Car registration changes postponed

The Government has postponed a decision on reforming the annual August change to the car registration, forcing the industry to abandon its plan for a twice-yearly number-plate change starting from next March. Chris Godsmark, Business Correspondent, reports.
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The car industry had spent much of this year trying to persuade the Government to back its plan for a bi-annual registration change. The Society of Motor Manufacturers and Traders (SMMT) had expected to hear the decision from the new Department of Transport and the Environment in July and had been repeatedly told that an announcement was "imminent."

But it emerged yesterday that the car dealers' association, the Retail Motor Industry Federation (RMI), was told a few days ago by ministers that the switch to a twice-yearly plate-change in March was no longer possible.

At a meeting with Christopher Macgowan, the RMI's chief executive, Baroness Hayman, the roads minister, said she was "embarrassed" that the Government had still not made a decision. The minister added that March 1998 was now "off the agenda".

Mr Macgowan said: "This is a colossal setback. We are less than happy with the performance of government who claim to be close to business. If this is an example of being close to business I shudder for the future." The SMMT is understood to have been given similar news in a telephone call from the department earlier this week. An official is thought to have confirmed that the industry's solution was "not on".

The SMMT declined to comment on the conversation yesterday, but a spokesman said the car industry was "very unhappy" at the situation. "We do not understand the delay in announcing the change when the whole industry is united. We would say: please minister, tell us what the delay is for."

The previous government issued a consultation paper on changing the system last December and the RMI and SMMT responded in March with an agreed industry plan. Originally they had recommended four changes a year to number plates, but re-grouped around the bi-annual change after concerns that the vehicle licensing agency, the DVLA, would not be able to cope. The existing run of letters would continue twice a year until the end of the alphabet.

Coping with the August car bonanza costs manufacturers millions of pounds each year, to build up stocks of 500,000 right-hand drive cars. Though a twice-yearly registration change would have cost the DVLA several hundred thousand pounds, the industry had recently offered to fund the additional cost. But car makers needed a decision this month to arrange their production schedules to meet a March deadline.

Government sources yesterday blamed the delay on technical issues at the DVLA, but indicated that a reform of the system could happen later in 1998.