S19 distance exemption is ‘unworkable’ says CPT

Trade body’s consultation response says DfT guidance for local journeys and for ‘less than cost’ operations are deeply flawed

The Confederation of Passenger Transport has slammed proposed distance limits in guidance for Section 19/22 regulation as ‘wrong in principle and unworkable in practice.’

Responding to the Department for Transport’s consultation as it tries to rectify infringement of European Union regulation, the CPT has said important wording has been omitted from the exemption proposal for S19 holders: ‘The words ‘the nature of goods carried, or’ which give an indication of the intention of the regulation, have been misleadingly omitted from the consultation.

‘We believe that any formulation that is of any use to the community transport sector will facilitate unfair competition between licensed and unlicensed operators. The Government previously removed this exemption from the goods sector for this reason (among others).

‘In order to determine whether a given operation has only a minor impact on the market because of the distance involved, you would need to look at the distances involved in all the operations in a given market (such as the market for home-to-school transport in Morpeth) and restrict operation under permit to, say, the first 20% by increasing length.’

The CPT’s response adds: ‘The exemption is not intrinsically linked to commercial/non-commercial operation and could have the unintended consequence of a large increase in the operation of unlicensed minibuses.’

The CPT also takes issue with the exemption for services charged at less than cost. It says that the European Commission is likely to clarify the definition of ‘non-commercial’ as ‘not generating income’ when it issues its Mobility Package this year: ‘Deleting this exemption now will save having to change the law again almost immediately,’ it says.

‘If the Government insists on leaving this exemption in place, we would say that a 10% difference between revenue and cost is not substantial. The difference should be at least 25%.

‘We strongly oppose the idea that volunteers’ time can be monetised and used to inflate the cost of providing a service. This could easily lead to a situation where payments could generate a profit on the actual cost of running a service (with volunteers) but could count as substantially less than cost once volunteers’ notional wages were added in.’

Though suggesting changes in wording, the CPT supports the S19 exemption from O licensing for work which the commercial sector does not contest. It also predicts that the new guidance will have a negative impact on some community transport groups, but points out that, on the other hand, some commercial operators will be able to stay in business.

Steven Salmon, Head of Policy Development said: “CPT has always maintained that the market rules for local transport should be based on safety and consumer protection, and not on the charitable status of players. The DfT consultation moves in the right direction, but it raises a number of detailed suggestions which worry us because they risk replacing one sort of unfair competition with others.”