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Driving Instruction (Suspension and Exemption Powers) Bill [WAYS AND MEANS]
10.24 pm
The Parliamentary Under-Secretary of State for Transport (Paul Clark): I beg to move,
That, for the purposes of any Act resulting from the Driving Instruction (Suspension and Exemption Powers) Bill, it is expedient to authorise—
(1) the imposition of fees in connection with exemptions from prohibitions concerning registration, and
(2) payments into the Consolidated Fund.
I kept my remarks on the money resolution brief, but I also put on record our thanks to the constituent of the hon. Member for Dunfermline and West Fife (Willie Rennie), Lesley Anne Steele, in coming forward in what must have been difficult circumstances, and thereby bringing this matter forward to where we have reached today.
For the purposes of any Act resulting from the Driving Instruction (Suspension and Exemption Powers) Bill, it is expedient to provide a power in uncommenced provisions in the Road Safety Act 2006 to charge a fee for the costs incurred as a result of the exemption arrangements that enable partially qualified driving instructors to provide instruction for payment. The Bill amends uncommenced provisions in the 2006 Act, in particular those affecting sections 124 and 129 of the Road Traffic Act 1988. Section 129 enables trainee driving instructors to apply for a licence that permits them to offer instruction for payment. The registrar of approved driving instructors, who is an employee of the Driving Standards Agency, may charge a fee in connection with such an application—that fee currently stands at £140 per licence granted.
The existing trainee licence scheme is quite rigid in terms of its entry requirements. Applicants must have passed the first two of the three approved driving instructor qualifying tests. However, the 2006 Act envisaged more flexible qualifying arrangements for trainee instructors. Trainee instructors will obtain practical experience of providing tuition through the granting of exemptions from the requirement to be registered, as provided for in the uncommenced provisions of the 2006 Act. Unfortunately, that Act does not provide for a fee to be charged in connection with these exemption arrangements. The DSA needs to be able to continue charging trainee driving instructors a fee in connection with applications to give paid instruction while working towards admittance to the register of qualified instructors.
If the DSA were unable to pass on to applicants its costs for processing those exemption requests, they would fall on the agency’s other customers and I am sure that the House would agree that that would be unfair. Alternatively, the DSA would not commence the new provisions and would continue to rely on the existing trainee licence regime. That would deny trainee driving instructors the more flexible qualifying arrangements envisaged in the 2006 Act.
We shall be introducing an amendment to the Bill to provide for the charging of fees in connection with the exemption from this registration. It is intended to replace the fee-charging provision that supports the existing trainee licence scheme. It is for this reason that the Ways And Means resolution is being introduced and, on that basis, I commend the resolution to the House.
10.27 pm
Willie Rennie (Dunfermline and West Fife) (LD): This Ways and Means resolution is eminently sensible. We need an arrangement in place whereby we can assess the trainee driving instructors as well as the registered ones, because it is pointless to do one part of this without addressing the full picture. I am grateful to the Minister for introducing the resolution, because it will allow us to have a much more comprehensive package of registration arrangements to ensure that people are fit and proper to be driving instructors in one way or another.
Petition
Schools (Manchester)
10.28 pm
Mr. John Leech (Manchester, Withington) (LD): I wish to submit a petition on behalf of PACE—Parents Against the Closure of Ewing school—which has been signed by some 10,576 people from south Manchester and from across the rest of Greater Manchester who are, like me, opposed to closure of Ewing school.
The Petition of persons concerned at Manchester City Council’s proposals to close Ewing School in Didsbury, Manchester.
Declares that Manchester City Council is currently considering proposals to close Ewing School in Didsbury, Manchester; notes that Ewing School is a specialist school that teaches children with speech, language and social communication disorders, from the ages of 5 to 16 years; further notes that Ewing’s pupils are among the 1 per cent. of children with more severe and complex speech, language and social communication needs; further notes that many of the pupils have specific problems with understanding and the use of the spoken word and have further difficulties with social interaction; recognises that Ewing School has a high teacher to pupil ratio, which enables the school to provide an intensive Teach and Learn environment.
Believes that Manchester City Council’s proposals to close Ewing School and relocate the pupils to mainstream schools are misguided; further notes that many of Ewing’s pupils have previously been excluded from mainstream schools; further believes that Ewing School offers a safe and secure learning environment that is more conducive to their pupils’ complex needs, which gives them the chance to achieve a high standard of education
The Petitioners therefore request that the House of Commons urges the Government to do all in its power to persuade Manchester City Council to rethink its plans to close Ewing School and to permit the school to remain open and free from the threat of closure
And the Petitioners remain, etc.
Vehicle Scrappage Scheme
Motion made, and Question proposed, That this House do now adjourn. —(Ms Butler.)
10.30 pm
Nadine Dorries (Mid-Bedfordshire) (Con): The vehicle scrappage scheme was launched on 18 May and is therefore less than a month old. In a press release today, after just 28 days, Lord Mandelson declared that the scheme was a success and had given the car-making industry the boost that it needed. It is slightly premature to issue such a press release after such a short time. The new car industry may consider the scheme a success, but it has actually failed in several areas and could be improved. I shall highlight some of the many ways in which that might be done.
The Department says that there will be a compliance review in two months’ time. Given the statement today by Lord Mandelson, I wonder whether the Minister can confirm whether it will still take place. If the press statement today is a premature finding for that review, it leaves no room for debate or suggested improvements.
Dr. Stephen Ladyman (South Thanet) (Lab): I congratulate the hon. Lady on obtaining this debate. I have a big facility in my constituency, run by a company called Copart, which is very interested in the scrappage scheme. Does she agree that getting the scrappage scheme up and running so quickly was a great achievement, but that there are bound to be things that can be done better? The two-month review must be a real review, in which stakeholders can provide information to the Government about what could be done better, and the Government can then react to that positively and incorporate it into the scheme. In other words, the two-month review must be a real review, open to full consultation.
Nadine Dorries: The hon. Gentleman has pre-empted part of what I was going to say. I also have a Copart division in my constituency, in Stewartby. I agree that when the compliance review takes place, consumers, members of the scrappage industry and other interested parties should have the opportunity to contribute to the review.
Problems with the scheme are evident after only a month of its operation. For example, there is limited consumer choice. There is also a focus on new car sales, instead of the entire motor trade. Of course, the scheme was introduced, practically the night before the Budget and released the next day, as an emergency measure to boost the flagging car industry. One cannot say that it has failed in that—today’s figures show sales of 60,000 cars in a month—but other parts of the motor industry are as important. Organisations such as Copart are suffering, but there is a way to improve the scheme in all its aspects without having a detrimental effect on new car sales.
In his initial press release, the Secretary of State said that the scrappage scheme was intended to stimulate car sales across the whole motor trade and that the benefits of the scheme would be balanced with the needs of other sectors of the car industry, such as the second-hand car market. However, we know that that has not been the case. In Britain, the only way in which to secure the
£2,000 support is for a motorist to acquire a new car or a new van by visiting a dealer. The dealers are generally tied to one manufacturer, as most new car dealers are. Obviously, documentation checks take place through the Driver and Vehicle Licensing Agency database. Manufacturers will invoice the Department for £1,000 and provide match funding. Some manufacturers offer additional incentive finance, whereas others drive a hard bargain, with fewer incentives, particularly with the smaller new cars, which elderly people tend to go for.
The consequence is that in the modern second-hand market there is no benefit for the for people who might wish to trade up rather than commit the larger net amount to an entirely new vehicle. Some consumers who do not normally make new purchases will also be unfamiliar with the credit risk arising from the expensive capital purchase. I believe that some people from lower-income groups and the elderly are disadvantaged as a result. Many people who have a 10-year-old car have a 10-year-old car because they cannot afford to trade up to a new car. The difference between the 10-year-old car and the new purchase is huge.
A £2,000 saving from £8,000 or £10,000 is not that much for a retired couple in their mid-70s to 80s who have had their car for a long time—probably since just before they retired. They do not have much capital, so that reduction in price does not really help. If we had a way of helping such a couple to have access to second-hand cars that were more reliable—after all, one of the reasons why the scheme was introduced is that 10-year-old cars are not as safe—I could definitely see that as an improvement in the scheme. It would boost the automotive industry as a whole rather than just the new car sector.
We do not have a portable voucher such as the one in Germany and California, whereby people can take their voucher wherever they wish to buy their car. They have much greater access to the market and to what is available. That empowers the people who hold the vouchers. They are not then subjected to one particular dealer, or to one particular type of car or manufacturer. They have the buying power because they have a voucher in their hand. We know that that system has been incredibly successful in California and Germany. Perhaps we do not have a portable voucher scheme because our scheme was brought in so quickly and hurriedly due to the circumstances that we faced at the time. Does the Minister believe, now that we have had more time to reflect on the matter, that he will consider the portable voucher scheme in the review that will take place after two months?
I recognise that the strongest driving force behind the new scheme is car sales. My constituency is near Luton, where LDV is suffering its own problems and uncertainties, so I do not want to sound as though I am diminishing the importance of boosting new car sales. I am not. I believe, however, that the portable voucher, by enabling people to trade up, will provide a longer-term stimulus to the automotive industry and new car sales.
There are also valuation problems. People receive £2,000, and it does not matter whether the car is worth more or less in individual part sales. It seems as though there could be some room for work there, too. If consumers are channelled into making scrapping arrangements
solely through their local dealership, which will have arrangements with other scrappage dealers, that does not give the consumer power over where they can take their cars. They are tied in to the dealer—not only by the finance available from the Department and the dealer, but on the scrappage side, too.
There are effects on the scrappage trade, too. We would be foolish to sit here and think that 60,000 new car sales and the scrapping of 60,000 cars this month, in addition to what already takes place, will not cause a spike in the scrappage trade that, in turn, will cause a downturn in prices. That is happening and as a result the scheme is suffering.
The Department has not had time to make appropriate due-diligence checks on the organisations that will be intimately involved in delivering the scrappage element of the scheme. Copart in my constituency is a subsidiary of an American organisation and is one of the largest scrappage organisations in the UK where there are 1.5 million scrap vehicles every year. It would be good if the experts on this part of the scheme could be brought in for discussion, with due diligence being paid to how they deal with their scrappage and the effects that the scheme is having on their businesses.
The scrap industry is suffering from cash-flow problems at present, as the price of scrap metal has fallen by 20 per cent. There was great anticipation of the scheme before it was launched and, although I have not had time to check today, I imagine that the fact that there have been more than 60,000 car sales this month means that the price of scrap has fallen even further.
The capacity to deal with the volume of scrappage safely and in a sustainable way needs to be assessed. Nobody wants too few vehicles to be processed, but equally no one wants a car mountain. In the present state of the scheme, there is no strong commercial incentive for parties with large-scale capacity in vehicle scrappage to enter the trade chain. That is another good reason why the organisations to which I have referred should be brought into the review process.
Another element is the EU’s end-of-life vehicles directive, whose aim is to achieve a greening of the auto industry. The Department has said that the “green side of things” is secondary to the boost that the scrappage scheme will give the car industry, but I reject that. I am a member of the Energy and Climate Change Committee, and I believe that green considerations are equally important, as they have their own effect on the economy. The green side of the scrappage scheme needs to be given an importance equal to that of boosting the car industry, and we must make sure that people using the scheme are aware of it.
The Department for Business, Innovatina and Skills says that it has urged car manufacturers to review their vehicle disposal arrangements to accommodate demand, but manufacturers and most dealers are locked into sole-source agreements with particular vehicle takeaway companies for the first stage in the vehicle disposal sequence. As a result, any difficulties that arise can be resolved only when there has been a contractual failure and there are vehicle takeaway problems. That is too late, because by then the companies will already have failed to meet the criteria laid down for them. Making sure that that aspect of the matter is given full consideration is another reason why it is important that we have a review at the end of two months. Compliance with the
EU’s end-of-life vehicles directive may be harder to achieve if the scheme eventually achieves its target of 300,000 vehicles, with the bulk of vehicles being dealt with in a shorter space of time and causing the spikes in scrap management that I have described.
I shall summarise my argument in three minutes. We need to make the scheme fully successful during the 10 months, for the benefit of the economy. No one doubts or disputes that—least of all me, given that my constituency is next door to Luton. As the scheme is constructed and operating, it may not deliver strong benefits for any part of the automotive industry over the longer period.
It is clearly important that the scheme delivers good results for new sales, as that is how part-funding from manufacturers is being leveraged. However, its design has built-in disincentives for consumers to achieve maximum personal choice, and an example of that is the lack of a portable voucher that I mentioned earlier. I hope that the Minister, when he responds to the debate will say something about portable vouchers: has the Department begun to look at them, and does it think that there is any point in making them available? Will they be part of what is assessed in the review?
The requirement that arrangements for vehicle scrappage can be made only through dealerships also limits consumer flexibility, and distorts business volumes in the scrappage industry. The scheme’s focus on new sales also disadvantages other parts of the total automotive economy.
The Department has stated that the scrappage industry and green aspects are secondary—an unfortunate and indefensible statement. The scrappage industry has already experienced some economic loss, and it would be wrong to raise environmental risks. Britain should take the opportunity of the compliance review that will be undertaken after the second month of the scheme to put in place new arrangements that open up consumer choice and spread the economic and green benefits across the whole of the automotive economy.
Finally, it is worth considering whether there could be a longer-term scheme. The Government have recognised that the scrappage programme is important to stimulating the car industry. The present scheme may or may not end before a general election is called, but there may be scope for a longer-term arrangement, particularly one based on greater consumer choice and with clearer environmental credentials. So my main points are about: the portable voucher that people are given; the fact that environmental considerations are as important as the stimulation to the car industry; and consumers being given greater access, particularly in terms of the scrappage element of the scheme.
10.45 pm
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