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Delegated Legislation Committee Debates

Draft Department for Transport (Driver Licensing and Vehicle Registration Fees) Order 2003

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Fourth Standing Committee on Delegated Legislation

Thursday 13 November 2003

[Mr. James Cran in the Chair]

Draft Department for Transport (Driver Licensing and Vehicle Registration Fees) Order 2003

8.55 am

The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I beg to move,

    That the Committee has considered the draft Department for Transport (Driver Licensing and Vehicle Registration Fees) Order 2003.

May I be the first to welcome you to the Chair, Mr. Cran?

The order establishes the legal framework necessary for the Driver and Vehicle Licensing Agency to pool the cost of maintaining records in respect of driver licensing and vehicle registration. It will enable the DVLA to take further steps towards a balanced, integrated and equitable fee structure for its customers.

The background to the order is the public service-wide policy that costs should be borne through fees by the individuals receiving or using a service. The alternative is costs falling on the general taxpayer. For statutory public services, including driver licensing and vehicle registration, fees are set to recover full costs, but no more than full costs. When the order is approved, we will continue to recover no more than the overall costs of the services to be covered by the pooling order. The order extends the degree of flexibility already inherent in the existing fee regimes.

As things stand, the cost of the driver-licensing regime falls disproportionately on young adults and those over 70—in many cases, the people in society less well placed to bear the cost. With the greater flexibility that the pooling order will allow, we will remove the £6 fee for each three-yearly licence renewal for drivers over the age of 70. For newly qualified drivers, many of them young adults, the combined fees for a provisional licence and upgrade to first full licence will be reduced by £3 from £41 to £38. From the day that those new fees come into effect, existing provisional licence holders and new applicants will benefit from the overall lower £38 fee.

Drivers who have the misfortune to suffer from a medical condition that means that they have a duty to prove that they are not a risk to other road users will continue to benefit, because the rising cost of running medical investigations can be pooled with other costs. Vocational driving licence transactions for provisional entitlement, claiming test passes and renewal from the age of 45 are to be free of charge. We have listened to representations from the transport industry that the current charges for those transactions often serve as a disincentive to people entering or continuing their career as bus or lorry drivers. The changes that I am

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proposing will reduce the barriers to those seeking employment in that sector.

Other groups that will receive special attention are drivers seeking re-issue of a licence following revocation by a court, and high-risk offenders. Their fees will be increased to ensure that those concerned continue to bear a full share of costs. Those changes to driver licence fees will in part be paid for by the increase in the first vehicle registration fee.

Why introduce a pooling order now? The current fees regime has grown over the past 30 years since the registration systems were first centralised into national registers held at the DVLA. The basic fee structures for driver and vehicle services have evolved in an inconsistent manner, even though the processes within each system are essentially similar and are becoming increasingly integrated.

Over time, with advances in technology, the concept of separate driver and vehicle registers has become an anachronism. Most obviously, a driver who is a vehicle keeper will have one postal address. An accurate register needs to capture and update the most recent address. Other aspects of the registers are converging. Operating costs are shared, and this fee order allows related fees to mirror that.

The Department for Transport is implementing a number of initiatives to tighten up the vehicle registration system, improve the accuracy of the vehicle record, and generally improve service delivery to customers. These initiatives contribute to the Government's anti-crime agenda and assist police forces and local authorities. Electronic service delivery is also a key investment priority for the agency. The pooling order offers greater flexibility with regard to the sharing out of these costs.

To help achieve the re-balancing of the financial burden, the vehicle first registration fee will be increased from £25 to £38, bringing it into line with the proposed fee for the first provisional driving licence. This is the first increase since the fee was introduced in 1998, and it has been set ahead of inflation to facilitate the reductions in fees elsewhere. The fee for issuing duplicate registration documents to replace lost, destroyed or stolen documents will also be increased to the level of the fee for duplicate driving licences.

The DVLA has undertaken a public consultation on these proposals. Only two of the respondents opposed the proposal to pool costs and re-balance fees.

Mr. Christopher Chope (Christchurch): Before the Minister sits down, can he clarify one issue? As driving licenses now have photographs on them, there is a requirement to renew them every 10 years. The Minister addressed the issue of licences renewed at the age of 70. Can he address the issue of fees charged for licences that have to be renewed after 10 years, as a result of photographs being introduced?

Mr. Jamieson: Perhaps I can answer that in my winding-up speech.

In conclusion, the order pools two existing groups of costs and creates a simplified and more equitable fee

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structure that will reinforce policy priorities and underpin the DVLA's service modernisation agenda. I believe that motorists will welcome these reforms.

9 am

Mr. Chope: I, too, welcome you to the Chair, Mr. Cran. The Committee knows that, as you have been in the Chair during similar debates within the past fortnight, you have expertise on the subject.

The order sets a framework for the future. The Minister briefly addressed the rationale and the implications, but with the publication this week of the Government's document on identity cards—

The Chairman: Order. I want to send out an early signal that I do not wish there to be a debate on identity cards this morning. This is a very narrow order. Let us keep to the matter under discussion.

Mr. Chope: I shall be quite open about the matter. The document on identity cards refers to the possibility of the driving licence fee increasing to £69 without the identity card, and costing slightly more with the identity card, but representing much better value for money. Therefore, it is already Government policy that the driving licence fee will rise to £69, even if that has nothing to do with identity cards. I invite the Minister to comment on how that is consistent with some of the other things that he said, and how it would be paid for.

The Chairman: Order. It is perfectly fair for the hon. Gentleman to raise the matter, but the Minister has got the point, so let us leave it behind and return to the order.

Mr. Chope: I am grateful, Mr. Cran. For the Minister's information, those sums are on page 11 of the consultation document, ''Identity Cards—The Next Steps''. One of the rationales that the Minister deployed in supporting the pooling argument is that if the cost of the initial fees and renewal fees are too great, there will not be compliance. Paragraph 11 of the explanatory memorandum explicitly states:

    ''There are three policy reasons for seeking to allow cost-pooling . . . The fee increases needed would principally affect younger drivers and potentially increase the number of people driving without a licence, already running at around 500,000 drivers''.

That 500,000 people are driving without licences is extremely serious. How would that number be affected if the fee rose to £69? If it is does not go up to £69, as envisaged in the White Paper, it will have to be pooled. The costs borne by the vehicle registration process will be great indeed. The Minister said that the vehicle registration fee had not been increased since it was introduced in 1998, but it was nevertheless one of the Government's first stealth taxes. There had never before been a requirement to pay a fee on first registration of vehicles. The fee has had a disproportionate impact on the vehicle leasing and rental sector.

The proposal is to increase the fee by just over 50 per cent. However, if we allow such pooling and turn down that policy road, there is a threat that the fee for first vehicle registration might have to increase to as much as £100 to pay for the additional cost that would otherwise have to be borne by licence applicants.

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The question that I asked in my intervention about the renewal of licences is relevant. Licences are required from the moment that a person passes their driving test until the age of 70. The new driving licences require a person to renew the licence every 10 years so that the photograph can be updated. There is an obvious cost associated with that, which is not apparent from table A, printed in the document.

I am not saying that the principle of some pooling is inappropriate, but I hope the Minister can be more up front in explaining the future implications of additional costs on licence fee increases. He said that the order was an anti-crime measure. Can he be more explicit about how the number of drivers on the road without a driving licence—500,000—will be reduced? Whether we are talking about an identity card or a driving licence, there is not much point in such a system if so many people can carry on without bothering to get a driving licence.

Does the Minister believe that there is an enforcement problem? If so, how will that be addressed, and will the additional costs of enforcement be borne by the pool? Or does he think that the penalties are an insufficient deterrent? How does all that sit alongside the potential sharp increases for driving licence fees? I hope the hon. Gentleman will consider such issues.

The Minister referred to discussions and consultation. I fully accept that the £6 fee for pensioners to renew their licences has always been controversial. It was initially introduced by a Government, whom you, Mr. Cran, and I were privileged to serve, because there was no opportunity for pooling outside. All the money had to be raised within the licensing regime. The policy context was that we had to consider whether it was reasonable to burden first-time drivers with all additional costs, or whether those aged 70 and above should make some contribution.

I have no quarrel with the principle of the policy that allows the £6 fee—which, though relatively small, is still a nuisance—to be removed. However, I hope the Minister will address the situation that lies ahead, and the problem of those 500,000 people who do not bother having a licence at all.

9.9 am


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