Motor Vehicles: Registration

Transport written question – answered on 7th June 2007.

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Photo of Lembit Öpik Lembit Öpik Shadow Secretary of State for Northern Ireland, Northern Ireland Affairs, Shadow Secretary of State for Wales, Welsh Affairs

To ask the Secretary of State for Transport what factors he took into account in increasing the vehicle registration fee from £38 to £50; and if he will make a statement.

Photo of Stephen Ladyman Stephen Ladyman Minister of State, Department for Transport

The increase in first vehicle registration fee from £38 to £50 was implemented to ensure that the DVLA driver and vehicle registration costs continue to be covered by the fees levied. This is necessary for the DVLA to comply with its statutory duties as an executive agency and trading fund. The initial vehicle fee increase was mirrored by a smaller increase from £38 to £45 for the first provisional driving licence.

The fee increases result from three public consultations over a two-year period in which the different options for meeting the DVLA budget envelope were explored in detail and gradually focused on the two fees noted. The consultation reports and conclusions were shared with respondents to the consultation and are published on the DVLA website. The explanatory memorandum to the changes in regulations summarises these. In essence, the DVLA undertakes 62 different registration transaction streams to maintain the vehicle and driver registers, but is only able to levy fees on 10 of these. Hence 16 per cent. of the transactions carry the costs for all the register maintenance and, of these, the 3,000,000 first vehicle registrations and the 950,000 first provisional driving licences bear the brunt. Other transactions such as change of vehicle keeper or of address are not fee-bearing, to encourage compliance, and these transactions have increased in number far faster than chargeable transactions.

DVLA has made very significant productivity gains over the last four years and by 31 March 2008 will have reduced its costs for the 2004 by some £50 million. However, its volumes have increased by around 15 per cent. during the same period. This has resulted in a rise in total costs. Conclusions drawn from the consultations were that the preferred way of addressing this was to increase the fees.

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