Clause 7.—(DATE AND PERIODS OF ROAD VEHICLE LICENCES.) (Hansard, 12 June 1958)

§ Mr. Ernest Davies
I do not think that this Clause need detain the Committee for more than a few moments. However, I should like the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation to clarify one or two points. As I understand, this Clause will enable motor vehicle excise licences to be taken out at certain fixed dates during the year for a twelve-month period, or, presumably, for a shorter period, instead of their all expiring, as they do, at the end of the normal four quarters of the year or on 31st December at the end of each year. That is to say, at present there are certain peak periods, of which the end of December and the beginning of January are the greatest, when the licences fall due for renewal.
In his Budget speech the Chancellor explained that the intention was that in future it would be possible for licences to be taken out on the first day of the first month in which they are required for periods of four, eight and twelve months. I do not understand why he should have selected the periods of four, eight or twelve months. Why is the system of being able to take them out for quarterly periods—which is the normal system and which is understood by people—being changed to three periods during the year? As far as I can see from the Clause, it is not obligatory. In other words, the Clause would permit the quarterly system to continue.
However, I am sure that the intention or the Clause is acceptable to hon. Members on both sides, because it results in a substantial administrative reform. It 496 has been most inconvenient for local authorities, under the present system, to have the vast majority of motor vehicle licences falling due on 1st January of each year and having to recruit temporary staff to cope with the applications for renewal. If by substitution of this procedure there is a spreading of the load, as it were, over the whole year, clearly it will be of considerable benefit to the issuing authorities and will ultimately result in a reduction in administrative costs.
7.45 p.m.
The Chancellor estimated that it would cost £2 million in the first full year of the change, because there will be, as it were, a deferred income. A lot of licences will be renewed over subsequent periods and will not be automatically renewed on 1st January next year. That means that there will be a deferred revenue, but it is not lost; it is merely put off. Once that £2 million has been deferred it does not recur. It is not a recurring loss.
This is certainly a wise administrative change which I am sure will be welcomed by local authorities which issue the licences. However, I should like to know from the Parliamentary Secretary exactly what are his intentions. What is the plan that the Ministry has in mind? The Chancellor said in his Budget speech that details of the arrangements would be announced in due course by his right hon. Friend the Minister of Transport and Civil Aviation. Perhaps the hon. Gentleman will be able to announce those details tonight. They should certainly be given to the House before the Bill is on the Statute Book.
In Section 2 (a) it is rightly provided that where payments are made for broken periods of the year the payments should be in no less proportion than the number of months for which the licence is taken out bears to a year. That is understandable. But under subsection (b), where they are taken out of broken periods they shall not exceed for each month of the period ten per cent. of the duty on the corresponding annual licence. If licences are taken out for a broken period as they have been in the past—for three months in a number of cases—I have never understood why the 497 licence holder had to pay a higher sum for the three months than he had if he took it out for twelve months.
Admittedly, there may be a slight increase in administrative costs, but, on the other hand, it does not seem fair on the licence holder to charge him 10 per cent. more, as is permitted under the Clause, if he decides to take out his licence for three or four months, as now will be the case, instead of twelve months. Why should he have to pay 10 per cent. more as a penalty in those circumstances? After all, the Treasury gets the not inconsiderable sum of £12 10s. from most vehicles. What is the justification for this penalty upon the licence holder who prefers to take his licence out for a broken period? In many cases the car may be laid up a part of the year, which is in some way an advantage from the point of view of road congestion.
There is one final point which I should like to put. Will there be a continuation of the system whereby the post offices issue the licences at certain periods of the year? Up to the beginning of January of each year applicants can lodge their forms at the post offices and receive their licences over the counter straight away. This is certainly the case in London. But after a certain period that lapses and application has to be made to County Hall.
When the system of being able to take out a licence from the first of any month for a period of four, eight, or twelve months comes into force, is it proposed that it will always be possible to go to the post office to obtain a licence? Certainly, it will be a great advantage if that is the case, because it will save either sending the application by post or visiting County Hall or other municipal offices. I should like to know from the Parliamentary Secretary whether, now that licences will be obtainable all through the year rather than fall due at peak periods, the system of issuing licences at post offices will continue.
I should be glad if the Parliamentary Secretary would clarify those points when he replies. As I have said, this is clearly a desirable administrative change which, in the long run, should result in the spreading of the work for municipalities and should benefit those who apply for vehicle licences.

§ The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. G. R. H. Nugent)
As the hon. Member for Enfield, East (Mr. Ernest Davies) apprehends, the purpose of the Clause is broadly, as he said, to get rid of the seasonal peak and to relieve the administrative burden that occurs at peak periods, which is increasing every year as we get an extra half-million vehicles on the roads; and, secondly, to give a useful convenience to motorists in that in future, instead of having to conform with the calendar quarters or months, the licence will start from the beginning of the month in which the licence is required. Both from the viewpoint of the motorist and the point of view of administration, this will be a real benefit.
The hon. Member's first question asked why my right hon. Friend the Chancellor of the Exchequer suggested the intention of making periods of one-third of a year instead of quarterly. The procedure for bringing in this innovation is for my right hon. Friend the Minister of Transport and Civil Aviation to make an Order. That power is contained in subsection (1) of the Clause. In due course, my right hon. Friend will come forward with his Order before the end of this year, in good time to bring the new scheme into operation next year.
Our reason for changing to the basis of four, eight and twelve months instead of quarterly periods is an administrative convenience. It will reduce the number of licences in the year from four to three, so that there will be some reduction in the number of licences running. Our view was that this would reduce the administrative costs. On the other hand, however, as the motorist will get the advantage of being able to begin his licence from the beginning of the month in which he wishes to put his vehicle on the road, he will not be put to additional expense, because he will have the licence for four months instead of for three-monthly periods. In practice, that should be found to work quite conveniently to suit everybody.

§ Mr. Ernest Davies
Does that mean that in future the licence will be only for four, eight or twelve months and that it will not be possible to have a quarterly licence? Does this mean that if a person wishes to renew a licence, not for the 499 whole year, but for a quarter, as can be done at present, he must renew it for four months and not for three months?

§ Mr. Nugent
That is right. In future, four months will be the minimum instead of three months at present, but the motorist will get the convenience of starting his licence from the beginning of the month in which he wishes it to start. He will still have the same right to claim for a rebate for any complete month in which he does not use the vehicle.
The hon. Member correctly told the Committee the effect on the revenue, that in the first year in which we alter the calendar basis there will be a loss of £2 million, which will be made up in subsequent years. As I have said, the Government's plan will in due course be published as an Order by my right hon. hon. Friend. That will bring into being the new machinery and the new arrangements.

§ Mr. Davies
The Chancellor stated that the Minister of Transport would give the details. The Joint Parliamentary Secretary will know that once an Order is in draft—in this case, presumably, it can be prayed against—it must be either accepted or rejected; it is too late to take into account the views of hon. Members. I was hoping that since it was stated that details would be published, they would be given to the House and the views of hon. Members could be expressed upon them one way or the other before the Order is laid.

§ Mr. Nugent
I was endeavouring to give the hon. Member the intentions of my right hon. Friend in the scheme. It will be on the basis of thirds of the year instead of quarters. The periods will begin from the beginning of the month in which the owner of a vehicle wishes to license his vehicle and it will run quite simply in the terms that the hon. Member has indicated. In the original Order, we do not intend to bring in the provision, which subsection (6) outlines, which would alter the calendar basis of the annual licence.
Our intention is to see whether the new licences coming in each year will be sufficient to shift the burden off the calendar basis to avoid the seasonal peaks. If it does, we shall not need to employ that device. If it does not, in 500 the course of a year or so, when we have been able to see how the new arrangement works, it may be necessary to introduce another Order which will give the licensing authority—that is, ourselves, through the county councils—the necessary authority to alter the calendar basis so that applicants who apply for a licence for a year will be given the option of changing either to eleven months or a period of up to fifteen months, to shift them off the annual peak of December-January.
We intend, however, to wait for the first year or so to see whether that is necessary. It may well not be necessary because the new licences coming in at the rate of half a million a year may be enough on their own to shift the seasonal peak. That is, broadly, our intention.
Concerning broken periods, the hon. Member made a plea which must have been felt by many motorists in the past. He asked why they get a rebate on only a 10 per cent. basis if they have quarterly licences. The answer is that that is the established basis because of the extra administrative cost, as the hon. Member apprehended. There is no other basis for the lower rate. It costs rather more to deal with the extra number of licences and, therefore, the 10 per cent. basis has been established. The change that we are making leaves that position untouched. Incidentally, there will be a slightly less unfavourable rate for the eight-month licence than for the four-month licence.
The hon. Member also asked about the issue of licences from post offices. The answer is that the same facilities could be provided as now. I agree that as we shift off the seasonal peak that should be a very great convenience indeed in the case of renewals in the future. I hope that the Committee may now be ready to approve the Clause.