§ Queen's recommendation having been signified—
§ Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Road Traffic (Vehicle Testing) Bill, it is expedient to authorise—
§ Mr. Eric Forth (Bromley and Chislehurst)
This is an interesting measure, which received a brief consideration at Second Reading. The brevity was such that the House did not have time to assess adequately the implications of the measure's financial aspects. My hon. Friend the Member for Basingstoke (Mr. Hunter), the Bill's promoter, hinted that it had some not insignificant implications that we should explore briefly in the context of this money resolution.
One might have expected a Ways and Means resolution. Will the Minister explain to the House why there is no such resolution, but a two-part provision under the terms of the money resolution? I shall explore that matter in a moment. Are any significant initial set-up costs anticipated as a consequence of the considerable measures in the Bill? My hon. Friend the Member for Basingstoke said—albeit briefly in reply to a question on Second Reading—that he expected some increase in the charge made for MOT testing of vehicles. He said that he thought that the increase would be about £1 per test and that that would go some way towards—or would completely cover—the additional cost of the measures in the Bill.
That may or may not be so. First, I seek the Minister's assurance as to whether she believes the additional revenues raised will cover the total costs. Secondly, does she have anything to say about an undertaking regarding limits on the increase in the charge for MOT testing as a consequence of the Bill's provisions? That information would be useful. I want to know what initial set-up costs will be involved. Will they be covered entirely by the Treasury under this money resolution or will there be an attempt to recover those moneys on behalf of the taxpayer through additional charges for MOT testing? That would involve not just the equipment required, but staff training and perhaps even the recruitment of additional staff. I seek the Minister's assurances.
My main question is what will be the relationship between A and B: the payment out of money provided by Parliament for any expenditure incurred, and the payment into the Consolidated Fund of any sums received by the Secretary of State by virtue of provisions of the legislation. In other words, would moneys coming in be expected fully to cover the costs or would there be a limitation on the charges and the incoming moneys?
130 I can put that another way. Let us suppose that both the initial set-up costs and the running costs associated with the Bill's provisions were much greater than those envisaged initially. Would the Minister expect the additional charge for MOT tests to go up and up limitlessly in order to cover the costs, no matter what they were? Will the hapless motorist, who is obliged to submit his vehicle for an MOT test every year, be expected to pay any additional costs arising from the requirements of the Bill?
That is a very important question because it goes to the heart of the matter. Will the measure be a burden on the motorist for virtually no return, or do the Government expect to pay for it so long as the initial costs remain as they estimated?
§ Mr. Andrew Lansley (South Cambridgeshire)
Has my right hon. Friend noticed, as I have, that the explanatory notes accompanying the Bill use the word "corresponding" to describe the relationship between the increased expenditure and the charges that are levied for the MOT fee? The Government's view seems to be that there is a direct, "corresponding" relationship between Government expenditure and charges.
§ Mr. Forth
I am grateful to my hon. Friend for that point. That worries me. We want to hear from the Minister, as do tens of millions of motorists, whether all the costs—initial and running—of the measure will be passed on to the motorist by additional charges for MOT testing or whether she will give protection to motorists by saying that the Government will absorb some of the costs.
That point is particularly apposite now, given the difficulties in which the Government find themselves on additional costs for motorists and users of commercial vehicles. The Government are already embroiled in that argument, and there was a demonstration today by road hauliers. Hidden within this money resolution is the potential for yet further increases in charges on the motorist for compulsory annual MOT testing. We seek reassurance on that.
I take this opportunity to give the Minister a chance to reassure the country's motorists about the likely outcome of this measure. It would not be going too far to say that the answers that we receive to our questions on the money resolution will read across into the Bill's later stages and considerably influence hon. Members' decision whether to give it a fair wind when it returns to the House after its consideration in Committee. There is a degree of importance attached, as ever, to the information that we seek on the money resolution.
§ Mr. Andrew Lansley (South Cambridgeshire)
I shall follow the remarks of my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) with one or two specific points because I agree with his general proposition about the money resolution.
First, the legislation is designed not to achieve the computerisation of the MOT vehicle testing system, but to allow the Secretary of State to use the material generated through that system to a greater extent. The money resolution and the explanatory notes that accompany the Bill make it clear that £22 million will be transferred into the MOT test certificate charges annually. That is where 131 the figure of an extra £1 per test comes from, because there are about 22 million tests a year. That expenditure is, of course, directly consequent not on the Bill, but on the computerisation project. Yet the Bill and its money resolution are designed to give the Government a licence to increase the expenditure on the computerisation project and, as a consequence, obtain a "corresponding"—I use that word because it is used in the explanatory notes—increase in the fee that is charged to motorists.
§ Mr. Forth
My hon. Friend has, typically, closely studied the Bill and its provisions. Is he satisfied that the figures mentioned are a limit on the likely expenditure and would, therefore, give a guarantee to motorists, or does he suspect that they are merely indicative and, if the costs were significantly higher, they would be passed on to the motorist?
§ Mr. Lansley
The latter rendition is more accurate, and the figures in the explanatory notes are indicative. It would be interesting if the Minister were to say that she is sure that the expenditure on the computerisation project will not exceed £22 million, and motorists might find that reassuring.
I fear, however, that the measure effectively gives the Government carte blanche to spend money and recover it through the fees. Of course, if Ministers wanted to do so, they would have to introduce amending regulations to raise the limit of £30.87 on the cost of an MOT certificate. They might well do so by statutory instrument at a later stage. They would have relied on the fact that the measure had been passed earlier without the proper scrutiny of the House, which clearly would have happened in the absence of this debate.
My second point is that the £22 million that motorists will have to pay is not the sum total. Although it does not constitute public expenditure, the Bill makes it pretty clear that a cost will be imposed on the estimated 19,000 garages that will have to undertake training activity. That will amount to another £5 million in start-up costs.
These matters are set in an unfortunate context, to which my right hon. Friend the Member for Bromley and Chislehurst referred. I shall not elaborate on it because that would be outside the strict confines of the debate. However, the total level of taxes on motorists is an estimated £33,000 million. As the House will know, only a small proportion of that sum is spent directly on roads and the maintenance and administration of the road traffic system.
§ Mr. Deputy Speaker (Mr. Michael Lord)
Order. Having just said that he would not stray beyond the bounds of the debate, the hon. Gentleman is starting to do so. I ask him to come within the bounds of the debate.
§ Mr. Lansley
Yes, Mr. Deputy Speaker.
I ask whether it is beyond the bounds of the Government to accept that the cost of the computerisation project of £22 million, or whatever it turns out to be, could not be accommodated within the enormous sums that are already raised from the motorist by one route or another.
It is clear that one of the purposes of the proposed legislation is to allow the Secretary of State to provide the data generated for such persons as he sees fit. It is— 132 [Interruption.] The Government Whip, who is normally silent on these matters, seems to understand what I am saying. He will know that clause 2(6) makes the necessary provision. Presumably he will be able to enlighten the House on the terms on which the Secretary of State is proposing to make the data available. We know that he will be selling the information. However, it appears from the explanatory notes that the Government do not foresee a reduction in the cost to motorists of the MOT test certificate, although the Secretary of State will be able to generate income through the selling Of data that are generated through the MOT testing system.
The money resolution is required not to generate money to support the Bill, but to support the computerisation project, which could proceed by way of secondary rather than primary legislation. Motorists will have to pay the bill for the project although they pay enormous bills in any event. This is just one of so many computerisation projects that are presumably intended initially to reduce costs but result in increasing them.
Finally, the Government are proposing through the proposed legislation to exploit a money-making opportunity. However, nowhere in the explanatory notes or the money resolution is there an indication that the Government could raise money and defray the costs to the motorist of the MOT testing system. I suspect that rather the opposite is the case and that more money will be put into the pocket of Government in addition to whatever is asked of the motorist.
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson)
I begin by addressing the concerns raised by the right hon. Member for Bromley and Chislehurst (Mr. Forth) and the hon. Member for South Cambridgeshire (Mr. Lansley), which are exclusively about the costs of the computerisation of the MOT test. Both the right hon. Gentleman and the hon. Gentleman entirely ignored the benefits that will accrue to motorists from the modernisation that will come from the scheme. These are benefits that relate to reducing crime and the potential for crime, including fraud. There is the possibility that in future we shall be able over the telephone, for example, to make the relevant arrangements that apply to our vehicles.
It is not unusual for Opposition Members to be concerned exclusively with the cost of everything and the value of nothing, and their overriding consideration is the cost of computerisation. As I am sure the House is aware, computerisation is being procured under a private partnership contract. We hope that the cost will be less than £22 million a year. However, we wish to ensure, as is par for the course with the Government, that the best possible value is gained from the contract. The taxpayer will not foot the bill. The costs will be met in their entirety through a moderate increase in the cost of obtaining an MOT test. It is estimated that the fee will increase by no more than £1 a test, which is one thirtieth of the existing cost.
§ Mr. Forth
I am grateful to the Minister. She seems to be saying that the fees will be increased to cover whatever the costs may be. That is an important aspect of what my hon. Friend the Member for South Cambridgeshire 133 (Mr. Lansley) and I were asking. If the Minister is saying that, as I think she has just said, that means that she cannot guarantee that the increase in the MOT will be only £1. It could end up being considerably more than that, if the costs were more than are now estimated.
§ Ms Jackson
Given the record of the Conservatives, I have no doubt that, if they proposed a computerisation project, the charges would be open-ended and would run for ever. As I have made abundantly clear, the Government are driven by the ethic—I believe it is an ethic—of best value.
It is proposed, rightly, that after computerisation it will be possible for information to be sold. Of course the Government will ensure conformity to data protection legislation. In no case would information about vehicle presenters or vehicle keepers be available for sale, as such information cannot and will not be held on the database. In response to the hon. Member for South Cambridgeshire, the selling of such data to prescribed persons will be under regulations. The income from the sale of information will be used to offset the costs of the computerisation scheme.
Another concern raised by the hon. Member for South Cambridgeshire was what he perceived as increased starting-up costs for MOT testing centres and costs for training inspectors. We estimate that the average start-up costs will be no more than £500.
The first part of the financial resolution dealing with expenditure is a standard provision authorising any expenditure incurred by the Secretary of State in consequence of any provision in the Bill. In response to questions from the right hon. Member for Bromley and Chislehurst and the hon. Member for South Cambridgeshire, I have already touched on why such expenditure will arise. No new net public expenditure burdens are forecast to arise as a result of the establishment and running of the proposed MOT database. The costs will be passed on to the consumer, as I have said. We perceive the costs as being very small.
The increase will apply to vehicles run by local authorities as well as by private motorists, although many local authorities run their own MOT testing stations and therefore test their own vehicle fleets.
The second part of the provision dealing with expenditure reflects the possibility that local authorities may consequently incur additional expenditure. Another head of expenditure likely to arise as a result of the Bill's provisions will in future require organisations and people involved in MOT testing to meet the costs to the Vehicle Inspectorate of providing MOT training and authorisation for them. As I said, we estimate such start-up costs as being no more than £500.
As an increase in local authority spending could mean an increase in revenue support grant, and, as the grant is payable under local authority legislation rather than under the Road Traffic Act 1988, the provision needs to be included in the Bill. However, as I have made clear, any new burdens arising are likely to be extremely small in the context of local authority spending generally.
The first part of the provision dealing with potential sums likely to be received by the Secretary of State mirrors the existing provision in section 84(4) of the Road Traffic Act 1988 as regards the destination of sums received arising in pursuance of sections 45 and 46 of the 134 Act, among others, as currently drafted. The destination of sums received by the Government in such circumstances is generally to the Consolidated Fund, and that is provided for in the Bill.
In practice, the income streams arising from the Bill—the most significant of which will simply be the replacement of income from the sale of blank pads of MOT certificates to testing stations with income from the notification by them of results of tests to the MOT database—will pass into the Vehicle Inspectorate's trading fund. It is standard practice for that to happen in respect of Government agency trading funds, in accordance with the Government Trading Funds Act 1973.
The second part of the provision dealing with sums that are likely to be received by the Secretary of State is directed to potential new sources of income. I have already touched on the most significant of those, and that income will, in turn, be used to offset the costs of introducing computerisation into the MOT scheme.
I regret that the promoter of the Bill is not present in the House.
§ Question put and agreed to.