Motor Vehicle Insurance Disc (Hansard, 28 January 2004)

§ Andy Burnham (Leigh) (Lab)

I beg to move, That leave be given to bring in a Bill to amend Part 6 of the Road Traffic Act 1988 to require users of motor vehicles to display on the vehicle a disc certifying that a policy of insurance or security in respect of third party risks is in force; and for connected purposes. Have you ever had the feeling, Madam Deputy Speaker, that all the action may be happening somewhere else? I certainly have. I can assure the House, however, that what my Bill lacks in timing it more than makes up for in the quality of its proposals.

Driving without insurance is an antisocial, selfish and irresponsible act, on a par with drink-driving and carrying a similar social stigma; but the existence of a sobering 1.25 million uninsured cars on our roads shows that it is all too easy to get away with it, and that a worrying number of our fellow citizens are prepared to try. One in 20 of the motorists driving around Britain's towns, cities and villages at this very moment are uninsured. They have the potential to wreak havoc and wreck lives, but they are able to remain anonymous, and the public have no easy means of identifying them. It is a terrible game of Russian roulette, in which the losers are always the law-abiding motorists and innocent civilians.

The high levels of evasion show that the current system is not working. There is a requirement for drivers to produce valid insurance to renew vehicle excise duty, but the policy could run out in days, or could easily be cancelled. We need a simple means of placing public pressure on all drivers to keep their insurance up to date. In addition, police, traffic authorities and, most important, the general public should have an easy and instant means of spotting those who do not. The Bill achieves those twin aims by amending and inserting two basic measures into the Road Traffic Act 1988: a duty for drivers to display a simple disc on their windscreens as proof of valid insurance, and a duty for insurers to issue a standard-form it detachable disc, akin to the tax disc, to people taking out new insurance policies.

While I would claim credit for that idea, I must admit that it was put to me by someone else. In a small way, this is a vindication of our parliamentary system. About two years ago Mrs Doreen Gill of Findlay street, Leigh, visited my advice surgery to express concern about a friend who had been unfortunate enough to have an accident with an uninsured driver. That person had been left out of pocket and out of sorts by the whole experience, and Mrs Gill felt strongly that something should be done. She proposed the introduction of an insurance disc, and having thought about it carefully since then, I have concluded that she is absolutely right. Yes, there are practical questions to be asked, and discs can be forged; but to those who always seek obstacles to any change, I say that if it is good enough for car tax it is good enough for insurance.

Arguments against my Bill are arguments for scrapping the vehicle excise duty disc. The process need not be complicated: it simply means making the insurance policy a public document for windscreen display rather than its being kept in a drawer at home. If discs help to cut tax evasion, they will help to cut uninsured driving. At the risk of annoying the 321 Chancellor of the Exchequer, let me say that it is arguably more important for people to be insured than to be taxed. We cannot forget that there is a much greater financial incentive for the avoidance of insurance than there is for the avoidance of tax, given the relative cost of each.

There are different classes of insurance evader. There is without doubt a hard core who will drive without licences, tax or insurance. They are unlikely to be moved by the need to have an insurance disc, but they would be easier for us all to identify. There is another group of evaders who are prepared to take a risk, perhaps delaying obtaining cover for a month or two. That group could be swayed by the requirement for an insurance disc. They could no longer enjoy the anonymity that the current system affords them: friends and family would notice their failure to display a valid insurance disc. A third group comprises the well-meaning but absent-minded. I dare say that many Members—including me—fall into that category. Such people see the renewal reminders arrive from the insurance company and keep meaning to do something about their policies, but never get around to it. A daily and embarrassing reminder on the windscreen would cut that sort of evasion.

I hope that sceptical voices in the insurance industry will take note of the emphatic public backing for an insurance disc that RAC research revealed this week: 87 per cent. of drivers would support a disc if it could be shown to reduce insurance premiums. I hope that they will also take note of the strong and effective campaign of the Daily Express on the important issue, and its unequivocal backing for the Bill as part of the solution. The editorial in Monday's edition said: Rarely has an issue been so straightforward. Make insurance discs compulsory now. I accept that the Bill is not the only solution to the problem; it should be part of a package of measures to tackle driving without insurance. We need to review the punishments for insurance evasion. It cannot be right that the fine—usually around £150—is a fraction of the cost of insurance. The incentive for people to take a risk is too great. First, we need stiffer penalties, for example, higher fines, instant driving bans And community, even custodial sentences for repeat offenders, such is the gravity of the offence.

Secondly, I would support moves for more integrated use of the Driver and Vehicle Licensing Agency database and the new insurance database. I hope that the police can have access to that to identify and target people whom they know to be driving without insurance.

Thirdly, the insurance industry should consider what more it can do to reduce the soaring cost of motor insurance. I represent an area where public transport is poor and job opportunities are limited. Many people are on low incomes and have to travel to work. Some are being priced out of driving a car—that is a form of social exclusion. I heard on the radio this week that a first-time driver was quoted more than £2,000 for insurance. Young men are statistically the most likely to cause accidents, and, as a society, we have a vested interest in their being insured.

322 I urge the industry to consider moves towards a more even pricing structure, perhaps with cross-subsidy between policyholders. There is already a levy on insurance policies to pay for claims against uninsured drivers through the Motor Insurers Bureau. A cross-subsidy pricing scheme could mean that the cost is used to cut evasion rather than to pick up the pieces of uninsured accidents, as happens now.

The Co-operative Insurance Society is taking a lead and I should like more insurers to follow its scheme, whereby new drivers can reduce the cost of their policy by hundreds of pounds through undergoing further training, especially on motorway and night driving.

The Government have initiated a review of the issues under Professor David Greenaway of Nottingham university, which shows that they are aware of the severity of the problem, and he is due to report his findings later this year. I hope that he will seriously consider the measures that I have outlined, listen to the arguments for an insurance disc and come down firmly in favour of it. It would overlay and complement the other measures that are being considered to tackle driving without insurance. I hope that Professor Greenaway will look abroad to France, Italy, Ireland, Australia and, even closer to home, Jersey, where an insurance disc scheme appears to work well and there is less insurance evasion than here.

The costs of failing to act mount year after year. This week, the RAC estimated that we shall all soon pay £60 on our insurance policies to cover the cost of uninsured driving. It also stated that the death, damage and injury that uninsured drivers cause may lead to a £1 billion bill. Of course, prosecuting offenders means huge costs to society in police and court time.

If an insurance disc cut evasion by 10 per cent. or 20 per cent., it would be worth introducing. That makes the Bill a win-win measure. It is good for motorists and insurers, but most important, it is good for the public. The only losers are those who flout the law and expect the law-abiding majority to pick up the bill. Objections about practicalities crumble in the face of the potential benefits.

The Bill is a workable solution to a growing scourge in our society and I commend it to the House.