Third Standing Committee
on Delegated Legislation
Thursday 3 April 2003
[Mr. David Taylor in the Chair]
Draft Department of Transport (Fees) (Amendment) Order 2003
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I beg to move,
That the Committee has considered the draft Department of Transport (Fees) (Amendment) Order 2003.
What a pleasure it is to sit here this morning in this Committee under your chairmanship, Mr. Taylor. It is the first time that I have had that pleasure.
Mr. Don Foster (Bath): Stand.
Mr. Jamieson: The hon. Gentleman says, ''Stand'' but the Committee sits. The person who is speaking stands, but the Committee sits, if I may correct him on that.
The Department of Transport (Fees) Order 1988, which the order amends, specifies functions and matters to be taken into account in the determination of fees to be fixed by the Secretary of State. In other words, it specifies what costs my Department may consider when setting fees for the various road traffic services that it provides, such as driving tests and MOT tests, for which it already has the statutory power to charge. The order updates the 1988 order and creates no new powers or offences.
The Department has for many years set a charge for MOT tests. We are, however, computerising the MOT scheme, the costs of which must be considered among others. The order provides for that. Parliament has already given us approval to introduce new services or amend existing ones and to set charges for them. The order specifies the costs that the Department will need to consider. The services are compulsory driver training schemes—we have yet to take a decision to introduce them—check tests for approved driving instructors, vehicle identity checks and training courses for those involved in MOT testing.
Mr. George Osborne (Tatton): Does the order include the compulsory driving courses that people are sent on if they commit offences, as an alternative to getting points?
Mr. Jamieson: The order deals simply with any fee that may be charged for the compulsory part of that service. It has not been introduced yet and the order does not introduce it. The Transport Act 2000 contains a power to enable us to do so and if that power were taken in the future, another order would have to come before the House. If Parliament decided that it wanted to introduce it, it could do so. It could be a new driving test for all car drivers, as is the case with motor cyclists, who have to take an off-the-road pre-test to show that they are competent in handling the vehicle. Parliament may decide that such a test is appropriate for drivers as well, but the order does not
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consider that: it simply says that if, in the future, Parliament makes that decision, we have the ability to charge for the overheads involved.
I shall summarise the detail of the order. It contains two articles. Article 1 names the order and sets the day when it will come into force. Article 2 contains three paragraphs, which relate to powers under the Road Traffic Act 1988 and the Vehicle and Registration Act 1994. Paragraph (1) of article 2 introduces the amendments to be made to schedule 1 to the 1988 order. Schedule 1 of that order identifies in column 1 the various fee-fixing powers, specifies in column 2 the functions relating to them—the tasks to be performed by my Department and its agencies to deliver the service for which the fee is being charged—and specifies in column 3 the paragraphs of schedule 2 to which the 1988 order apply.
Schedule 2 of the 1988 order prescribes various cost elements, such as the direct costs of the service, the costs of staff, offices, equipment and so on, the spreading of initial set-up costs and the recovery of past deficits in fee income.
Paragraph (2) of article 2 contains three sub-paragraphs. Sub-paragraph (2)(a) makes three changes. First, it substitutes in column 1—''Fee-Fixing Power''—in schedule 1 to the 1988 order new wording relating to the Road Traffic (Vehicle Testing) Act 1999 for the wording in the Road Traffic Act 1988 relating to MOT tests. The new wording includes the power to charge fees for attendance on courses in connection with MOT tests. That is the important sentence, in terms of what the provision does, but I had to describe all the legal niceties that go with it. Secondly, it re-arranges column 2—''Specified Functions''—in schedule 1 to the 1988 order and adds functions relating to the computerisation of the MOT scheme. Thirdly, it extends the scope of column 3—''Specified Matters''—in schedule 1 to the 1988 order to include paragraph 8 of schedule 2 of the 1988 order, which allows for the recovery of past deficits. That brings the order in line with the Vehicle Inspectorate trading fund orders, which already provide for this. Those amendments are shown in part I of schedule 1 to this amendment order.
Sub-paragraph (2)(b) adds a new entry to schedule 1 of the 1988 order referring to the new power in the Road Traffic Act 1988 to charge for compulsory driver training courses, which was inserted by section 257 of the Transport Act 2000, to which the hon. Member for Tatton (Mr. Osborne) referred. Relevant additions are made to the columns in schedule 1 to the 1988 order. Those amendments are shown in part II of schedule 1 to this amendment order.
Sub-paragraph (2)(c) substitutes for the old wording in column 1—''Fee-Fixing Power''—in schedule 1 to the 1988 order new wording referring to section 132 of the 1988 Act, which was inserted by schedule 29 of the 2000 Act, and which concerns examinations for approved driving instructors. The new wording allows for fees to be set for check tests. Those amendments are shown in part III of schedule 1 to this amendment order.
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Paragraph (3) adds a new entry to schedule 1 to the 1988 order, referring to the new power in the Vehicle Excise and Registration Act 1994 to charge fees for vehicle identity checks, which was inserted by section 33 of the Vehicles (Crime) Act 2001. Relevant additions are made to all columns in schedule 1 to the 1988 order.
Those amendments are shown in schedule 2 to this order.
I hope that that thoroughly clarifies the order, which I commend to the Committee.
Mr. Christopher Chope (Christchurch): May I also welcome you to the Chair, Mr. Taylor? It is a great pleasure to serve under your chairmanship for the first time.
I am surprised that the Minister has not mentioned today's hot news. Today is the launch date for the new Vehicle and Operator Services Agency. An expensive series of press releases has been issued in the Minister's name announcing the good news to the world at large. It is typical of the Minister's innate modesty that he decided not to mention that today.
There is a serious aspect to the matter. The Conservatives are concerned about this extravagant Government's increasing tendency to indulge in stealth taxes and to use self-financing regulatory authorities as a backdoor means of obtaining finance. The Minister failed to tell us that, throughout the past four or five years, the Vehicle Inspectorate has had an obligation to break even on the basis of producing a surplus of up to 6 per cent. a year that can be returned to the Treasury by way of a dividend. In fact, the Vehicle Inspectorate has been doing rather better than that: it has been producing a surplus that averages about 8 per cent. That means that there has been no danger of the Treasury not getting a 6 per cent. return. In the financial year that has just ended, there was no increase in MOT fees.
I thought that it would be useful to see what the business plan for the new organisation, the Vehicle and Operator Services Agency, says about fees in the coming financial year. The business plan does not yet exist. It certainly has not been published on any website and I would be grateful if the Minister would guarantee that the fees charged for MOT tests will not increase next year.
In his opening remarks, the Minister referred to functions relating to the computerisation of the MOT scheme and I think that he said, ''The costs of the MOT tests must be considered against other costs.'' I am not sure what he meant by that, but we can see from the most recent annual report and accounts of the Vehicle Inspectorate that an enormous cross-subsidy is going from those who pay for MOT tests to other services provided by the inspectorate.
On the basis of the figures in those most recent accounts, I would have thought that there was no justification for increasing the fees to be imposed for MOT tests in this financial year. Let us not forget that those who have to take MOT tests are inevitably more vulnerable road users because they cannot afford to buy
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brand new cars, unlike Ministers and Government officials. Such road users are ordinary folk, who find it impossible to have a new car. If they have a car that is more than three years old, it is subject to an annual test.
It would be a very regressive use of the Government's powers to introduce an additional stealth tax on this hard-pressed group of motorists who already face average motoring costs of £55 per week per household in this country—up from £35 a week in 1997. The fees order could give the green light to substantially increased fees that will be a burden on those motorists. I hope that the Minister will be able to allay our fears about that.
The order would give the power to ensure that any losses incurred under the new private finance initiative contracts for the computerisation of the MOT scheme would immediately be passed on to the hapless road user, rather than borne by the private sector as part of the risk transfer associated with such a contract. I hope that the Minister will assure us that that contract will be a profitable venture and that no additional costs will arise from it that will be passed on to hapless road users.
We have several concerns. The Minister says, rather speciously, that it is necessary to have the power to recover past deficits when he knows jolly well that there have been no deficits in the past, the previous obligation to break even from year to year has been very successful and substantial returns have been given to the Treasury.