Motor Vehicles (Compulsory Insurance) Bill
Friday 28th January 2022
(2 years, 10 months ago)
Commons ChamberMotor Vehicles (Compulsory Insurance) Act 2022 View all Motor Vehicles (Compulsory Insurance) Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Peter Bone (Wellingborough) (Con)
I beg to move, That the Bill be now read the Third time.
I thank my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) for giving the Queen’s consent. I thank all those who have supported the Bill, particularly those were selected for and attended the Bill Committee without whom it could not have progressed. I was thinking that to speed things up, I could just say, “This Bill is going to save the average motorist 50 quid a year and is one in the eye for the European Court of Justice”, but we probably need to do a bit more than that. The expressions of Opposition Members tell me that I better press on.
My Bill, which received Second Reading on 29 October last year and passed Committee stage on 5 January this year, deals with an issue that was considered in detail during a Westminster Hall debate entitled “Motor Insurance: Court Judgments” on 22 September 2021. That debate was led expertly by my right hon. Friend the Member for Chipping Barnet (Theresa Villiers), who cannot be here today, but I thank her for all her continued support for the Bill.
As an aside, when we have presentation Bills, it is a very good idea, if there is not time in this Chamber for us to debate Second Reading for as long as we would like, to obtain a Westminster Hall debate so that we can get the issue discussed at length before coming to this Chamber. That is a very good example of what happened.
The Bill’s purpose is to remove the requirement for compulsory motor insurance for vehicles used exclusively on private land and for a wide range of vehicles not constructed for road use. People might say, “You don’t have to have motor insurance for vehicles used on private land or for vehicles that are not a motor vehicle.” They would be right that that is the interpretation of the Road Traffic Act 1998 that has stood since its inception. That interpretation was held to be correct by the Government, motor insurance and motorists alike, but then along came the ECJ and the Vnuk case.
In 2014, the ECJ made a decision that confounded the European Union and the British Government. The case of Vnuk extended the requirement for compulsory third-party motor insurance far beyond the scope of the Road Traffic Act. If the ruling is allowed to be enforced in our courts, it will put ordinary people in breach of the law for not having motor insurance for their vehicles used exclusively on private land. To give just a few examples, motor insurance will become compulsory for a golf cart that never leaves the golf course, a ride-on lawnmower that someone uses in their back garden and a tractor-trailer that is never designed to leave the farm. It would also extend compulsory motor insurance to machines that were never intended to be used on any road.
The Road Traffic Act 1988 requires that motor vehicles intended for use on roads and other public land must be insured. It does not require compulsory insurance for vehicles on private land, nor does it require compulsory insurance for vehicles not intended to be used on roads. The whole purpose of this Bill is to return the law of this land to that envisaged in the 1988 Act.
Sir Greg Knight (East Yorkshire) (Con)
I congratulate my hon. Friend on getting so far with his Bill. I chair the all-party parliamentary historic vehicles group and meet many motorists and motoring organisations, including those connected with motorsport, and I have yet to hear a single objection to the measure he proposes. Is he aware how much widespread support he has?
Mr Bone
I am very grateful to my right hon. Friend, who has been a staunch supporter of this Bill. To his point, there has been no objection; in fact, there has been tremendous support. I am afraid that in the whole process, the only person who has bowled a bouncer is him—but I will come to that later.
Anna McMorrin (Cardiff North) (Lab)
Can the hon. Gentleman clarify what would happen? We know that many accidents take place on farmland. Does public liability insurance apply? Could he confirm what would happen to somebody who was the victim of an awful accident on that farmland, for example?
Mr Bone
The hon. Lady goes to the crux of the matter. That question was brought up in Committee by the right hon. Member for Warley (John Spellar), and I will discuss it in some detail later on; if I may, I will deal with it when I get to it.
This Bill will restore the interpretation to British statute that this sovereign Parliament always intended. Most importantly, it will end any associated liability for insurance claims against the Motor Insurers’ Bureau for the cost of accidents on private land when motor insurance was not held. Importantly, the Bill does not seek to invent new policy, nor, to the point the hon. Member for Cardiff North (Anna McMorrin) raised, would it limit the Government or Parliament in changing insurance regulations for motor vehicles in the future, if that is what Parliament decides to do.
How did we get into this mess? Under the European Union withdrawal agreement, the Vnuk decision has become retained EU case law. In other words, it is the law of the land unless we change it. We cannot just ignore it, because it is an EU court decision and has now become the law of the land. Therefore, it is essential that we act to prevent this European Court of Justice decision from punishing motorists through higher premiums. At a time when the cost of living is at the forefront of all our minds, this is an opportunity to save ordinary people from an unnecessary burden.
I will explain further: if the status quo is allowed to continue, to account for its liability for accidents on private land, the Motor Insurers Bureau will have to increase its charging levy. That levy is paid by the motor insurers, which in turn will pass on the cost to the motorist.
That is all well and good, but how much will the extra cost be reflected in the average motorist’s insurance premium? The Government actuaries have got out their bean counters, pressed a few buttons on the computer and estimated the cost. By removing the Vnuk judgment, the average motorist will be saved from a £50 price hike to their insurance premiums. Let me say that again: the Government experts say the Bill will save the average motorist £50 each and every year.
Clearly, there are huge benefits to motorists, so it is no surprise that the Bill enjoys support from both sides of the House. I thank hon. Members on the Opposition Benches for supporting something that will benefit all motorists. On Fridays, as we know, it is good when both sides of the House work together to achieve something that helps our constituents.
Anthony Browne (South Cambridgeshire) (Con)
My hon. Friend mentions that motorists might benefit from reduced insurance by getting rid of the clause. Will those of us who have just renewed our car insurance, including me, get some sort of discount as a result?
Mr Bone
Nice try! It is important that the motor insurance industry knows that the Bill is making progress, so it has not put the £50 on. If we do not do it, that will happen. It is not that people will see their motor insurance go down by £50 per year, but that they will not see it go up by £50 a year. My hon. Friend can go ahead and renew his motor insurance.
I believe that I am correct in saying that, if passed, the Bill will be the first Act of Parliament to remove retained EU law. It will certainly be the first to remove retained EU case law, so it will be a landmark step in taking back control of our own laws. It is just one of the clear advantages of leaving the European Union that we can now alter our laws to ensure that they are interpreted the way that this sovereign Parliament intends.
The Bill will be the first of many post-Brexit dividends to be established in primary legislation. We will deliver the independence that the British people voted for and put pounds back into their pockets. In fact, it would not be a bad idea for the Government to have a Brexit Minister whose sole responsibility it was to root out such savings across the whole of Whitehall—and for that person to be a Brexiteer who had consistently supported that point of view, maybe even a Spartan, and clearly not someone who is a member of the current Government. Does that give the Minister any clues?
The Vnuk judgment has also led the European Union to revise its European directive, because it was as surprised by the decision as we were, although, as with many decisions taken at EU level, the interest of the ordinary motorist has been sacrificed in the name of greater harmonisation between states. The revisions it has made will fail to protect motorists in the EU from the associated costs of the compulsory insurance requirement on private land. Because of Brexit, this Parliament has the opportunity to do better, and that is just what we are doing with the Bill.
I will briefly mention the case of Colley v Shuker, which is being considered by the Court of Appeal next week, as I know the implications of the Bill have been questioned in relation to it. It is clear, however, that the case bears no connection to the Bill that we are considering today, as it involves an accident where an insurance policy was in place. The effect of the Bill is only to restore the statute book to the position that everyone understood it to be before the Vnuk decision.
I mentioned earlier my gratitude to Committee members and I am thankful for their excellent contributions. In Committee, the right hon. Member for Warley raised an important point, which the hon. Member for Cardiff North made today, that the obligation that we have discussed arises in cases where there has been an accident and possibly an injury. It is certainly true that protecting genuine victims and general safety is of the utmost importance when considering insurance requirements but, in most cases, for accidents involving motor vehicles on private land, a different type of insurance policy will already be in place. In many cases, there is even an existing compulsory insurance requirement, such as public liability insurance, employers liability insurance or events insurance.
As previously stated, the Bill does not seek to create new law or to tie the hands of Parliament in making changes to the requirements for motor insurance in the future. What it does is restore the interpretations of the Road Traffic Act 1988, which stood for almost 30 years. In that time, copious case law in British courts shaped the interpretation of that Act and established through precedent recourse to the Motor Insurers’ Bureau in certain circumstances. To give the House an example, although my local Waitrose car park might technically be on private land, were I to have an accident with an uninsured driver, the Motor Insurers’ Bureau would have liability, as established through existing case law. It is impossible to anticipate every possible accident scenario, although the Road Traffic Act has historically proved very adaptable. If, out of the blue, an incident highlighted a deficiency in protection for injured parties, I have every confidence this Parliament would act to rectify that.
I would also like to address the concerns of my right hon. Friend the Member for East Yorkshire (Sir Greg Knight), who bowled the Minister quite the bouncer during the Committee. I must add my thanks to the Under-Secretary of State for Transport, my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), for stepping in at the very last minute to deal with the Bill in Committee, as the responsible Minister was unfortunately ill on that day.
My right hon. Friend the Member for East Yorkshire raised a concern about how electric scooters will fall under the Road Traffic Act. It is my understanding that electric scooters would be classified as motor vehicles under the Road Traffic Act and would therefore require compulsory insurance. However, electric scooters are not allowed to be used on the roads, so Parliament will have to clarify that situation. That is not relevant to this Bill, because all we are doing is restoring the law to what it was before the Vnuk judgment.
Sir Greg Knight
I am trying to be helpful, actually. Although it is, as my hon. Friend says, not a debate for today, does he agree that there is a good case that if electric scooters are allowed on the public highway, they should be insured?
Mr Bone
I think the law as it stands requires them to be compulsorily insured, even though they are not allowed on the road. That is a dilemma for the Government to sort out, but it is not, happily, for this debate.
I will move on to a second similar thing. I understand that there is a bespoke arrangement in place for electric bikes, whereby insurance is not compulsory. Although these bikes are used on public roads, they do not have to be compulsorily insured. It is also true that given how expensive the equipment is, many electric bike owners still opt to take out an insurance policy. It may be possible to look at expanding the arrangement to electric scooters, but again that will be a matter for Parliament to consider, and it is not relevant to what the Bill does. My right hon. Friend has brought it up, and it needs to be looked at by the Government.
Finally, clause 2(2) sets out the jurisdictions of the Bill. The provisions in the Bill extend and apply to England, Wales and Scotland only. The exclusion of Northern Ireland is consistent with the convention that Westminster will not normally legislate for matters that are within the legislative competency of any of the devolved Administrations. The Bill therefore does not legislate for Northern Ireland, as the matters to which the provisions of the Bill relate are within the legislative competency of the Northern Ireland Assembly. I understand, however, that the Northern Ireland Assembly is closely following the passage of this Bill, which will set an example that it might want to follow.
I am thrilled that leaving the European Union has given us this opportunity to deliver a clear Brexit dividend and to finally take back control of our laws. I hope this Bill will be the first of many over the course of this Government to deliver on our key post-Brexit objective.
Suzanne Webb (Stourbridge) (Con)
I rise to support the Bill from my hon. Friend the Member for Wellingborough (Mr Bone). I thank him for such a detailed speech that made me fully understand exactly the content of the Bill.
I was reading up on this, and the ECJ ruling and the subsequent rulings that upheld the Vnuk ruling are simply impractical. The ECJ’s ruling was based on the Vnuk case of 2007, whereby the eponymous farmworker from Slovenia was injured because of being knocked off a ladder by a trailer that was attached to a reversing tractor. The incident occurred on private property, and compulsory motor insurance was already purchased to comply with Slovenian law. Mr Vnuk’s claim for damages against the insurance company that provided the tractor’s compulsory motor insurance policy was initially rejected by the Slovenian courts. However, the European Court of Justice, in its infinite wisdom, overturned the decision of the Slovenian courts, and ruled in favour of Mr Vnuk—quite unbelievable. Now that we are out of the European Union, as my hon. Friend mentioned many times in his speech, we can pass this important Bill, so that we will have a common sense approach to motor insurance claims—indeed, a common sense approach to much of everything, now that we have left the European Union.
The Vnuk case led to the extension of the 2009 EU motor insurance directive on compulsory motor insurance for vehicles used on private land. In addition, the definition of a motor vehicle, as defined in the Road Traffic Act 1988, was widened to include vehicles that were not adapted for use on the roads. Were it not for the introduction of the Bill, motor vehicles would now include agricultural machinery such as tractors, motorsports vehicles, and light electric vehicles, all of which are not commonly used on public roads. The European Court of Justice’s broad interpretation of the 2009 EU directive has led to excessive liabilities, and the implementation of the Vnuk decision would have had a hugely detrimental impact on insurance providers and motorists, as my hon. Friend clearly said.
The Government Actuary’s Department has analysed the financial impact of the Vnuk ruling, and the figures do not make good reading for insurance providers and motorists. Based on an increased frequency of claims due to an increased number of both legitimate and fraudulent claims relating to incidents on private land, the insurance industry would have faced costs in the region of £2 billion. Those costs would have been passed on to motorists who were facing an approximate additional cost of more than £1.2 billion. That would have translated into a £50 increase in insurance premiums for the average car user. At a time when motorists are feeling the pinch with rising prices at the pumps, the removal of the European Court of Justice ruling on the Vnuk case from British law by the Bill will be welcomed by my constituents. More than 64% of voters in Stourbridge voted leave, and this Bill will be welcomed by them as a prime example of the UK, and this Government, taking back control of our laws.
The 2014 ruling by the European Court of Justice undermined the Road Traffic Act passed by the House in 1988, whereby compulsory motor insurance was limited to accidents on roads and public places. Some 94% of respondents to the Department of Transport’s consultation, which sought the views on the ECJ’s position from insurance providers and policy holders, opposed the ruling and supported the original Act passed by this House. Now that the UK has left the European Union and the jurisdiction of the European Court of Justice, we are free to make our own laws in the interests of the British people. This Bill takes advantage of our freedom from the European Court of Justice to remove an impractical ECJ ruling from UK law and deliver lower insurance premiums for motorists. I am therefore delighted to support the Bill, and I know my sentiment will be shared by many people in my constituency.
Claire Coutinho (East Surrey) (Con)
It is always a pleasure to follow my hon. Friend the Member for Stourbridge (Suzanne Webb), and I congratulate my hon. Friend the Member for Wellingborough (Mr Bone) on this excellent Bill. I have been in my place for only a couple of years, but in this House it sometimes feels as if the job of Parliament is to add to legislation, and it is also really important that we look at deregulation. When we see regulation that is costly and has no support from industry or consumers, and that does not work practically, it is very much the business of this House to root it out.
We have talked a bit about the Vnuk ruling and how it will apply to the EU 2009 motor insurance directive, which would extend compulsory insurance to vehicles on private land and possibly to vehicles not constructed for road use. My hon. Friend the hon. Member for Wellingborough mentioned golf buggies, tractors and ride-on mowers, but there is also a real possibility that it might affect mobility scooters.
I support the Bill because not only would that regulation add huge costs to motor insurance, but it is not wanted in this country and, practically, it does not work. We have heard about some of the costs; I agree with my hon. Friend the Member for Stourbridge that, at this time, adding a motor insurance hike of £2 billion—an average £50 rise for 25 million people—is not something we want to pursue. Although we may have different views across the House, and indeed across our party, on how to address the cost of living issue, we can all agree that it is a real issue this year and we do not want to add to that through unnecessary regulation.
The Department for Transport did run a consultation in 2016-17. There were 902 respondents, 94% of whom rejected the policy. That consultation was not just industry-based but included members of the public. When regulation is not wanted by industry or the consumer, we have to wonder why we feel we can impose that on the British people.
On whether the regulation would work, RSA’s consultation response shows that there is no guarantee that private insurance markets would provide competitive policies. It is a very bad idea for Government to intervene on insurance markets and force them to put forward products that they would not necessarily do themselves. There is no guarantee that the products work and that they would be at a decent cost to consumers. Looking at some of the vehicles that the regulation might extend to shows that there is no clear practical way of enforcing the legislation. The sheer volume of claims that might end up coming forward could overwhelm the insurance industry, which would not work for anyone at all.
Finally, to echo the point made by other hon. Members who have spoken, let us look at why we are in this place. The EU has not yet put forward the legislation, but because the European Union (Withdrawal Agreement) Act 2020 took a snapshot of EU law on 31 December 2020, we are still having to use some EU law unless we decide to overturn it. The EU courts must have regard to the existing decisions and general principles set out by the European court before 2020. That is a really good example of the real-world effects of a relentless, bureaucratic engine and a one-size-fits-all policy approach on our consumers here, when it is not wanted.
I congratulate my hon. Friend the hon. Member for Wellingborough on one of my favourite pieces of legislation, which I am happy to support.
Jane Hunt (Loughborough) (Con)
I am delighted to follow my hon. Friend the Member for East Surrey (Claire Coutinho). I nearly said right hon. Friend—it is only a matter of time. I congratulate my hon. Friend the Member for Wellingborough (Mr Bone) on an excellent piece of legislation.
Brexit was an historic moment for our country, which brought with it the opportunity to free our businesses from overbearing bureaucracy and reduce costs for consumers in order to boost innovation and growth across the economy.
Anna McMorrin
I just could not let that go, sorry. Notwithstanding this Bill, which does look to streamline certain issues, there are many Brexit-related issues up and down the country, in our businesses and at our borders. I do not think the hon. Member can justify the comments she just made.
Mr Deputy Speaker (Mr Nigel Evans)
The good news is, this is not a debate about Brexit. I do not mind passing references to it, but let us not turn the debate into something that it is not.
Jane Hunt
Thank you, Mr Deputy Speaker.
This Bill is another step in the right direction as, by ending the effect of the Vnuk decision, we will remove needless and excessive liabilities that place an unnecessary administrative and financial burden on the Motor Insurer’s Bureau, businesses and policy holders. Indeed, I note that the Government Actuary’s Department has estimated that Vnuk would lead to an estimated £50 annual increase in insurance premiums for motorists and £2 billion in extra overall costs for the insurance industry. This would be a terrible outcome, given the current issues over the cost of living. I also agree with my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) that, given that £50 is only the average, younger drivers will bear the brunt of the increase as they constitute a higher risk.
We also know that Vnuk would impact significantly on businesses, in particular those in the motor sport industry. Ahead of the debate, I was contacted by one of my constituents, Mr John Kirkpatrick, who is a director of the Motorsport Industry Association. He has informed me that the association has been lobbying the European Commission against the adoption of the Vnuk proposal because, as the UK Government have acknowledged, it could lead to an additional annual cost of £458 million for the UK’s motorsports industry. I am told that the industry has a turnover of £10 billion annually and is of huge importance to the midlands, being the centre of motorsport valley and employing 40,000 people. It is also recognised globally as the centre of excellence and the go-to community of knowledge and innovation. So this Bill would go a long way to supporting the midlands economy and helping to level up the country.
Of course, since the ruling the EU has also taken steps to address its impact. This leaves the UK in the perverse situation that it is stuck with a snapshot of EU law at the end of the transition period, all while the EU itself is enacting reforms to address what it has described as absurd over-regulation. Well, amen to that, Mr Deputy Speaker.
Taking all this into account, I will be supporting the Bill today, and I hope that the Government continue to work to remove all unnecessary red tape inherited from our membership of the EU so that we put the success of our businesses and the finances of consumers first.
Marco Longhi (Dudley North) (Con)
By way of a passing reference to Brexit, I would like to reassure my hon. Friend the Member for Wellingborough (Mr Bone) that my thinking is very much aligned with his on all matters Brexit, so he should feel a degree of confidence in what I am about to say.
The people in my constituency overwhelmingly voted to leave the European Union—I believe in the region of 72%. The general election in December 2019 proved yet again at the fourth time of asking that the United Kingdom wanted to leave. So would you not agree, Mr Deputy Speaker, that it is right that we should continue to end needless retained EU laws? I am pleased to support the Bill and that the Government also support it.
I echo Mark Shepherd from the Association of British Insurers, who said:
“There would have been no easy way to monitor compliance and enforcement for those using their vehicles on private land. It would also have been difficult to establish the circumstances of any claim, so increased the scope for fraud, that ultimately ends up being paid for by motorists through their insurance premiums.”
That is something that any one of us is very familiar with if we own a car.
Following Vnuk and the subsequent case of Lewis v. Tindale, the UK motor insurance industry has found itself financially liable, via the MIB levy, for accidents involving uninsured vehicles in circumstances where compulsory insurance is not required. This arises from the decision in Vnuk and Lewis and the imposition of EU law requirements that were retained post Brexit by the European Union Withdrawal Act 2018. The Bill will remove the lingering effect of EU law in this area and restate the position under the 1988 Act whereby motor insurance is required only for the use of motor vehicles on a road or other public place. I should perhaps declare a minor interest here: I own one vehicle that is currently off the road.
Marco Longhi
SORN—that is the word.
At a time when everyone is facing increasing household bills, fuel costs and cost of living, we should make it our priority to get rid of any unnecessary financial burdens. The Bill will reduce the cost of insurance for motorists across the UK. As has been said a couple of times already, implementing Vnuk across the UK would have cost something in the region of £2 billion, covering all existing motor cars, motorbikes, business vehicles, motorsports and other businesses.
Sir Greg Knight
I am a car owner too—I think most of us are—but is it not also important that without the Bill, the future of British motorsport could be seriously at risk?
Marco Longhi
I thank my right hon. Friend for his intervention and I completely agree with his observation.
It has been calculated that insurance policyholders could face an estimated cost of over £1 billion if Vnuk were implemented, expressed as a potential increase in individual insurance premiums of circa £50 for 25 million consumers. An extra £50 a month is a lot of money for many families; it could mean choosing between eating or heating their homes. Our constituents should keep that £50 in their own pockets, and not cover the costs of some idiots who may cause accidents and fail to insure their vehicles while they are at it. To me, the Bill smacks of pure common sense.
Dr James Davies (Vale of Clwyd) (Con)
It is a privilege to follow my hon. Friend the Member for Dudley North (Marco Longhi). I congratulate my hon. Friend the Member for Wellingborough (Mr Bone) on his work on the Bill over a considerable number of weeks, and I am pleased to speak in support of its Third Reading.
The Government’s intention to support the objectives of the Bill is clear. Following an incident in 2007, a European Court of Justice ruling in 2014 directed the extension of the provisions requiring motor insurance for those using public roads to a wider range of vehicles on private land, as we have heard. That includes in gardens, on golf courses, at motorsport events and even in museums, and therefore potentially includes lawnmowers, quad bikes, golf buggies, mobility scooters and other light electric vehicles, motorsports vehicles, and agricultural and construction machinery.
In practice, of course, this would be largely unenforceable, and it would quite possibly be an unwelcome duty on the police. The House of Commons Library notes that the EU itself has now reached an agreement
“to reverse some of the impact”
of the decision, so I am glad that Ministers are supportive of efforts to truly tackle the relevant piece of inherited EU law here in Great Britain through this Bill.
For most, of course, the primary benefit of the Bill is that it will overcome a punishing rise in insurance premiums. The average motor insurance premium in the UK is already £436 per year, rising to over £1,000 for higher-risk groups. In the three months to December 2021, there was a further 5% increase in premiums, and as life returns to normal and—we hope—our road miles increase again, that may well increase further. Doing what we can to stop additional price hikes should therefore be a priority, and the Bill will help to achieve that.
The Government Actuary’s Department has calculated that implementing the ECJ’s ruling would increase motor insurance bills by up to £50 for each of the 25 million motorists in the UK as a result of their subsidising off-road insurance claims. The total cost would amount to £1.2 billion or, on some estimates, up to £2 billion. As we have heard, a Department for Transport consultation on the matter in 2016 found that 94% were against making the changes to compulsory motor insurance that would otherwise arise. Of course, in many cases insurance is already in place to cover accidents, including employers liability insurance and public liability insurance, as the hon. Member for Cardiff North (Anna McMorrin) pointed out.
At a time when petrol and diesel costs have been rising, a further increase in the cost of running a car would be most unwelcome. That is particularly significant for many people in my north Wales constituency, for whom car ownership is often vital. Local public transport provision is limited in many ways. As chairman of the all-party parliamentary group on Mersey Dee North Wales, I am working with hon. and right hon. Members and local government representatives and officials to secure improvements in that.
Sir Peter Hendy’s Union connectivity review has recognised the significance of upgraded rail connectivity. Even so, the improvement to public transport connections is a slow process. Sir Peter also recognised the need to upgrade road infrastructure, including the A55. The transition to electric vehicles means that cars are here to stay, and my constituents need them to be affordable.
The Bill’s explanatory notes acknowledge that its provisions could lead to a loss of tax revenue from insurance premium tax. By pledging their support for the Bill, Ministers are clear that they have the interests of motorists at the forefront of their considerations.
Dr Davies
Indeed. It is true that those with multiple vehicles stand to be punished even more if the Bill does not pass—my hon. Friend is quite right.
My constituent Andrew Wilde wrote to me earlier this week. His whole family are motorsport enthusiasts—in fact, he is a member of the North Wales Autograss Club —and he believes that the Bill will support the whole industry. He worries that without this Bill, the UK motorsport sector will see insurance costs increase by over £450 million.
Andrew goes on to say:
“I believe motorsport brings a lot to this country - more than simply Lewis Hamilton winning the FI Title. That can be seen when you drive down the M40 & see the high quality companies based in our country. It provides good quality jobs & just as important, hundreds of thousands of the population with enjoyment, either participating or watching.”
I very much share my constituent’s positivity, and I am pleased to support the Bill.
Anthony Browne (South Cambridgeshire) (Con)
It is an honour to follow my hon. Friend the Member for Vale of Clwyd (Dr Davies). I congratulate my hon. Friend the Member for Wellingborough (Mr Bone) on bringing forward this legislation. It is the first to get rid of some inherited EU law, as he said, for many of the reasons that have been highlighted by other Members.
Clearly, anything that reduces costs for motorists is welcome. As many Members have done, I declare an interest as a motorist who pays car insurance, which costs a lot of money. Anything that brings that cost down is very welcome, particularly during a cost-of-living crisis, and this measure that will help with that.
As my hon. Friends the Members for Vale of Clwyd and for Dudley North (Marco Longhi) mentioned, the retained law is incredibly impractical in the details. Just how would it work? How would responsibility be assigned? How would pay-outs be made? None of that has been properly sorted out. Practical measures are very important in a farming constituency such as South Cambridgeshire, where there are an awful lot of off-road vehicles—I live in a small farmhouse, and we can drive for quite a long way without going on to a public road.
Just as important is the unpopularity of the retained law not just in the industry, but among the public. Various Members have mentioned the consultation that the Government held, in which 94% of respondents said that they did not want that legislation. It is expensive, impractical and unpopular, yet we still have it in the UK.
My constituency is quite different from many of those that other hon. Members have mentioned because it overwhelmingly—63%— voted remain. I think, however, that even my constituents would have trouble understanding why the European Court of Justice, rather than this Parliament, should be able to decide the policy and laws on insuring golf buggies.
Chris Clarkson (Heywood and Middleton) (Con)
Does my hon. Friend agree that one of the first positive signs of our new freedom post-Brexit is that we can start to reverse some of the impractical judgments that were made without the UK specifically in mind, which started, for example, with the Factortame case?
Anthony Browne
I completely agree. I declare another interest. I used to be Europe editor of The Times and I lived in Brussels for many years. I used to drive around across borders. If you drive for a couple of hours from Brussels you get into Luxembourg. Another half an hour and you are in Germany. Within 10 minutes, you can drive between France, Germany and Luxembourg: you are crossing borders the whole time. From that point of view, one can understand why one would want some co-ordination between insurance policies and so on. In the UK, we are an island. That is a very different position and different motoring rules apply. Often, the EU would have motoring rules, for example regulations on child seats in cars, that might have made sense if one lived in Luxembourg and drove into Germany and France every day and would not want to have the different regulation of child seats. In the UK, however, there is no particular reason why we should have the same regulation for child seats in cars as there is in, say, Poland.
Anthony Browne
We do. Clearly, people do drive from what is now the EU to the UK, but the volume of traffic is very low.
I want to raise a point about why we ended up with this European Court of Justice ruling. As a Europe editor of The Times, I wrote various think-tank reports about EU regulations and structure. I advised the Government and was involved with European law-making for about 20 years. In the Lisbon treaty, there is the principle of subsidiarity. We do not talk about it much in this place. When Margaret Thatcher was Prime Minister, she talked about it and everyone scratched their heads saying, “What is subsidiarity?” The basic principle is that one should make laws at a European level only where necessary, for example on cross-border issues such as pollution or trade. I cannot see any argument for why the insurance of golf buggies needs a pan-European law.
Sir Greg Knight
I join my hon. Friend in declaring an interest as the insurer of several vehicles. Is it not the other side-effects of Vnuk that are so offensive and why we are right to support the Bill? Without the Bill, would it not mean that, for example, ride-on lawnmowers would need to have insurance?
Anthony Browne
My right hon. Friend is absolutely right. That ECJ judgment has incredibly wide-ranging implications across many different sectors. I picked on golf buggies, but it affects lawnmowers, agricultural vehicles and electric scooters, as we heard. It is incredibly wide ranging. It is baffling and extraordinary how a Slovenian farmer, Mr Vnuk, getting knocked off his ladder—poor guy; I hope he was not too badly injured and I hope he got compensation—can lead to a series of different judgments, amendments and so on that cost the British motor insurance industry £458 million or a £50 increase in premiums for British drivers, a total of £1 billion a year. It is difficult to explain to voters, even in remain constituencies like mine, what the justification is for that.
Before my right hon. Friend’s intervention, I mentioned subsidiarity as a principle enshrined in an EU treaty. There are various mechanisms in the EU to try to ensure subsidiarity. Parliamentary committees of national Parliaments are meant to have votes and give red flag warnings when EU legislation contravenes it. However, this was not EU legislation. It was a judgment from the European Court of Justice and, as case law has the effect of legislation, it was enshrined in UK law after we left the EU. That raises the question of the European Court of Justice.
I reported on the European Court of Justice. I have visited its buildings many times. I will give one little anecdote about a story I once tried to do. The British Government were appointing a judge to the ECJ. I thought that that was quite an important story. The British Government were involved and the ECJ had, when we were in the EU, a constitutional role in the UK. It could make laws that overrode the national Parliament and the national Government, and could change the lives of British citizens. The Vnuk ruling is a clear example of that. At the same time that I was suggesting to the editor of The Times that I write a story about the British Government’s appointing a judge to the European Court of Justice, there was some controversy over a judge on the United States Supreme Court, as hon. Members may recall—one of them had a nanny they should not have employed, or something. I said, “This is a far more important story. The British Government are involved. This court changes the lives of British citizens. It can overrule the British Government and the British Parliament.”
I wrote my story, and the next day the Supreme Court wrangling was front page of The Times, the main story, and my story about our appointing a judge to the European Court of Justice was a “News in Brief”, a tiny little thing. This is not a pro-remain or pro-Brexit argument, but even when we were members of the EU we had virtually no knowledge or understanding of the workings of the European Court of Justice or its important or significance.
When we were members of the EU, I used to play a little parlour game: “We have the right to appoint a British judge to the European Court of Justice. What is the name of our judge on the European Court of Justice?” I used to ask MPs and so on, and no one had any idea. I searched for his name in newspaper articles and this particular judge was never mentioned—I cannot actually remember his name now. I will save their blushes, but I asked the serving Europe Minister at the time, “What is the name of our judge on the European Court of Justice?” and he had no idea. I thought, “We really do have a problem as a country. We have no understanding or appreciation of the importance of the court, the way it works or the influence it has over our daily lives in this country.”
The Vnuk judgment is not only a clear example of the role of that court, overriding the objections of the British Government and of Parliament, but a clear breach of the principle of subsidiarity, which is enshrined in EU treaty law. There will probably be other examples of retained EU legislation; my hon. Friend the Member for Wellingborough suggested that there will be a whole series of such bits of legislation that we think are inappropriate for the UK. He suggested a new Government position: a Brexit Minister, someone who has had an interest in this issue for the whole time and is not currently serving as a member of the Government. I wonder who he could be thinking about?
Without repeating that suggestion, let me make another one. I keep coming across different bits of legislation in this place that we can only enact as a result of our having left the EU. This Bill is one example, but there are many others. It would be useful for the Government to compile a list across all the different Departments of all the little things we are doing as a result of leaving the EU, as well as the big things such as reforming the common agricultural policy and so on.
Mr Richard Holden (North West Durham) (Con)
One of the first things we did was to change the taxation on motorhomes, which is very important to my constituents because North West Durham is where we manufacture many of them. Under the EU regulations that came forward, gold-plated by our civil service, we would have seen a 700% tax increase, which we have been able to reverse since leaving the EU. I agree with my hon. Friend’s point, but does he think that we need to see all those practical examples laid out by the British Government to show the benefits of our having left the EU?
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before the hon. Gentleman responds to that, is there any possibility of steering his great speech back to Third Reading of the Motor Vehicles (Compulsory Insurance) Bill?
Anthony Browne
I was talking about the underlying legislative process for the Bill. I thank my hon. Friend for his intervention, and I agree; there are probably many other bits of legislation such as this, and it would be good to get a holistic view of the impact of all that.
For all the reasons I mentioned at the beginning of my speech, before talking about European jurisprudence, I fully support this Bill. The Vnuk ruling is impractical, it is expensive to motorists, including myself, and it does not serve the deemed objectives. For the reasons mentioned by the Opposition, the Government probably do need to think about whether there are any other bits of legislation needed to ensure that there is no harm done by lack of insurance on private land, but this Bill is incredibly popular and I fully support it.
Sir Mike Penning (Hemel Hempstead) (Con)
I will be quite short, because there is a lot of important business still to come. As a Eurosceptic before Brexiteers were even invented, I completely agree with my hon. Friend the Member for Wellingborough (Mr Bone) and with this Bill.
I am a little sceptical in another way, however, and this is for the Minister’s ears. The motor insurance industry is very clever at telling us by how much something would go up if we did something, and often their actuaries very early on write in to the risk that premiums would go up—and premiums are going up in the country today. When I was in the Minister’s position on the Treasury Bench as the roads Minister, the industry came to me and said, “If we have continuous insurance, we will be able to lower premiums, because we are taking the risk away in respect of uninsured motorists”—who are paid for by everybody in the Chamber and around the country who insures their vehicle. Motor insurance sits with our constituents.
I completely agree with the principle that nobody should be on our roads who is not insured. If the vehicle is off the road, we should make a statutory off road notification and register it as off the road, because the law states that it should be insured even if it is on the drive.
I have not seen any proof or example of motor insurance going down since those promises were made. The Minister should keep a close eye on the motor insurance industry. It is a very profitable marketplace. The industry may say the cost will go up by £50 per policy, but that £50 has actually already been written in. The Minister should give the industry a subtle hint and say, “How come it hasn’t gone down since we have had continuous insurance?”
Mike Kane (Wythenshawe and Sale East) (Lab)
What an excellent finish to the contribution from the right hon. Member for Hemel Hempstead (Sir Mike Penning). I will get on to the £50 bonus in a few moments.
I congratulate the hon. Member for Wellingborough (Mr Bone) on securing progress for his Bill and on selflessly putting himself forward to be the Brexit dividend Minister. No wonder he has been mounting a full-throated defence of the Prime Minister on the news channels over the past few days. Those things are possibly connected.
The hon. Gentleman did a good job of explaining the background of the Vnuk case and its consequences for motorists here. I thank him for that good explanation. I did not agree with everything he said but people will look back at the Hansard report and say it was a good contribution.
As has been made clear, we have operated under the scheme set out in the Road Traffic Act for many decades. It is proportionate and it works, although that is not to say we should not revisit it from time to time. The Government have intended to overturn Vnuk for quite some time. The cost of uninsured drivers is currently met by the Motor Insurers’ Bureau. The Government have estimated that the implementation of the ECJ ruling in the Vnuk case could cost policy holders £1.227 billion, or an average rise of around £50 for 25 million customers. I think that figure is right, but I will come back to it, if I may.
Sir Mike Penning
I say respectfully to the shadow Minister that that cost is being met not by the Motor Insurers’ Bureau but by motorists in this country. That is probably very important.
Mike Kane
It is indeed met by motorists, who are hard pressed in this cost of living crisis.
A few people veered slightly off the highway in the debate. There were terrific contributions from the hon. Members for Stourbridge (Suzanne Webb), for East Surrey (Claire Coutinho), for Loughborough (Jane Hunt), for Dudley North (Marco Longhi), for Vale of Clwyd (Dr Davies) and for South Cambridgeshire (Anthony Browne). I would love to talk about subsidiarity well into the night and juxtapose it with the principle of solidarity that the European Union was founded on—that is not a remainer case; it is just a great debate—but that is not for this place today.
Churchill said that a fanatic is someone who will not change their mind and cannot change the subject. We have seen a bit of that today. From some Government Members we have seen what I would call hubris—they are glad after the fact. Ask Odysseus how that worked out; I would be careful with it. The right hon. Member for Hemel Hempstead hit the nail on the head: there will be no £50 dividend. I shall say why—and I am going to veer off course.
There is an £11 billion pothole-repair backlog in this country. That is what is driving up motor insurance, because most damage is done by potholes. The Secretary of State for Transport has cut pothole-repair funding in Hertfordshire by 23%. The area represented by the Under-Secretary of State for Transport, the hon. Member for Copeland (Trudy Harrison) in Cumbria has the most reported potholes in the land. For the last 40 years—during which the seat belt rules have applied—the number of fatalities on our roads has gone down and down and down. In 2020, the number rose by 5%: we have reversed a 40-year trend. That is what will have an impact on people’s motor insurance, for sure. The £50 deficit—the “Brexit deficit”—is a complete misnomer. It will not affect motor insurance one bit. I think that that is what the right hon. Member for Hemel Hempstead was referring to, but let us see the insurers put that £50 in their policies! I doubt we will see that happen any time soon.
I could carry on, and name other factors that will have an impact on motor insurance—[Interruption.] It seems that Members do not want me to do that, but let me briefly talk about the highway code that we are implementing next week. There has been no promotion of it—absolutely nothing. The Government’s transport team are saying that they will get round to that in February, way after it has happened. We have major changes coming. What will that do to the accident ratio in the next few months, and what will it do to motor insurance payments? The cost of living crisis has been mentioned a great deal. How will the hike in national insurance payments affect the crisis that our people face? How will the depletion of our gas storage affect it?
Thank you, Mr Deputy Speaker, for allowing me to veer off track ever so slightly. I congratulate the hon. Member for Wellingborough on the Bill, but it is clear that there is much more work to do. We need to ensure that people who have to drive can afford their motor insurance and can afford to drive safely, and we need to look at the whole picture, in the round, of the damage being done to road maintenance and road safety. I look forward to hearing from the Minister about that.
The Parliamentary Under-Secretary of State for Transport (Robert Courts)
I congratulate my hon. Friend the Member for Wellingborough (Mr Bone) on his expertise, his dedication, his hard work and, of course, his success in promoting his Bill and securing its passage as far as Report. I also congratulate him on his success in having secured what has become, as my hon. Friend the Member for East Surrey (Claire Coutinho) told us today, her favourite piece of legislation. Sadly, she is not in her place to hear of that success.
May I say what an honour it is—and a pleasure, as always—to follow the hon. Member for Wythenshawe and Sale East (Mike Kane)? I thank and pay tribute to my right hon. Friends the Members for Chipping Barnet (Theresa Villiers) and for East Yorkshire (Sir Greg Knight), my hon. Friends the Members for East Surrey, for Stourbridge (Suzanne Webb), for Loughborough (Jane Hunt), for Dudley North (Marco Longhi), for Vale of Clwyd (Dr Davies) and for South Cambridgeshire (Anthony Browne), and my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning), as well as others who have spoken today or during the Bill’s earlier stages.
As all those right hon. and hon. Members, and my ministerial colleagues, have made clear, this is an important issue. The Government have made it plain since 2014 that they do not agree with the European Court of Justice’s ruling in the Vnuk case, and that view was shared by 94% of the 92 respondents to the Department for Transport’s consultation. The Vnuk decision created the unnecessary extension of motor insurance to private land, as well as, potentially, a greater range of vehicles. That is why we have announced that we will remove the effects of Vnuk from British law in February 2021. As my hon. Friend the Member for Wellingborough said, it will be a landmark moment when we remove law that does not work for the United Kingdom. That will include removing the associated financial liability imposed on the Motor Insurers’ Bureau via the courts’ decision in MIB v. Lewis.
The Bill represents the best possible opportunity to address this issue at the earliest possible opportunity. It will clarify the way in which the compulsory insurance obligation operates in Great Britain, and will make it clear that there is no obligation to extend insurance to private land and vehicles not constructed for road use. It removes any retained EU law rights to compensation from the Motor Insurers’ Bureau, and it provides that retained EU case law that is inconsistent with the position that it sets out will cease to have effect. That effectively removes the Vnuk decision from the law, and that is why the Government support it. I should perhaps declare a minor interest here: I own one vehicle that is currently off the road.
Mr Bone
With the leave of the House, I would like to thank all the people who have assisted with the Bill and particularly those who have spoken today. My hon. Friend the Member for Stourbridge (Suzanne Webb) brought up Brexit, saying that two thirds of her constituents voted for it, and then, blow me down, that was topped by my hon. Friend the Member for Dudley North (Marco Longhi), who said the proportion was 70%—
Mr Bone
Indeed. Then, of course, we moved to my hon. Friend the Member for South Cambridgeshire (Anthony Browne), who said that Vnuk would be very difficult to enforce and just happened to mention that nearly two thirds of people there voted remain. In fact, that was the only place in the United Kingdom that I went to as part of the leave campaign where there were remain posters up in the windows as I knocked on the doors.
I thank my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning), not least for his help at the beginning of the debate. He and the excellent shadow Minister, the hon. Member for Wythenshawe and Sale East (Mike Kane), also rightly made the point, “Hang on, motor industry, we have done you a pretty good favour today. How about looking after motorists?” Like so many organisations, it is very quick to put things up but not so quick to bring them down, so I hope that that was noted.
My hon. Friend the Member for East Surrey (Claire Coutinho) said that if there are regulations that we do not need, let us reduce them. My hon. Friends the Members for Loughborough (Jane Hunt) and for Vale of Clwyd (Dr Davies) mentioned the cost—the £50 hike that would occur—and the consultation in which 94% were against the Vnuk decision. I am not quite sure what the other 6% were thinking about, but that is pretty high. I also thank the hon. Member for Cardiff North (Anna McMorrin), who made a really important point, which I hope we dealt with in the Bill. At the beginning of the process, I was very concerned about that, too.
Let me turn to some of the people who are not in the Chamber today who have helped with the Bill. In particular, I thank James Langston of the Department for Transport and the team for all their assistance. I thank the excellent Minister at the Dispatch Box and the shadow Minister—without Opposition support, we could not have made progress today, so I am very grateful.
I thank Nick Robbins of the Motor Insurers’ Bureau and David Holt of Weightmans for their immensely detailed knowledge and help. I thank my right hon. Friend the Member for Chipping Barnet (Theresa Villiers), who not only led the Westminster Hall debate but attended many stakeholder meetings, and my right hon. Friend the Member for East Yorkshire (Sir Greg Knight), who bowled one or two bouncers during the process, and I am very grateful for that scrutiny.
It has been gratifying to see such widespread engagement with and support for the Bill, including from the National Farmers Union and members of the all-party groups on motorsport, farming and historic vehicles, all of whose specialist area of interest will be profoundly impacted by the Vnuk judgment. I also thank, as my right hon. Friend the Member for Central Devon (Mel Stride) did in relation to the previous Bill, Adam Mellows-Facer, the Clerk of Private Members’ Bills, who I can embarrass—my right hon. Friend could not because he had left the Chamber, but I will embarrass him and say what a professional and helpful job he has done.
Finally, I thank Isobelle Jackson in my office, who helped in preparing all the work behind the Bill. Just getting a private Member’s Bill to this stage takes a lot of work and I have an enormous appreciation for all the work that she has done.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Mr Deputy Speaker (Mr Nigel Evans)
Even though some of the speeches veered all over the motorway, and Mr Browne’s hit the barrier several times this morning, congratulations on getting the Bill over the line, Mr Bone.