§ 7.31 p.m.
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The LORD STRABOLGI in the Chair.]1307
Lord Lucas of Chilworth moved Amendment No. 1:
Page 1, leave out lines 20 to 24.
§ The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendment No. 2, as both amendments are probing amendments. We come to the Committee stage of a Bill which had its Second Reading in February. At that time I expressed my distaste for the Bill generally because it seemed to me that there were three major issues with which the Bill attempted to deal in a catch-all, leave-all way; and that some of the elements that the Bill attempted to put right required a major consideration and should come before both Houses of Parliament with a great degree of agreement among traders, manufacturers, consumer bodies and the Government. The absence of such agreement was demonstrated rather well in the Second Reading speech of the noble Lord, Lord Willams of Elvel, who with other Members of this place agreed that the matter was of considerable importance.
§ The amendments tabled in my name on the Order Paper are designed to flesh out some of the areas where the Bill cannot deal with the problems practically. I turn therefore to Amendment No. 1, which deals with signing, if I may so describe it, of certain classes of used motor vehicles. I say "certain classes" because who is to say what is an unroadworthy vehicle? It is a matter of judgment. In different areas of the country, authorised examiners for Department of Transport tests (MoT tests) have different opinions as to where danger obtains.
§ In 1989, 6 million used cars changed hands, some of them more than once. As the Bill stands, it is impractical to label a selection of those 6 million motor cars. Motor cars come from auction houses and fleet owners into dealers' premises, usually in large numbers. They are generally deposited on a forecourt or parking area which may also be used as a sales area. It is impractical to go around labelling motor cars during the first few days when the vehicles are on the premises.
As the Committee may have noted, I do not wish to delete subsection (6A)(b) because it is easy to print on a standard order form a line stating:
This vehicle is roadworthy/unroadworthy".
§ When a salesman discusses a transaction with a buyer it is easy for him to strike out the appropriate words. That is why I have left the provision in the documentation, but it is impractical to sign vehicles on a forecourt or in a sales area.
§ There is nothing inherently wrong with with selling unroadworthy vehicles. The trade has for all time recognised that inter-dealer buying comes under the old adage of caveat emptor. A dealer does not expect to be told. A retail customer may wish to buy a vehicle which is deemed to be unroadworthy. He may want it because it is unique or to break for spares and so on.
§ For a legitimate trader to put up a sign which actively sends away customers is a restraint on reasonable trade. I said "legitimate". There are those 1308 who would argue that, if a used car trader offers a report, however genuine it may be, a customer may be reasonably satisfied as to the vehicle's roadworthiness, so additional signing would not be necessary.
On Second Reading the noble Lord, Lord Williams of Elvel, said, "As he"—that is the noble Lord, Lord Ezra—
rightly pointed out, the sale of unroadworthy vehicles is a criminal offence under Section 75 of the Road Traffic Act 1988".—[Official Report, 9/2/90; col. 1076.]
§ He then added that clocking is a criminal offence under the Trade Descriptions Act. We have therefore clearly established that there are two offences. We are talking about enforcement not the definition of a new offence. The offence exists.
§ Perhaps I may ask my noble friend the Minister, who I hope will contribute to our debate, whether the Government have any plans to stiffen Section 75 of the Road Traffic Act 1988 at some time. It is also necessary, particularly in the light of what the noble Baroness, Lady Fisher of Rednal, said during Second Reading, to remind the Committee that a minimum—less than 1 per cent.—of fatal and serious injury accidents are caused as a result of mechanical defects. That suggests to me at least that there cannot be many unroadworthy vehicles on our roads.
§ I also wish to remind the Committee of what I said during Second Reading, that some agencies—certain motor clubs and independent engineers—carry out examinations of vehicles. On a typical three to four year-old vehicle, the cost of such an examination is 6 or 7 per cent. of the windscreen value of that car. Most used car buyers are attracted to a car and, come what may, they will buy it, whatever the colour, model or style. Few will ask for details of ownership or whether there has been a mechanical examination. I believe therefore that the necessity for signing them is misplaced.
§ Amendment No. 2 extends the functon of trading standards officers and others by permitting authorised officers, irrespective of qualification, to become vehicle examiners. The trading standards service is already under much pressure. I wonder whether there is great value in extending its functions. In this regard it has no authority other than that which obtains after the sale has been made. It has no specific authority before the sale to extend an authority to others who may not be qualified. I invite the noble Lord, Lord Ezra, to explain to the Committee who will pay for this additional demand on the service and for the training of the officers. There is already a totally competent body of examiners in the vehicle inspectorate of the Department of Transport. I can see no value whatsoever in extending that responsibility to yet another body of people. I beg to move Amendment No. 1.
§ 7.45 p.m.
§ Lord Ezra
The amendment moved by the noble Lord, Lord Lucas, seeks to delete the requirement that a car dealer charged with selling or exposing for sale an unroadworthy car could use the statutory defence only if he had also displayed a prominent 1309 notice on the windscreen that the car was unroadworthy.
It is generally acknowledged that the present statutory defence provision available to persons charged with selling or exposing for sale an unroadworthy vehicle makes the law difficult to apply. Following the Second Reading debate, together with Mr. Gareth Wardell, who introduced a similar Bill in another place, I had a meeting with the Minister for Roads and Traffic, Mr. Robert Atkins. He wrote to me about a number of issues in the Bill. In the letter he confirmed that it was the Government's intention to make it more difficult for motor dealers to avoid prosecution for selling unroadworthy vehicles. He stated:our objective is to ensure that dealers take more care, and to ensure that the purchaser is well aware of the facts in the case of a legitimate sale of an unroadworthy vehicle".Those are clearly stated words. Our objective in seeking to retain the clause corresponds exactly with that of the Government. We only appear to differ in the means by which our common objective might be achieved.
The route favoured by the Government is apparently to strengthen the defence provision by inserting what is known as the "due diligence" defence into Section 75(6) of the Road Traffic Act 1988. This type of defence is commonly used in consumer protection legislation. It allows the person charged with an offence to escape conviction if he can satisfy a court on the balance of probabilities that he took all reasonable precautions and exercised all due diligence to avoid the commission of the offence. It has proved its value time and again through its application in many general areas of consumer protection law.
However, it can be questioned whether such a general defence is appropriate in the specific area with which we are concerned. Its inclusion could in some cases weaken the present position and would not fulfil the common objective: namely, to ensure that the dealers take more care and the purchaser is well aware of the facts in the case of a legitimate sale of an unroadworthy vehicle.
As the noble Lord, Lord Lucas, pointed out, it is perfectly proper to sell unroadworthy vehicles. It is perfectly proper to purchase such vehicles. Where I fail to follow his logic is that he said that, if there were a notice drawing attention to the fact that some of the wares in the forecourt were unroadworthy, this would somehow inhibit the commercial operation. I should have thought it would do precisely the reverse. Those who are interested in purchasing unroadworthy vehicles could immediately have their attention drawn to them. Those who wished to avoid such vehicles could look elsewhere.
At Second Reading, as the noble Lord, Lord Lucas, has already reminded us, the noble Lord, Lord Williams of Elvel, made the point that the proposed new defence could impose an onus on the seller to decide for himself whether a vehicle was roadworthy, It is fair point to make. Nevertheless, following that debate I received a letter from Sir Gordon Borrie, the Director General of Fair Trading. He said that nobody would be required to make an expert 1310 decision about the roadworthiness of his or her car. It would simply be, as is the case now, that anyone who sold a car which was unroadworthy would be liable to be convicted in the absence of a defence. Any seller who knew that his or her car was unroadworthy or who suspected that it might be unroadworthy could take advantage of the defence provided for in this clause of the Bill.
We have proposed a simple system which meets a particular need in a uniform way. It meets the common objective, along with the requirement to include information in sales documents. I hope therefore that the noble Lord, Lord Lucas—who pointed out to us that it was a probing amendment—will not pursue it.
Perhaps the Committee will now allow me to refer to the noble Lord's second amendment, as he dealt with that as well. Its effect is to remove the provision which would give trading standards officers powers to go on to forecourts to check that vehicles offered for sale were roadworthy. Again this was extensively debated in our Second Reading.
All parties are in agreement that the offence of exposing for sale and selling unroadworthy vehicles is of vital importance. There is much discussion about how the defence can be tightened up to ensure that it is effective. But what is the use of a solid offence provision if it is coupled with, as we contend, ineffective enforcement? At present, as Members of the Committee will recall, two organisations have enforcement responsibilities recognised under the Act: the police and the Department of Transport vehicle examiners. Neither body has in the past recognised it as one of its priorities periodically to go on to garage forecourts and subject cars exposed for sale to a check for roadworthiness.
When people buy a car which turns out to be unroadworthy, their first port of call, should the dealer not voluntarily put matters right, will more often than not be the local authority trading standards or consumer protection department and not one of the bodies designated under the legislation. In some cases local authorities have used their general powers to take proceedings following the sale of an unroadworthy car. However, unlike in other situations involving product safety—for example, the sale of an unsafe electric fire—they have no power to go on to the trader's premises to check purely whether other cars that are available for sale are safe. That is because motor vehicles are exempt from the general safety provisions of the Consumer Protection Act 1987.
If the cars on the forecourt have a description applied to them, for example that of being in good condition, trading standards officers can use their powers under the Trade Descriptions Act to enter the premises and check whether the description is correct. However, where no description is applied, even where they suspect that a garage is regularly selling unsafe vehicles, they can take no action other than to pass the matter on to one of the existing enforcement agencies which do not regard forecourt checks of this nature as one of their priorities.
It is surely wrong therefore for trading standards officers not to have the necessary powers to ensure effective enforcement as regards this offence. They 1311 are responsible for ensuring that a wide range of goods are safe for use. They are the first port of call for aggrieved consumers. The noble Viscount, Lord Ullswater, said on Second Reading that trading standards officers are not experts in assessing roadworthiness. The noble Lord, Lord Lucas, also made that point. That is indeed so, but nor are they generally experts in the safety of electrical goods, the composition of petrol, the determination of fineness of precious metals or in checking if a car is in good condition. Nor are they likely to be experts in assessing the level of radiation in irradiated food. However, these are all jobs that they are expected to carry out. Trading standards officers have the power to collect evidence but they employ experts from whatever field is involved to obtain the evidence they require. That is the way in which they now operate in all these diverse matters and there is no reason whatever why they could not operate in such a way in respect of used cars being offered for sale on garage forecourts.
It would be up to the experts employed by the trading standards officers to ensure that the examination and opinion conformed with whatever criteria are used to satisfy their legal requirements. Trading standards officers naturally seek advice from persons with impeccable and proven professional credentials. In many instances these are likely to be officers from one of the existing agencies. I was pleased to have the assurance from the Minister responsible for roads and traffic at a meeting which I have referred to that his examiners would be able to respond reasonably quickly to requests for inspections. Past experience, however, indicates that unless trading standards officers are given the power to investigate checks on garage forecourts to ensure the road worthiness of vehicles on display, such checks are unlikely to be carried out effectively by those currently possessing the enforcement responsibility. It is for those reasons that I hope the noble Lord, Lord Lucas, will not pursue Amendment No. 2.
§ Viscount Ullswater
I note the amendments being moved by my noble friend Lord Lucas but I should like to remind the Committee of what I said on Second Reading as the Government's view has not changed since then. I would say in answer to the question of my noble friend that the Government intend to put proposals before Parliament, as soon as time permits, to make it more difficult for unscrupulous motor traders to escape conviction where they knowingly sell unroadworthy cars which are likely to find their way onto the road in that condition. But statutory defences under the criminal law need to be drafted and considered with great care. That is not necessarily to say that the Bill is defective in that respect, or that the amendment of my noble friend is not welcome, but I believe that it is preferable for this matter to be dealt with in a Government Bill, prepared by the parliamentary draftsmen.
I do not therefore propose to move any Government amendments today, either to this clause or to any other part of the Bill. However, I support the intention of the second amendment moved by 1312 my noble friend Lord Lucas to the extent that it would remove one of the Bill's unsatisfactory features. As I said on Second Reading, trading standards officers are generally not qualified to assess vehicle roadworthiness. No doubt they would say that they would take experts with them for this purpose and I am sure they would.
However, it seems an odd proposal to give the TSOs those powers which they are not qualified to use themselves when there exists—the Government wish to stress this point to the noble Lord, Lord Ezra—an expert inspectorate which already has the necessary powers and whom TSOs can call upon if they suspect that a garage is selling unroadworthy vehicles. My noble friend has said these are probing amendments and I am sure he will deal with them in that light.
§ Lord Peston
Before the noble Lord, Lord Lucas of Chilworth, says what he is going to do with his amendments, I wish to ask the noble Viscount what we are to make of his broader remarks. The Government do not deny that a problem exists. There is a serious problem here, and for the people who buy cars in this area it is a matter of some urgency. It is not a trivial matter and it should not be delayed. This is the only Bill before us. There is no government Bill. However, the Government will introduce proposals when time allows. I could give the noble Viscount a long list of government legislation that many of us would not like to see on the statute book. If that were dispensed with, there would be a great deal of time for a Bill of this kind. However, I shall not bother with such a list at this time.
I did not intend to intervene until this point, but my concern is that we would be a great deal more impressed with the Government's view if we could be told whether there is any sense of urgency on the government side. I do not seek to defend this wording if there is better wording available. My reading of the Bill is that it would help the consumer, at least to some degree, but I would much rather have a government Bill that did the whole job, and I am sure that the noble Lord, Lord Ezra, feels the same way. However, I would not like to feel that a government Bill was to be introduced at any old time, which means never. Has the noble Viscount anything to say to us to reassure us as to when such a Bill would be introduced? Obviously he cannot anticipate the Queen's Speech, but will he say how urgently the Government are dealing with this matter?
§ Viscount Ullswater
I went a little further on Second Reading. I can inform the Committee and the noble Lord that we anticipate that this matter will be dealt with in a road safety Bill which is due to come before the Chamber. However, as the noble Lord quite rightly said, I do not wish to anticipate the contents of the Queen's Speech in the autumn.
§ Lord Lucas of Chilworth
I am most grateful to my noble friend the Minister for giving a timetable as regards what the Government intend to do on the matter of enforcement elements. Frankly, that is the 1313 right way to go about these two matters. I agree with the noble Lord, Lord Peston, that this is a serious matter. It has been a serious matter for many years. Nevertheless it is odd that the purchase, sale and maintenance of motor cars evoke the most extraordinary emotions in people, whereas perhaps an exploding gas cylinder in a mower does not evoke nearly the same kind of feelings.
In the first part of our discussion in Committee this evening the Minister reminded us that to legislate in the area of the designation of roadworthy and unroadworthy vehicles, and, as the noble Lord, Lord Ezra, mentioned, the defence, brings in its train an element of revision of the criminal law. Amendments to the criminal law are best dealt with by government rather than private legislation.
I have made my points. I have heard the views of the Committee, which I shall consider. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 2 not moved.]
§ Clause 1 agreed to.
§ 8 p.m.
§ Clause 2 [Power to make regulations]:
§ [Amendments Nos. 3 and 4 not moved.]
Lord Ezra moved Amendment No. 5:
Leave out Clause 2 and insert the following new clause:
("Power to make regulations
2.—(1) The Secretary of State may by regulations make provision—
- (a) for the purpose of regulating the circumstances and manner in which information relating to the distance travelled by any motor vehicle shall be recorded or declared at any time by any person, whether or not acting in the course of a trade or business or in the public service of the Crown; and
- (b) for the purpose of facilitating the enforcement of any regulations made under this section.
(2) Without prejudice to the generality of subsection (1) above, regulations under this section may—
- (a) provide that expressions used in the regulations shall be construed in a particular way for the purposes of this section;
- (b) provide that a contravention of any provision of the regulations shall constitute a criminal offence punishable—
- (i) on conviction on indictment, by a fine or by imprisonment for a term not exceeding two years or both;
- (ii) on summary conviction, by a fine not exceeding the statutory maximum.
(3) Where the Secretary of State proposes to make regulations under this section, it shall be his duty before he makes them—
- (a) to consult such organisations as appear to him to be representative of interests substantially affected by the proposal; and
- (b) to consult such other persons as he considers appropriate.
(4) The power to make regulations under subsection (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament and shall include power—
- (a) to make different provision for different cases; and
- (b) to make such supplemental, consequential and transitional provision as the Secretary of State considers appropriate.").
The noble Lord said: In moving Amendment No. 5 I should like to say that I have paid particular attention to the words of the noble Viscount, Lord
Ullswater, at Second Reading. Referring to the existing Clause 2, he said at col. 1080 of Hansard of 9th February:
The Bill would confer on the Secretary of State the most sweeping powers to make regulations to govern the motor trade. These enabling powers are so widely drawn that they could be used for almost any purpose from introducing a licensing system for the motor trade right down to regulating the width of the stripes on a car salesman's suit".
§ I have taken that wording to heart. Not wishing to prescribe the way in which car salesmen should dress I thought it desirable to introduce an amendment which would limit the scope of the clause. The new Clause 2 which I now propose would contain regulations giving powers to the Secretary of State in only one specific area, namely that relating to the recording of mileage information.
§ The evil of clocking and its cost to both consumers and reputable traders were well expounded at Second Reading. There appears to be general agreement that there is a need for some form of mileage recording scheme. The difficulty lies in agreeing exactly what kind of scheme is most appropriate.
§ Options include the following. There could be a scheme which would require the mileage of all vehicles to be recorded at the Driver and Vehicle Licensing Centre (DVLC) each time they are relicensed or ownership is transferred. There are many who would support that proposal. Alternatively there could be a similar scheme but applying only at the time when a vehicle changes ownership; or there could be a scheme based on either of the above but restricted to recent vehicles, namely only those of less than three or four years old, which are most prone to clocking. In other words, the scope of any regulation would be limited to cars which are most likely to be clocked. Finally, there could be an even more restricted scheme limited to cars sold by fleet owners. That is the choice.
§ There is also room for debate about whether any scheme would best be administered solely through the existing mechanisms of the DVLC or whether it should be in private hands, or perhaps a combination of both. There are a number of firms which have established themselves in that area. Since the Second Reading debate I have been advised by some of them of the very extensive and valuable work which they do.
§ A further area for debate is whether there is a need for any legal compunction to require those subject to a scheme to provide information or whether it should depend purely on their co-operation. I know that the Government favour the most minimal scheme, operated by the private sector and dependent on co-operation. That is the impression that I have of the Government's thinking on the matter. My choice would be for a scheme having statutory backing, applying at least to cars up to four years old and with information being recorded at the DVLC at each licensing date.
§ A scheme involving the voluntary co-operation of fleet owners has already been tried. It failed through lack of co-operation. There are very good reasons for that in practical terms. Put simply, ex-company cars are usually in good outward condition. They 1315 have, after all, been used to represent the business. They are not very old—four years is generally the maximum. However, usually they have covered a higher than average mileage. The highest price will be obtainable from a dealer, who can make the highest profit on the car. That, unfortunately, will often be the dealer known as a "clocker", because those are the ideal vehicles for clocking. As soon as word goes round in the trade that a particular company is co-operating with a mileage recording scheme and another is not, the first company will almost inevitably find its ability to sell its cars severely handicapped.
§ None of that should be taken even to imply that fleet car companies work hand in glove with clockers. Of course they do not. However, it is a fact of commercial life that only a few companies would co-operate if they knew that some of their competitors would not. It seems clear, therefore, that if only to ensure fairness in the market place a statutory provision requiring recording of mileage information is necessary.
§ The question of whether any scheme should be within the private sector or include the DVLC leaves room for discussion. Indeed, discussions are currently taking place between the Institute of Trading Standards Administration—with which I am connected as president—and the DVLC, and also with one of the large private sector companies interested in developing this area. Even that company, however, expects that the basic information would be acquired using the DVLC under statutory powers as the collection agency. It is very interesting that that should be the response of a leading member of the private sector in this area.
§ The scenario is thus one in which everybody is agreed on the need for some scheme. Private sector information providers, fleet car operators, consumer bodies, motoring organisations, trade associations and enforcement interests see the need for a scheme to have some degree of statutory backing. The proposed amendment meets that need in giving the Secretary of State flexible powers to regulate on the detail of any type of scheme which might be agreed or to act quickly to make a change to a scheme already under way. I beg to move.
§ Lord Mason of Barnsley: I rise to support the insertion of new Clause 2, a clause which is designed to help to clear up some of the misdeeds of the second-hand car racketeers. I was astonished to learn that, of the 7.5 million used-car transactions per year, 3.75 million vehicles were sold by the trade, of which 2,800,000 were shown to be unroadworthy. I am not referring to the legitimate trader, but if 25 per cent. of those vehicles are illegal, there is an urgent necessity to look sympathetically at all suggestions to curb these dangerous fraudsters and eventually abolish the practice of selling cars which the dealer knows to be unroadworthy, riddled with faults and with false mileages on the clock.
§ I am therefore concerned with those unscrupulous forecourt car dealers who take advantage of the ignorance of the unsuspecting car buyer. It is not 1316 possible for every second-hand car buyer to have a qualified car mechanic with him when considering a purchase. I feel especially sorry for the couple making their first purchase without qualified assistance. I believe that they need some legislative protection. This new clause is designed to make some progress in that direction; to stop the dangerous, illegal practice of turning the second-hand car mileage clocks back; cheating; and selling a partially clapped out car irrespective of the dangerous consequences of such a fiddle.
§ I understand from surveys carried out that, over a period of 10 years, 20 per cent. of second-hand cars have had their mileage clocks tampered with. Just imagine the deaths and injuries which may well have been caused by nearly clapped out engines under car bonnets travelling at speed on motorways and suddenly the engine fails. It is too late then. There is a pile up and there are casualties, all because of greed, the profit motive and the urge to make a quick quid by falsely enhancing the value of the car with a low mileage on the clock.
When the last survey took place on the problem of unroadworthy cars, Barnsley was one of the towns involved. The survey in Barnsley revealed that, on visiting 28 garages and examining 81 cars, 70 cars were regarded as unroadworthy; that is, 86 per cent. The number of cars regarded as seriously unroadworthy was 34; that is, 42 per cent. Bob Wright, Barnsley's director of consumer and environmental services, stated:
The results are a damning indictment on the motor trade and will shock and alarm the public. We are not surprised by the results—we know the problem was immense. However, it takes a survey of this nature to prove that unsafe cars were and still are being sold all over the country".
§ New Clause 2 is concerned with the appalling, illegal practice of re-clocking an odometer and cheating a car buyer into believing that a car is younger and safer than it is—a major fraud, prevalent in our country, with all the despair that it brings to the car purchaser and the deaths and casualties that it can cause on our roads.
§ It is estimated that in excess of £100 million per year illegal profit is currently made by unscrupulous motor dealers winding back high mileage readings. A typical case in Barnsley concerned a Vauxhall Cavalier which was sold with a mileage indication of 27,000 miles. That was claimed to be a correct indication. On investigation by the trading standards officer, it was learnt that the vehicle had travelled over 114,000 miles—87,000 miles in excess of that stated. Every 1,000 miles reduced its worth by £30. It is not unusual for a reading of 75,000 to be reduced to 25,000, bringing with it an illegal profit of £1,500.
§ The new clause suggests one way as to how we might deal with the clock fiddlers and encourages the Minister to bring forward regulations which will by law necessitate the mileages travelled by a vehicle to be recorded or declared at any time by any person; and records to be kept, supplied by the motorist at the time of registration and re-registration; in other words, there will be a tightening of the law to catch the clock-fiddling fraudsters.
§ To those potential killers—no doubt some of those unroadworthy vehicles have killed persons in motor 1317 car crashes—fines and minor prison sentences are insufficient to stop them. Longer gaol sentences should be imposed. Computerisation of mileages recorded by owners of every car every time it changes hands might be effective, but I fear not to the unscrupulous car sharks. The threat of a long sentence in gaol; lost business; being barred from the trade thereafter—all that might well cause them to think again and to realise that it can never be worth the risk. Penalties are contained in the new clause. I support them, but I personally would have been much more severe.
§ 8.15 p.m.
§ Lord Lucas of Chilworth
I did not move the two previous amendments because, in re-framing the clause, the noble Lord, Lord Ezra, has perhaps removed some of the most objectionable parts of the Bill as it then stood. Nevertheless, I am not happy on a number of grounds with the new clause that he proposes.
It is wrong to give the Secretary of State flexible powers, as the noble Lord, Lord Ezra, called them, to deal with this one and only matter—mileage recording. Those who may well become Secretaries of State might impose the most draconian regulations upon the industry. I do not believe it right that power should be given unless it is in primary legislation and there is virtually 100 per cent. agreement. That agreement must come not only through the consumer bodies but through the industry, including manufacturing, wholesaling and retailing.
The noble Lord, Lord Ezra, read out a number of options, none of which appealed to me and all of which I could beat with no problem at all. I can assure him of that. One of his proposals was limitation to fleet owners. Who are fleet owners? There are some respectable names among the renters. They are the people who rent out cars. Their turnover of motor cars is about nine months to 12 months. The turnover of cars which are provided as perquisites for certain employees in lieu of cash is about 36 months with very low mileage. The turnover of salesman-type cars is about every 18 months at around 40,000 miles. The average mileage per year—you can read this in most motoring magazines once or twice a year—is about 11,000 or 12,000 miles.
It does not take much intelligence—it does not even take added reading of motoring columns in newspapers and magazines—to tell a prospective purchaser what he might reasonably look for. It is nonsense to suppose that a car should be re-registered each time it is licensed at the DVLC. The period preferred by the noble Lord was four years. If one looks at the statistics, one sees that about 3 million cars are company registered, either in the company's name or in the secretary's name. A quarter of those are leased. As I said, about 6 million cars change hands annually. An average age for a motor car is about 6.3 years. Many different figures and criteria therefore apply. I remind the noble Lord, Lord Ezra, that in the short time that I was in my noble friend the Minister's position at the Department of Transport, we examined that problem and could not find an equitable solution.
1318 Perhaps I may now turn briefly to the comments of the noble Lord, Lord Mason of Barnsley. I do not know whether the noble Lord will be proud of what he said when he reads Hansard tomorrow. He used very strong language. He talked about dangerous cars. I do not know whether that was in the context of unroadworthy cars or clocked cars because he did not make it too clear. He talked about deaths and killing. I have dealt with the killings and deaths on roads due to mechanical failure. That is not the kind of language which will endear anyone to the supporters of the legislation that we want to see. Mention was made of the unlawful cheating to the sum of £100 million per annum involving unsuspecting purchasers. I have been a long time in the motor trade and I have not met many unsuspecting purchasers. Most of them are pretty canny.
Nevertheless, there is a problem which in my view there is only one way to solve, and which cannot be restricted to one element of the trade (a three or four year-old fleet car or whatever it may be). The solution would avoid credence being given to spurious mileage records deposited at the DVLC or any other registry, at some cost to some body. It is for the Government, the Department of Transport, the retail organisations and the consumer organisations to enter into meaningful conversations with manufacturers to develop a system of mileage recording which is at least 75 per cent. or 85 per cent. foolproof and tamper-proof. We shall then get an evenly spread over and pretty fair chance of catching the rogue.
Again I remind the Committee that this is a matter of enforcement. The law is already in place. I look to the Government to advise on how enforcement of the current law can be better carried out. I hope that the noble Lord, Lord Ezra, will not persist with a measure that is essentially spurious, faulty, cannot be enforced, can be circumvented easily and would bear more harshly (in his preferred course) on one sector, a sector which I do not believe should carry that kind of burden.
§ Lord Ezra
I cannot refrain from intervening again in the light of those critical comments from the noble Lord on what I thought was a quite limited and on the whole helpful amendment. He says that he does not believe that any of the variants that I indicated could work, that he does not understand what is meant by "fleet car owners" and that the only measure that could possibly work would be some form of tamper-proof odometer which has still to be devised, marketed and introduced into cars as yet unborn and unmade. Obviously that will take a very long time.
We are concerned with a present problem. I suggest that the views that he expressed are not necessarily shared by the Government. I should like to quote again from the letter that I received from Mr. Robert Atkins after my meeting with him. It is dated 14th March. On the question of clocking he says:I am in no doubt that this problem can best be tackled by the private sector through the development of a scheme which makes 1319 best use of information already available in the trade. The idea would be to concentrate on those vehicles most likely to be at risk of clocking (eg: good condition high mileage company cars)".That is precisely to what I referred, but what the noble Lord, Lord Lucas, feels is not a worthwhile endeavour. The letter continues:Such a scheme would depend on the co-operation of those companies with car fleets, auction houses and garages generally. Nevertheless"—this is very important—we recognise that the sponsors of such a scheme may wish to have some co-operation from DVLC. Officials are already considering with several interested parties how such a scheme might work, and they are also looking at what additional resources might be needed at DVLC".I bore that in mind as well as the observations of the noble Viscount at Second Reading when I put forward this revised Clause 2. It seems to me that it is entirely in line with the way in which the Government are now thinking.
§ Viscount Ullswater
I note that the noble Lord, Lord Ezra, in moving this amendment to his Bill is responding to the criticism which I and other noble Lords made at Second Reading about the scope and imprecision of Clause 2. I note that he now proposes that the regulation-making powers of the clause should be restricted to the question of car mileages. However, this still leaves all the difficulties which were discussed at some length at Second Reading. There is a number of fundamental outstanding questions: for example, how mileage records would be verified; what demand there would be for such information; and how the service would be funded.
At Second Reading the noble Lord, Lord Williams of Elvel, said:In debates in this House all systems that have been put forward have been found to be defective in some way. Therefore, I do not believe that the clocking side of the Bill takes us much further. I should like to see much more thought given to the matter before primary legislation is produced".—[Official Report, 9/2/90; col. 1077.]On that point I agree with the sentiments expressed by the then spokesman for the Opposition.
The Government deplore the practice of clocking and remain ready and willing to consider practical ways of deterring it. But legislation is not always the right answer. I believe that if there is to be a mileage recording scheme, a non-statutory one would be preferable. I suggest that that could provide a basis for a more flexible and targeted scheme which would be financed by those who want to make use of such information rather than being paid for by the taxpayer.
The Government would like to see that course pursued thoroughly first before they could accept the need for additional legislation. Having said that, the Government take note of the amendment.
§ Lord Ezra
I am pleased to note what the noble Viscount had to say. I believe that this is an important issue. The amendment does not deliberately lay down precisely how the matter should be dealt with but discussions are taking place. I believe that the amendment will help to focus attention on this issue.
§ On Question, amendment agreed to.
§ New Clause 2 agreed to.
§ Clause 3 agreed to.
Lord Ezra moved Amendment No. 6:
After Clause 3, insert the following new clause:
("Damaged and rebuilt vehicles etc.
In section 23 of the Vehicles (Excise) Act 1971 (regulations with respect to the transfer and identification of vehicles) after paragraph (d) there shall be inserted the following—
(dd) make provision generally with respect to vehicles which have been damaged, including provision for the endorsement on any registration document issued in respect of a vehicle after it has been rebuilt of particulars of the rebuilding, provision for a vehicle to be subject to a safety check before the issue of such a document, provision for the surrender of registration documents relating to vehicles which have been damaged and provision with respect to certificates and the marking of vehicles;"").
§ The noble Lord said: This amendment introduces a new clause after Clause 3. As the wording makes clear, it deals with the rebuilding of insured vehicles after impact accidents. The fact is that between 250,000 and 300,000 vehicles are currently written off by insurance companies every year and notified to the DVLC. According to the statistics, approximately half of those vehicles are repaired and re-registered through the DVLC without any safety inspections. That is the nub of the problem.
§ The police in particular are much concerned with stolen cars which may be disguised by using written-off vehicles and taking on their identification plates. But that is not the problem with which this amendment is concerned. The problem is the large number of dangerous, repaired vehicles—often two or three vehicles put together—which are sold to the public without any proper safety examination. Trading standards officers receive in excess of 80,000 complaints annually relating to second-hand motor vehicles.
§ I can quote a few examples of such repaired, written-off vehicles to give the Committee an idea of the scope of the problem. For example, a Saab written off in Scotland was sold for £300 scrap value. It reappeared shortly afterwards and was retailed for nearly 10 times that value—£2,900. It was described by an engineer, who examined it subsequently, as totally unroadworthy and necessitating repairs estimated at £4,000.
§ Similarly a £7,500 Volvo sold in Scotland was immediately valued at £2,000 less when examined by an independent engineer. A scrap Cavalier sold in Humberside for £450 reappeared with its mileage altered and its body repaired with filler and paint. The car, which sold for £3,500, was found to have a twisted frame. I have many other examples that I could mention to the Committee.
§ On 4th February 1987 the then Minister for Roads and Traffic, Mr. Peter Bottomley, held a meeting with interested parties from the police, the DVLC, the trade motoring organisations, and trading standards officers. The trade was unanimous that all repaired and rebuilt ex-write-offs should be subjected to independent examination before being 1321 relicensed by the DVLC. Subsequent to that meeting, the Association of Chief Police Officers after wide consultations produced a comprehensive report on the subject together with detailed recommendations. A copy of that report was sent to the Secretary of State for the Home Office and a copy has been placed in the Library of another place.
§ The report called for surrendering of vehicle registration documents to DVLC in the case of seriously damaged vehicles, and that the vehicles should not be reregistered until they had undergone a test by a Department of Transport vehicle examiner. The test, which would obviously be paid for by those trading-in the vehicle, would ensure that the vehicle's identity was not disguised, and that the vehicle has been repaired to satisfactory safety standards. A further recommendation was aimed at actively discouraging wrecked vehicles being used to disguise stolen vehicles, and at informing subsequent purchasers of rebuilt wrecks of the true history of the vehicle.
§ Those are the purposes of the amendment. The subject has been exhaustively inquired into. All interested parties consider it a matter which urgently requires to be dealt with. The references made by the noble Lord, Lord Mason of Barnsley, in his intervention earlier about dangerous vehicles certainly apply to this category. I believe that there is an obligation to minimise the risk. I beg to move.
§ 8.30 p.m.
§ Lord Mason of Barnsley
I rise again to support the noble Lord, Lord Ezra, and hope that this new clause might be accepted.
The problem of the motor trade, in particular the second-hand car business, continues to be real for local authorities and their trading standards officers. I am informed that in Barnsley we have considerable difficulty in ensuring that unroadworthy, falsely described and clocked cars are identified. The clause deals with the problems arising from damaged and rebuilt vehicles and the need to divulge information on registration documents, and provisions for safety checks.
The new clause seeks more effective enforcement, and for the Minister to provide regulation making powers to ensure that seriously damaged vehicles would not be reused on the road until they had passed a safety check and registration documents had been reissued by the driving licence centre.
The second-hand car dealers who rebuild insurance write-offs must be dealt with. The Institute of Trading Standards has campaigned long and hard for increased safety measures against the crooked elements in the second-hand car trade. The last joint survey carried out by the trading standards officers and the Department of Transport inspectors reveals that of the 193 vehicles tested and examined, an amazing 153 were not fit to be on the road.
Bob Wright—who is Barnsley's consumer watchdog, the environment and consumer affairs officer—who carried out the inspections in Barnsley produced a report which revealed that faults discovered included severe structural damage, dangerous brakes, wayward steering, worn seatbelt 1322 mountings and faulty lights. Trickery was common place, and many garages had attempted to mask faults with paint or filler. In one case the worn tyres of a Fiat car had been cunningly recut to make it appear that there was tread on the rubber although it was bald. The sub-frames of several Mini cars were falling apart. It was not uncommon to find seatbelt mountings corroded, and numerous cars offered for sale with foot and hand brakes not working. Bob Wright stated that many of these vehicles could have put lives at risk. It is not just drivers about whom we have to think, but passengers and other road users.
Increasing numbers of comprehensively insured vehicles are being rebuilt after impact accidents and are being relicensed having earlier been notified to the DVLC either by insurers or the police as uneconomic to repair. As the noble Lord, Lord Ezra, has stated, between 250,000 and 300,000 vehicles are currently written off by insurance companies in this way and are subsequently notified to the DVLC. Approximately half of these vehicles are repaired and reregistered through the DVLC without any safety inspections by anyone in authority. Consequently, there are a large number of dangerous repaired vehicles, many of which are cannibalised, which are sold to the public without any proper safety examination.
That is the crux of the problem. It is a highly dangerous practice. Ways and means should be found by Government to stamp it out. This new clause makes a start. Second-hand car dealers who rebuild insurance write-offs need to be dealt with. I hope therefore that the Minister is sympathetic to the call that is made in the new clause.
§ Lord Lucas of Chilworth
I am certainly sympathetic to the calls that the noble Lord, Lord Ezra, and the noble Lord, Lord Mason of Barnsley, make. Both of them have totally misdirected their attention. The new clause that is suggested by the noble Lord, Lord Ezra, is a catch-all catch-none clause. It is badly drafted. For example, it states:make provision generally with respect to vehicles which have been damaged".There is then reference to what we in the trade used to call the cut-and-shut job—two parts of a vehicle welded together. The noble Lord, Lord Mason, referred to some motor cars which were for sale and which apparently had been purchased. However, anybody with any reasonable wit, intelligence and eyesight can tell a tyre that has been recut. It does not take very much to make a prosecution on that.
The serious element that I suspect lies behind the amendment is this. A vehicle that is written off is taken away from the then owner and he receives cash in lieu. It then becomes the property of the insurance company. The insurance company make the best they can out of the deal and sell the vehicle. It is there that the fault lies. Perhaps I may remind the noble Lord, Lord Mason, that it very often is not the used car trader who commissions or undertakes the work of serious accident damage repair, it is another totally different body of people. The car then comes on the market perhaps in an auction or elsewhere. It is the insurance company which has 1323 the responsibility to look after its goods and the potential insured person. It is he who is ultimately the loser.
I have dealt again with death and serious injury incidental upon mechanical failure. I do not wish to go over those figures again. It is a serious matter. I urge the Minister to engage in serious conversation with the insurers. It is with them that the real responsibility and remedy lie, not with such a catch-all catch-none amendment which involves three different people, all at great expense, whom someone—the consumer at the end of the day—will have to pay.
§ Viscount Ullswater
Again, the noble Lord, Lord Ezra, appears to be proposing the establishement of a complex, expensive and bureaucratic system that would be of doubtful value in practice. There is no reliable evidence that vehicles repaired after serious damage represent any significant threat to road safety. Therefore, the Government note the noble Lord's proposal, but do not believe that it would make any tangible contribution to road safety.
Consumers can take elementary precautions to protect themselves when considering the purchase of a used motor car. For example, it is highly desirable to have the car examined by an independent expert before committing oneself to buying it. The prospective purchaser would also be well advised to ask to see the vehicle registration document. If the seller is not prepared to agree to either of those requests my advice to the consumer is to consider looking elsewhere.
As regards the "ringing" of vehicles, arrangements have been in place for many years which involve insurance companies, the DVLC and the police. I do not see the need for them to be replaced with statutory requirements. However, the Government take note of the amendment.
§ Lord Ezra
I am grateful to the Minister for his remarks and for the fact that the Government take note of the amendment. I listened with care to the comments of the noble Lord, Lord Lucas, particularly about the insurance companies. I am sure that they would wish to co-operate in any scheme which, at the end of the day, would be as much in their interest as anybody else's. It would keep cars on the road in a safer condition than would otherwise be the case.
§ On Question, amendment agreed to.
§ On Question, Whether Clause 4 shall stand part of the Bill?
§ Lord Lucas of Chilworth
The Committee will agree that we have covered most of the elements contained in the Bill. I suspect that Members will wish to deal with more pressing and urgent business this evening. Therefore, it would not be helpful if I embarked on the reasons why I do not like Clause 4. Indeed, neither do I like Clauses 3, 2 or 1.
§ Clause 4 agreed to.
§ Remaining clauses agreed to.1324
§ In the Title:
Lord Ezra Moved Amendment No. 7:
Leave out lines 4 to 7 and insert ("and to make provision for the recording of mileage information and for damaged and rebuilt vehicles etc.").
§ The noble Lord said: In the light of the amendments previously moved, I beg to move.
§ On Question, amendment agreed to.
§ Title, as amended, agreed to.
§ House resumed, Bill reported with amendments.