"By 2004, the DVLA aims to have merged driver, vehicle and insurance
records into a "single or virtually single" database from which the
number-plate microchips will be programmed".

http://www.geocities.com/lclane2/microchips.html

Anyone have any updates on how this plan is getting along?

Anything relating to a Government department and an IT initiative usually
ends up in millions of taxpayers money being wasted over several years and
then the whole lot being scrapped as it suddenly becomes unworkable and too
expensive. There is then another 2 years of Public Accounts Committee
inquiry - with more money wasted on accountants and solicitors trying to
work out what went wrong, by which time, nobody cares because the
governments already got it's eye on another Big White Elephant.