On behalf of the families in Ireland still suffering, two and a half years on, from the overnight deregulation of the taxi industry, we thank the committee for extending the invitation to our group to explain our plight.
FAIR is an all-ladies group. We were officially set up on 4 July 2001. We did not realise then that we would still be in the same position today. Its sole purpose was to highlight the injustice of the negative impact that deregulation is having on ordinary families. We made a presentation to the Committee on the Environment and Local Government when the taxi industry was part of its remit. With last year's election came a change in responsibility and we find ourselves today before the Joint Committee on Transport. While we receive political support from members of political parties on a cross-party basis, unfortunately, we have achieved very little to date and find ourselves no further down the road and without one situation having been resolved.
I will give a brief history of our situation. The taxi industry, as I am sure members are all aware, was regulated for 22 years, from 1978 to 2000. That is a long period for families to have to comply with restrictions, regulations and denial of entry. During that time there were slight adjustments, but the Taoiseach's Dublin taxi forum clearly stated that it would not recommend deregulation, that licences should continue to be restricted and that to qualify for a licence one would have to fulfil certain criteria. Essentially, that meant that one would have to work as a cosy for seven years, after which time, if one was lucky, one would be allowed to buy a wheelchair-accessible taxi licence for £15,000, which is a great deal of money. Unfortunately, even at that price, our families were not allowed in.
Among the paperwork submitted and distributed, the members will see a copy of an application to be allowed to buy one of those licences. They will also see an accompanying receipt and a refusal dated November 1999. That emphasises that we had to comply with the regulations in force for those 22 years. Those two decades cover the span from generation to generation. They were the rules and that is what our families had to comply with.
As a result of these restrictions on entry, licences escalated in value because, to provide their families with job security and stability, people had no choice but to buy an existing saloon licence from a member of the taxi fraternity choosing to exit the industry. Not only that, but the high market value was recognised by the Revenue Commissioners and widows' children were charged probate tax as a percentage of market value. We also had cases where capital gains tax was charged, again as a percentage of market value. Bearing in mind that capital gains tax up to 1998 was 40%, it was a considerable amount of money. Inheritance tax was similarly charged as a percentage of market value.
These are all examples of our Government profiting at a percentage of market value. The cost of buying into this industry was, in Dublin, up to €100,000, or £80,000. Naturally, most people did not have that money under the mattress so the only way one could buy into the industry was to borrow, in most situations using the family home. Bearing in mind that Dublin was one of the most expensive areas for such purchases, with only Ennis surpassing it, a loan of this magnitude is currently costing, on average, €934 per month. This is for something that is worthless, something that anyone can now buy for €6,000. How can that be just?
Two years down the road, I have yet to speak to any political individual who can tell me that is fair, that people can be denied permission to buy a licence one day, then buy an existing saloon licence at market value, then be charged £3,000 by the city council for a transfer fee and then, all of a sudden, have it written off as worthless within hours. The person is left paying €934 a month, every month, for something that is worthless. If that was for one or two years, one would find it tough, but when one is facing more than a decade of payments, it is impossible to put into words the impact that is having on families, particularly where incomes are dropping significantly. How would anyone's family cope with that level of a valueless debt?
Total deregulation was implemented overnight with no impact study, no consultation and no consideration of the impact it would have on families who had previously been denied entry. There was no consideration of the impact it would have on the future industry and we have all seen where that has led. There was no future policy whatsoever. Deregulation was implemented on foot of a court decision, as was rightly identified at the hearing the last time. We were delighted to be present when the European Parliament delegation met the committee members. In his summation, Mr. Justice Roderick Murphy stated that he had to take into no small account European law and the rights of European citizens, who could not be indirectly discriminated against by being denied permission to buy a Government-issued taxi licence.
What about the rights of our families, who had previously been denied entry? Was it reasonable to implement a total free-for-all after 22 years of stringent restrictions? Was it reasonable to change the rules without ensuring that it was done with due regard to our families, who had to abide by the rules previously? Was it reasonable to remove all qualitative as well as quantitative restrictions, bearing in mind that our Minister for Transport has gone on record on more than one occasion as describing the industry currently as a jungle? That is for the members to decide.
In our estimation, the Government has failed to monitor and oversee the market which it chose to regulate, to implement reasonable policy change when necessary and to realise that normal market forces were pushing prices so high that extra licences should have been issued. It has been stated that political reasons came into play, that perhaps the unions should be held accountable because they fought change. Individual families are not responsible, should not be held accountable and should not be left suffering as a result of precipitous deregulation.
The only certain thing is that our group's families were denied permission to obtain licences and nobody can explain why. There was a need for additional licences. That is blatantly obvious when one thinks of the increase in licences since deregulation. Why were they not issued on a phased basis? Why was there not a continuation of the policy of issuing wheelchair-accessibility licences so that one would have a certain quality of standard of entry of vehicles? Our Ombudsman, Mr. Kevin Murphy - a copy of the letter our group received from him has been supplied to the committee - expressed sympathy with our situation and said he would have taken issue with the manner in which the Government implemented total overnight deregulation had the Minister acted in an administrative capacity rather than in a legislative one, legislative action being beyond the Ombudsman's remit.
The impact of 20 November 2000 on our group's families has been that licence values dropped from €100,000 on average in Dublin to €6,000 within hours. There has been an increase of in excess of 300% in the supply of licences. We have gone from 2,722 licences issued in Dublin to 9,307 as of yesterday, 29 April. Other counties countrywide have experienced similar levels of increase. Our group has a report stating that taxi-drivers' earnings are down 36% on average. Obviously, those worst affected by deregulation, those with the large loans for licences, are experiencing huge difficulty. That is further compounded and illustrated in the other report which states that IIB home loans figures have shown a 30% default in loan repayments by taxi-drivers. We are now in a situation where taxi-drivers are having problems gaining loan approval for vehicles because of the stress they are under. There is a huge reduction in earning capacity.
The other innocent families suffering from this are widows, the sick and the elderly, the most vulnerable families in our society, who had been depending on the rental income that their taxi licences would bring them. This rental income was, whether the committee thinks it reasonable, something that families expected, particularly, for example, in the case of a widow who, when settling up her husband's estate, saw the Revenue Commissioners accept a market value on a taxi licence. In some cases involving children as young as seven, families were charged a market value percentage for probate tax. This gave these people a realistic expectation that this was a source of income for them and their families and, accordingly, they felt they had assurance there and also from the Taoiseach's Dublin taxi forum that they should hold on to licences as a means of income.
That income has been virtually wiped out overnight. These people could have sold these licences, but they felt, with the forum, a regulated market and the taxing of licences as assets, that they had guarantees inherent in the licences. That is totally gone overnight. It has led to the utmost form of unfair competition, where one has individuals queuing up behind three new licence-holders for every one pre-deregulation licence-holder and the new licence-holder is repaying a €6,000 loan as opposed to a €100,000 loan.
Total, overnight, unqualified deregulation of the taxi industry has been an unmitigated disaster and we now find ourselves with seemingly weekly reports of new standards to be applied to the industry. We are finding it necessary to re-regulate. In that re-regulation, however, where are the families of the "pre-deregs"? The only way in which the industry can be developed is through the implementation of stringent controls to improve standards, but all those controls involve extra investment that families will find impossible. The widows and "pre-deregs" will be pushed out unless the matter is addressed now. Elderly men who had been depending on their taxi licence for their pension have had to return to work. Their families had realistic expectations of a pension. There have been cases of social welfare refusing a man a non-contributory pension on the basis that he held a taxi licence from which he could realise an income. The sick, who were also depending on rental income, have been similarly affected. On top of long-term illness, they are now suffering financial loss.
What has the Government done to address the matter? There was the Finance Act 2001 and those who benefited most from that were the investors, who could write off a loss against other income and earnings so that, having paid tax at the rate of 40%, they could reclaim 40% of that value. It was of little or no use to the widowed, the sick or the old because it was based on rental and leasing income only. The same is true of high licence-debt holders, given the amounts to be repaid, especially those who had only bought into the industry at a late stage. Late entrants had no opportunity to avail of the scheme and the same is true of the widowed, the sick and the old.
After that came the taxi hardship panel and we welcome the opportunity to discuss that with the committee today. We have hitherto been unable to arrange a meeting with the Minister to discuss it with him. We were led to believe that the taxi hardship panel had been set up as a wholly independent body, but we established that very clear terms of reference were laid down for it. One of the three panel members had a conflict of interest because he had accepted an appointment as part of the "three wise men" panel which was to advise the Government on financial cutbacks. When one is both advising on cutbacks and determining hardship - and, accordingly, payments - there is a conflict of interest. When we first met the three-member taxi hardship panel, we explained our situation. By the time of the second meeting, the report had been virtually completed. They told us that they felt reasonably happy that they had a very clear picture of the whole situation. At that stage, they told us that they had not realised that licences sold for different prices across the country. They worked part-time for three months on a very complex issue. Unfortunately, that led to huge anomalies and inconsistencies in the report. They told us that they had met two or three people from each category.
To highlight the anomalies in the taxi hardship panel's report, I will give some examples. Of two gentlemen, one aged 49 and one aged 50, neither has any sort of private personal pension. The 49-year-old owes a taxi licence loan of £80,000, while the 50-year-old owes nothing on his licence. According to the findings of the taxi hardship panel, the 50-year-old who owes nothing is to be paid €13,000, while the 49-year-old gentleman, who owes £80,000, is to receive less. In the widows' category, a widow with dependent children was to receive the maximum one-off payment of €15,000, but one must bear in mind that her days are numbered. One with no children was to receive €10,000. There is no analysis or determination of whether that widow is young or old, whether she has one child or ten children, or of whether she is living in Dublin and being charged probate tax on £70,000 or in somewhere such as Navan, where taxi licences never sold for that much, and where she would never have had a realistic expectation of that figure.
The exclusions that apply in the report are absolutely cruel and ruthless. For example, it appears - although there is no clear determination - that a widow working for three or four hours a week in Tesco's is to be excluded because she has another source of income. In the category of high licence-debt holders, there is a total lack of comprehension of how families are living. They are to be totally excluded unless they can prove that they have defaulted on their loans. Yet there is no understanding that drivers, regardless of the number of hours they work, cannot afford to lose their credit rating if they need to replace a car. Those families focused on trying to survive in the industry are putting themselves under enormous strain not to default on their loan. It appears that only those families who can prove that they have defaulted on their loan are to be paid.
There is no clarity whatsoever and the awards discussed will in no way address the hardship suffered. As one MEP clearly stated, the level of payment would hardly pay the interest for more than a year on a high licence-debt loan. The maximum payment for a family with a £100,000 loan is €10,000. They cannot afford to default on their loan and have to work horrendous hours to maintain their credit rating. Widows' days are numbered and we feel our families submitted to the panel on an individual basis. That was how we were led to believe our cases would be examined. There is no analysis of subcategories and that is the basic minimum required. The exclusions must be looked at because they are cruel and ruthless.
When we made the taxi hardship panel's report available to the delegation from the European Parliament, it stated that the proposals were totally derisory. In its report, hot off the press today, it raised questions about it which require further investigation. We lodged our petition with the European Parliament in October 2001. The reason was, as already stated, that while we have individual support nationally, virtually nothing had been done. The taxi hardship panel's report was published only in December. Now, two and a half years later, not one cent has been paid to one family. The strongest measure that we have of how seriously the Parliament has taken our petition and our case is that it is the first time that it has sent a delegation to Ireland.
This presentation was prepared before we knew that the report was coming out today. The report, its recommendations and conclusions are already in front of the committee. When the delegation met us, it was alarmed at the delay in addressing the situation. It thought that our rights as European citizens under the European Charter of Fundamental Rights had not been recognised. We are extremely upset that we had to take our case to that level because we live in a democracy. Justice should be the right of every family regardless and we are simply innocent citizens who should never have been left to suffer as a result of precipitous deregulation.
With regard to the report, we feel all our families have been affected by deregulation. There is not one family we know of that could afford to lose an asset of that value and not suffer. It has affected all our families differently. We feel that the Government's approach has been, perhaps understandably, based on cost and economics. Perhaps the report passed unanimously in Brussels today may be a more independent and impartial assessment and we urge the committee to examine it seriously.
In their folders, members will see confirmation from Dublin City Council that it has taken in in excess of €36 million through the sale of new taxi licences. This figure is ongoing; it is not closed off. Every time a new licence is issued, that fund grows and it will continue to grow. It is reasonable to say that the figure nationwide is considerable. This money, which is paid into the Exchequer, is from families who were not denied entry and it should be used to alleviate the hardship that our families are suffering. Is it acceptable that the Government has made money and continues to profiteer from deregulation at the cost of extreme personal and financial hardship of our families?
In addition to the €36 million raised in Dublin, and more countrywide, Exchequer funds were built up over the 22 years of regulation and denial of entry through capital gains tax, probate tax and inheritance tax, all based on market value - a market value created by Government regulation. We also had 22 years of transfer fees which, in latter years, were the equivalent of €3,800 each time. The day our husbands bought taxi licences, they had to pay an administration fee of €3,800. Coincidentally, that is now undertaken for €100. According to the taxi hardship panel report, the maximum fund countrywide is to be €15 million. We find that objectionable because €36 million has been taken in Dublin alone on new licences since deregulation.
A key point in our plight is that our future is hanging in the balance. Our situation is one of natural injustice. Our families have been left suffering through no fault of their own. It is two and a half years since deregulation. Surely it is now time to finally solve this fairly. We are committed to having this injustice addressed, no matter how long it takes. If it is necessary to reinvest in this industry to tame the jungle, then our families will be forced out of an industry which we borrowed €100,000 to enter. To where can we carry the loan? There are not many jobs that will allow one to carry that level of useless debt. Our families are in this nightmare. How long is it to go on? This is the only industry where one does not know from sunrise to sunset what the next announcement will be. All we know is that there is no follow-through.
All the announcements appear to propose additional financial pressure on drivers. Surely it is necessary to address the injustice of deregulation to create some sort of level playing field so we can look to the future and participate in an industry of which we are all proud because we are not proud of it now. As many people have stated to our committee members, we are almost ashamed to say that our husbands are taxi-drivers. Unfortunately, our husbands are chained to the steering wheel and will continue to be so unless there is proper and adequate redress.
People lie awake at night, worried about their future, feeling they have no control over it because there has been no consultation and no assurances. We have tried to make people aware of this but so far no one has listened to the extent that they have done enough about it. The proof is that two and a half years on, not one cent has been paid. We are talking about a small group of families, some vulnerable, widows, the sick, the elderly and people with useless licence debt.
Our plea is for the committee to support us, read the submission we lodged with the European Parliament, read the report passed in Brussels today and make up its own mind. If members feel that our families deserve to be in the situation we are in, if they feel it was right that we were denied entry and that the industry was deregulated overnight without notice or consultation or due regard to the impact it would have on our families and if they feel it was fine for the forum to have been thrown away, that is a decision they will have to live with because we have to do so every day. We ask that members look to their own consciences and, if they feel our families have been treated unfairly, they should support us and do everything in their power to highlight the injustice.
A newspaper article during the week referred to the possibilities of a legal case but if our families had any confidence in the judicial system, we would be waiting for a legal case to proceed. Unfortunately, we have no confidence because deregulation was implemented on foot of a court order and we cannot afford to wait any longer. The strain on our families is difficult to comprehend. We are under such pressure that we are having to make serious life decisions, those one does not like to make public. For example, my husband has said he has almost fallen asleep at the wheel. Is this the standard we want?
We plead with the committee for its members' support. We would appreciate if members would meet and discuss the European report, published today. We do not know what the committee's remit is, but it has the means to stress to the Minister for Transport that the report is probably the best opportunity we have to finally draw the line in the sand and address this injustice, if it is done in a realistic manner. We urge the committee to revert to us and give us its take on this matter. Naturally, we are available to answer any questions.
