The new fee structure will see drivers who apply for their first licence paying less, with a single £38 fee replacing the £41 paid under the existing two-stage system. In addition, the £6 currently paid by those over 70 to renew their driving licences every three years is to be scrapped under the new scheme. To "offset" the savings to drivers, the fee charged to register a new vehicle is being raised from £25 to £38. The SMMT has responded that the proposed increase in costs to consumers seemed to be covering the estimated 1.75 million vehicles that remain unlicensed each year, and that when the issue was raised at the Modernising Vehicle Registration Implementation Board - a group which represents consumers, the police, the motor industry and government - there was a unanimous rejection of any proposal to increase the current £25 fee.
Christopher Macgowan, SMMT chief executive, said, "At a time when new car prices have fallen by up to 20 per cent and the car market is under considerable pressure, it is outrageous that a tax hike of this kind has been approved."
Matthew Carrington, RMI chief executive, said: "The RMI was not alone in opposing this increase, and it would appear that the views of a key part of the industry have been largely ignored." He added, "We reject the DVLA's statement that 'by bringing the fee paid to register a new vehicle in line with the fee paid for a driver's first driving licence, the DVLA has rectified an imbalance'. There is no direct correlation in our view between driving licence and vehicle registration fees. We accept that as part of this package there will be licence savings for some drivers - particularly the over 70s - but over a life-time new car purchasers who change their vehicles regularly are likely to be significantly out of pocket.'