Vehicle Excise Duty (Hansard, 20 July 1994)

§ Mr. Key

The vehicle record maintained by the Driver and Vehicle Licensing Agency plays a key role in the fight against crime. It identifies vehicle excise duty—VED—evaders and thus helps in the fight against vehicle and traffic offences but is also an important source of data for the police in tackling serious crimes. Defects in the record are, however, hindering these efforts, and give rise to significant shortfalls in VED revenue. I intend, therefore, to introduce changes that will tackle the theft of vehicles in particular as well as crime more generally. These changes will be directed against crime and against dishonest car owners and not law-abiding motorists.

Evasion of vehicle excise duty amounts to £145 million a year. It costs the taxpayer a further £25 million in enforcement costs in my own Department, and in addition there are costs to the police and the courts in tracking down and prosecuting evaders. We continue to make improvements in the numbers of evaders brought to book but although the level of evasion seems to have been contained, we have been unable actually to reduce it.

A major factor that frustrates our endeavours is that vehicles without a tax disc in the windscreen cannot be 253W tracked to their owners if they have not notified DVLA that they have acquired the vehicle. This is because, under the present procedures, a person who parts with a car is obliged to notify DVLA—but many do not; and the person who acquires it is also obliged to notify DVLA that he is now the keeper, and although most do, they often wait until the tax expires, which may be up to a year later.

I am therefore proposing some fundamental changes to the present registration procedures to require those who part with a vehicle to notify DVLA, at the same time and on the same form, as those who acquire it. This would mean that the vehicle record could be brought up to date immediately. It would also allow us to replace existing vehicle registration documents with log books containing a number of improvements, in particular the inclusion of features such as a list of previous keepers and a record of mileage which I know motorists are keen to have, along with new security features.

While a more accurate vehicle record would have many benefits, it could not eliminate VED evasion completely. This is because there are other ways in which VED can be evaded which are not picked up in the records. Because the present system allows for breaks in licensing when the keeper claims the vehicle is not in use, evasion of VED for short periods is difficult to detect. I therefore propose to introduce a system of continuous licensing based on possession, rather than use, for all cars and motorcycles.

Naturally there are many details to be settled and the needs and wishes of those that will be affected must be taken into account. I will be issuing a consultation document shortly.