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Follow us on TwitterFollow us on LinkedinEarlier this year, the Welsh Government launched a consultation on wholesale taxi and private hire licensing law reform in Wales.
Currently, the same legislative framework for regulating taxi and private hire licensing exists in both England and Wales.  However, as part of the new devolved settlement for Wales, to be introduced through the Wales Act 2017, taxi and private hire licensing will become a matter within the legislative competence of the National Assembly for Wales.
The Welsh Government is talking advantage of the new devolved settlement for Wales to undertake its own review of taxi and private hire licensing arrangements in Wales.
In this editorial, I will be looking at the proposals for legislative reform put forward by the Welsh Government relating to taxi and private hire licensing.

Law Commission Report

In May 2014, the Law Commission for England and Wales published its proposals for the reform of the legislative framework governing the licensing of taxis and private hire vehicles in England and Wales. The proposals were developed as part of the Law Commission’s Eleventh Programme of law reform, commissioned by the Department for Transport.
The terms of reference were to review the law relating to the regulation of taxis and private hire licences with a view to modernise and simplify having due regard to the potential advantages of deregulation in reducing the burdens on business and increasing economic efficiency.

Welsh Assembly Reform Proposals

The Welsh Government stated that it considered that the majority of the recommendations put forward by the Law Commission would, clarify and simplify the legislation governing taxi and private hire licensing in Wales. On that basis the Welsh Government is largely, in principle, in favour of the majority of the proposals put forward in the Law Commission report in relation to taxi and private hire vehicle licensing in Wales.
The Welsh Government launched a consultation with the purpose of seeking views on some of the specific recommendations set out in the Law Commission document.
There were however, some recommendations that required further detailed consideration according to the Law Commission.  Part of the consultation also sought to begin a dialogue with local licensing authorities, drivers, operators, passenger groups and other stakeholders about how taxi and private hire vehicle licensing can be improved in Wales.
These were the specific legislative reform issues proposed by the Welsh Government:

Moving to a single tier licensing system

The Welsh Government have indicated a preference towards moving to a single tier taxi and private hire licensing system in Wales.

The Welsh Government said that the public does not understand the distinction (between a taxi and a private hire vehicle) and the advancement in technology means that a booking for a journey can be made within minutes of the journey taking place. Moving to a single tier regime will also simplify licensing arrangements and open the way for setting of national standards whilst making enforcement more straightforward.
During the consultation, 45% of respondents expressing a view that agreed with the Law Commission recommendations saying that the distinction between hackneys and private hire vehicles should be retained. About 39% of respondents, mainly public authorities, argued that the distinction should be removed in favour of a single framework, whilst 16% could see advantages and disadvantages in both frameworks.
The implementation and practical application of a single tier licensing system is yet to be determined but the Welsh Government have initially indicated that a single tier licensing system could, combine the characteristics of both taxis and private hire vehicles, enabling pre-booked and “there and then” hires both operating under a regulated fares model.
Under a single tier licensing system, the Welsh Government will also seek to prescribe national standards for all taxis and private hire vehicles, set by the Welsh Ministers, with the power for local licensing authorities to set additional standards where it is appropriate to do so.

Record keeping requirements for taxi drivers

There is no current requirement on taxi drivers to keep records – unlike private hire operators – of the journeys undertake carrying passengers.  The Law Commission did not support the introduction of record keeping requirements for taxi drivers except in respect of taxis picking up passengers outside their licensing area.

In principle, the Welsh Government supports the maintenance of accurate record keeping by taxi drivers.

This proposed new requirement is necessary for the purpose of safeguarding passengers according to the Welsh Government.  There is however recognition that such a requirement ay be unreasonable for journeys that are not pre-arranged.  It seems therefore that the proposed requirement on taxi drivers to keep accurate records will only apply where they are undertaking advanced booking work.
Despite the potential practical difficulties of this proposed requirement, 60% of respondents expressing a view in support of the proposal that all journeys should be recorded.  26% of respondents said that journeys that have been pre booked, or in the case of taxis, out of area journeys should be recorded.

Hackney carriage “intermediaries” to be licensed

The Welsh Government have expressed a view that hackney carriage only companies (often described as ‘radio circuits’ or ‘taxi associations’) – who currently do not require a licence to operate – requires stricter control in relation to the handling of personal information taken from accepting bookings.

It stated that any person that is responsible for taking taxi bookings and handling personal information should be licensed because “…such a person could have organising taxi bookings and in doing so, would be responsible for handling potentially sensitive and personal information.”

90% of respondents supported the proposal that all persons involved in the handling of personal information should be licensed.

The “fit and proper” test

The Welsh Government has given a strong indication that it will retain the “fit and proper” persons test for taxi and private hire licensing in Wales.  Additionally, it has indicated that it is likely to extend the “fit and proper” persons test to vehicle licence applicants.

Consultation feedback have made it clear that the retention of this test must be accompanied by a statutory definition of “fit & proper” or alternatively that criteria by which “fit and proper” would be assessed be clearly defined.


The Welsh Government have given a strong indication that it considers national standards necessary.  It said: “The Welsh Government considers that it is sensible that minimum standards are set to improve consistency of service across local authority areas in Wales.”

In addition to national standards, arrangements are likely to be put in place giving licensing authorities the discretion to add appropriate conditions on individual licence holders where the imposition of any condition is justified, reasonable and proportionate.

Fee setting

The Welsh Government have proposed the setting of private hire licensing fees nationally, set by the Welsh Ministers, which could not be varied locally. Taxi licensing fees will continue to be set locally, but at a level no lower than the national private hire fee.
There was very little support for such a proposal.  Respondents instead opted for an approach where local licensing authorities can set fees for licensing taxis and private hire vehicles locally, but in exercising this function, having due regard to guidance issued by the Welsh Government.

In light of the overwhelming feedback, it is unlikely that the Welsh Government will seek to set fees at a national level but may issue statutory guidance for licensing authorities to consider when setting fees.

Information sharing

The Welsh Government have given a strong indication that it is in favour of a requirement on licensing authorities to record enforcement action that has resulted in removal or suspension of a taxi or private hire licence and that this information should be made available and accessible to other licensing authorities, who shall be required to consult the information prior to an application for a licence being granted.

Licence plate trading

The practice of trading taxi plates between licence holders is likely to cease in Wales.  This practice is primarily a feature of areas where taxi quantity restrictions exist.
Both the Law Commission and the Competition and Markets Authority indicated that the trade in taxi plates should not be a feature of the licensing regime.
Respondents overwhelmingly supported this approach.

It appears likely that the Welsh Government will introduce new rules that will outlaw trading in taxi plates.  Instead, licence holder will be required to return their taxi plates to the relevant licensing authority for reissue.

There then remains the problem of compensation.  Taxi proprietors would have invested significant amounts of money for their plates.  Proposals for a compensation scheme or a “buy back” scheme have been put forward but little information has so far been put forward with regards to this.

Equalities in the licensing regime

No substantial changes to equality legislation is being proposed. 

The Welsh Government have said that the existing Public Sector Equality Duty that applies to licensing authorities together with local flexibility to add local conditions or requirements on licence holders is sufficient to enable better performance of the duties set out in the Equality Act 2010.
The Welsh Government have indicated that it could require licensing authorities to:

  1. Conduct an accessibility review at three year intervals;
  2. Review taxi rank design to ensure compliance with the Equality Act 2010; and
  3. Provide information about the licensing authority and local operators in alternative formats, as well as information about the types of vehicle available in their area.

Review of a licence decision before appeal

Finally, there are likely to be changes to the redress procedure in relation to a licence holder seeking a review of a licensing authority’s decision in relation to their licences.

The Welsh Government have strongly indicated that the first stage of an appeal process should be the right of an applicant or a licence holder to seek a review of the initial decision by a person independent of the initial decision, so as to ensure that any review undertaken is impartial if not fully independent.

If the appellants remain dissatisfied with the outcome on an appeal, which must be dealt with within a reasonable timeframe, then the right to proceed to the Magistrates’ Courts will become available.
This has the virtue of allowing remedies to be made without referring the matter to the courts and can reduce the number of cases that may otherwise be considered by magistrates.

Next Steps

The Welsh Government have not published a response to the consultation setting out its formal proposals for law reform. It has indicated that it will publish a white paper this summer with formal proposals and the next steps in its taxi and private hire licensing law reform programme.
Despite the absence of its formal report, we can be certain that there will be significant taxi and private hire law reform in Wales.  The Assembly have indicated that it is broadly supportive of the majority of the Law Commission’s proposals which serves as a good indicator to what is to some in Wales.
The law reform work undertaken could represent the most significant and radical change in taxi and private hire licensing law since the Local Government (Miscellaneous Provisions) Act 1976.  As with other areas of licensing, the UK Government will no doubt be keeping an eye on developments in Wales before making its own decisions for England.
Since the Law Commission report, the UK Government have done very little to progress taxi and private hire law reform. If the reforms in Wales prove successful in terms of simplifying and modernising the taxi & private hire regulatory system, it may prove the catalyst to progress taxi and private hire law reform in England too.


Taken from the August 2018 PHTM edition.  This article was written by Stephen Mccaffrey, Head of Kings View Chambers & Taxi Defence Barristers.