Motor Insurance: Court Judgments

William Cash Excerpts

Wednesday 22nd September 2021 Westminster Hall

[Sir William Cash (Stone) (Con)]

I am extremely glad to follow my right hon. Friend the Member for Chipping Barnet (Theresa Villiers), for whom I have the highest regard as a lawyer, a member of the Conservative party that delivered Brexit and—if she does not mind my using the expression—a spartan, because she was one of the people who brought about the situation that we are happily in at the moment, whereby we have the ability to repeal legislation and to deal with some of the problems that she mentioned. In particular, I would mention the fact that the primary legislation in question would be authorised by the European Union (Withdrawal Agreement) Act 2020, section 38(2)(b) of which enables us to override any EU law through an expressed and direct provision in our own primary legislation and therefore to deal with the problem as a piece of primary legislation.

I listened very carefully to what my right hon. Friend said about the private Member’s Bill introduced by my hon. Friend the Member for Wellingborough (Mr Bone), which will receive its Second Reading on 22 October 2021. I merely venture to suggest that there are some precedents for private Members’ Bills to be given some additional oomph by the Government. If they put their mind to it and have the commitment to do it, which I certainly believe should be the case in this instance, it can be done. In fact, I did just that in relation to the International Development (Gender Equality) Act 2014, because the Government gave me full support for a Bill that was languishing at around No. 17 in the private Members’ ballot. The Act did some very substantial things, including imposing on our development aid projects the commitment and guarantee that we would make it a legal, judicially reviewable duty to enforce the protection of women and children in relation to international development aid. If the Government can do it for that, I would suggest that, given the scale of the problem, which my right hon. Friend the Member for Chipping Barnet so expertly described, there is very good reason for them to give support to my hon. Friend the Member for Wellingborough and to ensure that we get the results that are needed in the national interest, as identified by my right hon. Friend the Member for Chipping Barnet.

[Sir Greg Knight]

I agree with what my hon. Friend has to say. Does he agree that the quickest way to deal with this issue is for the Bill to go through on 22 October? He used the word “oomph”. It can go through quite simply, if the Government do not object to it. My understanding is that the Government are not going to object to it, but perhaps we could have some confirmation of that later.

[Sir William Cash]

I may say to my right hon. Friend, who is a very good friend of mine, that that is a very welcome piece of news, because this is exactly what happened in the case of the International Development (Gender Equality) Act. What happened was that the Clerks in the House were sitting there with bated breath to hear whether anyone was going to object, because all that has to be done on such an occasion is simply for any Member to object. It does not have to be a Whip; it can be any Member of the House. On that occasion, we got down to about No. 17 or 18 on the list—wherever I was. There was complete silence, and the Bill went through. That is what can happen, and I therefore strongly agree with what my right hon. Friends the Members for East Yorkshire (Sir Greg Knight) and for Chipping Barnet have said. I think this is a potential opportunity.

I was very interested in what my right hon. Friend the Member for Chipping Barnet said regarding the question of what the EU was up to at that stage. I am speaking as the Chair of the European Scrutiny Committee, and we shall keep an eye of these matters. We also propose reports, bring forward suggestions and inform the House accordingly in Hansard and so forth. On 30 June 2021, as my right hon. Friend said, the European Commission announced a decision to waive the requirement for UK drivers to show a motor insurance green card when entering the European Union. The decision needs to be fully implemented through publication in the official journal, and there is a waiting period of 20 days, so in the short term green cards are still needed.

The point I want to make is that on 29 June, the Transport Secretary published a ministerial statement, along the lines that my right hon. Friend mentioned, on the motor insurance directive—removal of Vnuk, in other words. It states the Government’s commitment, which the Minister announced on the Floor of the House:

“To remove the effects of the…ruling in the Vnuk case from GB law.”—[Official Report, 29 June 2021; Vol. 698, c. 8WS.]

Putting two and two together, if the Minister has said that the Government intend to remove the effects of it, and we have also the opportunity through the private Member’s Bill, and we know it is precedented for the Government to take the action I have described, I see the potential for a fair wind for this. That will be a tribute, not only to my right hon. Friend the Member for Chipping Barnet, who has spoken today, but also my hon. Friend the Member for Wellingborough.

I would like to touch on the principles that underpin the issue of EU retained law. I will outline it by saying that the issue of EU retained law in this context arises partly in relation to the Road Traffic Act 1988, which has not yet been amended to comply with the European Court of Justice decision. Legislative change is necessary, as my right hon. Friend has said, to bring clarity on the matter, given that pre-exit European Court of Justice case law is now part of UK domestic law, as retained EU case law.

Given that, what is going to happen next? I will give a description of the extent, nature and depth of what my right hon. Friend for Chipping Barnet has rightly put forward, in one instance, with huge financial consequences, with the EU going into reverse, and the absurdity of our being in a position where the EU deals with it in its legislation and we are stuck with it in ours. I am now going to address the question of where I think the Government’s navigation should go.

In June 2016, just before the referendum, I was responsible for bringing forward a Bill that set out the basis on which the legislation after we won the referendum—as I was confident we would do—could be dealt with. There is a huge body of legislation, some of which I will refer to in general in a few minutes. Given the scale of the problem, the best thing to do was to deem all EU law as part of UK law, so that at least we grabbed hold of it as a whole, then we could deal with it on a piecemeal basis.

My Bill was one and a half pages long. The Bill we ended up confronting under the former Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May), went far further and more regressively—if that is not a contradiction in terms—than was necessary, by incorporating the whole concept of EU retained law and the principles of EU law. With it came the assertion in section 6 of the European Union (Withdrawal Agreement) Act 2020 that the courts, if they wish to do so, given the circumstances of a case, would be enabled to quash any Acts of Parliament, if inconsistent with the judgments that they came to in interpreting the issues before them.

That is all very well, but those of us who are acquainted with the manner in which EU law was implemented under section 2 of the European Communities Act 1972, know very well that the Factortame case was the example above all others where the whole of the fishing industry was thrown into chaos, with Spanish fishermen invading our waters. The issue in question turned on the Merchant Shipping Act 1988. I remember saying to the Attorney General at the time that I thought it was a very unwise business for them to do introduce that Act, unless they put at the beginning, “notwithstanding the European Communities Act 1972.” Had they done that, then the judgment in Factortame, which struck down the Merchant Shipping Act 1988, could not have taken place because the courts would have been under an obligation to comply with the provisions of the Act, which would have said notwithstanding the Act of Parliament in question, the UK could legislate on its own account.

I referred to section 38(2) of the European Union (Withdrawal Agreement) Act 2020, which specifically contains the words “notwithstanding” and “direct effect”. It is notwithstanding the direct effect of any provisions that are on the statute book as part of EU retained law, and it enables us to override the European Union (Withdrawal Agreement) Act and, some may care to note, the Northern Ireland protocol. So, the law is in place.

As my right hon. Friend the Member for Chipping Barnet indicated, it can be done by primary legislation. I am just adding a bit of flavour as to how it came about and how it can be done. I listened to my right hon. Friend the Member for East Yorkshire and what he said in the context of the Bill proposed by my hon. Friend the Member for Wellingborough.

I turn to the question of the absurd situation identified by my right hon. Friend the Member for Chipping Barnet and what the Prime Minister said about it some time ago, using very strong language. If it was an absurd position before he was Prime Minister, it is doubly so now, and that is why we need to tackle it. The intention behind the grandfathering, as it is called, in EU retained law under the European Union (Withdrawal) Act 2018—

[Hannah Bardell (in the Chair)]

Order. The right hon. Gentleman is making a very flavourful, detailed and interesting speech, but I gently remind him that we are trying to stick as best we can to the specific topic of the effect of the court judgment on the cost of motor insurance. He is giving us a very interesting tour of his knowledge of EU retained law, but I gently remind him of the topic.

[Sir William Cash]

I am very glad that you mention that, Ms Bardell. I am not giving a tour of my knowledge; I am giving a tour of the answer to the question that is before the Chamber at the moment. It is the only way it can be dealt with. The remedy is there, as my right hon. Friend the Member for Chipping Barnet has said.

I will pursue this point for a short few minutes, because it is really important to get this on record. The objective of the grandfathering of EU retained law was to maximise continuity and stability following our withdrawal, without an express commitment to keep this anomalous category of law on the statute books indefinitely. There are ambiguities in all this and they have to be resolved as well. As I have indicated, the most dangerous situation would be if the concept of EU supremacy continued to apply, notwithstanding what I have said.

We have one directive here. I can assure you, Ms Bardell, that the House of Commons Library briefing paper No. 08136, published in November 2017, identified up to 20,000 EU laws that fall into this category. Forgive me if I make the point again, but it is important that people understand the scale of the problem and the fact that it can easily be remedied. About 900 directives are in force, almost all of which apply to the UK, which are not generally retained, and there are 12,484 regulations, around 7,000 of which were incorporated in the UK as

“the amended legislation is considered as one with the legislation amending it”.

There are 7,000 EU decisions, which are converted through the European Union (Withdrawal Agreement) Act and apply to the UK. That also includes European court judgments and case law before exit date, converted to UK law as retained EU case law.

I am now Chairman of the European Scrutiny Committee, having been on the Committee for 38 years, with my hon. Friend the Member for South Thanet (Craig Mackinlay). I can assure the Chamber that there is a very easy way to achieve this, but it is a complicated political manoeuvre, which is now under consideration by the Government. These laws were passed under qualified majority vote, as was the ports directive, for example, which I believe is now on the execution block for the same reason. It was done by qualified majority voting behind closed doors, and much of the legislation that emerged out of the Single European Act is stuff that we would never have implemented ourselves.

In a nutshell, this is a serious matter. It raises questions of sovereignty and the role of the courts, and it raises practical questions of the scale that my right hon. Friend the Member for Chipping Barnet has referred to. One incident she mentioned would cost the British taxpayer £1 billion. That is the scale of the necessity to get this right. I conclude by congratulating my hon. Friend the Minister. She and I have got to know one another very well over the past few years and I am delighted that she has got the job.

[Hannah Bardell (in the Chair)]

I thank the hon. Gentleman. We will now move to the Front-Bench speeches. I call the SNP spokesperson, Alan Brown.

--- Later in debate ---

[Theresa Villiers]

I am grateful to the Minister for her thoughtful and comprehensive response. I am also grateful to everyone who has taken part in today’s debate and for the support that has been demonstrated for making this change to our law, reversing the unintended consequences of the Vnuk judgment. To respond to some of the points made by the Minister, this is a problem that is already happening. Because of the principle of direct effect, Vnuk-type claims are already coming in and in some instances are already being paid, so there is an urgency to this. It is not just a theoretical possibility: it is having an impact already, and in due course the costs could be very considerable, as the Minister said.

I also welcome the contribution made by my hon. Friend the Member for Stone (Sir William Cash) regarding the complexities of EU law. I reiterate that we need to look afresh at how we deal with the body of EU law, because if we have to bring forward primary legislation every time we need to change, amend or update it, that will make for a very crowded parliamentary timetable. We need to see whether we can start using secondary legislation in this context, as is being contemplated by Lord Frost. After all, the vast majority of this law arrived on our statute book as a result of secondary legislation, so I hope the Government will take away the fact that Vnuk is an example of a problem that will recur many times in future unless we make some changes to the European Union (Withdrawal) Act.

[Sir William Cash]

Will my right hon. Friend give way?

[Theresa Villiers]

I had probably better not, because I am only supposed to be summing up. I hope that today’s debate has given some momentum to the Bill tabled by my hon. Friend the Member for Wellingborough (Mr Bone), which I encourage colleagues to support. Sadly, it only takes one Member of the House of Commons to object to that Bill for it to fall, but we have heard some sensible scrutiny of it today, which I hope will reassure some of those who follow these matters on Fridays with great care.

We all recognise that the pressure on the Government’s legislative programme is intense, and that that pressure has been made even more acute by the pandemic. However, I welcome the Minister’s assurance that the Government are supportive of the Bill tabled by my hon. Friend the Member for Wellingborough, and that if it fails, they will look to legislate as soon as they have the opportunity. I urge them to take this issue seriously and to ensure that we remove Vnuk from the statute book as soon as is practicable, so that we save people costs on their motor insurance premiums and give a bit of a helping hand to families across the country who may be finding it difficult to make ends meet and pay the bills. It is unnecessary to impose this cost on them, and it is time that we legislated to remove that cost from them.

Question put and agreed to.

Resolved,

That this House has considered the effect of recent court judgments on the cost of motor insurance.