Number 8 Region
Meeting with the Law Commission
Gissons Inn, Nr Exeter 22nd June 2012
Question and Answer Session
John Tye: In the report you have comments on replacing on any street with booking in a public place. Can you propose what the possible outcome of that would be, how it would change it radically?
Jessica Uguccioni: The whole area that we talk about applying for hire and the definition of where that would apply, I think that was in the context of looking at private land and railway stations versus airports and we recognise that there is quite a patchy way of dealing with that kind of question of whether you know, are applying for hire if you are on private property, private property now extends so widely that we felt it would be useful to have a look at that and have a think about how we ought to be approaching it, should it be limited to a street, is that what counts, does it matter that some are accessible by everyone or ought there to be some extension of the concept of whether it is just anywhere where the public has access, so for example, it doesn’t matter whether it is a private parking lot in a massive mall centre or things like that. So I think that’s what we were trying to get at but we are really trying to see and sort of get more evidence about whether it would make a difference and whether we ought to be thinking about making changes, say for example on how and may be bringing the regime close to railway stations which are deemed to be streets, whether that sort of works well and whether we ought to be rolling that out more extensively, not just to say a railway station is under the Public Health Act for example, so that’s what we were thinking.
John Tye: The case I was thinking about was Eastbourne versus East Sussex County Cars back in 1998 or something like that and I seem to recollect that the case on that one specified that it was illegal for the franchise holders to operate at that railway station because they were visible from a public street and I think uses to Street Offences Act 1963 where a prostitute can work from a private address but if she hangs out of the window she is touting. Is that sort of the area you are looking at?
Richard Percival: Yes, I think the broad point is that a lot of space, a lot of the places where the public are and is now private land and the Victorians dealt with it by deeming railways to be streets for the purpose of applying for hire so that’s may be or that may not be, I’m not sure but what it seems to us is that it is no longer the case that the public only go on the streets and that therefore we ought to be looking at bringing the rules on applying for hire on to private property in the same way that we do with railways elsewhere. One other obvious area are airports where we think the way in which airport proprietors can come to arrangements with private hire vehicles, there are private hire operators that have an exclusive service, that doesn’t look like a very competitive way, that doesn’t look like a very good way for consumers or a very competitive environment so we are looking at ways in which we can deal with that. As Jessica said, the same thing might be the case where you’ve got private land in malls and so on. Now there are two sorts of elements to this. One is you can have, what you do with stations is create the rules applying for hire apply at the station precinct as it were, on parts of the station that are open to the public which means that you can’t apply for hire unless you’re licensed but it doesn’t mean that the proprietor has to let you in. As you know there are plenty of stations these days where the cabs or private hire are required to pay a fee and so on to get a place. Now that’s perfectly legal and I don’t think you can go against that in the sense that it is fundamentally private land but the question is whether you are creating by the use of this private land to which the public have access that you are creating an anti-competitive situation. Now with the airport situation it is not really applying for hire rules that is the issue, it’s the exclusivity of the arrangement on private land. Airports seem to be a particular area where that could be used in a way that is (05:29) anti-ethical to consumer protection so we might want to have particular rules for airports.
John Tye: That brings me on to the question, in the case of airports, you’ve got Manchester Airport Authority who operate very restricted rules. They’ve got a Dick Turpin tax, vehicles aren’t allowed to drop and pick up etc. You’ve actually referred to a shuttle service as a possibility from airports. Is there any way that this law reform could mandate airports to provide specific drop and pick up points for the taxi and private hire services?
Richard Percival: Yes, I think that will definitely be on the agenda, we were looking at those sorts of ideas so that if you have an exclusive contract then you have to make appropriate provision elsewhere. That might be designated pick up points, it might be the shuttle service to the nearest highway which is another possible way at getting at the same issue but we are certainly very interested in those sorts of ideas, yes.
Darth: Just to elaborate on that point, Bristol airport which a lot of us in this area would use, they do have an area that is designated for setting down and picking up, you can be there for a few minutes but they now charge £1 to get in to that tiny little car park. Does that fall under the same sort of remit that you could say, look, that’s not fair, you do have a private hire company that operate their cabs from here people but the rest of the country when they come shouldn’t have to drop on the main road which is dangerous, in order to avoid having to charge the customer even more just because basically you are tight and ripping us off.
Richard Percival: Yes, we have got to get the balance right, we have got allow people to enjoy their private property to a degree and after all the people who own Bristol Airport own the land to which it is situated and so we can’t require them to behave as though they are highway authorities. On the other hand we have to have some kind of sense that they are not conspiring to rip off the consumer as it were. Now I would have thought that charging £1 to get in isn’t that big a deal and that it might be something that is within the realm of reasonable, whereas saying that you can’t pick up at all and some airports do, at Gatwick I think isn’t it, that you can’t pick up at all unless you are with that particular operator, seems to be the wrong side but we are very open to points on this. I don’t’ think it is a bright line sort of thing, do you know what I mean?
Christopher Wildman: The aspiration in the 1995 DDA was bringing open access to all transport hubs. Now that never came about, part of that was never enacted and it has obviously been superseded now but wouldn’t a far better way be free and open access to all transport hubs; ferry terminals, airports, railway stations, bus stations, heliports, the list goes on and on but if it was free an open access and if it was put in to this act it would stop all of it.
Richard Percival: We are going to have to take this away, I still think you are saying that the normal rules about that you can exclude other people from your land except for the basis on which you are prepared to allow them on it, that those rules should be completely abrogated for taxis and private hire and not for anyone else but that is one end of the spectrum I think we need to look at so I wouldn’t exclude it but I think as I said earlier as with all of this stuff it is all a question of balancing different interests isn’t it and you’ve got to get that balance right but I think from our point of view in this project that the touchdown for that balance is to make sure that you are doing something which is fair and reasonable for the consumer.
Christopher Wildman: I am not suggesting that Malls which you brought up should be different, I am just saying transport hubs and transport hubs themselves, as far as I am aware, have to be licensed. It could be part of their license in effect that they have to allow free and open access but you are going to have to take it away aren’t you?
Richard Percival: Yes, I have to say that it is a particularly ingenious thought that we could recommend that the CAA or whoever it is requires at least a reasonable plan for access or something like that, that is very helpful.
Karen Atherton: If an LA has an air quality action plan in place and needs license vehicle emissions brought down, will they need to apply to Secretary of State, and if they do will those conditions apply to all the other areas and if it doesn’t apply to all the other areas, how would such a decision effect vehicles licensed elsewhere but working cross border?
Richard Percival: You are going to have to help me with the situation here, I don’t quite follow this.
Name not stated: What she is worried about is that if they have a no emissions zone and someone out of here comes in with a polluting vehicle, how do you enforce?
Richard Percival: Well, I don’t know how the enforcement regime for low emission areas works frankly do you?
Karen Atherton: No I don’t to be honest.
Zak Kowalski: I believe London have just brought this in, a ten year rule, because of emissions, I don’t know if it has quoted a Euro standard for a vehicle engine but that is the way that large city air quality controls are going.
Richard Percival: So the argument essentially is that there is an argument against across cross border work by private hire or taxis doing pre-book I suppose.
Karen Atherton: Well, I think particular one would be more effective for private hire because it is the private hire that won’t be allowed to change any standards that may have been put in place by the Secretary of State, whereas with the taxis they can do.
Richard Percival: Well, I suppose one answer would be that it is in the power of the Secretary of State to make the national standards for private hire appropriate in terms of emissions and frankly one would expect there to be a vehicle age limit on there, most private hire licensing authorities do have some limit now don’t they, but that’s not a complete answer is it because you are talking about a situation where you’ve got a particular local authority for its own perfectly good reasons presumably is trying to get a higher standard of vehicle emissions than surrounding areas. Now you are saying that’s going to be cut down by cross border work, well that might be right but before you think that is a really big issue you would want to quantify this and compare it to the fact that you have got cross border traffic by people going to work and other vehicles. You would have to show that there was a particular contribution made by cross border private hire to emission figures that didn’t apply generally that was really worth worrying about but if you did come up with that evidence, you know, give it a try, and if you did come up with the evidence then it is an interesting point that we’d have to try and factor in but it would be a question about how significant the effect is I think.
Christopher Wildman: I think Plymouth is quite well suited to this scenario because Plymouth is the honey pot in the area. To the south there is nothing but sea and a shortage of taxis in the sea, to the north there is a big open space called Dartmoor which is very rural, to the east is another rural area and to the west we have got the river separating us from Cornwall which requires a toll to cross. Now what worries me with operators being allowed to license cars, drivers and themselves in different areas yet work in the honey pot area, we could end up with an operator operating from the South Hams in Wembury just on the edge of Plymouth, licensing his drivers in west Devon to the north of Plymouth and the vehicles licensed in Cornwall to the west of Plymouth but none of the work will happen in those three areas, all the work will happen in Plymouth. Who is going to pay for all the enforcement in Plymouth because that is where it is needed?
Richard Percival: That is a very good point and resourcing of enforcement is one of the issues that we didn’t really tackle in the paper and it is something that has come up very strongly since. If you go to a national system, firstly on license fees, let’s start with license fees, firstly we think there is a compelling case for keeping the ring fencing around license fees and I know there is a lot of suspicion from drivers that it is not a very transparent form of ring fencing at the moment and I think there is a lot of work that needs to make that more obvious that you are having proper ring fencing of the Hackney and private hire licensing to your enforcement rather than gambling or other forms of licensing. So, keep the ring fence, perhaps even make it clear that it can be used on enforcement against both vehicles and drivers, possibly even think about other uses for that ring fenced money but that’s a slight distraction. If you are moving to a national system for private hire which is essentially what we are saying for conditions on private hire then it starts making sense to think about there being a national scale of fees for private hire, national license fee. Now it would still be collected locally and administered locally and enforced locally but it would make sense to have a national standard. Personally I think there is an interesting argument for having a graded set so that it almost a per vehicle cost if you see what I mean so I think providers would have to pay a much higher license. What you might then think is well, if you are going down that route why don’t you collect it nationally so that you have a national pot of license fee money which is to be spent on enforcement. What you would then need to do is to get that back to local areas, how would you do that? Well, it would make sense to do it not according to where you are licensed but according to where the enforcement need was. That means you would want to try and develop some kind of measure or metric by which you could establish where there were high enforcement needs and concentrate the money there. What that would mean in effect is that private hire operator licenses and I suppose driver vehicle licenses as well for that matter were being deployed nationally to enforcement hot spots rather than going to wherever they happen to be licensed because we are now saying where we happen to be licensed doesn’t matter anymore. So that’s an idea, I don’t want to push that too far, that is an idea that I think is emerging at the moment but that would be one way in which you could think that this is a system that could start working for enforcement and for enforcement of where you do get problems, after all it is quite often that the distinction between private hire and Hackney is where the enforcement issues arise, is being payable by the right people and in the right place.
John Streeter: We have a current fleet of 380 vehicles, two thirds are Hackneys, one third private hire so we are looking at both sides of the fence here. We have got a wonderful relationship in Brighton with our licensing council and we have had for years and when the unification of the two towns arose in the late 90s we wanted a taxi board and we now operate a taxi forum with counsellors, licensing people and various fractions of the trade. Like our gentleman back there speaking about Plymouth, we agree with exactly what he said, we are the honey pot of the south. We get sick to death every weekend with out of town vehicles coming in, particularly from Wealdon, and they license their vehicles as cash cows. They owe Wealdon Council a lot of money and they are not serving the area they are licensed for. In addition to that we’ve got Ada? On one side, we’ve got Lewis on another and to be honest, without the enforcement that our Hackney carriage office couldn’t really do with, we need backing, we need help and we definitely want localisation. That’s what we want. We can control the thing down there altogether with the council and everything and to have a national standard of private hire is an absolute waste of time. We regularly tender for work with city contracts with schools, with disabled people. Now we’ve got the guidelines on our vehicles laid down by Brighton and Hove City Council who in turn sub-contract out to someone 10 miles away that are absolute rust heaps and this cannot be right, you know, we want to work with the council, their hands are tied in this economic times, you know, so at the end of the day localisation, I’ve read your report once and I’d be a liar if I said to you face to face I understood everything. I disagree with a lot of it but the long term aim must be localisation where it works. I do accept you’ve got a very difficult job. I’m very disappointed that a lot of your observations are London based because London are 40 years behind Brighton I can tell you that with licensing, probably 40 years plus and I’ve been on the TNG, I’ve been to Transport House, I’ve had 25 years up there, I’m a union man through and through so I do attend meetings and it’s not just an observation having a go at you guys, you’ve got a very difficult job to do but as far as we are concerned we really want localisation. That’s got to be the way forward.
Richard Percival: I think what I would say to that is firstly I think the idea on the national standards for private hire would after all deal with rust heaps competing with you wouldn’t it. It would mean you’d have a level playing field in terms of the standards of the private hire side and it would equally be a level playing field for the Hackneys because it would be a minimum for the Hackneys so that people go under so it seems to me that it actually helps part of your issue rather than causing a problem for it. If you come down to the other area you are talking about, if you are saying there is a problem with too many people competing with you coming from other areas, if they are competing unfairly because they are being able to register at a lower standard, well, that’s what we need to address and that’s what we are talking about, addressing with a national standard. If, however, you are saying you don’t like the competition where is the consumer interest in that? Can I just add one quick point because you did mention contract work and I think there is an interesting practical issue there about the number of different standards of which people have to work to and the different contractual, the NHS, the Local Education Authority, Social Services may well have distinct standards and that causes a sort of problem and unnecessary bureaucratic hurdles. I hope that minimum standards would help that because I hope that if you could persuade the contract managers in those institutions that the national standard was adequate in terms of both driver and vehicle safety that would help deal with that but I think we also ought to be saying something about in the report because it seems a pointless form of bureaucracy to have different contract managers coming up with different sets of standards. I realise that was slightly off the main point.
Jessica Uguccioni: If I can just add to that, we were in Brighton just two days ago and we sort of saw the fleet and I was actually quite surprised when I was there in the sense of the arguments that we heard from PH drivers where they were arguing for a one tier because the standards in Brighton are the same for PH and taxis and the fares that they charge are the same and the standards are extremely high so it is a very different dynamic that we saw there with a lot of pride on the PH side, you know, having the same topographical knowledge, everything the same, so it’s very much more of a view of saying everything as a taxi and that’s what seems to be what works there and there are practically no problems with sort of any other kind of touting or completely unlicensed vehicles so that was something that we observed there and we saw the very high standards that are in Brighton.
John Streeter: And hopefully you’ll be back there in August. You obviously learnt that we have currently got 540 Hackneys in Brighton and we’ve got the same number private hires. Now if overnight you did have a one tier system we have also got a green council down there. At this moment in time we’ve got 141 rank spaces. We are going to have major problems if the whole thing is opened up which it could well be. I could foresee people from all over Sussex just getting a Hackney carriage and just coming in to Brighton on the weekends so we are probably going to have to drive up to London to do the London trade and this is what we are saying, and you know, there are honey pots and there was a lady over here earlier on, I haven’t had the chance to talk to her yet from west Devon. Now I don’t know what sort of area they cover but if you’ve got a free for all you are going to get all these rural areas that are not even going to be covered. There won’t be a taxi service there. There won’t be private hire. It’ll end up being a part time trade where people will just work the Fridays, Saturdays and may be the Sundays and reading this report, and as I’ve said, I’ve only read it once and as I’ve said I’ve had 36 years in the trade from both sides. I’m coming from neither. As vice chairman of our company and Dave being the chairman we take it very seriously. We’ve got over 1,000 drivers. We employ nearly 80 staff and we have a very large concern. We are the largest taxi association in the south and when you guys do come to Brighton we will show you everything in the way of history and how we see the way forward and as I’ve said, I’m just grateful to get here today and so is Dave so that we can at least put our case on behalf of the trade generally. Cross border hiring is a major problem and it needs to be addressed.
Darth: Just out of interest, I was quite interested by what the gentleman from Brighton and Hove has just said actually. So this cross border thing, does that mean that in effect I can be licensed in Bath where I am now and I could come down to Brighton and work there?
Richard Percival: Just as you can now, yes.
Jessica Uguccioni: But only on a pre-booked basis, yes, and in terms of working at ranks and applying for hire that remains intensely local so someone couldn’t just come in to a different area and go applying for work so that’s clear, we are just talking about pre-booking and pre-booked work.
Darth: Okay, so it’s not really the Hackney carriage side of things as such, I couldn’t go to London and work there?
Sarah Clarke: Just coming back to what that gentleman said, there is the potential I think for very rural areas for there to be a cover of private hire vehicles during the day time but we don’t have a very thriving night time economy and I think there is the potential for a lack of service in rural areas because they will migrate to the city areas so I think it is something that needs to be looked at both from the perspective of the council where they migrate to and also the service in the council where they migrate from.
Richard Percival: There’s a sort of slight impression that at the moment private hire are essentially entirely local and that we are throwing the borders open and it will be all different. But that’s not right, what we are doing is we are removing one obstacle, significant obstacle, towards cross border work at a high level which is a triple licensing thing. At the moment you can license as an operator where you want to license as an operator, you can do pre-booked work anywhere in the country, as long as you happen to be licensed in one particular area. That happens a certain amount but not an enormous amount because that’s how the trade wants to economically run itself. It’s not as though triple licensing is an enormous obstacle to cross border work at the moment. I don’t see the point that this is an enormous change. I think where it might be a big and significant change is that it might make it easier for some of the very big companies to expand further, that’s an argument, but that might well be a perfectly sensible thing from a competition point of view.
Jessica Uguccioni: Something that has come across strongly is this notion of the public role that PH and taxis both have in transport and ensuring access to people and the point was put strongly that buses receive massive subsidies in order to be able to cover and provide what was expected of them but taxis receive none of that and given for example the rural point that you made, it strikes me that from a public interest point, it is not something that one would necessarily cover for economic reasons because it is lucrative but it is still felt to be important that people in certain areas should have access so I think that is something to explore as well from the point of view of is it actually a taxi problem or is it actually a much more broad public transport plan issue that needs to be addressed and taxis can play a role in it but it ought to be reflected as a public issue with all the pluses and minuses that might entail.
Zak Kowalski: The law commission’s provisional proposal for national safety standards for licensed vehicles state that for private hire vehicles these should be mandatory standards without the rights of the licensed authority to enhance those standards. For Hackney carriage vehicles these same standards would be minimum standards with the local authorities having the right to upgrade Hackney carriage vehicle standards if they wished. Bearing in mind that these two classes of licensed vehicles essentially do the same work for transporting passengers to their chosen destinations, a) why does the law propose that there should be different vehicle standards, for instance safety standard regimes for private hire vehicles as opposed to Hackney carriage vehicles; b) why does the law commission propose that the Licensing Authority should have the power to enhance Hackney carriage vehicle safety standards if they wish, thereby probably creating different Hackney carriage vehicle standards in neighbouring licensing authorities and a multitude of safety standards for Hackney carriage vehicles throughout the country and lastly, the multitude of Hackney carriage vehicle safety standards that would thus be created nationwide would continue to breed Hackney carriage vehicle proprietors licensing their vehicles with the least onerous licensing authority and work for private hire operators remote from their licensing authority, the law commission’s own submission of paragraph 1546 in the consultation papers states “taxis would continue to be able to do pre-booked work as they can under current law”. This is exactly the type of abuse that most stakeholders in the trades want to irradiate yet it appears that the law commission endorse the practices, why?
Richard Percival: The first point is we think we are disputing the notion that Hackneys and private hire do essentially the same job which is where you came in. I think the plying for hire distinction is a real one and important one so in other words the justification for distinction in treatment in terms of licensing between Hackneys and private hire rests on the notion that those forms of interaction with the public which are particular to Hackneys, ranking and plying and hailing, create different market conditions than doing pre-booked work where reasonably competitive market conditions are obtained. That’s the fundamental justification. Now, you go on to talk about differences in Hackney standards. The first point I make is that we are not suggesting that this is a no change proposed so it is not as if there would be greater differences between Hackney standards than there are now. We are saying that these should continue to have the same powers that exist as at present. If what you are saying is you are challenging us on the rationale for allowing licensing authorities to have much more elaborate conditions compared to private hire, I think that is a fair challenge there, but I would put it this way, I’d say that the key extra ingredient that you’ve got to have because of the “market failing” implied in ranking and hailing, is fare controls. You need to be able to control fares. You need to be able to control vehicle standards but then we are saying you should have a national minimum for that anyway. That’s where I came in when I was talking earlier about you could go further than where we are going and say that actually you ought to restrain the ability of licensing authorities to put extra conditions on. The problem you are going to start hitting there is that it sort of takes you out of the economics to a degree. It takes to the kind of cultural things where no-one is going to suggest abolishing the London cab standards for London because it is seen as being an important token of the city. It also takes you to colour standards, there are different views on colour standards. You can take the view that colour standards are a legitimate view of civic pride and they may have some economic benefits in that there may come a sense in which once you are a city or a town of a certain size that you need to have a kind of emblematic taxi fleet and that is part of being a city of that size and it may have economic advantages and other advantages. The other way of looking at it is to say that things like colour standards and indeed uniform vehicle standards are an interference with the ability of Hackney drivers to be competitive in the trade and I think there is a good argument to be had both ways on that. The bit where I think you are wrong is the last bit where you said that you had the Berwick type problem under our system. I don’t think you would because of the fact that the national standards for private hire would be the same as minimum standards for Hackneys. That means that there is nowhere in the country you can go and register as a Hackney which will be lower than the private hire standard in the place you want to actually operate in. So you get rid of that particular problem.
Zak Kowalski: The point I was trying to make is that Hackney to Hackney, area to area would be of different standards under your regime.
Richard Percival:: Well they are now, they wouldn’t be any different to now.
Zak Kowalski: But then you’d still have vehicles licensing under the least onerous authority working private hire.
Richard Percival: No, because at the moment the reason the Berwick situation works is because there are some places where the Hackney standard is lower than the private hire standard is where you want to work. Now on our system there won’t be anywhere the taxi standard can possibly be lower than the private hire standard for where you want to work so there is no incentive to register somewhere else. I will add a caveat to that, there is the possibility of the economic incentive I mentioned earlier, the point that we got from Liverpool about insurance, if there is an insurance issue that doesn’t matter, but in terms of the standards that are set for the vehicles and the drivers, under our system no taxi will ever be registerable at a lower standard than the national standard for private hire.
John Tye: Like Brighton, my licensing authority applies the same conditions to both classifications of vehicle. They work with a meter, it’s got the town tariff, they’ve all got to do a knowledge test, they’ve all got to be BTECd or NVQd, I think we were the first authority to mandate that, and basically they’ve both got to have two MOTs a year. Now I don’t think there is anywhere else in the country, possibly Brighton, that have got those conditions and it works. There are worries about cross border because of different standards from different vehicle providers. I am going to put a novel head on here and say I am not now representing the trade at all, I’m thinking about the general public. In their eyes taxi is a generic term that means a vehicle that gets you from A to B and that is a fact. The public don’t care. Why should it be that the public who exercise for whatever reason, perhaps they are arthritic, they are elderly, they can’t get in to the converted vans and London taxis, choose to use saloon car or specialist private hire vehicles. Why should they not be entitled to the same standard that they can get from a Hackney carriage. So I’d like you to put your travelling public head on and say yes, let’s have the same identical national standards across the board for both classifications.
Richard Percival: It’s very interesting to see how the dynamics are working here, we are saying that you should have exactly the same national standards, there should be a national standard but it operates as a national standard for PHV and a minimum standard for Hackney so the consumer assurance bit we’ve got because we are saying that whenever you get in to a vehicle whether it is private hire or Hackney you can be assured that it will meet that national standard. However, if what you are saying is essentially the same point that Zak was making, was that why you are having these elaborate extra conditions on the Hackney side, well I think that’s an interesting argument. I think you do need a fare regulation and essentially it almost looks like what you are saying is that in Bournemouth and Brighton is that you’ve got de facto one tier systems but that’s not quite right is it because you don’t have because private hire can’t rank and hail but in terms of actual standards they are identical standards, which presumably only works because you’ve got quantity restrictions in both cases because if you had exact standards no one would want to be a private hire only would they. So I think that in terms of consumer protection we are with you. The question then comes whether we should have the additional standards for Hackneys. Now most Hackney audiences want to support the hire standards because they see it as being part of the thing of differentiating the trades and frankly keeping the trade at a high enough level to be what you call a barrier for entry for people coming in and out very easily which arguably private hire is less likely to be, but you seem to be arguing much more on the question of additions. Alright, let me put it back to you – what do you think we should do about London then?
John Tye: London as an operating authority is a Jurassic park. They are still chomping on the back on the hills and leaves and the raptors have got out, we are the raptors. Going back to your original point, if you set the same high standards for both categories there can be no more tampering with conditions. They would be set nationally. The travelling public would be covered. They would be entitled. I’ve got to reiterate, put the travelling public first because if they are happy all of our guys fall in to place.
Richard Percival: Okay well that I think is a very interesting way of putting it. I think putting those together essentially what you are saying is that we are being too particularist about Hackneys, making too much of a big deal about the need for extra Hackney conditions. What extra have you definitely got to have, well I would say and you would probably argue, that the things I am talking about you’d need at least partly for private hire as well but I’m saying you’d need fare control for Hackneys because I think you need that if you are doing ranking and hailing, and at least you need the option of having as a licensing authority, a knowledge test for Hackneys. Now I don’t think you do need that for private hire or either fares or knowledge. Now I know this is a controversial statement but I do think even if we went with our standards with what we’ve provisionally proposed which is the national standard, national minimum thing, knowledge tests are one of the key dispute areas, I absolutely accept that. I still think that there is a pretty good argument that says that the market will sort that out and the private hire on the pre-book side, but I can see there are arguments both ways. That’s very interesting, I think this is very helpful because I think what we are essentially coming out with is another version of the Hackney position which is a different one from the ones that you sometimes get, not just London actually, it is lots of big cities, lots of places, which is another version which is antithetical to lots of conditions, presumably you’d say why on earth should you have colour conditions for instance.
John Tye: I don’t have any objections. In Bournemouth we match the buses except the buses have been a different colour for the last ten years.
Eric Payne: I want to state on why you want minimum standards for private hire and yet you want enhanced standards for Hackney carriage. I don’t want to see Hackney licensing officers go down the road of ego trip “we are going to have the highest standards in the country” and it does happen. And the same goes for colour. What on earth difference does the colour make. If somebody is that blind they can’t see a taxi sign on top of a roof they shouldn’t be hailing one.
Karen Atherton: What we have is we have the same standards for the driver standards both for Hackneys and private hire but the vehicles are different. Obviously we have purpose built for the Hackneys but our private hire companies or our circuit companies have both private hire vehicles and Hackney vehicles working on the same circuit but the customer when they do call will get the same standard driver who knows where they are going because we all have the knowledge test. If we go down the route where private hire don’t need the knowledge test while Hackney carriages do need a knowledge test and the customer rings the same company, it will come to the point where at some stage they are going to get a private hire driver who doesn’t know where they are going because they didn’t have to bother learning anything because nobody asked them to do a knowledge test so it is kind of a hit and miss affair then.
Richard Percival: Well that’s true, but it might not be a complete answer, is that the operator may start going out of business wouldn’t it. It is up to the operator in a competitive environment to provide the customer with the service it wants. I know if I want to pre-book a vehicle, and as you say, I don’t care whether it is a Hackney or a private hire, but I do care if the driver doesn’t know where he is going and gets me lost and so I don’t choose that operator again. The price as well.
Anita Whant: Yes, I agree with what you’ve just said and it just seems wrong in that you get in to a Hackney carriage that does have very good knowledge and the customer is not quite sure where they are going, it is good for the driver to actually be able to help them with that and the same when it comes to foreign students that come in to who can’t pronounce things. If you have a private hire driver who doesn’t know where they are going then obviously they’re not going to know what the customer is on about, so really you’re not thinking of the customer.
Limitation of Taxi Numbers
Richard Percival: Can I make an opening statement on this issue? Firstly I want to say as I’ve said earlier is that there are a lot of arguments about this and what I want to do is to just cut out the middle man a bit and come up with what I think and demonstrate what I think are the good arguments for the restrictions are and what the bad arguments are. You can persuade me I’m wrong obviously but just as a kick off, firstly the arguments against restrictions are classic economic competition arguments, you all know that. The arguments that work in favour, well firstly I don’t think our met needs surveys are a good basis for number restrictions. If you are saying the question is if the needs are met or unmet why on earth don’t you leave it to the market to determine that and then the way you do with every other kind of competitive industry in the country. However, nobody usually comes up with an argument based on unmet needs. People talk about over ranking and congestion, I think congestion and over ranking are good potential arguments for number restrictions. I used to say the same about environmental pollution, I think of those are good sound arguments but I want to see these arguments backed up and I hope the people coming from the trade are going to come forward with facts and figures that will demonstrate these issues. Now I’ve been taken on various tours of various cities to be shown over ranking but we need something a bit more scientific if we can manage it, so that’s an area which I think is a good area. Another issue driver livelihood and income. Now what I’m going to say about that is the hard truth that right now I don’t think it is a matter of policy. The fact that driver incomes ought to be kept up because it is a good thing that they can pay their mortgages and feed their children, that is not an argument that is going to run very far, okay. Now that doesn’t mean because it’s a competitive market people will say. That doesn’t mean that driver isn’t irrelevant to this argument because I don’t think it is, I think it is relevant at least in two. One it’s relevant in terms of the ability to maintain standards. I think there is a compelling argument that if you don’t artificially as an economist would put it, maintain driver income then the standard of the vehicle and service would inevitably deteriorate and people will become less safe because they are having to work longer hours to make up their income and so on. Those again seem to be quite respectable arguments in favour of why driver income matters in a public policy sense as opposed to a general welfare sense as it were. And the other point is that I would be interested to hear from licensing officers or those who have tried 51:31 people on this is that keeping driver incomes on a reasonable level with a reasonably static and committed group of people in the trade whereas if you open it up and you get people coming in and out and if people are only in the trade for a very short period of time, there is no kind of commitment whether financial or indeed what you might call emotional commitment to the trade then they are much more likely to be transgressing in various ways, in other words they are regulatory committee who are harder to regulate in the jargon. Those seem to me to be quite good arguments. I’ve heard a lot of good arguments, I’m not going to say where I’m sitting at the moment. I still think the starting point is that you’ve got the burden and proof of those who want to retain the number of restrictions but I certainly think there are good arguments to be had and I had mentioned some of them. I’m just trying to cut out the middle man.
Zak Kowalski: In a local radio WM west Midlands interview shortly after the publication of the law commissions public consultation paper Birmingham’s head of licensing stated that there was a need for a mechanism in any new legislation to limit not only the numbers of Hackney carriage vehicles but private hire vehicles as well. What, if any, would be the criteria conditions under which the law commission could envisage proposals for a workable sensible system for the limitation of vehicle license numbers in both the Hackney carriage and private hire trades?
Richard Percival: Well I think you have to persuade us of the wisdom of going there is the straight answer to the question. You have to persuade us as to the wisdom of going down that course.
Zak Kowalski: In Birmingham we are at saturation point in both trades, literally saturation point.
Richard Percival: As I said earlier I think the congestion argument is a sound argument in that we need to see it backed up but it is a sound argument. I could certainly see in which you had the ability of licensing authorities to put limits on the basis of a survey of congestion as opposed to a survey of unmet need, that would be the kind of route you’d go down if you were going down that kind of path so it is there to be had but you need to make the argument about why that overcomes the argument in favour of competition in a capitalist society essentially.
Eric Payne: Why are we using double standards because basically in parliament and in the civil service we have supply and I mean there are reductions being done in the military but in the taxi trade that is anathema. You want to derestrict the numbers and you want to flood the market with people that possibly aren’t very good at taxi driving and I can’t see where you do not balance the supply with the demand which is the logical way. It’s like the Japanese and Chinese operate their factories, it’s the way the stock market runs, it’s the way all businesses runs but no not taxis, we’ve got to throw it out the window.
Richard Percival: I’m sorry, I think you’ve got that completely the wrong way round. The argument for deregulation is precisely the argument which says that you ought to leave the market supply and demand to come to a solution to the supply of taxis. What you are arguing for is a restriction on entry in to taxi market by a bureaucratic mechanism which is the limit on licenses so in other words, in every other trade, you know if you want to be a plumber you put a thing in the window and you see if you can make a living at it or if you want to open a shop you open a shop, the local authority doesn’t license you and say sorry, we’ve got 300 shoe shops, let’s not have another one. Whereas you’re saying that taxis are different and they do need to be controlled by the local state. Now as I said earlier I think there are arguments for it but supply and demand isn’t one of them.
John Tye: Local need – if you have a local authority that is working in conjunction with the local trade, I mean serious conjunction as a team that must be the best source to determine what numbers I need locally. They are working for the common good of the travelling public in their area. Where you’ve got a situation, I can only use ours as an example, enforcement check ranks on a regular basis to the vice chair is an absolute terror. He’s out there quite a few nights of the week very often. Enforcement – we didn’t have enough money so the trade took on trained and operated mystery shoppers. The council said thank you, it was cheaper. We caught offenders. So I think that has got to be a standard worth arguing whereby monitoring it on a weekly basis, we are administering it, we are working as a team. Now it’s dawned on me, I went on one of the websites and I see that 86 local authorities around the country still limit numbers for approximately 25% of the trade. There has to be a reason that Liverpool, Cardiff, Pompi, I think Wirral recently, relimited. Have we had discussions with those authorities to ask them why they’ve gone back?
Richard Percival: Yes, you are right, we do have 25%, 10 years ago we had 33% so the tendency has to be to delimit not to limit. Now you are right, there are plenty of big places that have delimited and then limited again but I don’t think that you can necessarily say that we should take that as a datum which means that limitation is a good thing because you are taking that particular snap shot as opposed to another snap shot. The key is whether limitation is a good and proper and useful tool, not who uses and who doesn’t use it and again I am going to put this sort of slightly provocative argument to you, if I was an economist which I’m not, or a regulatory scholar which I’m not really, they would be saying what you’ve described sounds very like what you call regulatory capture, it sounds like your taxi association has done a jolly good number on its local authority, that you as a bunch of professionals are neatly conspiring with your regulator to rip off the public. I am not saying that okay! (laughs), but what I am saying is that you can’t assume that if you’ve got close relationships between the regulator and the taxi trade based on restriction of numbers that it is necessarily in the interest of the consumer as opposed to in the interest of on the one hand the bureaucratic interest of the licensing authority or on the other the economic interest of the trade, it may not be.
John Tye: Well I’m sorry but I actually think if you’ve got the two sides of the trade working it is a good argument. Have you actually approached as law commission those councils and said why have you gone back?
Richard Percival: No, we’ve had a lot of discussions with licensing officers through ILO and NALI and we have tried to approach the LGA and so far with fairly limited success. I think it is a perfectly reasonable point. We have been talking about this ourselves, about how we need to get some kind of historical input as it were from the local authority side about what the dynamic is. Since we are on this I will just mention one other point about numbers restrictions in highly regulated trade in that the Hackney trade is a highly regulated anyway, including fare regulations. Now there is an argument that says that if you have highly regulated trade if you don’t have numbers restrictions then what would have been the demand for numbers restrictions expresses itself in a different way like for instance strong political demand for putting the fare regulation up and things like that which ends up having a fairly similar effect and I have heard that said about when Newcastle delimited and relimited, I’ve heard licensing officers say things like (off the record), well we don’t really need numbers restriction necessarily because we’ve got our ways of controlling the numbers in the trade. Now if that’s the case you think why not go directly to numbers restrictions and be done with it so there is an argument around and the reason I’m mentioning it now is that it sort of plays to your point about collaboration between trade and licensing. There is an argument that says that the second best thing might be more regulation rather than less regulation, even if the best thing would be deregulation together if you could accomplish it which you can’t because of the market failures.
Donald O’Brien: I think it is essential that local authority are best placed for the needs of the public. The localism bill is giving more back to the councils so the government is saying that the local councils know best and finally I think the local authorities do not regulate entry to keep taxi operators happy and content. The fact is that local authorities are best placed to decide how they want their taxi service to operate and in its place to ensure that they issue licenses as and when is deemed necessary.
Richard Percival: Okay but so far when we were talking about conditions there were a lot of people in this room who were saying local authorities are definitely not the right people to determine conditions. They shouldn’t have colour restrictions, they shouldn’t have the London cab conditions elsewhere, so, you know, which way is it?
Bob Lethbridge: Derestriction leads to a one tier system which in turn leads to a lack of service to outlying areas especially in rural areas unless you do away with the Dead mileage rule and then that’s open to abuse and overcharging by individuals, whereas on private hire companies it is controlled by the company itself.
Richard Percival: Tell me if I’m wrong but I think there is a sense that in a lot of very rural areas the distinction is pretty nugatory anyway because virtually all work is pre-booked. There may be one or two ranks and a station in the whole area and the number of rank spaces might be measured in very small numbers. Now I’m not saying that doesn’t mean to say that the ranks aren’t important, they may be.
Bob Lethbridge: In north Devon, if you come in to Barnstaple at night you are swamped with taxis. Go out of Barnstaple a couple of miles, try and get a taxi and you can’t get one for love nor money because we can’t go out because of the dead mileage. Every car in north Devon is Hackney carriage and is governed by the dead mileage rule, so you are restricting the service that probably 50% of the people are getting and you are not getting any service. A lot of unlicensed vehicles are operating around Barnstaple and that area because it’s wide open for it.
Richard Percival: Are you saying there are unlicensed ranks?
Bob Lethbridge: No unlicensed vehicles.
Richard Percival: But how are they picking up passengers?
Bob Lethbridge: Because they know the local people.
Richard Percival: I see, it’s pre-booked essentially.
Bob Lethbridge: Yes.
Darth: You did make a point just to kind of clarify something because about ten years ago a third of the councils were limiting and now maybe it’s 25%. In my experience talking to councillors, the reasons councils initially delimited was for one reason only, because they are scared of the costs and implications of arguing with you and the government and trying to say no, we don’t want this to happen. It’s too costly for them to say actually you are wrong and we are going to fight you. They just cower down and go, okay if the government says delimit we better do what they say and councillors have said that to my face.
Richard Percival: I don’t really understand the logic of that, I mean, who challenges our met needs surveys, I mean the DfT doesn’t does it?
Darth: No but once upon a time this all started many years ago.
Richard Percival: Because of the OfT recommendation and the OFT. No, the OFT report following which the DFT published guidance which argued against numbers restrictions didn’t it? Okay, they are pretty wimpy councillors if they are actually scared of the government when the government is not enforcing non-statutory guidance. There’s no enforcement of that.
Darth: Well there must be some reason why so many of them just went okay, we better do that. But also you keep going on about I know on one hand we can’t just say well hold on we’ve got to have a standard of living and if we can’t pay the mortgage then market forces etc etc and then you keep also saying about what’s in the interest of the public, well, a local council to my mind, alright it is a public sector, just as you are public sector and kind of in effect you are saying for private sectors if somebody goes to the next county and gets cheaper insurance that’s their look out. Where I don’t quite understand why you could say to a local authority well it’s not your look out to do things, we are going to tell you what is going to happen whether you like it or not when it is in the public interest that there are many more taxis on the streets, I don’t quite understand that logic and the market forces will dictate that some of them will just leave and it will kind of naturally balance out. Well, by the same token then surely I went in to Marks and Spencers and I had to wait three minutes to be served, well why aren’t you as a governing body saying to Marks and Spencers that you have to have more staff so that I don’t have to wait that long. Is it not the same thing?
Richard Percival: I’m sorry, no, it’s completely the other way round. Your point would be a good point if the local authority licensed supermarkets and restricted the numbers of supermarkets to keep up the income of the poor benighted shareholders at Marks and Sparks. Now let’s keep on the good arguments here. There are arguments for intervention. What you want, numbers restriction is an intervention in the market to stop people doing what they would otherwise do. That’s on economic first principles that is probably unfair to consumers and it is people who want to go in the market and can’t and I do have some sympathy by the way, people talk about the advantages of double shifting on taxis, I do have some sympathy with the people that have got to take the bum shift because they can’t get a Hackney themselves but that’s a slight side point. You are arguing for an intervention in the market not for the market to do what the market does. There are good arguments for intervening in a market and there are bad ones but let’s work out what we are arguing here.
Darth: Okay but what I am trying to say is that surely the board of directors in Marks and Spencers are there to run the company as best as possible and a lot of people in this room are saying well, the people in the council know Bath better than the government do so why isn’t it up to them to decide?
Richard Percival: No, because the local authority are not the people who run the local economy. They did use to in the Soviet Union but actually that’s not how it works in a market economy. So you don’t want to have a free market in the supply of taxi services. You want to have licensing, quality controls. We want all those things too. So there are all sorts of arguments for intervening in what would otherwise be a free market where any Tom, Dick or Harry could jump into a car and do anything he or she liked. You’ve got to intervene in that for good reasons. We’ve got a good reason for safety, we’ve got a good reason for fares, and we’ve got a good reason for conditions. What I am saying is you need similarly a good reason for numbers restrictions because it is another form of intervention in what would otherwise be a market. There are good reasons so let’s concentrate on those.
Eddie Sears: I used to be a Hackney driver for 30 odd years. My question is twofold really. We are in a double dip recession at the moment and yet you’re saying in one of the first paragraphs of your law commission reforming law that we are going to increase over the next five years by 2.5%. I’d love to know where those figures came from. The other question is you are saying that by opening up the market you are going to be better off, the public is going to better off. They aren’t going to be any better off, they are going to be worse off and what you are saying is you don’t mind if somebody comes in to the trade, gets made redundant by a company, comes into the trade, spends £40,000 on a cab and he’s got to insure it and then he finds he can’t earn his money so he ends up going bankrupt. So you’re quite happy with that situation? In the private hire office that I work in, in the last month three drivers have gone on the dole because they can bring home more money on the dole with their family than they can earn from the office and it’s a free for all and yet the owners of the office still want to take on more drivers. In general they don’t care what the drivers earn. This is what happens in a free for all and it is a free for all for private hire in Plymouth whereas it’s limited on the Hackney carriage side and every Hackney carriage in Plymouth has to be wheelchair accessible, that’s the rule they’ve made. We are now in a situation where the only vehicles that now can be licensed on a new vehicle coming in to Plymouth has got to be a 2005 or younger vehicle coming in to the trade, that started 1 April. Hackney drivers in Plymouth aren’t earning their money. There are Hackney carriage vehicles parked up because people just can’t afford to rent them. There are drivers out there who are doing one or two jobs on an eight hour shift. This is the situation you’ve got at the moment and yet you are saying open it up. If you open it up in Plymouth 50% of the drivers in my office will go out and get a Hackney tomorrow because they think they can earn more money out on the ranks and they’ll work for a private hire firm as well so they’d be doing both sides of the trade and you’ve only got one firm in town that does that at the moment. So the trade isn’t going to be 2.5% better off in five years’ time, no way, because we are on a double dip recession and we are not earning our money now.
Richard Percival: Okay now on the point of the figures I am going to apologise and say that we have withdrawn those figures. We did rely on some figures from a frankly extremely expensive industry produced book that came out with figures for various things including growth but including particularly the revenue for the trade as a whole and the number of drivers which subsequently proved extremely helpful but robustly expressed pressure from the taxi trade on various blogs and elsewhere were revealed to be completely misleading and we have asked for our money back (laughs). Most of this affected the impact assessment, it wasn’t really fundamental to the report but we have withdrawn the facts and we are trying to look at it much more rigorously and so I am perfectly happy to hold my hand up and say one, apologies for us getting that wrong and two, thanks to the people who were on the blogs and elsewhere have made the points that have been very helpful and we are kind of trying to develop, that’s a minor point on the figures. Your broader point is of course I understand and in a human way one sympathises and I have not met a taxi driver yet whose income has gone up in recent years or whose hours have gone down and speaking entirely personally one understands that but the hard reality is I’d be lying to you if I said that as a matter of public policy the objective of keeping your wages high is going to be something that is going to hold any water, just because it’s right. What I was saying at the beginning there are other reasons why driver income can be such a matter from a public policy perspective but I am afraid the argument that you ought to have restriction because it is a good thing that you can keep your wages up is not an argument that is going to persuade anyone. I’m sorry but it isn’t. We might live in a different world to where it was but we are not in that world. So what I am saying to you is that if you want to argue for quantity restrictions don’t argue on that basis, argue on another basis. One of those bases is, as I was saying earlier, that driver income matters for public policy reasons to do with the safety of the driver and the safety of the vehicle. For instance, just as an example, I was talking to some people from Milton Keynes which was a town that deregulated a few years ago and they said they had a graph which showed the way in which failures on the test of the vehicle had gone shooting up after deregulation. Now one answer to that is well, you picked it up on the test so it doesn’t matter but actually that’s a pretty thin answer. The truth is I think there is a good argument that says if you don’t keep a reasonable amount of money going in to the cabbie’s pocket you are going to get crappy vehicles and you are going to get drivers who are over tired. So use those arguments, don’t use the argument that your income is going down. It’s a hard reality.
Katy Nicholls: I just wanted to come back on a couple of points that were raised in relation to Barnstaple and the outlying areas and obviously in relation to derestriction of numbers. We are a rural authority, we derestricted in around 1998. At the moment we have around 300 Hackney carriages and 12-15 private hire, sorry I don’t have the figures to hand. At this point I just wanted to raise a real issue in this type of rural area where we have had an unlicensed driver. We did take a prosecution for that but because it is so rural in nature and you have that regular client base and then taking a subsequent prosecution is very difficult and obviously that’s a real issue for us where we have drivers saying this particular person is still operating and we can’t gain evidence of that so we’ve never had lots of allegations of unlicensed activity so we are quite lucky. It’s an interesting point about private hire and servicing outlying areas. You’d think that if there was the need there that we’d have more private hire operators approaching us for licenses which hasn’t been the case.
Richard Percival: Two points on the north Devon situation – firstly, that enforcement issue, do you think the confiscation of the vehicle route would have been something that would be helpful to that point where essentially you’d still probably go to court but with the driver having to show that he wasn’t unlawfully touting, would that have helped you think or would it not have made a lot of difference?
Katy Nicholls: I guess that they would then secure another vehicle from another means.
Richard Percival: It wouldn’t be enough of an disincentive in other words.
Katy Nicholls – maybe not.
Richard Percival: The other question on north Devon – do you think that’s the sort of situation where the other zones might help if you could introduce a Hackney zone which didn’t include Barnstaple or whatever, would that be something that would help or is the demand so little that it wouldn’t be sustainable?
Katy Nicholls: I’ve never thought about it, it’s never been an option and I guess there could be some potential there.
Tom Harrington: You used the word snapshot to describe relimited. Obviously the only example I’m going to give you is a snapshot, I haven’t got a clue about what’s going on in the rest of the country but we run a 24 hour taxi and private business in Falmouth. You can always get a taxi in Falmouth, it’s never a problem and Cornwall’s quite an interesting case because very close to us we’ve got zones that are delimited. So we’ve got Helston which is literally 11 miles away and we get phone calls almost every single Sunday from 5am til almost lunchtime from people in Helston who cannot get a taxi in Helston because what’s happening is, people have got their own cabs, they go out Saturday night. It’s the only time they can make any money, they are all out there at that time. It comes to Sunday morning and at that time there is absolutely no service. There is no-one there to take the ladies to church and it’s an important thing in Falmouth because we are regulated and limited on numbers there is an entrance into coming in to our market so we run our businesses properly, there’s always someone out, we are providing that service not just for the rank but for the phone calls, it’s all entwined but it is a very important part of the community, especially on a Sunday morning with all the old dears going to church. Now, I can only talk using your words in a “snapshot” but I’ve got no other examples. I am sure there are other people in this room that could probably give similar examples of where delimited has led to a lot worse service and that’s surely what we are here to discuss, I’m surprised no one else has mentioned it.
Richard Percival: Fair point and I’m not making a snapshot generally, if you get enough anecdotes it becomes scientific. I meant by the snapshot thing in terms of the change and the way in which it is limitation and delimitation ebbs and flows. I think this is a very important point you are raising. The economics would predict that if you had a limited market and then delimited, two things should happen. One is that price should go down and the other is that and/or supplies should go up, and/or service should go up, the service including for instance waiting time. Now if you want to think about where the arguments in favour of limiting numbers comes from, one area to look at is whether the empirical factors, the actual facts on the ground bear out the economist’s predictions because if they don’t then they are undercutting the argument. What I’m saying is that argument is a good one, we need to have that backed up, we need to get whatever figures are available that can show that the predicted results haven’t happened in areas that are delimited.
Tom Harrington: The only way to get that would be to surely survey.
Richard Percival: Well an unmet demand survey wouldn’t do it would it, it might help with waiting times but it wouldn’t help with fares or with overall supply necessarily.
Anita Whant: Have you looked at how many Hackney and private hire drivers are actually claiming benefits to top up their income. One thing I’ve noticed is that in Bournemouth that there is actually quite a high proportion of drivers claiming benefits. Surely by flooding the market you’ll be putting more people on benefits.
Richard Percival: Yes, I’m sorry this isn’t an argument this isn’t 1984, that’s the argument that was made when the miners were on strike. That didn’t work then and it’s not going to work now.
Christopher Wildman: You said at the beginning about when we were talking about opening everything up that we shouldn’t interfere with markets, well local authorities with the agreement of government do limit another licensed area, they stop pubs and clubs opening where there are too many pubs so I’d like you to think that that is an example and also you use the word intervention which immediately brought to my mind butter mountains, wine lakes and all the rest of it where government goes out and buys at inflated prices butter, milk, wine in France and stock piles it. Then they sell it to the military cheap. I used to be a caterer in the Navy and all the butter was marked “intervention” so government do influence market with intervention.
Richard Percival: Absolutely they do and the demand is, well I say nowadays, particularly the past, the demand is justify the intervention. It is possible to justify the interventions. Take your pubs example, the economists would call that external costs, externalities, that you are imposing costs that cost businesses imposing costs on everyone else by the amount of unruly behaviour and so on that is in the area that cost other people money so there is a perfectly good economic argument there but there is also a perfectly good social argument for that. Quite what the social or economic for the Common Agricultural Policy is don’t test me on that but I do know it’s been under pressure so, yes, there are interventions. We’ve got lots of interventions we can justify in the Hackney trade like licensing and safety conditions. All I’m saying is that the boot is on the foot that says justify this one too. Let’s stop getting bogged down in this structure of the argument thing because there are good arguments for this particular kind of intervention. I’m not saying that they are there yet but they are good arguments so let’s concentrate on the good arguments that there are which are things like congestion, over ranking, carbon foot print,
Darth: I think the thing I’m really having difficulty with and I believe other people in this room and certainly the taxi drivers as a whole. You were saying the same sort of thing when I met you at Scarborough last year is that you are saying that there are good arguments and it’s not that you are saying there are good arguments, I don’t know what they are, you know what the good arguments are and you’ve said umpteen of them in the course of this morning about delimiting the taxis, so yes, my income will go down, so yes, I can’t maintain from a public safety point of view my taxi, you know the arguments therefore you know the answers but I don’t understand why you need to hear it from us when you already know it, I can’t get my head round that. I just want to quote the cabinet member for transport in Bath because where we do have a limited number we’ve just had a survey and he said each taxi driver is a business and needlessly the number of taxis will have a detrimental effect on these businesses and their ability to provide such an outstanding service. Well, how can you say the council can’t be correct in that standing.
Richard Percival: Well I can’t think of a dafter argument frankly. Think about grocer’s shops, he’s saying that all grocer shops are businesses therefore we can’t possibly allow any more grocer shops in because otherwise we’ll ruin these perfectly good businesses. You’ve made a very good point, those need to be backed up and calibrated that’s the point I’m making, so we need evidence to back this up and various taxi drivers and associations have taken me around various parts of the country and shown over ranking physically, that’s very striking, but it’s not something I can write down in the final report to justify numbers restrictions. Don’t let me make like I’m an advocate for it, what I’m trying to say that what we need is to ground these arguments with as much evidence as you can get, those are arguments about the effect of driver income going down, it’s about congestion, over ranking, pollution and it’s also about attacking the predictions of what should happen in the economist’s world when you derestrict so let’s concentrate on that, that’s what I’m saying. If you want to persuade us you need to concentrate on those kinds of concrete arguments.
Darth: Okay, well, it seems to me that what you are saying and please if I’m wrong then I hold my hand up, that what you are asking for is statistics.
Richard Percival: Yes, amongst other things, that’s right, that’s part of it.
Darth: We are taxi drivers and we aren’t economists and we don’t have the sort of funding that the government has to compile these statistics to be so specific as to look in to my life for say the last five years or, because there is a deadline to this, the next five years so how can I possibly do this without a time machine and going back and say well actually this is what has happened over five years, I don’t have the ability to do that.
Richard Percival: Okay, that’s a fair point and it’s tough on me to say that all the burden of research here has got to be yours and not mine. We of course will be working on this, we of course will be trying to look in to public sources and so on, but I have to say my experience so far of drivers and driver’s organisations is not quite as low level as you are suggesting. I think you’ve got some very vigorous organisations and some organisations that are capable of producing some good evidence and in fact frankly you’ve got individuals who do a good job at that because my inbox has got quite a lot of that in it from time to time. So yes, give us evidence and if all you can do is to write a response that says this is what I think will happen and I think this will happen because in my area, I mean you were saying for instance that in your area out of X many drivers, that is not a scientific survey but it is evidence and it helps so do what you can is what I am saying.
Karen Atherton: One of your main arguments with the derestriction of numbers is that it may cause the fares to be decreased, obviously making taxis more competitive. It doesn’t seem to be the case on the Wirral, the fares have increased, because obviously the level of fares has remained static but the number of vehicles have increased so it’s been diluted so now the drivers are requiring higher fares to meet costs.
Richard Percival: I think that’s a very good point and again tell us that and you don’t have to necessarily explain what the GDP of the Wirral is but just explain what your experience is and put indicative figures down, put down what you can because there are good arguments that say that people don’t necessarily behave in the way the economists expect them to behave which is no doubt very remise of the people concerned and for instance there is lots of evidence that price doesn’t fall much because we all know that the price that’s set for Hackneys is a maximum and not a minimum but they do tend to be kind of sticking around that price and that you don’t get falls. Knowing that kind of thing, that kind of empirical information about people and how they actually behave, that’s all very helpful and another good argument.
Zak Kowalski: Let’s take the holy grail of Oxford which you must have looked at. In Oxford you have a plate value of tens of thousands of pounds probably close on six figures yet all the cabs run three eight hour shifts, they all earn their money in that, the running mile is £1.29/mile and there are one or two councils that run at lower than that, all the rest are above that. That’s just a sign of how the public actually benefit but of course government and everybody else, they don’t like to see the plate values so high. You can’t have it both ways. You can’t have plate values at zero and fares at zero as well.
Richard Percival: The point about plate values is that to an economist plate values look like the capital value that is being put on unfair competition, do you see what I mean. That would be the economic analogy of what a plate value is, so to an economist a high plate value is an indicator that there is something uncompetitive going on.
Zak Kowalski: You’re telling us that the public are benefiting from this.
Richard Percival: Again, let’s get these arguments deployed, what I would say is that there is another argument against limiting entry to the trade is that it is unfair on new entrance and I think there is an argument that whilst there is a kind of environmental in favour of double shifting or triple shifting you say, but there is also an equity answer against it, it’s tough on the people who are having to pay the figure for the less good shifts when what they really want to do is to have their own Hackney and be in the market. Now I’m not saying it is a good thing but that is part of the argument.
Elaine Kale: We do have a restriction policy, I’m not going to tell you what I think of that policy or whether I think it is right or wrong but I can tell you what I think would happen if we derestricted and I think we wouldn’t necessarily have a flood of applications because a lot of the demand for plates is driven by the value of the plates and therefore if we were derestricted I suspect that there wouldn’t be a huge increase in the number of applications for vehicle licenses. The numbers may go up for a while but we believe it would settle around about 10% higher than the current number of vehicles that we have. We are quite heavily regulated. If you license a Hackney carriage in Exeter it needs to be wheelchair accessible, three years old maximum and you need to be an owner driver and you need not to have been issued a plate as a first holder by the council previously so that’s a cap on the number of people who are likely to apply. I am trying to help out people who are arguing for restriction, it’s not really an argument for restriction, it’s not quite what you are looking for but I wonder if you’ve considered a basis for restriction somewhere above significant unmet demand somewhere above what it is now and perhaps at a higher level so that it deals with issues of over ranking and congestion and to some extent the viable arguments in relation to driver income.
Richard Percival: Yes, I think that’s a good point. I‘ve been talking about if you were going to go towards congestion and over ranking you’d be using that as a substitute for unmet need at the moment but you’d still be having a binary yes/no situation. There is quite a compelling argument from Manchester and other places that have adopted a similar sort of scheme where they have an organic growth policy but the people that come from those sorts of areas seem to see that working reasonably well and you could link that in with the restriction couldn’t you. You could have a system where at a certain level of congestion or whatever the criteria were, you had a complete flat line as it were but at other levels you could have a requirement to allow a certain number of new plates per year or something like that.
John Streeter: I think we’ve got some common ground here anyway, I think we all agree both sides of the table. We are all here to serve the public and the safety issue is obviously paramount. That goes without saying. I think you will agree with us that it is all evidence also that all areas and all regions are different and we go back to the thing that if the Secretary of State oversees all this I think he is going to have a massive problem because it flies in the face of everything that you’ve presented to us today. I want to go on to one other thing on localisation. In Brighton the situation with the democratically elected council that give £9m in subsidies to the bus company. Now this is part of the Go Ahead group who in turn pay their shareholders. Now by you opening up and we’ve got this to compete with and in the last six to seven years these buses run 24/7. Now if you would like to see first-hand I will invite you any night you name, the busy nights, Friday, Saturday even, I’ll take you out personally at 10 or 11 o’clock at night til 5 or 6 o’clock in the morning and you can see all the cabs ranked up, you can see police moving the cabs on, we’ve almost had disputes there where we’ve had to block the town on occasions, and it’ll only get worse if the one tier system comes in. I’m speaking from Brighton here and the invite is there for you. You are very welcome and I will personally oversee it and I will see if I can get Peter Castleton from the police to come with me.
Richard Percival: That’s very helpful. I have to say we have had a number of very helpful similar invitations of which we are sifting at the moment but we’ll put that in to the pot. Just quickly, one issue. We are absolutely not suggesting one tier, let’s be clear about that.
Dave Smith: We have a council managed growth policy with regards to the issue of plates. Once you’ve done so many years on the waiting list you get a plate, I guess that’s the same in other places as well and that works very well. Every new plate has to be wheelchair accessible and for Brighton it works. I guess it could work everywhere else. In your summary here – 1.23 of taxis and local actions we have provisionally proposed only moderate changes to the regulation of taxis, apart from removing the licensing authorities ability to limit taxi numbers. We suggest retaining the local link with the setting of taxi conditions and fare regulation, licensing enforcement. We consider the legal definition of applying for hire which covers for hailing and ranking but do not propose radical change. Well in my book that’s a fairly radical change. You are happy for the council to make decisions on everything else apart from one of the most fundamental areas where they think they know better than you.
Richard Percival: It’s an interesting dynamic isn’t it because what we’ve got essentially is us saying that councils should have more power to set conditions above the minimum and you’re all saying no, no, wouldn’t have the power to set high Hackney standards, but on the other hand you want to have quantity restrictions and you are all in favour of quantity restrictions, that’s perfectly coherent but as I say it is very much a moving feast, we are listening to the arguments, new arguments are coming up all the time, new facts are coming up all the time.
John Tye: A small point on what seems to be the bone that gets chewed and although we talk about plate values it’s actually license transfer value. Whilst I cannot condone anything that happens in the six figure sum, I think it is important that you have that facility. To use your own analogy earlier on you don’t restrict shops, grocers etc, they are businessmen. Well in the same way you are actually promoting better more professional services from the taxi trade when you have people who are coming in, who are starting a business with an expensive vehicle and all the rest of the equipment and if you want them to show that commitment to the trade you must expect them to make an investment on which they might get a return for a number of years so it does have a validity for the trade, especially in the case where it is limited. I can’t justify some of the prices in fairness.
Zak – with regards to number restrictions, I believe that at least three areas in the last few years the police authorities have asked the local council to restrict numbers and you are aware of this. Have you or do you intend to get in touch with the Police Federation and ask them what the views of Chief Constables are throughout the country?
Richard Percival: Well not the Police Federation, we are getting in touch with ACPO and we are hoping to arrange a meeting with both traffic and licensing spokespeople.
Name not given: My question is related to driver training. I note within the document it talks about the potential to introduce mandatory training drivers with respect to equality, disability, discrimination. Our council have imposed the BTEC requirement which obviously has got a disability module. Would something like that satisfy that requirement?
Richard Percival: Yes, I think with the proposal essentially we were singling out the disability issue but it is quite right, all the vocational training that exist do I think include appropriate disability training. What we’ve been looking at there is the training component of the national standards so that would be set in any event by the Secretary of State as a minimum for Hackneys and a standard for private hire and we would expect it to be appropriately flexible so that it could be discharged in a number of different ways, that would be the standard sort of form I think.
Darth: One of possibly the oldest sayings in the book is if it aint broke don’t fix it and I am quite intrigued, alright then, we might need one or two plasters or slight alterations possibly but why does the government think that taxi and private hire is broken to put this much effort and money in to fixing something that isn’t broken?
Richard Percival: Well I think that the government certainly does think that it is broken to a degree, that’s to say that the way the legal structure works is pretty rubbish, that some of the definitions of applying for hire is pretty useless and this has effects on the way in which the trades work. The other thing is going around the country as we have it has been pretty rare for people not to say that there isn’t something pretty horrendously wrong with the trade. Now, they nearly always say that we are making it worse but I’ve yet to come up with very many people who think that everything is absolutely fine. There are one or two but not many.
Darth: Would you mind clarifying on that, you say you go around different parts, in fact most parts from what you’ve just said, and think that it is broken, well can you tell us because we aren’t aware of this and we are the taxi trade.
Richard Percival: Well people talk about cross border issues, they talk about enforcement, touting, income and derestrictions so all of those things are on everybody’s agenda but anyway I’m not really relying on that, I mean that was like an observation really. The taxi trade has what looks like creaking and old fashioned regulatory structure which absorbs a lot of resource to keep going and which is resonant of inconsistency, archaic terminology, fundamental stuff that people don’t understand and gets an awful lot of litigation. There are a very high number of cases going to the administrative court related to taxis for the size and significance of the trade.
Colin Holden: We’ve had sort of a controlled amount of taxis for the last 25 years, it’s gone up 10% with unmet demand surveys where the unmet demand surveys have said we are okay but the council have put in a natural growth situation and so we’ve got two or three more cabs than we had, it’s only a small area and the cabs themselves are in decline businesswise off of the rank simply because of mobile phones because there are a greater amount of individual owner drivers and to expand see the council and get a private hire vehicle which runs under the same situation as the Hackney does apart from it can’t rank up so it’s got a growth situation without encroaching on the rank so isn’t that the natural way forward so that private hire can increase because the rank business isn’t there as it used to be.
Richard Percival: If it were the case that there was no demand for ranking and hailing then derestriction should hold no terrors for you because people wouldn’t want to bother having a Hackney license would they?
Colin Holden: Yes they would because they would just do the Saturday and Friday night thing and the situation would decline.
Richard Percival: So that’s an area for demand for which there is an economic justification in meeting it.
Colin Holden: No, the demand is already met.
Richard Percival: But not on Saturday night if what you say is true.
Colin Holden: Yes it’s met but the rank is kept busy then and you can keep moving but the more you get on the rank obviously the less you will be moving.
Zak Kowalski: Bearing in mind that in urban hubs probably over 90% of licensed vehicles and licensed drivers misdemeanours occur during the hours of the night time economy what enforcement plans do the law commission propose to appropriately deal with the transgressions? How would the new legislation ensure that enforcement officers are obliged to tackle these offences during anti-social hours and how would the new legislation facilitate the proper and adequate funding of enforcement costs?
Richard Percival: First point, we have suggested increasing powers for enforcement officers and I think you are aware of what I think our proposals are and I mentioned earlier. I don’t think we can have a situation in which we demand by law that each council has five enforcement officers on the streets between the hours of whatever and whatever, but I do accept that there is a significant resource issue and I think it is resources rather than laziness that keeps licensing officers from operating at these sorts of times. Now, there is only so far we can go with that, I’ll be absolutely clear about that because we don’t hold the treasury’s allocation for local authority funding so there is only so much the law can do. One thing is to increase power but another thing is the thing I mentioned earlier about the notion of a national pool distributed according to enforcement need on the private hire license side and that I think is worth pursuing and again I should have said at the very beginning please when I come up with these ideas don’t anyone quote me as saying the law commission policy is now whatever I happen to say. I am trying to be open and sharing about the way that the thinking is going, the quid pro quo for that is that you don’t accuse me of fixing the law commission’s view but I think that is a possible area in which the legal structure could assist in concentrating resources to the point where it is needed most but I am not suggesting it is a magic answer as I don’t think there is one.
Zak Kowalski: Is there any mechanism that can be provided to offer greater remuneration to enforcement Officers to act at night just as we have at night time fares.
Richard Percival: I don’t think, the law can do that, local authorities can do that but I don’t think we can impose that on local authorities.
Roy Hamilton, Chairman – when will see the impact assessment?
Richard Percival: Good question, Jessica was probably looking at me with some vigour at this point because it’s actually resting in my in tray at the moment. I hope it will be back up on the website next week. Do take us up on it though because I have to say that the baptism of fire we had with the taxi trades over the inaccurate fees in the IA was frankly slightly awkward but very helpful and I’m sure you’ll repeat the exercise.