Mike Penning responds to a Transport Committee debate on the increase in the cost of motor insurance in recent years.

The Parliamentary Under-Secretary of State for Transport (Mike Penning): For colleagues who have been here throughout the debate, may I say—I know it is not my brief to do so—that my thoughts and prayers go to the family of the Red Arrows pilot who was killed this afternoon? Our servicemen do a lot for us. I say this as colleagues might not know that, sadly, this pilot died—the second fatality in the Red Arrows this year.

This afternoon’s debate has been excellent—led brilliantly by the Chair of the Transport Select Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman). In general, the debate has been sensible, measured and useful to our constituents. I cannot say that about parts of the speech by the hon. Member for Barrow and Furness (John Woodcock), particularly when it became party political. That is not what this evening’s debate was about, especially considering that the previous Administration were in government for 13 years and many of the measures he now asks us to bring forward could have been introduced then. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick), a former Front-Bench Transport spokesman was much better in his tone; he never used to read out a speech that was written before and that did not contribute anything to the debate.

To answer what was probably the only sensible point that the hon. Member for Barrow and Furness raised—about continuous insurance enforcement—60% of all those written to, having been shown to be uninsured, have responded positively and were either given a SORN—statutory off-road notice—or said that they would insure. About £122,000 has been picked up in fines, and 250,000 penalty notices have been issued—in excess of what we expected at this stage of the new piece of legislation.

Let us move on to the general debate, led so excellently by the hon. Member for Liverpool, Riverside. Everyone will be pleased to know that we shall not divide the House on the motion. There is an issue about the committee that is being formed, but I will come back to that in a few moments. Many of the issues I see in my constituency correspondence have been alluded to brilliantly in this evening’s debate.

To add to the anecdotal evidence, a member of my own staff was in a road traffic accident the other evening. She was hit from behind; the person got out of the car and was very amenable. My staff member said, “How are you? Are you okay? Do you want to go through the insurance process?” The other lady said, “I’d like to pay you privately because otherwise my premiums will go through the roof.” Everything was sorted out fine; no contact was made with the insurers or the police. However, she received a text message asking “Would you like to claim for the injury that you had?” A member of the public had obviously informed those whom I described to the Committee as ambulance chasers. Apparently it is not just the insurers who are passing information around; others also think that they can secure substantial earnings from such events.

Several Members paid tribute to the right hon. Member for Blackburn (Mr Straw). I thank him, in his absence, for contacting me to say that he could not be present this evening. We have worked closely for many years on many subjects when our respective parties have been in opposition and in government, and I believe that the motion has opened the Government’s eyes to the possibility of using his Bill for this purpose. There will be of course be attempts to find loopholes, but it is the Government’s responsibility to ensure that any legislation is fit for purpose.

I believe that 11, if not 12, Members spoke in the debate—that does not include those who have intervened—and it will be impossible for me to respond to all the points that they raised, but I will of course write to all those whose questions I have not had time to answer.

My hon. Friend the Member for Lincoln (Karl McCartney) made an important point about uninsured drivers. Uninsured driving is a criminal offence, and I am sure that no Member would condone it, but given that it contributes only £30 to the average premium, there must be many other factors in the market. I see that the hon. Member for South Down (Ms Ritchie) is present, and I shall comment on the position in Northern Ireland shortly, but the fact remains that that £30 is not the reason that premiums have been shooting through the roof—although we have seen some reduction in recent months.

Nevertheless, notwithstanding our concern about the size of premiums, we must in no circumstances condone uninsured driving, which plagues not only our constituents who pay their premiums but the police. Like the hon. Member for Bradford East (Mr Ward), I have been out with the local police force many times, and I am sure that anyone else who has done so will confirm that when the police pull drivers over for being uninsured, they will almost certainly pick them up for another offence which, in many cases, will have nothing to do with driving offences. People who wish to break the law in that way often wish to break it in other ways. We must help the police in every possible way to ensure that such fraud is dealt with, because driving without insurance is indeed fraudulent.

We must also help the insurers, who will doubtless be monitoring this debate and will realise that they are the pariahs: the nasty, horrible people to whom we must pay our premiums. I suppose that I should declare an interest at this stage. I have two daughters between the ages of 17 and 25, and the premium is high. I am proud to say that they have managed to work hard throughout their time at university, and that the work that they have done has helped to pay the insurance. I have not had to bear the whole burden.

The hon. Member for Bolton West (Julie Hilling) mentioned the crass decision by the European Court of Justice that gender could not be taken into account by insurers deciding premiums, although, as we all know, premiums are based on risk. I find that astonishing, because the figures clearly show that, sadly, boys aged between 17 and 25 are 10 times more likely to be involved in accidents than girls of a similar age. One of the most frightening pieces of evidence that has been given to me while I have had the honour of being the Minister responsible for these matters is that the most dangerous activity in which a young lady can engage in this country is sitting next to a boy aged between 17 and 25 who is driving a car.

Jim Dowd: Is not the problem with the European approach the assumption that every member of a certain group will behave in a certain way? It is a generalised rather than a personalised approach. The assessment is being made not on the basis of what a particular individual who wants to buy a particular product is likely to do, but on the basis of what people in a particular category are likely to do. Even if there is no evidence against an individual, that individual will be subject to the same penalty.

Mike Penning: I completely agree—just as I often agreed with the hon. Gentleman during the many years when we served on the Health Committee together. The actuaries have to be able to look at risk in general; otherwise we will all be put into the same pot, which is unfair to those who are in lower-risk categories. I have concerns that addressing this issue will lead to premiums being increased, not reduced.

Many colleagues, including the hon. Member for Hayes and Harlington (John McDonnell), have said we need to do more about the insurers, and I agree. I certainly do bring the insurers around the table, and I give them a very hard time. After all, they want things from me. They wanted the continuous insurance; they have been calling for that for years, and they have got it. They also want access to DVLA data in order to try to alleviate fraud, both intentional and unintentional.

People ask me, “What do you mean by ‘unintentional fraud’?” Well, I am a dad, and I was asked whether I would put my daughter on the insurance as an additional driver. I had to look very carefully at whether she was an additional driver or the main driver, but most parents would not know the difference, so we need to educate them on that. They think they are helping their young people by naming them as an additional driver in those circumstances, but if their son or daughter is, in fact, not the additional driver, that insurance will be invalid, and the insurer will almost certainly find that out—and if the son or daughter is involved in a crash, they will almost certainly not be covered, and anybody else involved in the accident with them will also be penalised.

Some Members who were present for the debate have moved on to other things, so our proceedings now feel a little like an Adjournment debate, where people have not returned for the concluding speeches. That is a shame, because this is not an Adjournment debate; it is, rather, a proper debate of the House with a motion before it. Perhaps as Members get more used to debates such as this, more of them will return to hear the concluding remarks.

I certainly will work with the devolved Governments in respect of their responsibilities. Responding to the comments of the hon. Member for South Down (Ms Ritchie), I have serious concerns about the market as it operates in Northern Ireland. I am not responsible for the market, however; that is a Treasury matter, which is why the Treasury took the recent debate. I also understand that the Northern Ireland regulators are conducting a review, and I can assure the hon. Lady that if there is any evidence of collusion in the market—if any cartels are operating there or here—we will come down on them like a ton of bricks, as would be only right and proper.

As the Transport Committee has concluded, there is not just one simple solution to this problem. I agree, for instance, that there is a postcode lottery. In some ways, that is similar to the gender issue we have just discussed. Some postcodes cover large areas; that is certainly the case in my part of the world. It is fundamentally wrong for people to be penalised because of the road or neighbourhood in which they happen to live. Insurance calculations used to be based on theft and damage rates, but modern cars are very difficult to steal. Joyriders still steal ordinary cars, but most vehicle thefts are of high-value cars that are stolen to order. That is a completely different kind of theft from the thefts that affect premiums.

Let us consider why premiums are so high. It is not just to do with uninsured drivers. It is also to do with ambulance chasers. Some 50% of all personal injury claims are made on car insurance. How can that be right when, as we have heard this evening, we have some of the safest roads in the world, and certainly the safest roads in Europe? Our killed and seriously-injured rates are extremely low, although we need to get them even lower. The truth of the matter is that most of these claims, many of which are fraudulent, are not reported to the police. Very often they are reported after the incident; Members have referred to constituents saying people followed up on incidents the following day. The hon. Member for Lewisham West and Penge (Jim Dowd) touched on this in his speech. The police would never have been called in such cases; it will never be on the records of the police that that sort of thing has taken place. Some countries in Europe, including Germany, have carefully considered the speed that someone would have had to be travelling to be in an accident before they can claim for whiplash. I was with the relevant German Minister at a conference recently, and we discussed this and other measures, particularly priority. The evidence is that this does not appear to be working in Germany simply because people are increasing the speed that they claim they were travelling at before the accident.

John Woodcock: I just want the Minister to set out why he has rejected our calls to restrict whiplash claims, given the seriousness of this problem in forcing up insurance premiums. Will he not reconsider?

Mike Penning: I have not rejected that; this was done by a colleague in the Ministry of Justice, as it is a legal matter. However, I completely agree with my colleague, as he is a legal person and I am not. There are legal differences between Germany and this country. Everything is possible, and this Parliament can do whatever it wants to do. [Interruption.] Perhaps that is not the case—I see some of my Eurosceptic friends in the House this evening. There are certain things that I would like to be doing in my Department that Europe prevents me from doing.

As we have heard across the House today, insurers have to take responsibility and say, “No, we’ll take you to court and we will challenge this.” They should not just settle out of court because it happens to be cheaper than the possible consequences of going to court. Immediately we start to do that, the no win, no fee ambulance chasers will look very carefully at their cases, and people who should genuinely get their compensation will get it and those who are swinging a leg, as my grandfather would say, will not. I shall refer back to my time on the Select Committee on Health, because it is not just in this area that we have this problem with insurance. Our hospitals, in particular, tend to settle out of court rather than challenging claims, and that is costing the taxpayer and the NHS an absolute fortune, so this is a culture that we have to turn around.

Hon. Members have touched on other aspects in the report and the evidence to the Select Committee. I have significantly changed the driving test, the practical and the theory, since my appointment, and I intend to change it even more. I have said it before and I will say it again that people are currently taught to pass a test; they are not taught to drive. They are not taught to drive safely for themselves and for others, and we have to make sure that we have qualified driving instructors and that everybody knows they are qualified when they get into that car. One change we are going to make—I hope that the Select Committee will agree with me on this—is that someone who is not a qualified driving instructor will not be able to take someone out on their own to teach them to drive. I am not going to stop parents, grandparents and sisters doing that, but someone who gets into a car marked “driving instructor” should not have to look for a little badge on the windscreen that says that the person is a trainee. These people should be qualified driving instructors. The industry supports me on this and we will do this. There also has to be an ongoing training programme for driving instructors. Some instructors took their qualifications many years ago, and we need to make sure that they are au fait with what we want from the driving test, although we also want them to earn an income.

As we have heard today, there are also things that happen to people suddenly when they pass their driving test. Clearly, some people—young people in particular, but not all of them—appear to have some kind of lobotomy when they get behind the wheel of a car. I am talking about highly intelligent young people who are perfect role models in every other aspect of their life, and then they get behind the wheel of a car. Sadly, as has been discussed, testosterone is one of the leading factors. Drink and drugs are involved, but testosterone is one of the big problems here.

In my constituency, the place where most people pass their test is St Albans. Between my constituency and St Albans is a rather large motorway called the M1, and to get back from the test centre, people have to cross it. That means that someone could be driving for the first time on their own and as they turn left or right to come off the A414 they will be on the M1. I think we need to give people, particularly young people, the opportunity to learn how to drive on the motorway before they pass their test. That is why we will pass regulations to allow qualified driving instructors to take learners on to motorways. Can I make that compulsory? No, I cannot because some counties have no motorways, so it would be discriminatory to do so, but we will give qualified instructors the opportunity to do that.

We need to make sure that the test is not the endgame, but not—in my opinion or that of the Government—to make it compulsory to take post-test qualifications. Pass Plus was a partial success, but was never really rolled out properly.

Jim Dowd: Before I came to the House, I used to drive extensively on the motorway network—in my company car, for those who were listening earlier—and the idea of the odd learner turning up on the motorway is strange. Traffic on our motorways travels at much higher speeds generally. Would it not be better to allow people to pass the traditional test and then take an additional period of tuition on the motorway, rather than allow someone who might have been behind the wheel of a car for only two or three hours suddenly to turn up on a motorway alongside juggernauts and fast-driving cars? The Minister will know better than anyone that the average speed on motorways is much higher than the 70 mph limit.

Madam Deputy Speaker (Dawn Primarolo): Order. Minister, I realise that driving on motorways is a very important subject, but I have a feeling that you were going to bring the debate back to the cost of motoring.

Mike Penning: An integral part of driving and the cost of insurance is how people are qualified to drive. That is why qualifications, as well as the ordinary driving test, are specifically mentioned in the report we are discussing, which is why I was speaking to the issue. However, I shall take your guidance, Madam Deputy Speaker, and steer towards more detailed work on the black box.

Madam Deputy Speaker: Order. I am very sorry, but I was trying to ensure that the Minister stayed where he wanted to be, whereas the hon. Member for Lewisham West and Penge (Jim Dowd) was tempting him away. I do not need a gentle rebuke from the Minister; I thought I was helping him.

Mike Penning: I know you too well ever to rebuke you, Madam Deputy Speaker, and I would never be led astray by the hon. Gentleman.

I do not agree with the hon. Gentleman. We have a situation in which young people—or, indeed, anyone—passing their test today can go on the motorway. There are no restrictions on that, and we need to give them the necessary skills. I have a full car, full motorbike, HGV and tank licence to boot, and I have driven on the motorway in all types of vehicle, so I understand. I have an H licence. The hon. Gentleman was indicating from a sedentary position, “What is a tank licence?”—it is an H licence for tracked vehicles.

Let me touch on issues of technology. As we heard earlier, some insurers have been using technology, particularly the black box. The Co-operative insurance company, which was mentioned earlier, has a scheme that encourages people to take the box in their car, and it monitors very carefully what speed one is travelling at, what time of day one is driving—nearly everything. I have been pushing quite extensively with insurers to roll that out further. It is the obvious way forward. If people are given the responsibility of a driving licence, they can be given the opportunity of responsibility. However, insurance companies have to be transparent. We have to know why the premiums are what they are and how they can best be broken down so that the public, when they look at their premium, know exactly what they are getting for their money. If there is a discount, we need to know exactly what it is and that if the person who takes out that policy sticks rigidly to the agreement their premium will not shoot up the following year or month.

In conclusion, I think this has been a very sensible debate. I welcome the report from the Committee chaired by the hon. Member for Liverpool, Riverside and I think that we can agree on most things. We have many, many Committees sitting already; one more would be quite difficult. We meet regularly on a cross-party basis to discuss these matters, and myriad Departments can be involved, depending on the issue in question.

At the moment, we are doing a great deal of work on penalties, which I have not yet touched on, and on the question of whether fines are the answer. The Secretary of State for Work and Pensions has already announced that he is going to allow fines to be increased for those on benefits. At the moment, the figure is £5, but that will increase to £25. I personally think that, as well as looking at increasing fines, we need to look at the points. In most cases, people will be prepared to pay a fine, but they might find the prospect of getting additional points on their licence more of a deterrent. They might decide that getting an extra six points, rather than just three, might mean losing their licence. I hope that such a move might prevent more people from driving while uninsured.

Karl McCartney: I understand what my hon. Friend is saying about points. Is there not also a need to make it socially unacceptable to drive while uninsured? Would it perhaps be prudent to consider a prison sentence for people who seem determined to do it three, four of five times or who have been involved in a serious accident while uninsured?

Mike Penning: I thank my hon. Friend for that point. We will continue to look at the penalties involved. Those of us who came through the drink-driving campaigns of the ’70s and ’80s will remember how we turned drink-drivers into pariahs, but that involved educating the public first, then using a big stick. We did the same with seat belts, and we now need to do it with drug-driving as well as with uninsured driving. We will continue to look at this, but, at the end of the day, it is for the magistrates and the courts to decide how they interpret the law. They have a degree of autonomy, which is why so many drivers who have more than 12 points have kept their licence. It is a matter for the courts to interpret the special needs of the people involved, and perhaps the lawyers who represent them are also a factor. I was shocked when I saw the figures, and it was my own Department that released them.

I know that the hon. Member for Liverpool, Riverside is going to respond to the debate. Her Committee has produced an excellent report, and we have had an excellent debate. I look forward to implementing many of the measures that have been mentioned, so that our roads can continue to be the safest in Europe and among the safest in the world.

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