Clause 187 - Vehicles not kept or used on public road

Finance Bill – in a Public Bill Committee am 10:45 am ar 18 Mehefin 2013.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Catherine McKinnell Catherine McKinnell Shadow Minister (Treasury)

As many classic car enthusiasts will know—we may have some on the Committee— the statutory off-road notification is required by the DVLA when a vehicle is not being used on a public road  and therefore does not require vehicle tax. SORN was introduced in January 1998 and it applies to all vehicles licensed on or after that debate.

I will allow the Minister to explain, if he deems it necessary, the thinking behind the changes that are being proposed. I will jump straight to my questions, because I want him to clarify a few points about the changes to the regulations. Will he confirm when the relevant regulations will be amended, how much the DVLA is expecting to save from the changes and in what ways it will make those savings? In other words, how many vehicles and owners are likely to be affected by the changes? Will there be any change in how vehicle owners can make a SORN declaration once the change takes place? An original reason for introducing SORNs was to enable the DVLA to keep up-to-date information and maintain accuracy on the vehicle register, to aid the police who rely on DVLA records when investigating vehicle-related crime and fraud.

Will the Minister clarify whether any assessment has been made of the potential impact of the changes on the detection of vehicle-related crime and fraud? Has he considered any change in penalties for failing to declare a vehicle in a SORN, following this change, given that owners could have failed to make a SORN declaration for many years now, rather than simply months, as under the current legislation?

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury

The clause is the first stage in the legislative process for making statutory off-road notification declarations across the UK indefinite, following the Government’s red-tape challenge, which took into consideration the public’s views on reducing road transport regulations, including the burden involved in making annual declarations of a vehicle’s continued storage away from the public road. Having listened to what the public said, the Government are now committed to removing the annual requirement, so that in future the declaration will be indefinite.

Some 2.4 million vehicle enthusiasts, such as classic car club members and motorcycle enthusiasts, keep their vehicles stored off-road for a long period. They will benefit from less bureaucracy. The move to an indefinite basis for the declaration also avoids the present unnecessary, inefficient engagement of tax enforcement processes set in motion when vehicle keepers forget to renew their annual declaration. It will contribute towards Government savings of some £3.6 million over the next 10 years. To support that policy intention, the clause removes from primary legislation defunct references to the annual basis of statutory off-road notification declarations, paving the way for changes to regulations to be presented to Parliament later this year to facilitate indefinite declarations.

The clause has been subject to targeted consultation with the police, in view of their road traffic enforcement role, and with the wider motor industry. In particular, the Government are liaising with the motor industry to ensure that this regulatory change has no unintended effects on vehicles that have come to the end of their working lives and need to be scrapped and issued with a certificate of destruction.

Let me deal with questions raised by the hon. Member for Newcastle upon Tyne North. The regulations will be amended in December and, as I have mentioned, approximately £3.6 million will be saved over 10 years. Approximately 2 million people a year will be affected.

On fraud or potential fraud, we expect no impact on fraud or evasion of VED. The DVLA has a range of measures to tackle VED evasion, from reminder letters to penalties through to prosecutions and wheel clamping. Currently, we collect 99.3% of VED, which shows that the measures are effective.

The Government are also looking at how this change can be best publicised, to ensure that the vehicle owners affected can take advantage of it. The Government will cease to issue off-road declaration renewal requests and the registered keepers of stored vehicles will not be required to take any action.

The clause will ease regulatory burdens for vehicle owners and unlock efficiency savings for the Government, and I ask that it stand part of the Bill.

Question put and agreed to.

Clause 187 accordingly ordered to stand part of the Bill.