The Government has rejected the recommendations of the House of Commons Transport Committee regarding the Office of Fair Trading's  report.

In a statement which largely echoed its response to the Office of Fair Trading's taxi and private hire report, the Government has responded to the House of Commons Transport Committee's recommendations contained in a highly critical examination of the OFT's study, which it branded "partial, doctrinaire and sloppily conducted".

The Government welcomed the interest shown by the Committee into the OFT's study and report, but said that it strongly supported the role of the competition watchdog in conducting market studies into sectors where laws and regulations may be detrimental to consumers.

The statement re-iterated the Government's view that it is detrimental to would-be taxi license holders where access to the market is restricted "without justification that is apparent to all", and also that consumers should enjoy the benefits of competition in the market.  In March a Government action plan was announced to improve the situation for all stakeholders in the taxi and private hire markets.

The Government responded to the Transport Committee's individual conclusions and recommendations as follows:

- The TC had concluded that the OFT had provided no real evidence of lower waiting times in unrestricted areas.  The Government said that it shared some concerns about the evidence, but considered that it would be logical to expect that waiting times would reduce if taxi numbers were de-restricted, but not necessarily at all times of the day.

- The TC claimed that de-restriction could be detrimental to off-peak availability since taxis would no longer be double-shifted.  The Government responded by saying that it was wrong in principle to refuse a taxi license to those meeting the relevant criteria, but that local authorities were best placed to determine local needs and thus were being allowed to justify their reasons for continuing to restrict license numbers.

- The TC asked why the OFT had not explained why the taxi and PHV market had been the fastest growing form of transport in the last 25 years.  The Government said that this fact should not preclude consideration of whether restrictions benefits consumers.

- The TC claimed that the OFT had not adequately addressed the interrelationship between taxis and PHVs, in particular that the latter decreased in number with taxi de-restriction.  The Government agreed that this interrelationship might have been considered in more detail, but that the OFT had provided some evidence on this point in its response to the TC.

- The TC highlighted the OFT's failure to examine comparative fare levels, particularly the effects of de-restriction.  The Government responded that it would cover the setting of taxi fares by local authorities in its best practice guidance.

- The TC was concerned that allowing a variety of taxi vehicles might mean that a disabled person might be unable to find one to suit their particular needs, and that the OFT's criticism of the Metropolitan Conditions of Fitness was made without taking the views of DAPTAC into account.  The Government responded that its forthcoming best practice guidance would cover quality standards which would take account of the views of disabled people.

The Government concluded by saying that restricting authorities would be expected to justify their policy publicly, and where this could not be justified de-restriction was expected.  It would review the situation after three years and take further action if necessary.

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