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Absolutely. Although I tend to argue for a slightly slimmer role for the Government, I do think that there is a place for them in this regard. When we insist on mandatory motor insurance, there is a clear role for the Government in ensuring that pressures on the price of that mandatory insurance are kept under control as much as possible. Having the Lord Chancellor’s oversight of the tariffs is one way in which we can ensure that the people who are already struggling with the escalating costs of motor insurance do not see them taken even further out of reach.
There is a clear risk of a serious moral hazard when it comes to escalating motor insurance. The more that premiums increase, the greater the risk—the greater the temptation, we might say—for some people to take the chance to illegally fail to take out motor insurance and to drive on our roads uninsured, with everything that that implies for safety and for coverage of third parties. Given the current high levels of motor insurance premiums, research suggests that around a quarter of 18 to 24-year-olds have been tempted to try to make savings by not taking out or not renewing their motor insurance policy—driving without insurance. Surely that number can only increase if the cost of motor insurance becomes ever more expensive and increases by far more than inflation or incomes.
As the real cost of motor insurance spirals, more people will be tempted to take the risk of driving without insurance, and young people are more vulnerable to this by far because their premiums are already so much higher. Such behaviour puts other people’s safety at risk and leaves them in an even more difficult situation in the event that they need to make a claim. The number of claims against uninsured drivers increased significantly last year.
The measures in the Bill are designed to keep insurance premiums under control, which is essential if we are to have a functioning motor insurance system. That is why I am not able to support the amendment, why I shall be supporting the Bill, and why I believe that the tariff system for minor injuries is absolutely necessary and must be retained in this legislation.