Second Standing Committee on Statutory Instruments, &c.


Wednesday 23 March 1988



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The Committee consisted of the following Members:

Chairman: Sir John Stradling Thomas

Arbuthnot, Mr. James (Wanstead and Woodford)

Atkinson, Mr. David (Bournemouth East)

Barnes, Mrs. Rosie (Greenwich)

Bidwell, Mr. Sydney (Ealing, Southall)

Bottomley, Mr. Peter (Minister for Roads and Traffic)

Bruce, Mr. Ian (Dorset, South)

Callaghan, Mr. Jim (Heywood and Middleton)

Carlisle, Mr. Kenneth (Lincoln)

Cox, Mr. Tom (Tooting)

Dickens, Mr. Geoffrey (Littleborough and Saddleworth)

Hayes, Mr. Jerry (Harlow)

Hinchliffe, Mr. David (Wakefield)

Johnson Smith, Sir Geoffrey (Wealden)

Jones, Mr. Robert B. (Hertfordshire, West)

Lester, Mr. Jim (Broxtowe)

Lloyd, Mr. Tony (Stretford)

Nellist, Mr. Dave (Coventry, South-East)

Thompson, Mr. Patrick (Norwich, North)

D. J. Gerhold, Committee Clerk

3 Second Standing Committee on Statutory Instruments, &c. Wednesday 23 March 1988


Draft Department of Transport (Fees) Order 1988

10.30 am

The Minister for Roads and Traffic (Mr. Peter Bottomley): I beg to move, That the Committee has considered the Draft Department of Transport (Fees) Order 1988. The order clarifies the basis on which the Department of Transport fixes fees for some of the services that it provides to road transport industries and the public. In 1985, the Joint Committee on Statutory Instruments scrutinised regulations setting fees in respect of the register of approved driving instructors. It highlighted the fact that, in general legislation conferring powers on Departments to charge fees for services does not specify the costs that may be taken into account in setting each fee. There is, therefore, a risk that different interpretations could be put on the scope of particular services envisaged by the legislation, and on the costs that could properly be recovered through fees. Section 102 of the Finance (No.2) Act 1987 clarifies the matter by providing for orders to be made specifying the functions associated with fee-earning services, and associated costs. The order specifies the functions and costs involved in the provision of 11 services offered by the Department. The first service is the licensing of goods vehicle operators and public service vehicle operators to ensure the safe and proper operation of vehicles, and, in the case of goods vehicles, to ensure the protection of the environment around operating centres. That work is undertaken primarily by traffic area offices. The second service is the testing of drivers of cars, motorcycles, heavy goods vehicles and public service vehicles, and the maintenance of the register of approved driving instructors. That is undertaken by the Department's driver testing and training division, with administrative support from traffic area offices. The third service is the issuing of licences to drive motor vehicles. The work is undertaken by the driver and vehicle licensing centre and the traffic area offices. The fourth service is the examination and testing of vehicles to ensure roadworthiness, which is carried out by the vehicle inspectorate. The fifth service is the examination and testing of vehicles, vehicle systems and components to ensure compliance with conformity of production standards. The work is undertaken primarily by the Department's vehicle and component approvals division. The sixth service is the approval of tachograph calibration centres, which is carried out by the vehicle inspectorate. 4 The seventh service is the granting of bus permits to allow voluntary groups and certain other bodies to charge for providing transport for their members, or other people whom the organisation serves, without having to comply with the full public service vehicle licensing requirements. That is undertaken by the Department's bus licensing division and traffic area offices. The remaining four services are the granting of international road passenger transport authorisations by the Department's bus licensing division, the registration of local bus services by traffic area offices, the licensing of local bus services in London by the metropolitan traffic area office, and the granting of international road haulage permits by the Department's international road freight office. The enactments set out in column 1 of the tables in schedule 1 to the order, empower the Secretary of State to fix fees for such services. The functions involved are set out in column 2 of the tables in schedule 1 to the order. The matters to be taken into account when calculating the cost of a function are set out in schedule 2. The cross-referencing in column 3 of the tables in schedule 1 specifies the matters in schedule 2 that are to be taken into account for a given function. The order will clarify the calculation of fees for the benefit of users of the services. It will also meet the concerns of the Joint Committee by establishing the scope of the costs to be covered by the fees. The order will not change Department of Transport policy on calculating fees and charges. That is based on the long-established principle, which was re-affirmed by the last Labour Administration, that the full economic cost of services should be borne by users, and that no part of the costs should fall as a bruden on the general taxpayer or add to the general level of public expenditure. The fees and costs of services are reviewed annually. The reviews take into account the forecast demand for the services in question, and the resources that are likely to be necessary to meet demand. The aim is, as far as possible, to keep costs and fees in balance. Proposals for changes in fee levels in 1988 arising from the latest annual reviews will be put before the House, as occurred in the past. I commend the order to the Committee. It will clarify the fees for services that help to maintain vehicle and road safety standards. The order does not alter the established policy that the costs of services should be borne by users, rather than the general taxpayer.

10.35 am

Mr. Tony Lloyd (Stretford): I thank the Minister for his opening remarks, which have allowed me to approach the order more easily than I otherwise would have been able to. Perhaps I am the only one who ever listens to him. We are tied together by an umbilical cord, in a relationship that is above and beyond the call of Parliament.

The Chairman: I am not sure whether that comment was in order.


Mr. Lloyd: I shall now restrict my comments to the order, Sir John. Will the Minister tell us whether we can obtain a copy of annex 2, or is he more likely to provide an annex to his speech rather than to the order? My first question is a global one. Why does the order appear before the House now? I understand the background legislation and the Finance (No. 2) Act 1987, but several matters in the order touch upon European legislation, and some of us are still reluctant to come to terms with the more sensitive aspects. It would be helpful to be reassured that the order is concerned mainly with domestic legislation, rather than simply a response to Eurocrats' demands on our system. Paragraph 8 of schedule 2 refers to "The recovery of any past deficits incurred in relation to any of the functions specified in Schedule 1 above." It covers specifically only two matters mentioned in the order—the issue of ordinary driving licences and public service vehicle licences. Will the Minister tell us again why he considers it reasonable to ask future generations to pay off the debts of past generations? At first sight, it does not seem reasonable, especially as there is no equivalent provision for heavy goods vehicle licences. Perhaps there is a minor reason, and it would be helpful if the Committee knew it. My next question is about paragraph 9 of schedule 2, which refers to value added tax. Will the Minister justify its imposition on only motor cycles and part 1 of the two-part motor-cycle test? It does not seem even remotely reasonable that one class of vehicle users should have that charge imposed on them alone. Why have they been singled out? I have a copy of a long letter that was sent to the Minister by a motorcycling group. It contains a scenario about the Minister's dreams of motorcycling in Derbyshire. It ends with the Minister dying in a crash. I do not know whether he recalls that letter. The motorcycle lobby has a rich imagination, so I hope that the Minister has not taken the letter so much to heart that he has decided to impose VAT, as a means of retribution for its more purple passages. The first part of table III in schedule 1 refers to the testing of different kinds of vehicles. The Minister must be aware that, historically, there has been a problem involving separate cars being bolted to each other. Will he ensure that the testing specified in the order is sufficiently well funded to ensure that the abuse of motor regulations will not only be outlawed but caught in the net and made practically impossible? Heading C on page 3 of the order refers to the carriage of dangerous goods. In the British part of the freight transport industry is concerned about the operation of the agrément dangereuse routier provisions, which are generally considered to be less demanding than our legislation. The Transport and General Workers Union's letter to the Minister points out that "European drivers work on average an 80 to 90 hour week". The letter states that, various degrees of failure showed up in vehicles that were randomly checked. It states that, in one survey, 14 out of 44 vehicles failed the check, because drivers had not taken sufficient rest or because vehicles were overloaded or defective. It 6 points out that, when vehicles carry toxic wastes and other dangerous substances, the combination of factors poses a threat on our roads. The monitoring of such vehicles must be funded. Are adequate funds generated through the fees and charges for the type of certificates issued under ADR regulations, to ensure that there is a proper complement of staff to control the monitoring that the industry wants? I should be grateful if the Minister would clarify the position, because there is a view that people do not exist in post because of an alleged failure to take such matters seriously. In its letter to the Minister, the Transport and General Workers Union stated: "With due respect, Peter, if as much time was spent on these serious issues as your road safety campaigns we might get somewhere." I endorse the Minister's road safety campaigns, and do not regard them as of lesser priority. However, the monitoring of the ADR and the passage of toxic wastes are important, and the Committee will be glad to be told that the charges allow for proper staffing to monitor defects. Page 12 of the order refers to licensing. Heading C states: "Applications for the registration of local bus services and the variation of such registrations". I appreciate that the Minister is being drawn into a matter that is outside his remit in the Department. However, bus registration and deregistration outside metropolitan areas are important. Since deregulation, an operator may register a service and, if he chooses, may deregister it, as long as he gives 42 days notice to the relevant commissioners. Smaller companies have been more vulnerable to deregistration. We question whether unfair costs are being imposed upon more ortnodox mainstream operators, who are concerned about smaller operators' ability to register and deregister, not so much on a willy-nilly basis, but at their own choosing. Schedule 2 of the order makes it clear that the fees include a return on the resources employed in carrying out any of the functions specified in schedule 1. In other words, the Department does not intend to lose money on the provision. Will operators—for example, Greater Manchester bus operators—be penalised by a system of registration and deregistration that allows smaller and less secure operators to undertake such work on a regular basis? Will the system increase costs for mainstream operators? In particular, because of expressed concern, will the Minister guarantee that there will be no attempt to lower the period for deregistration below the present 42 days? To do so would increase the level of charges necessary under the order and doubly penalise existing operators? My questions are fairly technical and, in the main, fall within the structure of the order. I shall be grateful for the Minister's comments.

10.46 am

Mr. Bottomley: The hon. Gentleman is to be congratulated on his general welcome for the order, which is designed to remove any doubt about the scope of the functions for which costs can be 7 recovered through fees. He would not expect me to reply in detail to his last question, which he said was outside the scope of the order. On annex 2, the hon. Gentleman rightly drew the Committee's attention to my remarks. He will find the full answer in columns 86–87 of the Official Report of 5 April 1976. In answer to, presumably, a planted question from the hon. Member for Warley, East (Mr. Faulds), the then responsible, Minister spelt out the position. The hon. Gentleman asked, "Why now?" The answer is that, under primary legislation we have the powers, and we are opting for the clarification to avoid doubt. The order is not a response to European pressure. It is brought forward to ensure that full cost recovery can be achieved. Some statutory powers to charge fees could have appeared to restrict the costs that might be taken into account when setting fees. That fear was raised by the Joint Committee on Statutory Instruments. The hon. Gentleman also referred to motorcyclists and value added tax. VAT is already applied to part 1 motorcycle tests, and the order does not change that. VAT is imposed on part 1 tests, because they are offered both by the Department and by approved testing bodies. Customs and Excise has ruled that the test is a competitive service on which VAT must be levied. The majority of part 1 tests are taken as part of a training course at an approved training body. The hon. Gentleman mentioned the interests of the motorcycling world and the various suggestions put forward, many by the Department. I am grateful for his recognition that our aim is to protect what is good about motorcycling and to reduce its harmful aspects. It is an economic form of transport available to young people and to others, but 43 per cent. of the 52,000 injuries a year are suffered by young people, usually men, aged between 16 and 19. We are trying not to destroy motorcycling as a lifestyle but to reduce avoidable injuries as far as we can. However, that objective is outside the scope of the order. The hon. Gentleman mentioned cost recovery. Increased charges will be possible for ordinary and PSV driving licences. They are long-term licences, for which many services, such as change of address facilities, are provided at no extra change over the period of the licence. It is a sensible system, which avoids charging too often as people change their addresses. Charging at the point of issue seems to be the most appropriate method. The hon. Gentleman also refered to bolt-together cars. I suspect that anyone who takes two old cars, cuts them in half and bolts them together again will offend some legislation, probably construction use regulations. However, most fees are charged for type approval of cars when they originally come on to the market. The unsafe practices that sadly occur in a minority of cases probably need to be dealt with in other ways. We are doing our best to ensure that vehicles are safe when they initially come on to the road and at later stages The hon. Gentleman referred also to enforcement and to checking for overloading, over-hours, and for the carriage of dangerous or hazardous goods. The 8 arrangements that were made a year and a half ago to concentrate the powers in the hands of the Health and Safety Executive, putting responsibility primarily at the time goods are loaded or unloaded, provide a better way of getting a concentration of information into the hands of those who can give advice and enforce safety standards. The level of on-the-road checking that is carried out by the Department of Transport and associated authorities is being stepped up, and we intend to do the best that we can to ensure that hazardous and dangerous goods, as well as heavy goods vehicles generally, are operated in accordance with the law. The law is there to protect the public, heavy goods drivers and other drivers, and we shall do all that we can to ensure that heavy goods drivers' hours regulations are abided by, and that the maximum load restriction becomes more of a deterrent to crooks, cowboys and the careless, who overload an unacceptably high number of vehicles. We intend also to do all that we can, within what is reasonably practicable, to ensure that, by the year 2000, heavy goods vehicles contribute to reducing road casualties by a third.

10.51 am

Mr. Lloyd: I ask the Minister to dwell a little on his last point. I have already said that the most important issue that I want to address is the funding of adequate monitoring not only of overloading, to which the Minister referred, but of the carriage of dangerous and toxic wastes—which is just as important—particularly, under the international ADR agreement to which the order refers. None of us would fail to deplore abuse, overloading and failure to operate properly under the ADR agreement. The Minister has said that the Health and Safety Executive has responsibility for such matters. Nevertheless, it is important to know that there is adequate funding. The House can pass the finest laws that the world has ever seen, but, unless we provide the means for implementing them, the exercise is bogus. To some extent, the order is part of that process of implementation. The levying of fees and charges will fund the monitoring system—in theory, at least. The Minister may prefer to consider that matter on another occasion, but we must establish the fundamental importance of adequate monitoring. If the levying of fees and charges must play a part in that, the Opposition will not argue about it. As the Minister knows, there is concern in the industry that there are not enough personnel, either in the Health and Safety Executive or in the Department of Transport, to take these issues on board. I should be grateful if he would state his response. No resources are being made available, either through the Department of Transport or through other Departments, to fund the Health and Safety Executive or the Department of Transport's own inspectors, to enable them to deal adequately with the issues that I have raised.

10.54 am

Mr. Bottomley: The hon. Gentleman has raised a serious matter. As he said, the discussion can be 9 continued at other times and in other places, but perhaps it would be best if I were to tie it to the order. ADR vehicles are tested annually by the vehicle inspectorate. The test is stringent. It has attracted the largest fee increase in recent years, which reflects the importance and cost of the work that is being carried out. We intend to continue to highlight for the Department, as one of the checking authorities, and 10 for operators, the need to live up to the responsibilities that must be exercised to make sure that vehicles are as safe as possible. The hon. Gentleman was right to concentrate on the carriage of dangerous and hazardous goods.

Question put and agreed to.

Resolved, That the Committee has considered the draft Department of Transport (Fees) Order 1988.

Committee rose at five minutes to Eleven o'clock.


Stradling Thomas, Sir John (Chairman)

Arbuthnot, Mr.

Bottomley, Mr. Peter

Bruce, Mr. Ian

Callaghan, Mr.

Carlisle, Mr. Kenneth

Dickens, Mr.

Hinchliffe, Mr.

Lloyd, Mr. Tony

Thompson, Mr. Patrick