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BMF welcomes apology over motorcycle tax evasion

The British Motorcyclists Federation has welcomed the apology from the Chairman House of the House of Commons Public Accounts Committee Edward Leigh MP, over adverse comments he made regarding the purported high level of Vehicle Excise Duty evasion erroneously reported to his committee by the Department for Transport (DfT).

Once Mr Leigh had been informed of the doubtful accuracy of the DfT figures supplied to his committee and had had this confirmed by the DfT, he wrote to them (see copy of letter below) for an explanation of the inaccuracies and also issued a statement apologising to the many thousands of law abiding motorcyclists who had been affected by the misinformation. In the apology he said that:

"The Public Accounts Committee findings (published in January 2008) on evasion of road tax in 2006-07 were based on national statistics provided by the Department for Tra nsport. The Department did not, however, give us all of the information we needed. It did not make the Committee aware at our hearing last year that a new, more accurate methodology was already being used to produce estimates of rates of road tax evasion for the year 2007-08, nor that it could have implications for the accuracy of the previous year's estimates upon which the Committee had to rely.

In writing to Mr Leigh, the BMF's Government Relations Executive Chris Hodder said: " The British Motorcyclists Federation welcomes your apology over VED evasion figures. We have made persistent challenges to the DfT over their obviously inaccurate VED evasion figures for motorcycles and we are pleased that these complaints have now been taken seriously. We also welcome your assertion that the DfT effectively mislead the Public Accounts Committee and hope you will indeed get to the bottom of this issue."

This apology, says the BMF, vindicat es its complaint that the original figures were wildly inaccurate. As now known, the DfT now admits that 'misread registration marks tended to inflate estimates of evasion and that 'detailed checking has removed this inflationary effect from the 2007 estimates.' The latest figures now show evasion rates for motorcycles at 6.5%, a massive reduction on the much-publicised 38% contained in the PAC's report.



Edward Leigh letter to DfT :

Department for Transport
Great Minster House
76-78 Marsham Street
Vehicle Excise Duty Evasion: 2007 Roadside Survey Results

As you may know the publication by your Department on 14 February 2008 of the latest estimates of Vehicle Excise Duty evasion has caused the Committee considerable concern and, frankly, some embarrassment.

The Department's new evasion figures, particularly for motorcyclists, show a dramatic reduction on the previous year's national statistics on VED evasion on which the Committee based its report as recently as January. This has naturally led to media comment on the value of the Committee's examination and the quality of its report.

It is clear that your Department must have had concerns about the methodology used for the 2006 evasion estimate and that officials were looking at alternative methodologies long before the Committee's hearing. But you failed to tell the Committee about that either at the hearing or subsequently when you had the results from the new method. You therefore allowed the Committee to draw up a report on the basis of information and evidence which you knew had been called into question. You might not have felt able to give us the specific new estimate for evasion until it was cleared for publication, but that is no justification for not flagging up the underlying problem.

I recognise that the Treasury Minute response to the Committee's report will presumably refer to the new evasion statistics, and to the implications for past estimates. But I would appreciate an early explanation of the following:

· Why the Department did not advise the Committee at the earliest possible date that it had reservations about the previous year's statistics;
· Why the Department did not inform the Committee at the hearing in October 2007 that it was working on enhanced data collection and estimating methodologies for the June 2007 roadside survey;
· Why the Department took so long to publish the results of the 2007 roadside survey; and
· Why the Department did not immediately alert the Committee once they had very different figures from those which had been discussed with the Committee at the hearing.

As Pa rliamentary scrutiny has not been well served by the way the Department has handled this matter, the Committee may decide to take further evidence.
I am copying this letter to Robert Devereux and to the Comptroller and Auditor General.

Chairman of the Committee

Issued by Jeff Stone: t: 0121 709 1040 m: 07802 763094 e: jeff.stone@bmf.co.uk
Details on this and other BMF activities can also be found on our web site: http://www.bmf.co.uk

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