Young Drivers: Government Support

Gregory Campbell Excerpts

Tuesday 20th February 2024 Westminster Hall

[Carla Lockhart]

Absolutely. We experience the same difficulties in Northern Ireland with the availability of testing. We find that people are ready for their test but no tests are available, and they then have to continue with lessons, or stop lessons and go back to them later. It is a dreadful situation. This is about ensuring manpower and resources are available in rural areas, as the hon. Member outlined.

What has prompted so many people to get in touch with me is specifically the exorbitant cost of insurance, particularly in the context of the cost of living crisis, where household budgets are already strained. Where once the bank of mum and dad stepped in, many parents just cannot do that to help to meet the cost of insurance. That leaves young people unable to benefit from the freedom that driving brings, which many of us enjoyed. That barrier to the road impedes access to employment, socialising, broadening their life experience and even travelling to study. The effect is particularly acute in rural areas, such as my constituency and, indeed, vast swathes of Northern Ireland, where public transport linkages are lacking in choice and frequency. Evening and weekend services are often reduced or withdrawn altogether, making the ability to travel via public transport non-existent.

The importance of driving and access to a vehicle is acute in these areas for the whole community, including our young people. I have no doubt that Members present from similar constituencies across the United Kingdom will reflect the same challenges faced by their constituents. In that context, we must look to the Government to support young drivers—to support them to get on to the road and to be safe on the road—which, in turn, will impact insurance premiums in the future.

These issues are interlinked. If we look at insurance costs, Confused.com—the price comparison firm—said that, on average, 17 to 20-year-olds had seen insurance rise by more than £1,000 compared with the same time last year.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate my hon. Friend on securing the debate. On insurance premiums, does she agree that it is important that not only we, but insurance companies make a significant distinction between young drivers who are careful—who take their time and learn to drive safely on the road—and those whom they punish? They punish not just those careless drivers with the higher premiums, but all young drivers, and that needs changing.

[Carla Lockhart]

My hon. Friend is pre-empting my speech, and I agree with everything he said. For 17-year-olds, premiums surged by an average £1,423, to £2,877. For 18-year-old drivers, the average policy price reached £3,162. Constituents have contacted me after having had quotes of between £5,000 and £7,000 for a vehicle worth half the price.

Since securing this debate, I have had positive discussions with the Association of British Insurers and local insurance brokers across Upper Bann, who are at the mercy of insurance companies across the United Kingdom. I thank Alastair Ross from ABI for his constructive engagement on this matter. The insurance industry cites a range of factors for the increase in premium costs, and it is worth highlighting those to enable us to explore how Government might help on this matter.

By way of background, insurance is based on pricing the risk of claims being made and the cost of those claims. ABI data shows that, for drivers aged 18 to 20 and 86 to 90, the frequency of claims and average cost of claims is higher, which can impact premiums for those age groups.

One of the largest elements that the pool of motor insurance premiums pays for is bodily injury to other drivers, passengers, pedestrians or the driver themselves. That is because serious collisions can mean life-changing injuries, with compensation sometimes running into millions of pounds.

The insurance industry states that young drivers are also more likely to be involved in crashes with multiple injuries and which involve a greater number of people. Insurers’ costs of dealing with associated claims can be very high. The industry view appears to be supported by data, so we are not coming to this debate without data, because we know that according to the statistics, young people, and particularly older people, are much more likely to be involved in an accident.

This is supported by statistics from the Department for Infrastructure and the Northern Ireland Statistics and Research Agency, which show that young drivers are over-represented in Northern Ireland’s collision statistics. In 2021, 17 to 23-year-old drivers were responsible for 23% of all fatal or serious collisions, yet they accounted for just 7% of car-driving licence holders. They also show that young drivers were responsible for 73% of the casualties in collisions involving drivers aged between 17 and 23. The over-representation in fatal or serious collision statistics is also represented in the Department for Transport’s road safety accident statistics and Great Britain driving licence data, which was used in a House inquiry on this issue that reported in March 2021.

We must also factor in the inflationary pressures on motor repairs and claims. While like-for-like quarter 4 figures for claim costs are yet to be finalised, previous quarterly and annual claims data have shown a clear picture of spiking costs for insurers. Payouts for vehicle thefts rose 35% in quarter 3 2023 versus 2022, longer repair times drove up the costs of providing replacement vehicles by 47% in the same period, and the cost to replace written-off vehicles has increased as the average cost of new cars has risen 43% over a five-year period. However, the largest single factor is repair costs, which jumped 32% in quarter 3 to £1.6 billion of the total £2.54 billion. That reflects a mixture of labour costs, rising energy costs, which we are all too aware of, and the fact that vehicles are becoming more sophisticated, with the likes of electric vehicles requiring even more specialist expertise to repair.

I have written to the Treasury suggesting that the Government, in their engagement with the Financial Conduct Authority, press for closer scrutiny of the industry to determine whether the basis for price increases cited by the ABI and facing drivers is a fair reflection of the pressures on the insurance industry. Many insurance companies known to us have merged and have left the market as a result, exiting from even insuring in the United Kingdom because of the high claims culture and the issues that I have raised. We therefore need to create an environment for these people to come back. They must know that the Government are implementing safety measures that help to drive insurance premiums down.

I note the Government’s response to a petition on this matter, which emphatically ruled out a Government commission. The Government have ruled out any investigation or interference in the market. Although I am realistic about the prospect of a Government U-turn, I believe that other steps can and should be taken to get young drivers on to the road, and importantly, to do so safely for themselves and other road users.

Faced with an industry that provides this basis for the increase in premiums, how can the Government help young drivers towards the rite of passage that is driving? The direction taken by Government must be to support better, safer driving. Let me be clear: most young people drive responsibly and safely, but, as with so many aspects of life, the majority suffer because of the actions of the minority, and that is undoubtedly the case here.

The Government could bring forward a number of measures to help reduce the number of accidents involving young people and thereby reduce the premiums for young drivers. Many of them may not be what young drivers want to see explored, as they all bring some form of restriction on the freedom that they desire. However, given the situation with insurance costs, we must look at all ways for young drivers to force the hand of insurers to reduce those premiums.

A graduated driving licence scheme is one such initiative. A graduated driving licence is the most effective intervention in reducing incidents and fatalities for young drivers. Based on extensive analysis, the scheme could include a minimum 12-month learning period before the driving test can be taken, a ban on intensive driving courses, lowering the age at which young people can learn to drive to 16 and a half, a restriction on the number of young passengers a young driver can carry, a restriction on their driving during nighttime hours, or a lowering of the blood alcohol concentration for drivers aged 17 to 24. All those measures seem fair and compatible with getting young people on the road soon after they turn 17, but more safely. GDL has significant public support. Research shows that the savings, both in terms of lives in road accidents and financial cost, would be significant.

The Government’s 2019 road safety statement indicated a commitment to reviewing GDL in the UK, but that has not been progressed yet. It is my hope that a restored Northern Ireland Executive can progress the agreed policy of GDL in Northern Ireland soon. Indeed, as envisaged by the previous Minister, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), that could be a testing ground for the policy’s effectiveness. Can the Minister outline progress towards that becoming a reality in England, so that help can be given to young drivers in relation to both safety and insurance?

The Government could also support young drivers through financial assistance for installing telematics in vehicles. Those devices can monitor driving and driving behaviour, thus helping to encourage safer driving. However, they can be expensive and, in the context of this debate, which covers cost as an inhibitor to driving, it would be good if the Government explored means of supporting the provision of those devices to young drivers.

I am conscious that other hon. Members want to contribute to the debate and I look forward to hearing other ideas about how we can assist young drivers in our constituencies. In conclusion, I stress the importance of allowing young people the freedom to drive and the necessity for that to be affordable to all. I urge the insurance industry to heed the plight of young drivers and, through transparency and fair pricing, to avoid any accusation of profiteering or unfair practices. I also urge the Government to explore the viability of providing some direct support and to look at how our licensing system can be modernised to help cut both the casualties and the cost of driving for young people.