(12 years, 9 months ago)
Commons ChamberThat is absolutely right; we need someone to take on and challenge the system. Over the years it has clearly become easier just to recoup the money by doing the same to someone else. That is what has happened in the system. Insurance companies have been guilty of such an approach and they have had to respond to what other companies have done. Those other companies have then also had to do it, and so the cycle goes on.
We considered the various component parts of the matter: whiplash injuries, referral fees, personal injury lawyers’ costs and many of the things that have been covered in great detail by other speakers and the Transport Committee. The overall conclusion was that there was not a simple solution to the problem of unaffordable car insurance and that, in fact, it is a complex and deeply flawed system. None of the component parts can be removed: they all fit together to create the system and they all need to be dealt with individually. We need a batch of measures, each one designed to deal with the component parts of what has become a crazy, crazy system.
Our work over the summer generated a number of case studies, some of which would be funny if they were not so serious. I was contacted in January by a teenager who had been quoted £26,000 for third party insurance on a 1.1 litre Citroen Saxo. When I raised that with the local paper, I was contacted by other young people who had received even more ridiculous quotes. One young woman was quoted a figure of £53,000, which was the record. I think we can take it that the insurance company did not want to insure that person. Clearly such premiums are unaffordable for anyone, even those with an extremely high disposable income.
The young seem to be particularly affected, but they are not the only ones experiencing problems. The hon. Member for Lewisham West and Penge (Jim Dowd) mentioned an incident concerning an elderly gentleman, which shows that the issue affects everyone. During the summer, I was visited by various reporters and journalists as part of my investigation. The comical thing was that invariably, after the interview or the filming, the journalist or the cameraman or woman gave me their story or that of their nephew, niece, son or daughter. They all had a tale to tell and were of the opinion that something had to be done.
A recent case study is worth considering because it is about an ordinary person. A gentleman and his wife owned a 2007 Vauxhall Corsa that was in decent condition. He had held his licence for 17 years and had had no accidents, and his wife had held her licence for five years and had had no accidents or claims. He had a nine-year no-claims bonus. In 2009-10, he paid £600, the next year he paid £800 and the next year £6,200—no accidents, no claims, no difference. Another sad thing about that case is that the gentleman has recently become unemployed, and because of that his insurance premium has gone up. How does that make sense?
That case study reveals the impact of the postcode lottery, which is an issue that has not been raised because it is difficult to do so. I mentioned that my very first meeting was in a mosque. There is a huge community cohesion issue because people say, “The reason we are paying a lot is because of those people over there.” That is why I was so keen to get involved in this campaign at the beginning. The young men I met were living in an area with ridiculously high insurance premiums.
People such as taxi drivers have been particularly hit. As other Members have said, taxi drivers’ premiums have risen exponentially and they are suffering greatly—far more in fact than the constituents who write to me because they are suffering. In my constituency, there is a second issue with taxi drivers, and I wonder whether it is the case elsewhere. Very few companies now want to insure taxi companies, and that is probably why the fees are more exorbitant. In my constituency, only one or two insurers will insure taxis in my postcode area. Is that something that the hon. Gentleman is familiar with and would like to comment on?
The hon. Gentleman makes a good point about the branding of people. Whether it is taxi drivers or all those who live in the BD3 area, the assumption is that because they are from that area they are all contributing to the high insurance premiums that we are paying. That is very unfair and also very dangerous as regards the cohesion of the wider community.
The report that we prepared concluded with a whole range of measures, and many Members have come up with additional measures. I conclude by again paying tribute to the work of the Select Committee, which needs to keep driving this. The title of our report was “It can’t go on like this”, and we all know that it cannot go on like this. If we all work together across the House we can slay this monster.