I wish to address myself particularly to Amendment No. 37, in the names of my hon. Friends and myself, which is in effect the insurance amendment.
In Committee we had a short debate, but one of the more heated debates, because five years after the subject of car sharing was first broached by my right hon. Friend the Member for Yeovil (Mr. Peyton) in his Transport Bill it still appears that there has not been satisfactory agreement between the Government and the British insurance industry on how the insurance of car sharing should operate.
The Government appear to be taking the line that many of the car-sharing operations that are to be legalised will fall outside the scope of a normal class 1 motor insurance policy. The Under-Secretary went so far as to accept that many of these journeys would be construed as being for hire or reward. It is all very well for the hon. Gentleman to take that line, but he must be aware that many people are at present using car-sharing schemes, perhaps illegally. Many will have the erroneous impression when the Bill reaches the statute book that the schemes will be legalised, and many more people will be encouraged to go in for car-sharing schemes and will find that technically they run foul of the law.
I still find it astonishing that after I and other hon. Members have been asking questions for many years about the relationship of insurance to car sharing and its alteration, though Ministers have gone and come and gone, the Department of Transport has apparently not reached a suitable understanding.
Both the motoring organisations, the AA and the RAC, are genuinely very concerned about this matter. They rightly do not want to see their members put in a position in which, because they see the publicity attached to this extension of car sharing and its legalisation, they are perhaps unwittingly breaking the law and will find themselves convicted of driving without insurance.
Over the past two weeks I have approached the Motor Conference, which represents all the groups of motor insurers in the country. I was somewhat perturbed to discover that the Motor Conference was taking its stand on what it called the petrol-sharing arrangement, the arrangement that the motor insurers came to in 1973 during the fuel crisis when they stated that persons sharing a car who just covered the petrol expenses among themselves would not be regarded as taking part in a hire or reward operation so that a class 1 policy would apply. The motor insurers seem to take the line that that is as far as they want to go in relation to standard cover under the car-sharing arrangements which the Government are proposing in the Bill.
I do not believe that it is unanimous, but if the insurance industry is taking that view, I submit that the Government cannot do a Pontius Pilate act, wash their hands of the affair and say that it is a matter for the insurance companies and private individuals, because at the end of the day people will be breaking the law, laying themselves open to prosecution, because the Government have failed to face up to the problem.
Why do the insurance companies feel that they cannot provide the kind of cover required? Ostensibly, they say that it is because they are worried that too many people would operate on a purely private-hire basis, taking advantage of class 1 cover, but actually by running a commercial business. That is the line that the insurance companies take, and I am sure that the Government do not want, any more than we do, to encourage people to act illegally in that way. But one of the interesting effects of the Government's proposed changes is to make absolutely clear the distinction between commercial operations of that kind and the sort of car-sharing operations in private cars which the Government expect to take place under the new proposals.
In these circumstances, I should have thought that that underlined the need for something to be done where that clear distinction has been made between, on one side of the line, hire or reward operations for which a certain kind of motor insurance policy is necessary and, on the other, car sharing which would be covered as part of the normal class 1 policy.
I do not for a moment think that there is any great additional risk involved for the insurance companies in doing that. I feel that the activities of many motorists are already being covered, in effect, because their insurers do not know of the car sharing will become more obvious because advertising for car sharing will be encouraged and people will think that they do not have to worry about it because it has been legalised by the Government.
On the other hand, if the insurance companies are to continue with their somewhat narrow line, because the Government refuse to legislate, we shall have a period of confusion and, at the end of the day, there will have to be legislation of one kind or another.
When the insurance companies say that this is all very difficult, I point out to them that a few years ago it was said to be impossible to cover passenger liability in respect of people riding on the back of a motor cycle, but it is no longer enormously expensive to cover that risk. I do not honestly think that the premium question which the Under-Secretary raised in Standing Committee is relevant here.
Although, to my regret, the Motor Conference could not accept the wording of our amendment or that the motor insurers should have responsibility, I took the trouble to write to the chief executive of perhaps the largest motor insurer in the country, the General Accident Fire and Life Insurance Corporation, and I am sure that the House will be interested to know what the general manager, Mr. C. B. Heath, had to say:
I cannot, of course, speak for the insurance market, but we, the General Accident, saw no objection to car sharing without charging an additional premium for the cover, provided, of course, that the policyholder did not derive profit from his activities.
In other words, that is the same kind of dividing line as the Government have established in their revised schedule.
What shall we find? Those motorists fortunate enough to be insured with General Accident—I am not advertising—will be able to feel that they can drive quite happily under car-sharing arrangements and be fully covered, and motorists insured with some other company or a Lloyd's syndicate will discover that they are not covered.
I submit that that is a most unsatisfactory state of affairs. It is as unsatisfactory as it was when some motor insurers used to issue policies which excluded passenger liability. It needed the passage of the Bill presented by my hon. Friend the Member for Stretford (Mr. Churchill) to make passenger liability compulsory to ensure that all persons could ride in cars in the knowledge that at least they were properly covered by the insurance policy.
If the industry is to take this divergent view within itself, the Government must take a greater interest in this aspect of what they are putting forward. If not, they will be rightly blamed for not having followed out the implications of what they are trying to do.
One problem is that, in their anxiety to do something, the Government have jumped a fence a little too early. They could easily have restricted the way in which car sharing was to have been spread. For example, they could have restricted it to people who shared a common place of work or a certain community interest. That might have satisfied some of the insurers who feel uncertain now.
My main criticism is that the Government appear to have taken the line that they did not need to go into this kind of detail. I find that unacceptable. As I said, it is five years since this issue was first raised—five years in which the Minister's advisers have known of the complications. I have no doubt that when the Bill becomes law, with a blaze of trumpets, as some great achievement by the Labour Government, they will say "We have at long last instituted car sharing." But if, by so doing, the Government invite large numbers of our constituents effectively to break the law by driving without proper insurance, that would be reprehensible and irresponsible.
I must put forcefully to the Under-Secretary of State that he should consider this amendment. I am not asking him to say that this is the ideal way of dealing with the problem. I shall listen with interest to what he says. I think it is a pity that we did not have a separate debate on this amendment. This issue merits a separate debate. Therefore, I hope that the Minister will answer this point before going into the intricacies of any other amendment.
If the Under-Secretary cannot give a satisfactory answer, I assure him that we shall continue to press this matter. Indeed, we hope that our friends in another place will press it. I am convinced that if the Bill goes through as it stands—if there is no agreement between the insurers and the Government; the insurers giving some kind of undertaking that the bona fide car sharer as opposed to the private hire operator will be covered—sooner or later the pressure of events will force the Government to legislate. Surely it is better for the Government, before the Bill goes through the other House and perhaps gets on the statute book, to get together with the Motor Conference and the motor insurers to try to hammer out this matter. It is not an enormous problem. It is a question of the Government saying "We accept that we have opened up a new avenue, we can see that there are complications, we accept that you have given us the petrol-sharing concession, but we feel that you will have to give us a bit more." They should say that, first, to legalise the situation and, secondly, to cater for the future.
I believe that car sharing is important. In Committee, my hon. Friend the Member for Sutton Coldfield (Mr. Fowler) gave some telling examples of car sharing and pooling in the United States. If we want to persuade people to share their cars to reduce the amount of energy being used, we must ensure that in no way can they be penalised by claims for damage to their cars not being met.
I hope that the Under-Secretary will take this serious point on board and be aware that, if we do not get a satisfactory answer tonight, he will hear a lot more of this matter in the further stages of the Bill and in the months afterwards.