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Sixth Standing Committee
on Delegated Legislation
Wednesday 29 October 2003
[Mr. Mike Hancock in the Chair]
Draft Road Vehicles
(Registration and Licensing)
(Amendment) (No. 3) Regulations 2003
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I beg to move,
That the Committee has considered the draft Road Vehicles (Registration and Licensing) (Amendment) (No. 3) Regulations 2003.
I welcome you to the Chair, Mr. Hancock. May I say how pleased I am to see at least one member of the official Opposition here? In a Room next door the rest of the official Opposition are attending to other matters.
The regulations are very good news for honest motorists, who constitute the overwhelming majority of motorists, and form a key part of the package of measures that the Government are introducing to tackle vehicle-related crime and fraud and to reduce vehicle excise duty evasion. All honest motorists are exasperated by those who do not tax their vehicles. Taken as a whole, the measures will ensure that evaders find it much more difficult to escape their obligations. They will improve the accuracy of the vehicle records maintained by the Driver and Vehicle Licensing Agency and its sister agency, Driver and Vehicle Licensing Northern Ireland. They will thus make it easier to trace vehicles involved in crime and to trace the keepers of abandoned vehicles.
We estimate that the DVLA vehicle record is about 92 per cent. accurate in respect of the ability to trace the keeper of a vehicle at any one moment. Accuracy is of particular importance, because the police depend on that record when investigating all vehicle-related crime. A further 5 to 6 per cent. of the people will be in the process of notifying change. We are specifically targeting the rump of vehicles outside the system through the package of vehicle registration reforms that we aim to deliver over the coming months.
Vehicle excise duty evasion remains a serious problem. According to our latest survey, evasion is running at a little over 4.5 per cent. by value, amounting to some £193 million a year. Long-term evaders constitute the greater problem in respect of crime, antisocial behaviour and vehicle abandonment, but much of the evasion in terms of value is short-term. About 60 per cent. of unlicensed vehicles have been unlicensed for four months or less. However, unless firm action is taken early on, the short-term evaders—the so-called ''month skippers''—will turn into long-term problem vehicles that fall out of the system and cannot be linked to a responsible keeper.
We take the problem extremely seriously. In 2002–03, the DVLA's enforcement efforts resulted in 820,000 offenders being brought to book, with more
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than £110 million recovered in fines, penalties and induced relicensing revenue. In particular, we are promoting joint working with local authorities through either Operation Cubit or devolved powers.
Operation Cubit is a partnership scheme involving local authorities, the police and the fire service to tackle abandoned and untaxed cars. The DVLA has taken part in 25 such operations so far this financial year, and another 10 are planned. Fourteen local authorities have been given devolved powers to clamp and to impound untaxed cars on behalf of the Secretary of State. Three more councils have been trained to be ready to begin operations, and more than 50 are in discussions with the DVLA about taking on those powers. That is an excellent example of effective partnership in action. By taking immediate steps against untaxed vehicles, councils are eradicating many of the problems associated with abandoned vehicles and reducing the costs involved.
Despite those initiatives, vehicle excise duty evasion and vehicle record inaccuracy remain significant problems. We need a step change in the legislation underpinning enforcement to bring about further improvement. At the heart of the Government's proposals for reforming vehicle registration and licensing is the principle of continuous registration—the principle that the registered keeper of a vehicle must take responsibility for taxing it and continue to do so until he or she has properly notified the DVLA that the vehicle has been sold or taken off the road.
Our proposals have been developed in consultation with the Modernising Vehicle Registration Implementation Board—a group of key stakeholders including the motoring organisations, the motor trade, the insurance industry and the police.
In May this year, I announced a number of changes as part of the continuous registration package that we intend to introduce. They include the introduction of a system of continuous registration from early 2004, the reissue of all vehicle registration documents from mid-2004 onwards, and the routine issue of letters of acknowledgement to all those who notify the DVLA of a change of keeper, or other particulars such as statutory off-road notification, known as SORN. There will also be enhanced checking of the identities of new keepers in certain circumstances—for example, for imported vehicles and in cases of other non-standard registration applications.
To achieve the key goals of reduced evasion and improved accuracy, it is important that the whole process of the detection of evaders is streamlined. The regulations will allow the DVLA to take action on evasion direct from the vehicle record. The regulations also deal specifically with the penalty or supplement that can be levied when a person fails to tax their vehicle on time. I intend shortly to introduce further secondary legislation to provide for the new vehicle registration document and other matters, and to make a commencement order to bring the ancillary continuous registration provisions of the Finance Act 2002 fully into effect.
The regulations under consideration are made under powers in section 7A of the Vehicle Excise and
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Registration Act 1994, as amended by the Finance Act 2002. The amendments cover continuous registration and the power to enforce directly from the record, and create a new criminal offence of being the registered keeper of an unlicensed vehicle. They give specific powers to the Secretary of State to levy an automatic supplement on those keepers who fail to license their vehicles on time.
The regulations set the level of the new penalty for those who are served with notices following their failure to license their vehicles on time, or to make a statutory off-road notification if they intend to take a vehicle off the road. The proposed penalty is £80, reduced to £40 if paid within 28 days of the notice being served. That penalty will apply if a keeper fails to license a vehicle or to make a statutory off-road notification within a month of the expiry of the previous licence or statutory off-road notification. The regulations also prescribe that the registered keeper of the vehicle shall be liable to pay the penalty.
We believe that the penalty of £80—reduced to £40 with prompt payment—is proportional and reasonable. It is comparable to other vehicle-related fixed penalties, such as the £100 penalty for unlawful use of a bus lane and £60 penalty for driving without a seat belt.
We believe that the measure will have a significant effect on the level of evasion. Along with the other measures to be introduced that I mentioned earlier, I hope that it will improve the integrity of the vehicle record and ensure that vehicles do not fall out of the system.
The Committee will wish to note that, under the terms of the primary legislation, the new penalties will be recovered as a civil debt. Payment of the penalty will be in addition to the requirement to relicense the vehicle. If evaders simply pay the civil penalty and do not relicense, we intend to use the new criminal offence of being the registered keeper of an unlicensed vehicle, set out in section 31A of the Vehicle Excise and Registration Act 1994, as amended by the Finance Act 2002. The primary legislation provides that, in circumstances in which a person persistently fails to license their vehicle, there is a minimum fine of £1,000.
I should make it clear that the regulations will have no effect on law-abiding citizens who license their vehicles on time. It is also not intended to catch those who may, through oversight or some temporary difficulty, buy their tax disc a day or two late. Only those whose vehicles are unlicensed for at least a month will face paying the supplement. According to the DVLA's records, some 60 per cent. of those evading vehicle excise duty have been unlicensed for four months or less. As I said earlier, they are the ''month skippers''—people who take a chance and wait a month or two before buying their tax disc. That does not change the fact that any unlicensed vehicle caught being used or kept on the public road without a valid licence may be subject to judicial enforcement action under section 29 of the Vehicle Excise and Registration Act, even within that one month period.
The regulations, although they are of key importance in reducing short-term evasion, will have
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less impact on the problem of longer-term evasion on vehicles that have fallen out of the registration system. We shall tackle those vehicles through enhanced roadside enforcement, in particular by wheel clamping and removal. My Department has set the DVLA tough targets to reduce the number of vehicles outside the registration system by 50 per cent. by 2007, ensuring that keepers have a greater incentive to carry out their responsibility to notify the DVLA when they dispose of a vehicle. Those measures will help to stop up the flow of vehicles out of the registration system and have a significant long-term effect.
The draft regulations form a central part of the package of measures I announced earlier this year to reform vehicle licensing and registration. They will greatly improve our ability to deal with people who fail to tax their vehicles on time without imposing a new burden on the law-abiding majority. They will also play a part in ensuring that the vehicle registration system will enable us to deal more effectively with crime, antisocial behaviour and abandoned cars.