Ministers have been urged to 'act without delay' to prevent a 'damaging' legal loophole from putting young people in Rotherham at risk in taxis.
Since the child sexual exploitation scandal in Rotherham was revealed in 2014, all taxi drivers in the town now have strict rules to adhere to, including having CCTV installed in their vehicles.
But the Communities and Local Government Committee said it is concerned that taxis licensed by other local authorities may still operate in Rotherham, even if the drivers have had their application for a Rotherham licence rejected.
MPs said action is needed to address the 'damaging' legal loophole to prevent young and vulnerable people from being put at risk.
They have called for Government departments to prepare guidance in law over taxi licensing 'without delay', adding that new legislation should be considered.
Taxi drivers had a 'prominent role' in child sexual exploitation in Rotherham, according to the 2014 report by Professor Alexis Jay which suggested that 1,400 children had been abused over a 16-year period while those in authority turned a blind eye.
Children were often transported in taxis while they were moved around to be abused.
A report by Communities and Local Government Committee says: "We believe that local authorities must be able to apply particular measures in relation to taxi licensing in their areas, such as requiring taxis to have CCTV installed, without those measures being undermined by taxis coming in from other areas.
"We recommend that, in order to ensure that lessons are learned from experiences in Rotherham, the Department for
Communities and Local Government works with the Home Office and the Department for Transport on the preparation of statutory guidance under the Policing and Crime Bill in relation to taxi licensing.
"That guidance should be brought forward without delay. Once the guidance has been introduced, the Government should monitor the extent to which it ensures consistently high standards in taxi licensing across the country, and also enables local authorities to put in place and enforce specific measures which are appropriate for their local circumstances.
"If guidance is not able to achieve this, the Government should consider legislation."