Motor Vehicles (Compulsory Insurance) Bill

James Davies Excerpts

3rd reading
Friday 28th January 2022 Commons Chamber

[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.

[Jane Hunt]

Does my hon. Friend agree that, in addition to those tax savings, a number of very large businesses—farms, for example—have numerous vehicles that never go on the public highway, and this would have a greater impact on them?

[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.