Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what plans he has to assess (a) trends in the incidence of people purchasing insurance coverage and (b) levels of insurance coverage purchased after the rise in insurance premium tax announced in the Autumn Statement 2016.

The Government does not have any plans to carry out such an assessment. Trends and the levels of insurance purchased are subject to a number of influences. These include the price of insurance. Price is set by insurers and is subject to a wide range of factors, of which tax is just one part. Other factors include inflation, changing assessment of risk, the performance of insurers’ investments and costs. It is therefore difficult to isolate and then analyse the impact of any one of these factors.

The Government has no evidence to suggest that this level of change to Insurance Premium Tax will lead to changes in the number of uninsured vehicles. The estimated number of uninsured vehicles in the UK has fallen from 2 million in 2005 to 1 million today.