Home Secretary Jack Straw has announced measures to prevent ringing and car insurance fraud. Ringing is when the identity of a written-off legitimate vehicle is transferred to a stolen vehicle.

The Vehicles (Crime) Bill hopes to put the brakes on a growing problem which sees an estimated 30,000 vehicles a year being ringed.

Under the terms of the bill, around 3,000 businesses in the motor salvage industry would have to register with local authorities and keep records. The police would be given the right of entry without a warrant to registered premises.

The bill also supports regulating the supply of number plates. At present there is no control over the supply of plates and no identity or entitlement checks before a set of plates is supplied.

Any vehicle written-off would have to have an identity check before the Driver and Vehicle Licensing Agency (DVLA) issues a registration document to a new owner.

The bill would also extend the time limit from six months to three years for bringing prosecutions for unauthorised taking of motor vehicles. This is to take advantage of advances in DNA testing. In addition, police would have access to a motor insurance industry database, allowing them to identify vehicles on the road that are uninsured.

The Motor Salvage Regulation Task Group estimates that up to 78,000 vehicles every year are likely to have been used for ringing or broken up for parts and that up to 12,000 vehicles are used for insurance fraud. By Straw's sums, the new measures hope to halve the current crime rate.

The average cost of a single stolen motor vehicle is about £4,700. This means that the costs for vehicles stolen for their parts and ringing would be about £367m every year. Add to this the cost of 12,000 insurance fraud vehicles that are not recovered and the total would be about £400m.