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The Parliamentary Under-Secretary of State for Transport (Trudy Harrison)
It is a privilege to serve under your chairmanship for the first time, Ms Bardell, or indeed under any Chair in Westminster Hall as a Minister. I am grateful to my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) for securing this debate on the effects of recent court judgments on motor insurance. I welcome the opportunity to provide an update and set out the Government’s position on this matter.
We have always been clear since the 2014 European Court of Justice’s ruling in the Vnuk case that we do not agree with it. That decision directed the unnecessary extension of the provisions requiring motor insurance to private land, as well as to a much greater range of vehicles. The excessive liabilities that it would place on the insurance industry and the potential increases to motor insurance are simply unacceptable. To be clear, if we had implemented Vnuk, which we are not going to do, these liabilities and potential increases are huge; they are not trivial. Government analysis suggests that Vnuk could have cost industry some £2 billion per year, and that would most likely have been passed on to consumers in increased insurance premiums.
Focusing on motorcar policyholders, that could have resulted in an increase in individual insurance premiums of around £50 for 25 million consumers. As my hon. Friend the Member for Bexhill and Battle (Huw Merriman) referenced, if Vnuk had been implemented, it would have had a catastrophic effect on the motorsport industry, and indeed all motorists. Vehicles would likely have been required to purchase motor insurance to compensate injury caused to other drivers, stewards and spectators. Motorsport in the UK is safe and highly regulated. Employer’s liability and public liability already provide a high level of protection, so adding a motor insurance requirement would have brought little benefit at a very high cost—some £458 million per year—had Vnuk been implemented.
Stakeholders have consistently informed us that it would have been prohibitively expensive for most of the sector, effectively making the motorsports industry unviable. The sector turns over almost £3 billion annually, generating full-time employment for around 38,000 people and part-time work for a further 100,000. That is why we announced that we would remove the effects of Vnuk from GB law in February, and delivering on that includes removing the associated financial liability imposed on the Motor Insurers’ Bureau via the Courts’ decisions in the Lewis case.
This commitment is a priority for the Government. Its removal is part of a new and prosperous future for the UK outside of the EU—a future where we can deregulate and set our own rules and regulations. At this point, I must commend the tenacity of my hon. Friend the Member for Stone (Sir William Cash) in challenging and successfully and competently setting out the direction he recommends that we take. His detailed knowledge provides important context on matters of EU legislation and is paralleled only by his ability to recall details and dates, which the debate has certainly benefited from.
That is why we will continue to explore bringing forward the necessary legislation as soon as parliamentary time allows, as it has not proved possible to provide a slot for a Government vehicle to disapply the effects of the Vnuk and Lewis judgments during this parliamentary Session. I hope that hon. Members will appreciate that responding to the pandemic was and remains of the utmost importance, and that we are still in a challenging time.
Craig Mackinlay (South Thanet) (Con)
It is very kind of the Minister to give way, and I welcome her to her new post. As outlined by my hon. Friend the Member for Stone (Sir William Cash), there are European Court of Justice judgments and instances where that law was applied to this country while we were in the EU that we did not agree with, and we were probably outvoted under qualified majority voting at the time. Does her Department have officials looking at other instances, such as the Vnuk case, that can be expunged from our legal system at the soonest opportunity, because we never wanted them in the first place?
Trudy Harrison
I thank my hon. Friend for his intervention, and it would only be appropriate to write to him with further details. It is also appropriate to put on record my thanks to my right hon. Friend the Member for Chipping Barnet for her work on the taskforce that generally assesses the potential for dealing with some of those unnecessary regulations.
Ultimately, the Government face many competing priorities in deciding what legislation to bring forward in the limited parliamentary time available. My right hon. Friend the Member for East Yorkshire (Sir Greg Knight) asked whether the Government would support the Bill—we are certainly supportive. I hope that is music to his ears. The legislation proposed in the presentation Bill represents the best opportunity to address the issue at the earliest possible opportunity. Rest assured that the Government recognise the importance of the matter. We will be following the Motor Vehicles (Compulsory Insurance) Bill with interest, as it would deliver the desired effects of removing Vnuk from GB law.
The Government would like to see the presentation Bill being brought forward by my hon. Friend the Member for Wellingborough (Mr Bone) succeed. The Government have worked hard to seize the opportunity to legislate quickly, as we recognise its importance. However, I am sure that all Members will appreciate that the usual pressures on parliamentary time have been made even greater by the amount of emergency legislation passed in the previous Session. The presentation Bill offers the best and earliest opportunity to make that change quickly and deliver the positive outcomes of removing Vnuk, which many Members have referenced today.
I was pleased to hear support from the spokespersons from the SNP and Labour, the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Bristol East (Kerry McCarthy). I very much look forward to their support when the presentation Bill comes forward. Indeed, I would invite the whole House to lend their support.
Alan Brown
I said that the Government need to make sure that no loopholes are created—that no categories fall between the cracks, so that insurance is not compulsory; motorsports was mentioned. If the Government are letting the Bill brought by the hon. Member for Wellingborough (Mr Bone) pass through, will they do some sort of risk or impact assessment?
Trudy Harrison
My officials have been examining the detail. If the hon. Gentleman would write to me with the specifics, I will be very happy to write back with a more detailed response.
The presentation Bill will comprehensively remove the effects of Vnuk and Lewis from GB law. The Government regard the Bill as uncontroversial, hence its provisions being appropriate for a presentation Bill. That is possible because the UK has a very strong consumer protection arrangement in place, via existing insurance products such as employer’s liability and public liability. Removing the effect of Vnuk will save the industry and consumers money without having any substantive downsides.
The Bill will have many positive effects beyond the headline objectives of removing the effects of Vnuk and saving motorists money. First, it will ensure that the law concerning third-party motor insurance in Great Britain is consistent. Currently, the Road Traffic Act 1988 does not require motor insurance for use of vehicles on private land, as its focus is on the road and other public places. It extends its scope to a sensible range of vehicles, as defined in the Act. The retained EU case law that would be removed by the presentation Bill contradicts that, by extending mandatory third-party motor insurance requirements to private land and to a potentially much greater range of vehicles. The law currently points in two different directions, and the Bill is a good opportunity to bring clarity to the law.
Secondly, it will head off potentially enormous enforcement complications. Had we implemented Vnuk, the police would potentially have been required to monitor newly in-scope vehicles never intended to go anywhere other than someone’s garden. The difficulty in gaining access to sites of collisions on private land may have led to the need for additional police powers and a practical effect of less enforcement of uninsured vehicles and of encouraging crime.
Thirdly, implementing Vnuk would have meant that a huge range of newly in-scope vehicles would suddenly have been required to be registered on the DVLA database, with licence plates required. It would have been preposterous to have to stick on a licence plate and register a ride-on lawnmower that never left the back garden.
Kerry McCarthy
While we are on the subject of uninsured vehicles, when can we expect to see regulations on e-scooters? There are so many of them—300,000 privately owned scooters are used on our streets, as well as the legitimate pilot schemes. When will the Government accept that the pilots have done their job and come forward with some regulations?
Trudy Harrison
I can speak with some experience on this issue, because my constituency has been a trial area. We are assessing the various trials and will be able to respond to the hon. Lady’s question in due course.
We understand the importance of the Bill for many Members, and we will watch its passage with keen interest. I was pleased to hear the hon. Member for Bristol East mention the support for cycling. I am delighted to say that during the pandemic we saw a 46% increase in cyclists. That has had a positive effect on my Department’s active travel aspirations.
If the Bill fails—I encourage all Members to ensure that does not happen—the Government will continue to explore bringing forward the necessary legislation as soon as parliamentary time allows.
I again thank my right hon. Friend the Member for Chipping Barnet for raising this topic of debate. Our commitment to remove Vnuk from GB law and to end the liabilities that impact on the insurance industry remains a priority for us.