Vehicle Registration Marks Bill

My Lords, I, too, ought to make an admission: I am going to join the committee of non-experts. Like the noble Baroness, Lady Hanham, I always struggle to remember my number. That is no great surprise to anybody in my household, since the few numbers that I can remember are usually my PIN, mobile phone and bank numbers—the number plate is one too many. I pay tribute to the noble Earl, Lord Attlee, for his introduction. As the noble Baroness, Lady Hanham, said, it was crystal clear. Although the noble Earl was suffering with his throat—and then not so crystal clear—he gainfully proceeded and did a splendid job, for which I thank him, because this is a useful piece of legislation. I am not at all surprised that, as with everything discussed in your Lordships’ House, there are experts here on vehicle registration marks. There is always an expert in your Lordships’ House and it is interesting to listen to what they have to say, even on perhaps obscure issues. As the noble Earl, Lord Attlee, said, motor vehicle registration began in the UK in 1903, with the introduction of the Motor Car Act. This was the first legislation to require the registration of motor vehicles and it included the requirement to display vehicle registration plates—therefore, we have had over 100 years of them. On behalf of the Secretary of State for Transport, the DVLA registers vehicles that are kept or used on the public road. This is in accordance with the requirements of the Vehicle Excise and Registration Act 1994—or VERA, as it is affectionately known—which has been amended by the Road Vehicles (Registration and Licensing) Regulations 2002. As we have identified, the registration and licensing process plays an important part in identifying vehicles and their keepers for road safety matters, and, importantly, in revenue collection. These main functions remain the principles for the vehicle register, which is held at the DVLA. The registered keeper of the vehicle is the person responsible for keeping, using and licensing it. This may not necessarily be the legal owner of the vehicle. Legal ownership of a vehicle is a civil matter, usually established by a bill of sale or other document of title. There is a statutory obligation on the vehicle’s keeper to notify the DVLA when disposing of it. When a vehicle is first registered and licensed, it is allocated with a vehicle registration mark. Vehicle registration is performed by the DVLA, their local offices or motor dealers, with the appropriate computerised links. Motor dealers with this facility subsequently send the first licensing and registration details to the DVLA, where the information is held on the central computer record. The DVLA holds in excess of 33 million licensed vehicle records. Vehicle registration marks are not items of property in their own right, so it is not possible to acquire legal title to them. Registration marks are assigned to and may be withdrawn from vehicles—rather than keepers—by the Secretary of State, as part of the registration and licensing process required by law. Furthermore, the DVLA, on behalf of the Secretary of State, can withhold registration marks if the mark is likely to cause offence or embarrassment—from having my name on it, for example—when displayed on a vehicle. Marks can be withheld for a number of reasons, such as on the grounds of political, racial and religious sensitivities or simply because they are regarded as in poor taste. When a registration mark is assigned to a vehicle, it normally remains with that vehicle until it is broken up, destroyed or sent permanently abroad. Since the early days of the registration system, the idea of having a distinctive or personalised registration mark for a vehicle has, as we know, appealed to many individuals. To meet the widespread interest in personalised and cherished registration marks, the DVLA introduced special facilities to allow vehicle keepers to acquire and retain the use of particular vehicle registration marks. Once a mark is assigned to a vehicle, further movement of that registration mark is subject to the requirements of the cherished transfer and retention schemes. As the noble Earl, Lord Attlee, observed, a market in attractive marks has in recent years begun togain momentum, in particular since the mid-1970s.In response to growing demand for attractive registration marks, the DVLA began in 1989 making available registration marks that had not previously been released for use. Up to this point, the only registration marks available to trade or transfer were those already in use on vehicles. There is still a steady trade in these numbers, which can range in value, as the noble Earl commented, from a few hundred to many thousands of pounds. The DVLA’s sale of marks scheme made it possible for the first time for an individual to buy the right to have an unissued registration mark assigned to their vehicle. These marks are seen as particularly desirable and are often purchased to celebrate a particular event such as a birthday, a wedding or an anniversary. The marks appeal to all ages and incomes. They can range in price from £250 to, as the noble Earl commented, more than £300,000. As a matter of interest, my own local authority owns a very famous number plate CD1, which I am told is worth somewhere in the region of £100,000. It must be one of the most sought-after municipal number plates in the known world. When the adjacent borough, Hove, existed, it had the number plate H20, which was also quite a sought-after plate. In 2005, income from the sale of marks passed the £1 billion mark for the first time since the scheme began in 1989, and I am informed that in excess of2.4 million marks have been purchased since that date. When the DVLA entered the cherished numbers market in that year, there were perhaps a dozen private businesses that traded in used registration marks. The market has since grown and there are today more than 150 registration mark traders. Many traders deal in marks that are already in use on vehicles, as well as in unissued marks, which are available only from the DVLA. The DVLA’s personalised registrations service operates in an increasingly crowded and competitive market. It holds a unique position in the GB personal registrations market. It is a source of new stock, which makes it a supplier to the market, industry and private buyers alike. During the last financial year, the net value from the sale of registration marks was in excess of £76 million, equating to just over 220,000 registration marks being sold. The next two years will see redevelopment of the sale-of-marks websites to provide an online payment and purchasing facility. This has been prompted by rapid changes in technology and a greater understanding of customer needs and demands. Customers currently research the website on a 24/7 basis for their desired mark, but then have to make their purchase during office hours. The new enhancements will allow customers to purchase marks online, which will be an attractive facility to those customers who frequently buy registration marks. The development of further online features will allow customers to perform other transactions, providing a better customer experience overall. When buying the rights to display a registration mark, the purchaser does not acquire legal title to it. They acquire only the right to display the registration mark on an eligible vehicle. Services provided by the DVLA for the acquisition, assignment and transfer of registration marks must be operated in a way that does not compromise the fundamental purpose of vehicle registration. Strict requirements are therefore in place for these facilities. Attractive vehicle registration marks can fetch large sums of money. In the past, there have been several cases of organised criminal activity aimed at acquiring valuable marks through unlawful means. The retention facility in its current format was introduced in 1992. As the noble Earl explained, the purpose of the retention facility is to allow a registration mark to be retained separately from the vehicle. Under current legislation, a right of retention must subsist in the name of the registered keeper only and it must remain so until the mark concerned is either assigned to another vehicle registered in his name or to that of a nominee. This requires the previous holder of the mark to remain involved in the process until a mark has been assigned to a vehicle. If they were to sell the entitlement to the mark, the mark might not be assigned to a vehicle for some time, possibly years. This can often be the case if the mark enters the cherished number-plate trade. Currently, the grantee must be contacted each time the entitlement needs to be extended or if an additional change of nominee is required. Not only does this create an unnecessary administrative burden for those trading in registration marks, it can prevent quick conclusion of a transaction. Also, the purchaser of the mark referred to as the nominee must rely on the integrity of the grantee to assign the mark as agreed, thus creating the potential for fraud and financial loss should the grantee go back on the agreement with the nominee. During Second Reading in the other place, assurances were sought that the greater flexibility that the Bill seeks to achieve would not create loopholes. Indeed, I can confirm that the Bill will not create any avenues for abuse in relation to retention schemes.It will make it easier for the customer without compromising current safeguards. Furthermore, it has the potential to reduce fraudulent activity in, for example, situations where a grantee may not honour an agreement by refusing to consent to the assignment of a mark after receiving payment. I can also confirm that the Association of Chief Police Officers—ACPO—has been consulted on the change and fully supports the amendment that the Bill will provide. The Bill proposes to change the way in which the DVLA processes the retention of a vehicle registration mark. It will amend the Vehicle Excise and Registration Act 1994 by simplifying the buying and selling or transferring of registration marks to both cherished number dealers and individuals. The purpose of the Bill is to allow a registered keeper to dispose of his entitlement to a vehicle registration mark when it is first put on retention, therefore easing administrative burdens. Departmental system development costs are estimated at being no more than £100,000. The department is committed to improving customer service. Because of the desire to ease regulatory burdens, these costs will be absorbed by the DVLA. Consequently, the introduction of the Bill will not have any financial consequences for businesses or individuals. I am advised that the Bill has no equality or human rights implications. The popularity of the sale of registration marks continues to grow. In the first year of the sales scheme’s inception the DVLA sold just 658 registration marks; now over 200,000 marks are sold on an annual basis. In addition to that, during the last financial year, the DVLA handled nearly half a million applications to transfer and retain cherished registration marks. We think that that shows the level of support for this active market in cherished vehicle registration marks—something which the Bill will do much to underpin. A number of noble Lords used the opportunity to make points about vehicle registration and the opportunity for criminality. Notably, the noble Lord, Lord Bradshaw, called for an assurance to deal with what he described as the absolute chaos of the current scheme. I do not see the scheme as being in absolute chaos. I recognise, as does the noble Lord, that there are occasionally some difficulties. But we are well aware of that and believe that although there will continue to be difficulties—there is always scope for abuse in these matters—we continue to narrow down the scope and opportunity. The Bill achieves that in some small measure. The noble Lord, Lord Bradshaw, is concerned about registration. To that end the Driver and Vehicle Licensing Agency administers a mandatory register of all number-plate suppliers in England and Wales— registered suppliers who must make a record of all number plates sold. It makes checks to establish the identity of the customer and his entitlement to the registration number requested. This is usually by requesting a photocard driving licence and a vehicle registration document. Failure to comply can result in a fine or suspension from the register, and it is illegal to trade in number plates when unregistered. So there is legislation that deals with that problem. That register will be extended to Scotland and Northern Ireland during the autumn of this year. The DVLA has recently obtained powers to enforce the scheme. In addition, both the police and trading standards officers are embarking on a programme of inspections and proceedings against those suppliers who breach the law, so we are taking action on the issue that the noble Lord is most concerned about. The noble Viscount, Lord Simon, asked about stall holders selling misrepresented plates. The Road Safety Act 2006 made it an offence to sell misrepresented number plates. This offence is to be commenced later this year following the making of regulations to introduce an exemption to the offence for plates that show wording such as ““Not for road use”” printed on their face. That exemption would allow the legitimate sale of show plates. There will shortly be a public consultation on the proposed exemption. We are conscious of the problem to which the noble Viscount referred. The noble Lord, Lord Brougham and Vaux, made a number of points about the Bill. He is concerned about potential abuses. He will recognise that the Bill and the amendment that it brings forward will make it easier to trade in vehicle registration numbers, but it will not necessarily impact on the market for counterfeit plates. The measures in place to cater for the register of number plates arise out of separate provisions in the Vehicles (Crime) Act 2001. Perhaps it would help noble Lords if I explained a bit of background to that. I am sure that the House will be interested to learn that a thorough internal review has recently been carried out by the DVLA into the administration of the register of number-plate suppliers. A number of other initiatives are under consideration that will improve the way in which the existing scheme operates. These will include: clarification on what constitutes a show plate, closing the loophole whereby illegal number plates are supplied for use on vehicles kept off-road but subsequently fixed to vehicles used on a public highway; and the introduction of annual registration, which will ensure that the register is kept up to date—a very important enforcement. It is proposed that reminders will be sent to registered suppliers on an annual basis, which will support accuracy and add a further dimension to enforcement. All those things will be subject to full public consultation and a regulatory impact assessment. The noble Lord, Lord Brougham and Vaux, made some reference to the Swedish model. Our view is that any scheme along those lines would have very serious implications for the many small businesses involved in the sale of number plates. As I have explained, there are many of those and it is quite a legitimate business. While the numbers will increase when Scotland and Northern Ireland are included in the scheme later this year, as of 14 April there were some 33,165 number-plate suppliers and some 39,274 outlets registered in England and Wales. To adopt the Swedish model would result in a loss of trade and, perhaps, some widespread redundancies. We have to be very careful how we approach this. There is a great deal of support for the current scheme, notably from Trading Standards and ACPO, which regard it as a very effective deterrent against criminal activity. I hope that I have responded to the points of concern. I know that I will not have fully satisfied everyone but on the narrow focus I urge your Lordships' House to support the Bill, as it is very valuable and will go some way to making the trade easier to understand and speed up transactions.