go into the same amount of detail, robust or otherwise. It is up to us to respond to the substance of the report and consider its recommendations carefully. To that end, it is appropriate to commend my hon. Friend and the Committee for producing two reports that helped greatly in our consideration of the OFT taxi and PHV study.

One or two hon. Members have alluded to the influential nature of the reports, of which we took full cognisance. As hon. Members know, my right hon. Friend the Secretary of State responded to the OFT on behalf of the Government on 18 March by means of a written statement. We responded to the two Transport Committee reports last month.

Our response to the OFT included an action plan for taxis and PHVs that we are now taking forward. Although we accepted many of the OFT's recommendations, we concur with the Committee that local authorities an best placed to make local decisions in the light of local needs and circumstances. Many colleagues made that point in a far more erudite fashion than me.

I was struck by the experience of hiccup and disruption outlined by my hon. Friend the Member for Brighton, Pavilion (Mr. Lepper), first through the merger of Brighton and Hove into one unitary authority. The new joint unitary authority conducted a survey of unmet demand, but there is a fear that the Government's response will cause great disruption for the third time. We shall send a letter to all local authorities and, without wishing to pre-empt Brighton and Hove, I should think that, given the detailed work that was conducted last year on a managed growth strategy and the amount of local detail in it, the Government would not seek to change the position that prevailed under it after the survey of unmet demand. Brighton and Hove's strategy appears exemplary and something that we would request of all local authorities that would like to retain quantity controls.

We start from the premise that quantity controls are appropriate given local circumstances and that any change to the position should be in local hands and determined by local people. It is entirely justifiable to say to local authorities, "You know the local market far better than we do and the unmet demand that exists in your area. Please tell us in simple language, because we are simple folk at the Department for Transport, why you think restrictions should remain." In most circumstances, that should be a straightforward exercise for most local authorities.

We therefore concluded that it was not the role of central Government to take away local discretion on the number of taxi licences granted by local licensing authorities, as the OFT recommended. For the reasons that I have outlined and that have, I believe, all-party support—local knowledge and autonomy for local government—it is appropriate for local discretion to remain. However, it is right and proper that local authorities first justify maintaining the restrictions. I stress that approximately half of all local authorities have such controls. I make it clear that the power to restrict taxi licence numbers in England and Wales outside London will stay with local government. I emphasise a point that perhaps the OFT overlooked. There are already two or three discernibly different sorts of market for taxis and PHVs.

As I have said, about half the authorities have no restrictions, including London—although London has a different regulatory framework. Some authorities—although not a whole lot—have reviews on a regular basis. Others decide, after exhaustive annual research, that they should allow 10, 20 or 30 more licences a year—this might be a bit of a caricature—thus allowing the same level of increase on a yearly basis as a sort of escape valve for the unmet demand. Other authorities go further and have restrictions in place which they review perhaps less than once a year.

So we already have a disaggregated market, rather than the pure market that, if I were being less than kind, I might say that the OFT report seemed to suggest that we had. We are very comfortable with the notion that things should stay local. We have already written to all authorities that have restrictions in place, not to ask them to justify their position—"justify" is the wrong word—but simply to substantiate why carrying on having restrictions is appropriate. If they are anything like Brighton and Hove, they will be able to answer that question in very short order.

Clive Efford

I understand why my hon. Friend has written to those authorities that have restrictions on numbers to ask them why that might be the case, and to assess whether it is necessary to continue to operate restrictions, but has the Department also written to those authorities without restrictions to ask whether they felt any need to cap the numbers because problems were being caused in their local area?

Mr. McNulty

My hon. Friend makes an entirely fair point. In the first instance, the answer is no. We have written to those authorities that have restrictions in the context of our response to the OFT report. They will need to reflect on whether they should have restrictions in the context of their local transport plan, and of how the PHV and taxi plan fits into it. It is not for us in the first instance to ask those authorities without restrictions why they do not have them, because that is beyond the purview of our response to the OFT report.

Mrs. Dunwoody

That is a perfectly reasonable attitude to take, as long as the Department is aware that some authorities that had initially deregulated found that the ensuing chaos did not provide a better service—in fact, it resulted in a much worse one—and sought a form of re-regulation. I know that my hon. Friend is as concerned about this issue as I am, and I would ask him to ensure that, when the Department decides which attitude it is going to take, it bears in mind the fact that it is not always simply a question of removing restrictions and saying, "Fine, this is the market and it works better." Sometimes, it works much, much worse.

Mr. McNulty

In the wider context, I would accept that argument. I would expect authorities that sought to put restrictions back in place to justify that decision in the context of how taxis and PHVs fitted into their overall local transport strategy. I would guess—this can only be a guess—that if a PHV and taxi strategy had been at the heart of local transport plans years ago, when deregulation first took place people might have thought twice about that deregulation, because they would have been able to see how it fitted in with all the other aspects of transport in their area.

As I was saying, we have written to those authorities that have restrictions in place, and they should at least be able to tell us whether there is unmet demand for taxis in their area and whether they have plans to grant new taxi licences accordingly. That has essentially been the legislative position for the last 20 years. We have asked all the local authorities concerned—fairly, I think—to respond by 31 March 2005. We have also made a commitment to review the position in this regard in three years' time, with a view to taking further action if needed.

Clive Efford

I do not want to labour this point too much, but in the Select Committee's second report—in our response to the OFT's response to our original report—we point out that the modelling suggests that local authorities with entry regulations in place are likely to have lower regulated fares. Bearing that in mind, it would seem logical for authorities without restrictions to consider whether their policy works in the best interest of the consumer.

Mr. McNulty

They may well do, and it is an entirely fair point, but I will not prescribe how each local authority, with or without restriction, should respond to their local circumstances. That is precisely counter to the theme running through our response to the OFT, which is that local people should discuss local circumstances and come to local remedies within the legislative framework, and within the context of the guidance that we will issue. That is the way matters should go forward, for both those with and without restrictions.

Mr. Chope

The Minister said earlier that the issue was not one of justification, and yet the Secretary of State for Trade and Industry, in a written statement in March, said that the Government believe that local authorities should publish and justify their reasons for restricting the number of taxi licences issued."—[Official Report, 18 March 2004; Vol. 419, c. 34WS.]

Mr. McNulty

Well, that was terribly well spotted by the hon. Gentleman. I meant justified in the context of standing up on a pile of bibles and discussing in public policy terms why it is appropriate that restrictions should be maintained. That was the tone of at least some of the contributions. Of course, they must justify. We will not write to them to ask what their policies are—we know what they are. Justification is to be in the context of the latest unmet demand survey, how taxis and PHVs fit within overall local transport strategies, and in relation to all the reasons that I have suggested. I thought that we were having a serious debate about the OFT report and our response to it, rather than a silly little game of call my bluff. But there we have it.

We have accepted the OFT's recommendations to produce best practice taxi-PHV licensing guidance because we consider that that should help local licensing authorities with a range of licensing issues. There will be full consultation on draft guidance before a final version is published—by the summer, I hope, but we shall wait and see. The guidance will cover most licensing issues, including quantity controls—in the context that I have set out—taxi fare setting, and, as I said earlier, a model local taxi-PHV policy framework for the local transport plan process.

I should stress that this guidance will of course be on a voluntary basis: ultimately, licensing decisions are matters for local authorities and they will remain so, in the current legislative framework—there was at least a nuance in some Members' contributions that somehow we are about to introduce new legislation, which I know was one of the OFT's recommendations. We have no intention of introducing new legislation, and we feel that what we want to achieve in our response to the OFT, and in terms of maintaining the local dimension, can be done within the existing legislative framework and within the guidance.

I have already mentioned the importance of taxis and PHVs to socially excluded groups, which is a very strong point. I would now like to say something about their importance to disabled people. Taxis are the form of public transport on which many disabled people depend most. Although they generally travel less often than others, for obvious reasons, when they do so, they make proportionately much greater use of taxis. That is why we encourage local licensing authorities to introduce local policies for accessible taxis before we make accessible taxis mandatory. As I announced last October, we are pursuing a policy that would see regulations introduced in many areas between 2010 and 2020. We are currently considering research findings, which will inform those technical regulations. In the meantime, we have already regulated to ensure that taxi drivers and PHV operators and drivers are under a duty to accept assistance dogs travelling with disabled people and to carry those animals free of charge. That said, of course, there is still much that we can do generally as regards taxis and PHVs before 2010.

Enforcement is of major importance, so that the taxi and PHV trades are seen to be for legitimate, licensed drivers and vehicles only. We are determined to crack down nationwide on the touts who jeopardise the legitimate taxi trade and encourage all police forces to give this problem the priority that it deserves. In London, for example, a lot of time and effort is going into combating touting.

Mr. Lepper

I hoped to catch the Minister before he left the issue of disabled taxi customers. Many of my disabled constituents who use taxis feel that one style of vehicle is not necessarily appropriate for all disabled travellers. Many people with disabilities would prefer and find it easier to use a saloon car than, for the sake of argument, a London-style black cab. Does the Department accept that that is so?

Mr. McNulty

We do. That is absolutely right, and the Disabled Persons Transport Advisory Committee and others who have done significant research would say quite freely that although the London hackney-style configuration is very useful, certainly for wheelchair access and a range of other disabilities, it is not the 100 per cent. all-singing, all-dancing, all-purpose vehicle for every single form of disability. Without going into the matter too much, that is why I profoundly disagree with the suggestion of a one-tier taxi. My hon. Friend the Member for Brighton, Pavilion (Mr. Lepper) is entirely right, not least in that the design of some saloons—those taxis that are more like people carriers—is far more appropriate and convenient for those with impaired mobility but who are not in wheelchairs. The whole array of different saloons that are on offer means that it does not follow that only one model is appropriate.

I want to dwell momentarily on touting. I recently went out on an anti-touting exercise to see for myself the good work being done by the enforcement authorities. I stress that we must not be complacent about the touting problem, but must continue with initiatives such as the recent decision to make the touting offence recordable, to deter persistent offenders. Such high-profile measures contribute greatly to making passengers feel safe when travelling by taxi and PHV.

To those in London and other urban areas who are tempted after an enjoyable night to jump into the first car that pulls up outside the nightclub, I take this opportunity to say "Don't do it, because you do not know what you are getting into." Unless that is a properly licensed cab or PHV that has been ordered for that customer, they do not know whether it is licensed, whether the driver has a licence, whether it is insured, whether it is roadworthy or whether or not the person behind the wheel is violent or a sex offender. Many people, not least young women—it frightened me when I saw this when out on the exercise in London—are jumping into the backs of cars that are in one form or another potential death traps. They simply should not do that, however much they are tempted simply to get in the car and go home.

Clive Efford

I could not agree with my hon. Friend more on that point. Does he agree that the reporting of those incidents is t essential to ensure that people are made fully aware that it is an illegal tout that is the cause of the problem? When people understand that, they will be more wary of getting into those vehicles.

Mr. McNulty

That is absolutely right. Far too often, touting is reported as a problem of the minicab or PHV sector, when it is not. Some of the most vociferous calls for more to be done to raise awareness and change the regulatory framework to stop touting—such as making the offence recordable—come from the legitimate end, which is overwhelmingly the largest, of the PHV industry. This problem is not about dodgy minicab drivers, but about t unlicensed touts who should not be plying their trade in the first place. I was grateful when I went out on the exercise that not only police but benefits officers and people from a range of other public agencies were in tow. Rather than just catching touts whose cars were unroadworthy or had no insurance, those officers caught the odd person who according to their records had been in bed ill for three months, or who had been taking disability allowance and not worked for a number of years. That was a good example of joined-up working.

Some of the anomalies in the regulations that govern taxis and PHVs in out of London still need to be addressed, as and when they are pointed out to us. This is an enormously complex area with much of the legislative and regulatory framework going back to Victorian times. We will seek to do something about those anomalies.

There is a little loophole in the Private Hire Vehicles (London) Act 1998—a fairly recent piece of legislation—which we want to deal with when we get the opportunity to do so. The 1998 Act, as my hon. Friend the Member for Eltham suggested, provides a framework for the licensing of private hire operators, drivers and vehicles in London. It was introduced as a private Member's Bill with Government support. The objective was to introduce a system of licensing for private hire vehicles in London, thereby bringing the capital into line with much of the rest of England and Wales, where touting is less of a problem precisely because that sector has always been licensed.

The Act was framed initially in terms of giving the Secretary of State the power to appoint a licensing authority. However, under the Greater London Authority Act 1999, responsibility for private hire and taxi licensing in London was transferred from the Secretary of State to the Transport for London organisation. TFL is introducing private hire licensing in three phases. Operators must have held licences since 2001; driving licensing was introduced last year; and vehicle licensing has just been introduced earlier this year. Special arrangements are in place to ensure a smooth transition to a fully regulated system, hopefully by 2006.

TFL and the trade have requested a change to the 1998 Act in order to close an apparent loophole that allows operators and drivers to work within the licensed structure without being licensed. The existing definition of private hire vehicle requires a vehicle to be licensed if it is made available to the public. Some operators and drivers who service contracts with hospitals, schools and so forth—often serving the most vulnerable people—are avoiding licensing by using the argument that they are not making their vehicles available to the public. A number of contract workers are therefore still operating unlicensed.

TFL and others, including the GMB, have been told that the Government intend to rectify that problem as soon as parliamentary time permits. I will certainly seek to do all that I can in that regard. It may be possible to test the difficulty more readily under the law, but small areas of law like that can have profound consequences for our attempt to put a fully licensed system in place in London, so they should be dealt with at the earliest opportunity.

Significant progress has been made in our understanding of where taxis and PHVs fit into the wider transport network. That is all to the good and the excellent reports from the Transport Committee also help in that regard.

There are a variety of views about the Office of Fair Trading report, and no one who has contributed to the debate has been shy in giving the House their full understanding of it. We believe that our response underlines the fact that we need to deal more fully with certain issues such as guidance across the range of issues that I have outlined. The first key recommendation about quantity control was important. Hon. Members have stressed the significance of the local dimension, local knowledge and local understanding of local markets. We take that point entirely on board, which is why we responded to the OFT report as we did.

I hope that the OFT report and the Government's response to it has, if nothing else, highlighted the crucial importance of taxis and PHVs throughout our communities. I hope that those who have expressed an interest thus far or those with a longstanding interest in the sector will understand all that we are trying to do in respect of the wide-ranging guidance that we will be issuing to the licensing authorities. They will know how licensing authorities already restrict some controls and will see how they respond to our initial suggestions.

We anticipate a rolling programme on a three-yearly basis. We have not yet determined the time frames. However, we are asking authorities by letter to respond by the end of March next year and we intend to respond to those responses by the end of April. The three-year rolling programme of review would start at about that time. I do not believe that the duties involved are too onerous.

Mr. Kelvin Hopkins (Luton, North) (Lab)

I am sorry to have missed most of the debate, but I have heard much of what my hon. Friend has said. I agree with the thrust of what the Government are doing. I want to ensure that there is a good provision of taxis and PHVs, as many people cannot afford—or do not want—to use cars. They depend on taxis where there are no public transport services. Many people who choose not to own motor cars depend on public transport, and fill in the gaps with taxis and PHVs. It is most important that the Government promote that option.

Mr. McNulty

I do not disagree with that. I am sure that there is a good reason to explain why my hon. Friend was not present earlier, but if he had been here he would have heard my hon. Friend the Member for Brighton, Pavilion confess that he has never driven a car and that he does not have a licence. He manages very well without a car, and would like to continue to do so with the help of a strong and vibrant PHV and taxi sector.

My hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) spoke about Plymouth's unique position, thanks to the 1975 Act that she described. In the first instance, Plymouth council must resolve the matters that she raised. I hope that the guidance that we issue will assist in that regard, as will an exhortation from me—to put it no more strongly—to Plymouth and everywhere else that a PHV and taxi regime has an important place in any local transport plan as part of an integrated transport strategy. I await the city's responses to our requests.

Linda Gilroy

I am not sure that I heard my hon. Friend correctly earlier, but is that guidance out for consultation? If it does not cover some aspects of the operation of the market in Plymouth, will he accept representations, from me and the city council, in search of clarification?

Mr. McNulty

I hope that the guidance will be out by the summer, and I assure my hon. Friend that it will be available for consultation. I do not want to pre-empt it, or Plymouth's reaction to it. Plymouth occupies a legislatively unique position, having its own Act to cover taxis. It would be churlish of my Department not to listen to what people have to say about that narrow legislative framework, and to see what gaps there may be in the guidance.

We have discussed in some detail matters that go slightly wider than the OFT's report and the response to it from the Government and the Select Committee. The debate has been very worth while. I do not want to be too critical of the OFT report, as it came to some good conclusions that we have, broadly, taken on board.

However, any omissions in it stem from the fact that there is not a universal and pure market for taxis and PHVs, as the situation varies between towns and licensing authorities. As the Select Committee response notes, there is wide variation in the relationship between the PHV and taxi sectors. Some people never see a hackney cab until they come to London, whereas others have no understanding of experience of minicabs.

The local peculiarities faced by each licensing authority mean that our decision to leave determinations of quantity restrictions at local level is the right way forward. I think that I heard the hon. Member for Christchurch (Mr. Chope) express agreement with that, on the grounds that it is a splendid example of the new Conservative localism.

All of a sudden everything is left to the local community. He has clearly pointed out that he understands the word "justification", although not the notion of nuance or irony, but he might just go back to the dictionary and look up the word "hubris"—I will spell it for him if he wants—in telling us how wonderful—

It being Six o'clock, MR. DEPUTY SPEAKER proceeded to put forthwith the deferred Questions relating to Estimates which he was directed to put at that hour, pursuant to Standing Order No. 54(4) and (5) (Consideration of estimates etc.) and Order [29 October 2002].