Charges for Licensing of Cabs and Cab Drivers

Orders of the Day — Transport Bill – in the House of Commons at 8:45 pm on 28th July 1981.

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Lords amendment: No. 16, in page 24, line 8, at end insert— and the sums so determined shall be such as appear to the council to be sufficient in the aggregate to cover in whole or in part—

  1. (a) the reasonable cost of the carrying out by or on behalf of the district council of inspections of hackney carriages for the purposes of determining whether any such licence should be granted or renewed;
  2. (b) the reasonable cost of providing hackney carriage stands; and
  3. (c) any reasonable administrative or other costs in connection with the foregoing and with the control and supervision of hackney carriages."

Photo of Kenneth Clarke Kenneth Clarke The Parliamentary Under-Secretary of State for Transport

I beg to move, That this House doth agree with the Lords in the said amendment.

The amendment makes it absolutely clear that district councils may not charge larger taxi licence fees than are necessary to cover their reasonable costs. Clause 33(3) removes from local authorities that have not adopted the Local Government (Miscellaneous Provisions) Act 1976 for the licensing of their taxis the limitation on their ability to raise fees.

Some people in the taxi trade expressed fears that local authorities might look to that as a means of gaining revenue, of making a profit out of the charges that they imposed. It was arguable that as the Bill stood they would not have been able to behave in that way, but as there were doubts it was safest to make the position absolutely clear on the face of the Bill. I hope that the amendment satisfactorily fulfils that purpose.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

As the Under-Secretary of State has said, considerable fears were expressed to members of the Standing Committee about what would happen in the future when authorities determined licensing fees. Can a district council be challenged on whether it is complying with the duty laid upon it by the Lords amendment? If for any reason taxi drivers or those in the trade contend that the charge is unreasonable, is there any means of redress? Do they have to bring an action against the council or can the matter be referred to any body for a check or for arbitration? Will those who audit a district council's accounts have to check whether the amount that the council is raising in fees on taxis represents the reasonable costs borne by the council in carrying out inspections, providing hackney carriage stands and in administration?

It appears—I think that this was confirmed by what the Under-Secretary of State said—that the amendment applies only in those areas where the Town Police Clauses Act 1847 applies. Is there any equivalent right or limitation in areas other than London? There is also great concern about what might happen in London. Have the Government given any further thought to how they might limit the new powers of the metropolitan authorities with regard to taxis to meet the fear that the new powers to increase both the function of the carriage office and the charges arising from it will bear heavily upon taxi drivers, in clear contrast to the position until now, in which the fees have been severely limited under the original primary legislation?

Photo of Kenneth Clarke Kenneth Clarke The Parliamentary Under-Secretary of State for Transport

As regards enforcement, it is open to any local authority elector affected by the level of a licence fee to challenge the local authority's accounts by means of a formal challenge at audit, although he does not have to go to the extent of a formal challenge. It would be open to an affected taxi licence holder simply to draw the matter to the attention of the auditor, who would no doubt then examine it.

If the auditor judged that the authority's charges were excessive, he could raise the matter with the council. If the circumstances warranted it, he could record the issue in his statutory report, which is a public document. If the local authority still did not act, it would be necessary to bring an action against it in the courts to challenge the legality of the fee. I am sure, however, that no local authority would choose to withstand a claim that the licence fees should be reduced once the auditor had judged that it was acting unlawfully and exceeding its costs.

As the right hon. Gentleman rightly pointed out, this provision actually deals only with those district councils which have chosen not to apply section 70 of the Local Government (Miscellaneous Provisions) Act 1976. For the other authorities, the more up-to-date legislation already contains a power to enable the authority to charge an appropriate fee and also a limitation on it. I will write to the right hon. Gentleman if I am wrong, but I believe that the wording of the amendment closely mirrors the equivalent provision in the 1976 Act.

The Home Office is responsible for the licensing of taxis in London. The Bill removes long—obsolete restrictions on its ability to charge proper fees for licensing taxis and taxi drivers in London. The Home Office will follow set Government policy in all licensing of charging only such fees as are necessary to recover administrative costs. The taxi trade can be reassured that the matter will be properly handled, because the Home Office will disclose the basis on which costs are calculated and will explain how fees are levied.

9.30 pm

There is a close relationship between the Home Office and the taxi trade in London and I am sure that the trade will be quick to bring to the attention of my right hon. Friend the Home Secretary or his successors any problems that arise if it appears that the costs of the Home Office in administering the system are becoming excessive or that the Home Office has inadvertently started to charge fees above the cost. The Home Office will follow the policy of not making a profit but merely covering costs and it will be publicly accountable for that.

Question put and agreed to.