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RMI Government Update: 17.04.2014Back

RMI2Welcometo the RMI’s weekly political bulletin on issues and legislation affecting the motor industry.

This week has marked the beginning of recess for Westminster, with both the House of Commons and the House of Lords closing for the Easter period.

As such, in this week’s government update, we will provide you with a rundown of the events that have taken place throughout last week, as well as this week.

Some notable ministerial changes were announced last week (more details are listed below) with many of the RMI associations already making contact with these ministers; congratulating them on their new positions and updating them with our current work.

Whilst announcements from Westminster have been relatively quiet, the European Parliament has been busy passing draft legislation through their chamber. A clear theme of ‘continuity and ease’ surrounds the proposals with free movement at the heart. We have provided you with a summary of two of these key proposals below.

The RMI has also submitted two consultation responses over the past two weeks, with the NFDA responding to the FCA’s study in Insurance Add-Ons and the PRA submitting a response to the Home Office in relation to the proposed localised set fees under the Licensing Act 2003. You will be able to find both consultation responses on the RMI website as of next week.

If you have any questions or queries relating to any of the features in this week’s edition, please contact Katy Recina via

For more policy updates follow @RMICaterina



Three New Ministerial Appointments

The Queen has been pleased to approve the following ministerial appointments:

  • SajidJavid MP to be Secretary of State for Culture, Media and Sport; and Minister for Equalities
  • Nicky Morgan MP to be Financial Secretary to the Treasury; and Minister for Women (attending Cabinet). The Queen has also been pleased to approve the appointment of Nicky Morgan to Her Majesty’s Most Honourable Privy Council
  • Andrea Leadsom MP to be Economic Secretary to the Treasury


Government seeks views on administration of business rates system

The government has announced the release of a discussion paper looking for comments and reviews of the ‘responsiveness and effectiveness’ of the current business rates system.

The review will be taking an in depth look into how rates are administered by the Valuation Office Agency and local authorities.

The review, which was initially announced in the 2013 Autumn Statement, will seek views and recommendations on five key areas of the system. These are as follows:

  • Property valuation
  • Property valuation timescale
  • How business rates bills are set
  • Collecting business rates
  • Use of ratepayers information

Exchequer Secretary to the Treasury, David Gauke, said:

“The government’s long term economic plan is to support business and enterprise and we have taken a number of steps to help them with their business rates. This includes over £1 billion of business rates support which took effect on Sunday.

“Through this review, we want to look at options for longer-term reforms that will make the system fairer, more efficient and more responsive to economic circumstances, while making sure business rates remain a stable and sustainable tax which funds essential local services.”

Each of the RMI associations, with help from the policy department, will be looking into the discussion paper and responding accordingly on behalf of those whose members it will effect.


Treasury announce £11m investment in low carbon vehicle innovation

Chief Secretary to the Treasury, Danny Alexander MP, announced a £11m investment had been awarded by the Technology Strategy Board last Thursday (10 April), at a Sustainability Hub event, which the RMI policy team attended.

Alexander stated that five different projects would each receive part of the investment. Speaking on behalf of the Technology Strategy Board, Chief Executive Iain Gray commented:

“We want to ensure that the UK is a global leader in low carbon transport technology, by bringing businesses together to work on ground-breaking projects to reduce emissions.

“These developments will enable us to embed innovation further into the UK automotive sector, giving us a competitive edge in this industry.”

Review of theory test fees

The Driver and Vehicle Standards Agency have launched a public consultation on: Changes to theory test fees.

The paper, published on 10 April, will consult on the reduction of fees for theory tests which may result in a 25% reduction.

The consultation forms part of a government commitment to lower the cost of motoring and will affect not only cars, but motorcycle, bus and lorry tests.

The proposed fees are as follows:

Theory test type Current price Price – 2014 Price – 2015
£31 £25 £23


Government publish report analysing the dynamic effects of fuel duty reductions

On Monday (14 April), the published their report on applying HMRC’s peer reviewed Computable General Equilibrium (CGE) model to the fuel duty reductions which have been announced since 2010.

The report has found that the basic design of the HMRC model, in terms of the UK economy,‘meets at large the key requirements for state-of-the-art applied tax policy analysis’.

In analysis of the findings, it is suggested that the tax reductions will increase GDP by between 0.3% and 0.5% in the long term.

The modelling also shows, increased profits, wages and consumption, all ‘add to high tax revenues. As a result, the cost of the policy falls by between 37 and 56 per cent in the long-term’.

The report does state, that the CGE model does surround itself with some uncertainty. This is namely in regards to the parameter included, for which sensitivity analysis is carried. Therefore, it is acknowledged that some economic uncertainty, which is not accounted for by the model, could impact upon the results of short-term analysis.

However, the peers do state, that for long-term economic effects, the CGE model is highly efficient, stating that this is where its strengths lie and it should be used for long-term analysis, rather than short.



MEPs refer new rules on re-registering cars back to committee

It was announced on Wednesday (16 April), that draft rules designed to simplify the process of re-registering cars and motorbikes within the EU had been referred back to the Internal Market Committee.

The draft legislation will look to ease the process of registration of vehicles for owners when moving to a new EU country. However, progress was delayed when it was confirmed that bill had been referred back to the relevant committee as the Council of Ministers were ‘not yet ready to close a deal on them’.

The legislation will look to simplify the re-registration process by ensuring that there is a ‘mutual recognition of roadworthiness tests’ and provide a system for linking the national databases which hold the names of vehicle holders.


The re-registration of a car in another member state of the EU is one of the ’20 single market concerns’ to be listed by citizens. The European Commission has estimated that simplifying the process could save business and citizens near to €1.5 billion a year.

EU workers will have portable pension rights

In an announcement made by the European Parliament on Tuesday (15 April), it was confirmed that ‘EU workers moving to a different EU country will be able to take their full pension rights with them’.

The draft law was passed by the European Parliament and will now await formal approval by the Council of Ministers.

In a comment made by rapporteur RiaOomen-Ruiten (EEP, NL), the text has been described as ‘a genuine improvement for many workers’ and is seen by the MEPs as a “necessity, now that Europeans can expect to live much longer”.

The European Commission have also spoken out in regards to the parliamentary vote and have welcomes the adoption by the European Parliament. The EU Commissioner of Employment, Social Affairs and Inclusion, LászlóAndor, said:

Workers need to rely more and more on supplementary pensions across Europe. It is vital to ensure that those who move across borders are not penalised with regard to their supplementary pension rights. This Directive complements the protection of state pension rights by ensuring that occupational pension rights are guaranteed after a limited period and that they are preserved when people move to another Member State.

The European Commission have stated that the Directive will improve the protection of mobile workers’ supplementary pension rights (i.e. rights under occupational pension schemes – so-called ‘second-pillar’ pension schemes which are linked to an employment relationship) in three ways:

  • Acquisition: pension rights should be vested (guaranteed) after three years of employment at the latest. When a minimum age for vesting is stipulated, it must not be higher than 21 years.
  • Preservation: the rights of workers who leave an employer-run pension scheme before retirement (“deferred beneficiaries”) must be preserved and treated fairly compared to the rights of those workers who remain in the scheme, for example as regards indexation.
  • Information: workers have the right to know how potential mobility would affect their pension rights, and those who have left the scheme (deferred beneficiaries) must be informed about the value of their rights.

Basic bank accounts for all

On Tuesday (15 April), the European Parliament passed a new law which will provide that any legal EU resident will have the right to open a basic payment account, without chance of this being denied on the basis of nationality or residency.

The legislation will also ensure that fees and rules for all payment accounts are transparent and comparable. This will make it easier for individuals to change to another payment account.

The Houses of Parliament are now in recess. The House of Commons will sit again on 28 April and the House of Lords 6 May. The next recesses are not scheduled to take place until May; when the House of Commons will break for recess on 1 May until 6 May and the House of Lords closing on 21 May and resuming sittings from the 4 May.



Monday 28 April

Oral Questions: Home Office, including Topical Questions (HC)

Tuesday 29 April

Oral Questions: Treasury, including Topical Questions (HC)

General Committee: Third Delegated Legislation Committee – Draft Licensing Act 2003 Order 2014 (HC)

General Committee: Finance (No.2) Bill Committee – To consider Bill (HC)

Wednesday 30 April

Oral Questions: Cabinet Office, including Topical Questions (HC)

PMQ’s: Prime Minister’s Question Time starting from 12:00 (HC)

General Committee: European Committee B (HC)

Thursday 1 May

Oral Questions: Culture, Media and Sport, including Topical Questions for Women and Equalities (HC)

Statement: Business Statement from leader of the House (HC)

General Committee: Finance (No.2) Bill Committee – To consider Bill (HC)

Friday 2 May House of Commons is in recess.

Posted by Sue Robinson on 17/04/2014