In 1998 the Labour government invented a new tax to hit drivers with. They claimed that to cover 'administration costs throughout the life of a vehicle' a £25 fee would have to be paid on first registration.
The government increased the fee to £38 from 1st January 2004. No justification was put forward for the 52% increase.
The Society of Motor Manufacturers and Traders described the increase as a 'rip-off', and suggested that the increase was to cover the estimated 1.75 million vehicles that remain unlicensed each year. In other words, law abiding drivers are being forced to pay the fee for unlawful drivers.
The Modernising Vehicle Registration Implementation Board — a group which represents consumers, the police, the motor industry and government - unanimously rejected any proposal to increase the current £25 fee.
Christopher Macgowan, SMMT chief executive said:
"There is simply no justification to increase this fee by up to 52 per cent for buyers of new cars and commercial vehicles. The truth is that due to fraud and evasion some 1.75 million cars fail to pay their duty each year and it appears that this is a back-door way of recovering the money.
In addition to the added cost to consumers, there will also be an extra burden on manufacturers and dealers who will have to change advertising and marketing materials to reflect this surprise new tax. At a time when new car prices have fallen by up to 20% and the car market is under considerable pressure, it is outrageous that a tax hike of this kind has been approved."

The ABD wants to see this 'fee' scrapped completed.
In truth this 'fee' is just another stealth tax on drivers.

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Demanding proper roads in exchange for paying one seventh of all taxes.