FEAR that the first registration fee would become another means of raising revenue for the DVLA is becoming a reality said Sue Robinson, director of the RMI National Franchised Dealers Association.

She was commenting on the increased registration and driving licence fees coming into force next month.

The Driver and Vehicle Licensing Agency (DVLA) has confirmed that it will raise the fees from May 1, despite opposition from the trade, and the lobbying of Transport Minister Stephen Ladyman.

Robinson continued: "The outcome is extremely disappointing given the enormous amount of time spent in trying to put across the point of view of motor retailers, and bearing in mind that the fee was originally introduced to amortise the costs of introducing the online registration process for franchised dealers."

The fee for a first driving licence will be increased from £38 to £45 while the fee for first vehicle registration will increase from £38 to £50.

Robinson said: "The new charging structure is being introduced to support the modernisation of DVLA and its licensing systems. Yet at the same time enormous amounts of income continue to be generated by the sale of cherished numbers, the majority of which goes directly to the Treasury.

"We estimate that the fee rises could add some £6m to the costs of the UK's new car dealer network."

The DVLA is already discussing funding options beyond the next two years and has confirmed that there will be further increases in first vehicle registration fee in 2008 and 2009.