Draft Department of Transport (Fees) (Amendment) Order 2003

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Mr. Foster: I am sure that, like me, the hon. Gentleman has read the explanatory memorandum. I remind him of what it says:

    ''The amendment provides that the fee can cover VI's overhead costs and allows VI to manage end of year surpluses and deficits.''

Will the Minister comment on whether one of the ways of managing the surplus might be a reduction in the fee that is charged?

Mr. Chope: The hon. Gentleman has a good point. We wait to hear what the Minister says, but I fear that the response of the Treasury is likely to be to increase the rate of return. That brings me to my last question for the Minister. In the past three years—ending this April—under its business plan, the Vehicle Inspectorate had to produce a rate of return of 6 per cent. for the Exchequer. We have not yet been told what the rate of return is going to be next year or in subsequent years. I would be grateful if the Minister would assure us that, at a time of declining inflation, the rate of return will be 6 per cent. or below. If the rate of return required is higher than 6 per cent., it would give much credence to the concerns that I have been expressing on behalf of the motoring public.

10.10 am

Mr. Jamieson: I wondered how long it would take before the hon. Member for Christchurch (Mr. Chope) said ''stealth tax''. I had written down that it would take him 30 seconds; it took him 10. As usual, I can assure him that all the fears that he has raised in that regard are unfounded.

The hon. Gentleman asked why I had not mentioned the Vehicle and Operator Services

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Agency—the new joined-up agency. Later today, I will in fact be launching that new organisation.

Mr. Osborne: What a glamorous life.

Mr. Jamieson: Indeed, it is an exciting and glamorous life—off to launch a new agency today and who knows what it might be next? I shall enjoy my afternoon in Bristol launching VOSA.

The hon. Member for Christchurch asked about the Vehicle Inspectorate and whether there will be a deficit. He is correct that the VI has been in surplus, but the difficulty is that the Government Trading Funds Act 1973 allows the recovery of past deficits. There was an omission in the Vehicle and Operator Services Agency Trading Fund Order 2003, which made no mention of that. We are introducing this measure to clarify that. It is not changing anything, but we need to ensure that it is in this order.

On the hon. Gentleman's concerns about MOT fees, those are set by regulations—the Motor Vehicles (Test) Regulations 1981. Those fees have yet to be determined. All that this order says is that where those fees are to be charged for the provision of the service, which means for the Vehicle Inspectorate's supervision of the MOT scheme, they can include overhead expenditure for those fees. That is all that this order says on that. There is no debate today on what MOT fees will be. That is for another time and, perhaps, another Committee.

The hon. Gentleman talked as if all the MOT fees were flowing back into a huge crock in the Department as a form of stealth taxation. I assure him that thirty-nine fortieths of the fee for an MOT test paid by a motorist go to the garage to conduct the test. The garage can vary the cost of the test. Sometimes a garage will substantially reduce the cost of undertaking the test as a way of competing with other garages. However, we receive only one fortieth of the fee, which goes to the Vehicles Inspectorate to enable it to supervise the scheme and ensure that it is operating properly.

Mr. Osborne: Is it true to say that the law-abiding people who get MOTs are subsidising those who do not because the money is used to chase up people who do not have them? Can the Minister give us some idea of how many cars on the road today that should have an MOT do not have one?

Mr. Jamieson: That is a very difficult one. Perhaps I can jot the hon. Gentleman a line to give him the latest information. The essence of what he is saying is right, which is that people who do not have an MOT are a curse on the road. Often, they are not paying their vehicle excise duty or are not insured. One feature of computerisation is that it will make it much clearer which vehicles do and do not have an MOT. More importantly, an officer at the side of a road checking a vehicle or number plate will be able immediately to access the computer record to see whether the vehicle has an MOT. That is not available to police officers at the moment.

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Ultimately, it is our ambition to have available not only the VED and MOT records but the insurance record. That is a little more difficult to organise, but useful to crack down on crime and on people who are using cars unsafely, which I think is what the hon. Gentleman was really saying. Those people are getting away with it. That is another area that we are cracking down on. Although the order brings in the fee increase only to pay for the overheads of operating that scheme, underneath it lies the important principle—

Mr. Osborne: The tip of the iceberg.

Mr. Jamieson: Yes, and under the water is this cracking down on crime by the Government—''tough on crime and the causes of it''.

Mr. Foster: As the Minister will have noted, I have tried to be restrained, but he must recognise that computerisation, welcome though it is, will not by itself solve the problem of vehicles being driven without an MOT certificate. Does he acknowledge that in the past three years there has been a 16 per cent. increase in the number of cars being driven without vehicle excise duty? Might part of the reason for that increase be the reduction in the number of traffic police? As the Minister raised the subject and I did not, if the Government are being tough and cracking down on crime and their target is to achieve a 30 per cent. reduction in car crime by next year based on 1998 figures, can he tell us how well we are doing in achieving that target?

The Chairman: Order. May I bring the Committee back to the topic under debate, which is the method of calculating fees for MOT tests, supervision of driver training and the service provided by the vehicle identity check scheme?

Mr. Jamieson: Yes, Mr. Taylor, I shall observe your strictures. The hon. Member for Tatton began to lead us astray and the hon. Member for Bath (Mr. Foster) further extended the debate.

Computerisation will give customers better services, make the system more secure and reduce crime. Motorists will also be able to obtain the MOT history of their own vehicle, which is useful when vehicles are changing hands.

The order simply makes clear statutory provision for overheads. The Vehicle Inspectorate's accounts are audited by the National Audit Office, so it does not and cannot make profits. The order simply ensures that, for example, the Vehicle Inspectorate's reasonable overhead expenditure is and can be covered.

As regards past deficits, it is difficult for the Vehicle Inspectorate to be sure that the MOT income matches its MOT expenditure. The order will simply enable it to manage its accounts more transparently from one year to the next.

There was no increase last year in the pad fee element—the fee that the garage pays for the pad of certificates—of the MOT test by the Vehicle Inspectorate. That was because the income from motorists was sufficient to enable it to administer the scheme properly without an increase. The Vehicle Inspectorate looks for extra income only when it needs it. It will need an increase this year to cover inflation

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and also to help it to pay for the computerisation of the MOT scheme.

Mr. Chope: I was disappointed that the Minister sat down just before he seemed to be about to answer the question about the rate of return—an issue that is fundamental to the debate. If the Treasury is to impose on the agency a rate of return of, say, 8 per cent., that is indeed an additional stealth tax. The Minister's failure to deal with that issue is serious. I shall give way if he has the information in front of him. He probably has the information, but is he prepared to reveal it to the Committee?

The Chairman: Order. I point out, Mr. Chope, that you are the intervener. The Minister has the floor.

Mr. Jamieson: I am not sure whether I am making another speech or intervening on the hon. Gentleman. Nevertheless, I shall endeavour to give a good answer.

If what the hon. Gentleman is saying were relevant to the order, that would be different, but it is not. The order simply enables the Vehicle Inspectorate to cover its overheads. The Treasury dictates the rate of return from any of these bodies. That is not a matter that we can deal with in the Committee. The hon. Gentleman must take it up with the Treasury.

Mr. Chope: It is going from bad to worse. I do not want to go into the matter at great length, but we must not let the Minister wriggle off the hook. The financial statements of the Vehicle Inspectorate for the year ending 31 March 2002—the last that were available—state:

    ''The financial objective of the Vehicle Inspectorate is to earn an average return of 6 per cent. per annum in the form of an operating surplus expressed as a percentage of average net assets employed at current values. The Vehicle Inspectorate has the additional objective of achieving an increase in the value for money of the services provided''.

The 6 per cent. return is set by the Treasury, as the Minister implied. It was set for a three-year period prior to this April. It has now expired and, in trying to hold the Government to account, what is the rate of return required of this new operating agency, which the Minister is launching later today? I imagine that the costs of the launch and the party accompanying it will end up being paid for by the users. When we get the information on that, we will be able to judge whether this is another stealth tax.

The Minister implied, or even asserted, that it will be necessary this year to increase the MOT fee. He says that is necessary because of the rate of inflation. However, in those last accounts, the administration of the MOT testing scheme and standards control generated an income of £24,152,000, and created a surplus of £9,188,000. That was a healthy surplus on the income. The income was almost 50 per cent. more than it had been in the previous year and the surplus was also double what it had been. The Minister is now saying that in the year that started just over a year after those last accounts, it will be necessary for the MOT fees to go up to reflect inflation. Why is it necessary for them to go up, when the surplus on the activity in the last financial year for which figures are available was just over £9 million?

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That shows that the Government's agenda is to try to subsidise its other activities through fees and charges that are imposed by self-financing regulatory authorities, while hapless customers end up paying much more than they should be, so that the Treasury can ultimately tax them through the back door. I hope that the Minister now has some more information on that because it is serious enough to warrant us voting against this fees order unless we can get to the bottom of it. We may also extend the debate longer, to the dismay of the Minister, who wants to go off to this party as soon as he can.

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