Motor Vehicles (Compulsory Insurance) Bill

Mike Penning Excerpts

3rd reading
Friday 28th January 2022 Commons Chamber

[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.

[Sir Mike Penning (Hemel Hempstead) (Con)]

SORN.

[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.

--- Later in debate ---

[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.