The Parliamentary Under-Secretary of State for Transport (Mike Penning)
It is an honour and a privilege and quite humbling to be the Minister responding to this Adjournment debate, which has been secured by my hon. Friend the Member for Enfield North (Nick de Bois), who is a good friend. As a father, I can only imagine the pain and suffering that Ricky’s family have gone through. I know they are here in the Gallery today, and I hope that some of my comments and those of my hon. Friend will help to bring them some comfort. I commend them for their dedication to the campaign they have been working on for some time with my hon. Friend and others on how we can close this loophole. I hope also that they and anyone else watching the debate will understand that Adjournment debates are usually a very personal affair between a Member of Parliament and a Minister. The fact that there are very few Members here in no way reflects how seriously the House or the Government take the issue. Indeed, there are more here than there usually are and that is because of the seriousness of the debate.
For me, this issue came to light many years ago, long before I came to the House, when I was a fireman in Essex. All too often, we would attend an incident and the police would whisper to us, “Another uninsured driver,” or “Another one with no licence.” One thing I was determined about when the Prime Minister gave me the honour of being the roads Minister was that I would look really carefully at the skills that drivers need to ensure their safety and that of others. I also wanted to look carefully at the whole area of car insurance, which we should remember is compulsory. Unlike many other types of insurance, which we can choose to take out, many of the things that are required by legislation when one drives a car are there because the state says that drivers have to have them. I was very conscious that we should look at the driving test, at the MOT, a review of which we announced in the House in the past couple of days, and at insurance. Why is it so expensive? Why have there been so many uninsured drivers out there? Why is fraud so easy at times? Why are people being allowed to do that and injure and kill other people while also pushing up the cost of insurance through their actions?
I commend the previous Administration because they started the process of change by bringing in things like the continuous insurance legislation that says that if someone owns a vehicle for which a statutory off road notification has not been made it must be insured, no matter where it is. It might be in someone’s garage or in their friend’s yard but if the owner has not made a SORN, they must have an intention to drive it. That change started to deal with the 1.2 million vehicles on our roads that are not insured. However, it did not address the issue of those who are fraudulently driving a vehicle or taking out insurance.
One group whom we have not discussed yet are those who commit fraud almost unintentionally, such as parents who say, “It’s so expensive for Johnny or Mary to insure their car; I’ll insure it for them and say that I’m the main driver and that they are an additional driver”, when in fact they are not. That is also fraud and when insurers realise that that is the case they cancel the insurance when someone tries to make a claim. That is a big issue and that boosts up costs.
This issue is fascinating to me, and my hon. Friend the Member for Enfield North is right that it is quite simple to address. The DVLA holds the details of anyone in this country who holds a British driving licence, so it should not be rocket science to say that if an overseas national or anyone without a British driving licence tries to get insurance and road tax, as my hon. Friend has described, to make it more difficult for the authorities to realise that they are driving illegally, surely those two parties—the DVLA and insurers—should be able to talk to each other, whether through the Motor Insurers Bureau or the Association of British Insurers. I asked that question very early on and was told, “It’s quite difficult, Minister. Let’s get the continuous insurance legislation out of the way first.” The Government had committed to doing that and the legislation is now on the statute book, and that has been a great asset in driving uninsured drivers off the road, but it is also a great asset to insurance companies and their profits, as we can imagine.
However, as my hon. Friend suggested, the DVLA had already spent a great deal of money trying to give this porthole facility to the insurers. Some 18 months ago I made a speech to the insurers and said, “We will give you this facility. It is expensive, so we will need some financial help from you as well, because you will get a tangible benefit from this, along with all of us.” There have been some difficulties with those negotiations in recent months, which I think is what my hon. Friend alluded to in his earlier comments. However, I am absolutely determined that this will happen.
Some people—the politically correct, in my view—have suggested that giving that information to insurers would be wrong because it would infringe data protection and the individual’s rights. I think the opposite. If someone is asking to be insured, which is a legal requirement for being on the road, they should supply all the relevant information to the insurer so that it can make a judgment on whether it wishes to insure the individual, because there are plenty of people out there who insurers would not want to insure—my hon. Friend alluded to some of them in his comments. The insurers could then make a judgment on the cost of the premium.
Of course, insurance is all about risk. Around 50% of all insurance claims are personal injury claims, which is something else we are working on. In this area, I was told that we should be okay, but I said, “Let us look at it another way.” If a broker or someone who is looking for insurance online is unwilling to reveal that information to the insurance company, that is fine and they should not tick the relevant box, but I am pretty sure that the insurance company will not insure them, because they have something to hide. I think that we have gone over that issue now; there are still some concerns on how quickly we can get that facility, but I am absolutely determined to do so.
Nick de Bois
I am grateful to the Minister for his thought-out response to the questions I raised. I think that we could also give some financial encouragement to insurance companies. At present, if a vehicle is uninsured, insurers have to run a fund that means that they meet third party liability costs, which is a growing cost to the industry, so I would have thought that they should factor that into their calculations.
Mike Penning
My hon. Friend must have been reading my mind, because I was about to say that the feasibility of this proposal is not just about the necessity of driving people who have done awful and terrible things, such as those done to Ricky, off the road, but about helping us all financially. We all know about the sheer cost of insurance; we have seen the publicity in the newspapers in the past few years. A lot of that is the result of uninsured risk. We need to ensure that insurers—in my negotiations and discussions with them I have reiterated this, because DVLA is my responsibility as Minister—do not go down blind avenues by saying, “This will cost us X, so what benefit will we get from it?” There is obviously a tangible benefit—one of the benefits my hon. Friend alluded to—but there are others, and it is not just in this sort of case that we would benefit.
When I listened to my hon. Friend’s speech I noted very carefully that this was about people reinsuring. There is a big problem with drivers not telling their insurers when they are handed fines and points by the courts. They should tell them immediately, and the insurers should certainly be informed when they do their renewals. I think the insurance companies need to do more than simply ask, “Have your circumstances changed?”
Only the other day, my insurance company texted me to tell me that my insurance was due for renewal. The text told me how much it was—it had gone up, as usual—and that the insurance company will take it out of my bank account at the end of the month and I do not need to do anything. That is very dangerous. It is convenient, both for me and, obviously, for my insurer, but there is no transparency for me, as the person being insured, on whether there have been any changes in my circumstances. I know that the small print on all policies says that we should inform the insurer, but the process should be much more difficult—just for that spare moment—so that we are able to gather the information and know exactly what is going on. It is in many ways just as bad as a parent insuring themselves for their child, but it is certainly not as bad as the case under discussion, because, as my hon. Friend suggests, such behaviour often occurs for a reason.
People who do not have a driving licence take out insurance not because they think, “This is protecting the public or someone else”; they do so to cover up something. My hon. Friend is absolutely right: if you go out on patrol with the police, you see that the modern technology in ANPR cameras is absolutely stunning. The police know whether the driver has an MOT, is insured or is the registered owner. All those things flash up in an instant, and the technology is being rolled out, but it will not pick up whether the driver has a licence, even though it will bring up whether they are insured.
There is another little problem, which my hon. Friend touched on, and it is to do with the new legislation on continuous insurance, because, as he quite rightly asked, if a driver does not have a licence why would they insure the vehicle? The answer is that it may be off the road, and although the driver might not want to SORN it, they might want to insure it so that if, for instance, their garage caught light and was not covered by their house insurance, the vehicle, which might be a classic or something like that, would be protected. So we must not put into the box marked “criminality” people who do not deserve to be, because there may be a genuine reason for their behaviour. But that is a small element and no excuse not to progress.
As we move forward, as we use the technology that we have, as insurers see how they can gain the financial benefits and as consumers see the benefits, we as a Government have to enforce the legislation, which is on the statute book for a reason. It is on the statute book so that everybody knows what will happen if they are hit by someone else or injured by a vehicle.
There is, as my hon. Friend said, a substantial cost from claims due to uninsured third parties, and it is something that we are going to drive down with the current legislation, but I hope that literally in the next few months we will come to an agreement with the insurers and their representative bodies. There is the will to do so, and where there is a will there is a way. It is something that I am determined to drive forward not only for Ricky’s parents, but for all others on the road, whether the issue is a financial one or involves those who have lost their loved ones, too.
Question put and agreed to.